Supreme Court Upholds Validity of PM CARES Fund, Affirms No Obligation to Prepare Separate COVID-19 Disaster Plan

SC Rules National Disaster Management Plan of 2019 Adequately Covers COVID-19; Funds of PM CARES and NDRF are Distinct and No Direction to Transfer PM CARES Fund to NDRF

In a significant judgment dated August 18, 2020, the Supreme Court of India in the case of Centre For Public Interest Litigation v. Union of India clarified several crucial issues related to the management of the COVID-19 pandemic under the Disaster Management Act, 2005. The Court emphatically held that the Union of India is not obliged to prepare a fresh or separate National Disaster Management Plan specifically for the COVID-19 pandemic, as the existing National Disaster Management Plan (NDMP) notified in November 2019 already comprehensively addresses all aspects of biological and public health emergencies, including epidemics and pandemics.

The petitioners had urged the Court to direct the Government to formulate a distinct National Plan for COVID-19, lay down minimum standards of relief for affected persons, mandate the use of the National Disaster Response Fund (NDRF) for COVID-19 relief, and order all funds collected in the PM CARES Fund to be transferred to the NDRF. However, the Supreme Court dismissed these prayers after detailed examination.

National Plan Adequately Covers COVID-19

The Court observed that the Disaster Management Act, 2005 mandates the preparation of a National Plan under Section 11, which must include measures for prevention, mitigation, preparedness, and roles of various ministries. The NDMP of November 2019 explicitly includes a detailed framework for handling biological and public health emergencies. It categorically recognizes epidemics caused by viral, bacterial, parasitic, fungal infections, and even biological terrorism.

The Court rejected the petitioners’ argument that a new plan was required specifically for COVID-19. It held that the National Plan is a dynamic and comprehensive document designed to address all types of disasters, including biological ones, and is supplemented by Standard Operating Procedures (SOPs), guidelines, and contingency plans formulated by competent authorities such as the Ministry of Health and Family Welfare. Further, the Court noted that various guidelines and containment plans for COVID-19 have been issued, which adequately cover measures like lockdowns, containment zones, and social distancing.

Minimum Standards of Relief Under Section 12

The petitioners’ plea to issue fresh guidelines under Section 12 of the Act, prescribing minimum standards of relief specifically for COVID-19 affected persons, was also declined. The Court held that existing guidelines on minimum standards of relief, which cover shelter, food, drinking water, medical cover, sanitation, and special provisions for widows and orphans, are applicable to all disasters, including COVID-19. There is no statutory requirement to issue separate guidelines for each disaster type.

Use of National Disaster Response Fund (NDRF) and PM CARES Fund

The petitioners challenged the constitution of the PM CARES Fund and urged that all contributions should be credited to the NDRF instead. The Court clarified that the NDRF, constituted under Section 46 of the Disaster Management Act, is a statutory fund managed by the Government of India for disaster relief. It can be utilized for COVID-19 related assistance upon requests from States as per guidelines.

The PM CARES Fund, in contrast, is a distinct public charitable trust created in 2020 to deal with emergencies like COVID-19. It is registered under the Registration Act, managed by trustees including the Prime Minister, and consists entirely of voluntary contributions without any Government budgetary support. The Court noted that contributions to PM CARES are voluntary and that its funds are separate from the NDRF. The Court declined to order the transfer of PM CARES funds to the NDRF.

Responding to concerns about audit mechanisms, the Court observed that while the NDRF is audited by the Comptroller and Auditor General of India (CAG), the PM CARES Fund, being a charitable trust, is audited by independent private auditors. This distinction is appropriate given their differing legal statuses.

Key Legal Takeaways:

- The November 2019 National Disaster Management Plan comprehensively addresses biological disasters including pandemics, thus no fresh plan is mandated for COVID-19.

- Existing guidelines for minimum standards of relief under Section 12 apply uniformly to all disasters, including COVID-19.

- The Government may utilize the NDRF for COVID-19 relief as per existing procedures and guidelines.

- Contributions to NDRF and PM CARES Fund are both permissible; PM CARES Fund is a voluntary charitable trust fund distinct from NDRF.

- No direction is warranted to transfer funds from PM CARES to NDRF.

This judgment underlines the Court’s approach of deferring to the Government’s expertise and institutional mechanisms in managing the unprecedented challenges posed by the pandemic while reaffirming the statutory framework under the Disaster Management Act.

Statutory provisions

Disaster Management Act, 2005 Sections 3, 6, 7, 8, 10, 11, 12, 23, 25, 37, 46

Centre For Public Interest Litigation v. Union of India (SC) : Law Finder Doc Id # 1736966