Thanks to the manner in which Parliament was pushed to pass The Lokpal and Lokayuktas Act (Lokpal Act) in 2013, all NGOs receiving more than Rs.1 crore (Rs. 10 million) funds from the Government and all foreign funded NGOs receiving foreign contribution of Rs. 10 lakhs (Rs. 100,000) or more, annually, are now covered by this Act. The problems that the Lokpal Act creates than seeks to solve in relation to the social sector are outlined below.
The manner of coverage of NGOs under the Lokpal Act
Under Section 14(1)(g) and (h) a director, manager, secretary or officer of any association or trust whether registered or not, receiving government funding or foreign funding will be a "public servant" for the purpose of:
1) prosecution of offences of corruption identified under the Prevention of Corruption Act, 1988; and
2) declaring movable and immovable assets for self, spouses and dependent children every year under Section 44 of the Lokpal Act.
In June, 2016, the limit of Rs. 1 crore on government funding was notified by the Central Government for such NGOs. The Rs. 10 lakh limit for foreign funded NGOs is already mentioned in Section 14(1)(h) itself. The Union Home Minister is the competent authority for such foreign funded NGOs. However, the June notification for foreign funded NGOs merely requires them to continue reporting on receipt of foreign contribution until it is fully utilised. There is no mention of the manner of disclosure of assets for the officers and employees of such NGOs.
The assets declaration format was notified in July 2014. Public servants need not declare assets valued below Rs. 2 lakhs. Since this notification the timeline for submission of assets returns has been extended multiple times. I can think of at least two reasons for this repeated extension:
1) A Bill to amend the Lokpal Act (even before it is implemented) was examined by the Parliamentary Committee on Personnel, Public Grievances, Law and Justice. One of its recommendations includes amending Section 44 to prevent disclosure of assets of spouses and dependents that is unrelated to the income of the public servant. The Committee has also recommended that such declarations be kept confidential instead of being disclosed on websites as is the current requirement under Section 44.
2) One of the spouses of a public servant has challenged Section 44 of the Lokpal Act in the Delhi High Court on grounds of privacy. The Bench issued an interim order requiring her assets declaration to be submitted in sealed cover until the case is disposed of. The next hearing in this case will be held after the Court reopens this month. In March this year the Court was told that about the Parliamentary Committee's recommendation. So the Court is probably waiting to see the Government's next move.
There might be others who have challenged Section 44 of the Lokpal Act. I am not aware of those cases. Readers may know of other reasons for the timeline extension. Please do educate me about them.
If NGO officers covered by the Lokpal Act do not declare their assets partially or wholly, then Section 45 of the Act presumes that they have been acquired through corruption. This implies that a complaint of corruption may be entertained by the Lokpal against such individuals.
Practical problems of covering NGOs under the Lokpal Act
It is not my case that NGOs should not be made accountable for their actions. Every person whose actions directly affect another person, should be accountable to that person, in particular and to others, depending upon who is indirectly affected by such actions. But such accountability must be clearly laid down and not left vague and subject to multiple interpretations. There are multiple practical problems in treating NGOs office-bearers as "public servants" under the Lokpal Act:
1) Lokpal and the Lokayuktas can only look into complaints of "corruption" as described under various sections of the Prevention of Corruption Act, 1988 (PCA). To the best of my knowledge, except for the offence of "abetting corruption", no NGO office-bearer can be accused of committing these offences as they simply do not wield the kind of public power and discretion vested in civil servants and other public servants such as elected representatives, judges and employees of public sector undertakings and universities and other autonomous entities under the Central or State governments. The 2013 amendments to the PCA tabled in the Rajya Sabha do not expand the definition of the term "public servant" anywhere in the Bill. However the 2013 Bill seeks to bring "public function" or a "public activity" committed by a "public servant" within the ambit of the anti-corruption law. Amongst the expansion of offences sought to be recognised as corruption, bribing a public servant to "improperly perform a public function or activity" appears quite prominently. Many readers, including some anti-corruption experts have understood this as criminalising "coercive bribe giving" where a poor person is forced to give a bribe to a public servant to access some benefit under a social welfare programme. This is not the correct interpretation of that clause. Only "collusive bribery" is sought to be criminalised by the Bill- where the rich may bribe an official to do something which is improper or even illegal.
