Tuesday, 10 January 2017

Compliance Under Lokpal Act Postponed Indefinitely

No need to file declaration of assets before 31st December 2016 

There was a lot of anxiety and panic in the nonprofit sector across India around compliance under the Lokpal Act before the 31st December 2016 deadline. As usual certain ‘professionals’ and ‘consultants’ had even started to advertise tutorials on “how to comply”. However based on our previous discussions with the government, we, at CAP, were reasonably certain that the date for compliance would be extended and indeed that has been the case.

CAP has also refrained from filing any writ petition in the court because we found that the authorities were quite responsive and sympathetic to the grievances which those within the sector had submitted earlier.

As per Office Memorandum (OM) dated 8th December 2016 issued by the Ministry of Personnel, Public Grievances and Pensions Department of Personnel and Training, Government of India: “There is no requirement for filing of declarations of assets and liabilities by public servants now”.

Further, according to the OM, the government is under the process of “finalizing a fresh set of rules” and the same would be notified in “due course”.

No specific deadline has been given within which the fresh rules will be framed. Hence, until the new Rules are framed and notified, one may simply stay alert and tuned in, but, do nothing more by way of compliance under this Act.

We are reasonably certain that given time, more reliefs will come our way. 

CAP’s Analysis and Advisory:
1) According to the OM of 8th December 2016, the government has withdraw the requirement for “Public Servants” to disclose their income and assets for the present until Government notifies a new set of rules.

2) However, since there is no amendment made to Section 14(1) g and h of the Act, trustees, officers, etc., of organisations receiving more than ten lakhs rupees under FCRA 2010 or more than one crore rupees by way of grant from central government will continue to be deemed ‘Public Servants’, though the disclosure requirement in the interim has been withdrawn. 

3) Our line of argument with the government continues to remain consistent -- persons covered under section 14(1) g and h should not be deemed as public servants as defined by the Act since they neither draw a salary from the public exchequer, nor are they appointed by the government and nor do not have the authority or representational character of a typical public servant from whom the Act was originally meant.

4) Much as we appreciate the interim relief provided, arduous requirements could once again be reintroduced by the government by way of a notification and hence it is strongly recommended that Section 14(1)h should be completely rescinded because there are more than adequate compliances and disclosures already in force under FCRA 2010. Besides, how does a trustee or an officer of charitable organization become ‘public servant’, simply because funds are received by the organization for charitable purpose/s from private foreign source/s?

5) Where Section 14(1)g is concerned, the issue pertains to grants from central government. However, the one crore rupees limit is too low. The threshold should be substantially raised. Also, for the purpose of improving oversight, the government could appoint government nominees to oversee and report to the government on utilization of such government grants.

CAP will continue to persuade the government in this matter along with other sector networks like VANI and industry bodies like CII. In the meantime, readers are requested to follow our blog for updates.

"To avail of any legal advisory contact us at connect@capindia.in"

No comments:

Post a Comment