New Delhi, July 22 - The Supreme Court on Friday dismissed a petition by NGO…
NEW DELHI(PTI): Government on Tuesday faced some tough questions for failing to evolve a regulatory mechanism to monitor thousands of crore worth of funds of over 32 lakh NGOs, societies and voluntary organisations, with the Supreme Court saying public money cannot go unaccounted and those misappropriating it must be prosecuted.
Taking umbrage to the fact that no steps have been taken to evolve a regulatory mechanism even after the lapse of six years since a PIL was filed, a bench headed by Chief Justice J S Khehar said the Centre and its departments were doling out crores of rupees but were not aware of the repercussion of non-auditing. The bench, which comprised Justices N V Ramana and D Y Chandrachud, also warned that “mere blacklisting” of these organisations would not suffice and civil and criminal action should be initiated for misappropriation of public money received by them from various government departments.
It said the misconception in the mind of the Centre and its departments on the issue of CAG auditing and complying with the General Financial Rule, 2005 made by the Finance Ministry, have to be removed and directed the competent authority to come out with guidelines and rules for a regulatory mechanism by March end “under any circumstances”. The bench noted that such action must be taken by the Centre and CAPART, which comes under the Ministry of Rural Development which has been instrumental in granting the funds.
“We consider it appropriate to direct the Centre and CAPART to complete the excercise of auditing and submit the report by March 31, under all circumstances,” the bench said. “There can be no doubt about the fact that the amount disbursed by CAPART/other government departments is public money and must be accounted for,” it said, adding that so far, the only exercise or action carried out in case of non- submission of balance sheet/returns is “merely blacklisting”.
In case of non-compliance of auditing and other rules, necessary civil and criminal action has to be initiated where public fund is received from CAPART or government departments and misappropriated, it said. The apex court said on next date of hearing on April 5, it expected the Centre to place before it the guidelines and rules for accreditation of voluntary organisation and detailing the manner in which they shall maintain their accounts, conduct the audit, the process of recovery and methodology of recovery of the amount in case of misappropriation and criminal proceedings. At the outset, the bench asked the Centre “how do you regulate the NGOs which get the money. It’s government money. Tell us how you regulate it and we will dispose of the PIL”.Additional Solicitor General Tushar Mehta said there were broadly three categories — contribution received by NGOs from abroad for which there are regulations, funds received from local bodies/societies/trusts for which there is no auditing and thirdly, these bodies collect money from local people for which also there are no regulations.
“When you yourself are saying there are no regulations, then why have you not come out with the mechanism. Till now, there is no mechanism. Let a mechanism come and thereafter amicus curiae and you (ASG) will assist. We will see what can be done and what progress has been made in terms of regulation,” the bench said. “When government fund is disbursed, why don’t you see what has happened to your money? It is public money. How can you do this with public money,” the court asked.
The apex court also took note of the fact that an Under Secretary rank officer has filed the affidavit and asked the ASG to ensure that officer of the rank of joint secretary or additional secretary files the affidavit. Amicus Curiae Rakesh Dwivedi said CBI has filed a status report showing how many NGOs have not filed the audit report and how many of them have not filed utilisation certificates.
“Huge amounts running into thousands of crores are doled out to these societies. There has been a case that many of them, after getting the grant, do not come back and they are merely blacklisted”, Dwivedi said. He said around Rs 9,000 crore has been disbursed to NGOs, societies, voluntary organisations from 2002-03 to 2008-09. “Union of India has disbursed Rs 4,756 crore. States have disbursed Rs 6,654 crore. Rs 950 crore on an average has been disbursed per year”, the amicus said. He referred to a report of Asian Center for Human Rights and said that several projects did not achieve the target and there was no pre-funding apprisal by Council for Advancement of People’s Action and Rural Technology (CAPART).
The bench also asked the amicus whether CAG audit of these funds takes place and what is the status after 2009. “You must be giving the money and seeking the utilisation certificates and auditing. There is a report of funding from 2002-03 to 2008-09 about the money given to the voluntary organisation, societies and NGOs and certificate of utilisation. But there is nothing to show what happened after 2008-09. “You have to see whether CAG auditing has been done or not. If CAG suggests that there was no utilisation certificate, what has been done,” it said.
When the bench directed the Rural Development Secretary and Director of CAPART, which comes under Rural Development Ministry, to be present before it this afternoon with all relevant records, the ASG sought postponement of the hearing till Friday. But the bench did not agree and insisted that the concerned officials should come up with the relevant records of CAG and other material today itself.
“Government is very slow. In every case you are seeking adjournment. You should have put the mechanism in place. Do it at least now, for the future,” the apex court said. “You have to bring the material (CAG report). It’s a part of the record. So much of money. Thousands of crores and no record? The matter will go on and we have to take a call. We can’t allow it to go into a flux. Something has to crystalize. Things will not go this way,” it observed.ASG Tushar Mehta said “there is a complete lack of coordination among various government departments and I am embarrassed due to this”.
The bench said “we will lay down the guidelines and rules you have to implement. There is a General Financial Rule 2005 made by the Ministry of Finance”. The amicus said there were an overwhelming number of societies which have not filed their audit reports, and they have to be prosecuted since public money is involved and Prevention of Corruption Act could be invoked when the amount was over Rs one crore.
“Government is using them for itself. We are saying so, so that they respond,” the bench said on a lighter note. The apex court has been seized of the matter for nearly five years and had ordered CBI to probe into charges of misappropriation of funds by many NGOs. CBI had in September 2015 informed the apex court that less than ten per cent of over 30 lakh NGOs functioning across the country had submitted their returns or balance sheets and other financial details to the authorities. The apex court had expanded the scope of the PIL, filed in 2011 against an NGO, Hind Swaraj Trust, run by anti- corruption crusader Anna Hazare. The PIL had sought probe into alleged embezzlement of funds.