Further, a specific clause making commercial organisations liable for prosecution for giving bribes or inducement is also proposed to be made an offence. However there is no reference to NGOs or CSOs in this Bill. Given this lack of clarity about which actions of NGOs will be deemed "corrupt" how their office bearers may be prosecuted for offences of corruption is a big question.
Article 20(1) of the Constitution guarantees this fundamental right to all persons, including NGO officers and employees:
"No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence."
So unless the PCA defines clearly, which actions of NGO officers and employees will amount to corruption, prosecuting them for offences other than for abetting corruption would amount to a violation of their fundamental rights. There must be clarity on how PCA will be applicable to NGOs except in the context of abetment of corruption. In the absence of such clarity, merely declaring them "public servants" does not serve much purpose.
2) Section 44 of the Lokpal Act requires every public servant to make the first round of declaration of assets after taking the oath of office at the time of recruitment. Obviously, the oath will be one of allegiance to the Constitution and other laws of the land and to observing secrecy in the case of Ministers and civil servants. To the best of my knowledge no such oath is taken by NGO officers and employees as they do not perform public functions or wield public power in the manner of civil servants. So how will this provision be implemented in the NGO sector is not clear. Next, Section 44 leaves it to the "competent authority" in every Ministry/Department to ensure that the assets declarations are uploaded on the official website. How will this provision will apply to NGOs is not clear. Will the Union Home Minister be the 'competent authority' to receive and upload assets returns of thousands of employees of foreign funded NGOs?
3) Further, officers and members of political parties cleverly kept themselves out of the ambit of the Lokpal Act. Section 14(1)(h) as passed by the Lok Sabha applied to any association that "received public donations". This clause clearly brought political parties under the Lokpal. But the final version approved by Parliament in 2013, dropped this phrase. So politicians got their parties out of the ambit of the Lokpal Act while keeping NGOs and CSOs. Unfortunately, Courts do not go into such motives that are not expressly indicated in the language of the law or that can be inferred form the law. If challenged Courts will only say that it was legislative policy to keep political parties out of the jurisdiction of the Lokpal, period and that cannot be questioned. Even though the very raison d' etre of political parties is to represent the people, their officers will not be treated as "public servants". This is the irony of the Lokpal Act.
Laws like the Lokpal Act are to be designed to bring clarity about how public behaviour is to be regulated, not add more confusion to it. Further, the Government scored a self goal when it succeeded in keeping the post of the Leader of the Opposition (LoP) in the Lok Sabha vacant. My analysis on how this is an incorrect reading of the law was circulated in 2014 when this needless controversy was brewing. As a result of this political grandstanding, the selection committee could not be constituted to appoint the Chairperson of the Lokpal and other members of that body. Now the Lokpal Act is sought to be amended to make the leader of the single largest party in Opposition a member of the selection committee for appointing the Lokpal when there is no recognised LoP in the Lok Sabha. So the electoral promise of setting up the Lokpal has been delayed by almost 3 years. This amendment Bill did not even come up for discussion during the last budget session of Parliament. While there is no Lokpal to look into complaints of corruption against those in government, the law is being pushed down the throats of NGOs. There is an urgent need of debate on all things relating to the Lokpal Act.
NGOs must not be misunderstood as opponents of their own accountability. However, there must be clarity in the application of the law and also a clear understanding of what is "public function or activity". If not NGOs working for the protection and fulfillment of the rights of the most deprived and marginalised will be targetted through these provisions. Is this the "rule of law" and "equal treatment before the law" that the Constitution guarantees every person? We need to debate this issue urgently.