Why are Indians denied ex gratia compensation for Covid-19?

Covid 19 Image Courtesy:livelaw.in

The Union government had made a submission before the Supreme Court that it would not paying ex-gratia compensation to families of persons deceased due to Covid-19. The court then passed a judgement that the Central authority under Disaster Management Act (DMA) has to issue guidelines on payment of compensation to these families.

The initial stand taken by the Union government was that it was not financially feasible for it and for the states to give such compensation and that it had to invest in long term infrastructure for health. However, on the day of the final hearing, on June 30 the Centre took a different stand and stated that the issue was of priority and making optimal use of the financial resources in the face of an on-going and unprecedented disaster, and not just financial ability.

While the arguments made by the Centre seem logically sound, do they stand the test of closer scrutiny of both constitutional and statutory mandate? Does the Supreme Court’s judgement make up for the lacunae in policy and will the people in need who have lost family members to Covid-19 have their rights safeguarded? We explore whether the Supreme Court’s judgement has actually brought some or any relief and whether the Centre can shirk off its liability after declaring Covid-19 as a notified disaster.

The two PILs filed by Reepak Kansal and Gaurav Bansal inter alia, seek ex gratia monetary compensation of Rs. 4 lakhs each to families of deceased who succumbed to Covid-19 under section 12 of the DMA.

Other reliefs included issuing directions for the issuance official document to families of deceased stating cause of death as Covid-19 and also a mandamus against the Union government to provide social security and rehabilitation to these families.

Why is it the Centre’s responsibility?

A question often raised is, why does the Centre have to do everything? States are managing the pandemic at the state level and public health is also a state subject; why then expect the Union government to compensate the aggrieved families. The answer lies not just in law but also in policy. The Union government’s policy from day one of the outbreak, has been to assume full control/responsibility and to centralise things. It was the central government that decided to impose a nation-wide lockdown without consultations with the state — forming an Inter-State Council– or even giving an advance time-frame or warning to the states or citizens. The lockdown thereafter kept getting extended for months until states were given (or left in) charge to manage on their own. It was the Union Home Ministry that declared Covid-19 as a “notified disaster” under the DMA so that assistance could be provided to states under the State Disaster Response Fund (SDRF).

The liability also lies in law as the Union Home Ministry had on April 8, 2015 issued a communication that stated that for any death which is caused due to disaster, an amount of Rs. 4 lakhs has to be paid to the victim’s family, in addition to other reliefs. Section 12 of DMA mandatorily provides for the National Authority defined under Section 3 of the said Act to recommend guidelines for the minimum standards of relief to be provided to persons affected by the disaster and it shall include, inter alia, ex gratia assistance on account of loss of life.

The arguments made during the hearing sum up correctly why this compensation is impending and a writ of mandamus upon the central authority is a valid ask. The counsel for the petitioner submitted that the word “shall” occurring twice in Section 12 of the Act puts a constitutional and statutory obligation on the part of the Central/State Government to recommend guidelines for providing ex gratia assistance which is in the nature of sustenance assistance. It was also stressed upon that this is also a constitutional obligation under Article 21 of the Indian Constitution as right to life stands affected in the given scenario.

Section 12 of the DMA states as follows:

The National Authority shall recommend guidelines for the minimum standards of relief to be provided to persons affected by disaster, which shall include:

(i) the minimum requirements to be provided in the relief camps in relation to shelter, food, drinking water, medical cover and sanitation;

(ii) the special provisions to be made for widows and orphans;

(iii) ex gratia assistance on account of loss of life as also assistance on account of damage to houses and for restoration of means of livelihood;

(iv) such other relief as may be necessary.

One other submission made by the petitioners rightly points to the purpose of DMA which is to provide social security & social insurance to the persons and families affected by disasters. Thus, denying the ex-gratia payment to the families of Covid-19 deceased shall not only hit on the foundation stone on which DMA 2005 is standing, but shall also defeat the whole purpose of DMA 2005. Giving compensation to these families who in many cases have lost the sole breadwinner of to the disease, would serve the letter and spirt of DMA and would also give them a sense of social security.

Did the Centre shirk off its responsibility?

During one of the hearings, Centre had assured the court that it will attend to the concerns as the issues are genuine. However, on the hearing held on June 20, the Central government filed an affidavit stating that it will not be giving ex-gratia compensation in Covid death cases where the number of deceased has crossed the figure of 4 lakhs and counting. The Centre reasoned that the finances of both the Union and state governments are under severe strain due to reduced tax revenues and increased expenditure on health infrastructure and looking at the scale of deaths, it would not be wise to spend such scare financial resources on compensation.

Furthermore, the Centre also cautioned courts from intervening in policy matters. “It is well settled through numerous judgments of the Supreme Court that this is a matter which should be performed by the authority (National Disaster Management Authority), to whom it has been entrusted and not one where the Court will substitute its own judgment for the decision to be taken by the Executive. Any attempt to second guess may create unintended and unfortunate Constitutional and administrative ramifications,” the affidavit read.

The Centre also washed its hands off the liability by pushing the same on states while reasoning that health is a state subject and burden would be on SDRF to pay such compensation. For all states combined, the total budget allocated to SDRF this year comes to ₹22,184 crore. “If the entire SDRF funds get consumed on ex-gratia for Covid-19 victims, the States may not have sufficient funds for organizing Covid-19 response, for provision of various essential medical and other supplies, or to take care of other disasters like cyclones, floods, etc,” the Centre submitted.

