Asks govt. to book those that fudged accounts, swindled money
The Supreme Court on Tuesday directed the government to audit nearly 30 lakh NGOs which received public funds but consistently failed to explain how they spent the money.
A Bench of Chief Justice of India J.S. Khehar and Justices N.V. Ramana and D.Y. Chandrachud was hearing a writ petition filed by advocate Manohar Lal Sharma.
It ordered that any NGO found to have cooked its books or indulged in misappropriation should be subject to immediate criminal prosecution. Besides, the government should initiate civil recovery proceedings against such rogue organisations.
The Supreme Court demanded that the government file a compliance report by March 31, 2017.
The judicial order is unprecedented because defaulting NGOs so far have been only blacklisted by the government. Pulling up the government for failing to put in place a regulatory mechanism to keep a watch on the financial activities of NGOs and voluntary organisations, the apex court ordered that by next hearing, the government should have framed guidelines for their accreditation, the manner in which these organisations should maintain their accounts and the procedure for recovery in case they fail to submit their balance sheets.
Though public funds to the tune of thousands of crores are spent on NGOs and voluntary organisations annually, the CBI submitted that only about three lakh of about 32 lakh NGOs file their balance sheets with the government.
At one point, the court was taken aback when it found that despite the large amounts drawn from State coffers and given to NGOs, the government seemed to be unaware that General Financial Rules, 2005 mandate a regulatory mechanism for them. “This is your [government] money and you have no record of how they [NGOs] use it?” Chief Justice Khehar asked the government.
In the forenoon, when the government sought an adjournment to produce records of the NGO audits, the Bench instead ordered the Rural Development Secretary and Director of Council for Advancement of People’s Action and Rural Technology (CAPART), which comes under the Rural Development Ministry, to be present before it at 2 p.m.
“There can be no doubt that the amounts disbursed by CAPART is public money and needs to be accounted for... the only exercise so far against those who have failed to file their balance sheets is blacklisting. It is necessary to start criminal and civil action by the Central government and CAPART,” the Supreme Court said.