The Centre also justified declaring Covid-19 as “notified disaster” under DMA stating that it was done as a special one-time dispensation in order to supplement efforts of state governments. The Centre also contended that there was no precedent for granting ex gratia compensation for an on-going disease extending for months or years and stated that if compensation is provided for this disease, denying compensation in other diseases would be unfair.

The Centre also took a stand that the term “shall” used in section 12 of DMA will have to be read as “may”. The submissions made by the petitioners counter this stand, and stated that the use of the word “shall” has been made twice in the section 12 which clearly indicates the intention of the Parliament that the National Disaster Management Authority (NDMA) is not only bound to recommend guidelines for the minimum standards of relief but such reliefs must contain the provisions of ex gratia assistance on account of loss of life.

During the hearing on June 30, Solicitor General Tushar Mehta on behalf of Union government submitted that the issue is not of fiscal affordability but of the most rational, judicious and optimum usage of fiscal and all other resources of the nation. He submitted that question is of priorities and it should not be misconstrued that government is contending facing financial constraint. He stated that in an ongoing disaster like Covid-19 views on “Minimum Standards of Relief”, under Section 12 will differ and the government will have to broaden its vision providing for a multi-pronged approach and putting life, health and safety of the citizens at the topmost priority, for which expenditure is needed on a daily basis. He submitted that it was advisable not to formulate a strait jacket guideline and a cast in stone formula on “Minimum Standards of Relief” with respect to Covid-19.

Can a govt claim fiscal strain against liability?

The answer lies in precedents of the Supreme Court. In Municipal Council, Ratlam vs Vardichan And Ors (1980) 4 SCC 162, the court had observed that the plea that “notwithstanding the public nuisance financial inability validly exonerates it from statutory liability has no juridical basis”. Justice Krishna Iyer had stated in the judgement, “the law will relentlessly be enforced and the plea of poor finance will be poor alibi when people in misery cry for justice”.

Also, while the Centre contended that the compensation would strain state governments, there are states like Bihar, Karnataka and Delhi which are paying one time compensation in the form of ex gratia to those families whose members have died due to Covid-19.

In Charan Lal Sahu v. Union of India, (1990) 1 SCC 613 (popularly known as “Bhopal Gas Leak Disaster case”) the court had held that the Government has the sovereign power of guardianship over the persons under disability and it is its duty to protect them.

Was the Supreme Court convinced?

On June 30, the bench of Justices MR Shah and Ashok Bhushan was in agreement with the submissions made by petitioners that the use of the word “shall” in section 12 of DMA makes the provision unambiguous and statutory enactments must ordinarily be construed according to its plain meaning and the beneficial provision of the legislation must be literally construed so as to fulfil the statutory purpose and not to frustrate it.

The court observed that the NDMA has not yet issued any guidelines for ex gratia assistance on account of loss of life due to Covid-19 and deemed it to be a failure on its part to perform its statutory duty cast upon by section 12 of DMA.

The court, however, also agreed that Covid-19 is a peculiar kind of “disaster” and there is a need to focus simultaneously on prevention, preparedness, mitigation and recovery, which calls for a different order of mobilisation of both financial and technical resources. The court thus observed that there is no justification to mandate the government to provide ex gratia compensation of Rs. 4 lakhs to affected families as the impact of Covid-19 is different from other disasters. It said,

“The Courts would be very slow to interfere with priorities fixed by the government in providing reliefs, unless it is patently arbitrary and/or not in the larger public interest at all. The Government should be free to take policy decisions/decide priorities (of course to achieve the ultimate goal of DMA 2005, government should be free to take its own decisions/priorities while providing minimum standards of relief and even towards preparedness, mitigation, prevention and recovery), subject to the availability of the resources/funds and the amount to be spent towards other reliefs on the aid and advice of the experts and looking to the circumstances from time to time. Therefore, no relief can be granted to direct the National Authority/Central Government/State Governments to pay a particular amount towards ex gratia assistance on account of loss of life to the family members of the persons who have died due to Covid-19.”

The court observed that it should be left to the wisdom of National Authority while considering the guidelines/recommendations of the Finance Commission in its XVth Finance Commission Report and the funds required for other reliefs/priorities but it has to consider issuing/recommend guidelines on ex gratia assistance on account of loss of life.

What amount to be paid by way of ex gratia assistance to the family members of the persons who died due to Covid-19 pandemic should be left to the National Authority/Central Government, the court held.

The court, however, skirted around the issue of whether receiving compensation was a matter of statutory right or even a constitutional right. It did not delve deep into the matter of rights of the affected families and deferred from declaring the right to receive compensation under DMA in the face of disasters as defined under the Act.

Is it fair to pressure the government to give compensation?

The defense of fiscal strain has already been raised by the government and it has submitted that giving compensation to such a large and growing number of deceased persons succumbing to Covid-19 would be a drain on the exchequer. While that is a valid point, it is not a legally viable defense to be put up by a democratically elected government working ‘for the people’. The fundamental rights of citizens in a democracy are sacrosanct and the right to life under Article 21 is indefeasible under any circumstance. Thus, the government’s defense even if it sounds logical, does not have a legal sanction. There is no law the government can harp on while making such claims and neither has any Supreme Court precedent supported the same in the past. Thus, making the government’s argument baseless and unfounded. Additionally, it is not just the fundamental rights that are being enforced here but the provisions of the DMA as well. When the Centre has, on its own accord declared Covid-19 to be a “notified disaster” it cannot cherry pick provisions that is suitable to its financial ability. If the government has given compensation in disasters like floods or earthquakes, the same principle, if not applied for Covid-19 would be unfair and an unreasonable classification which is not even provided for in the law. The law makes no exceptions and neither can the government.

The Supreme Court judgement may be read here: