Ex- Gratia Payment to COVID Affected Families – Supreme Court Directs NDMA to Draft Guidelines

On his last day at the Supreme Court on 30th June,2021, Justice Ashok Bhushan, with Justice MR Shah, declared that it is mandatory for the National Disaster Management Authority (NDMA) to frame guidelines for payment of ex-gratia assistance to the families of those deceased due to COVID-19. While affected families have welcomed this decision, some critics have viewed it as judicial overreach. They argue that the question of ex-gratia payment is a financial one requiring many policy considerations, and so, it must be made by a representative, elected government. This article explains how the Court navigated the limits of its jurisdiction in this matter to arrive at this decision.

In a letter dated 14. 03. 2020., the Central Government declared the COVID-19 pandemic to be a “Notified Disaster”. This declaration allowed the Center to govern this disaster by using some exceptional powers granted to it in the Disaster Management Act, 2005 (henceforth, the Act). Along with exceptional powers, the Act also casts duties upon the Government to meet the needs of parties affected by the disaster. Section 12 of the Act casts upon the National Disaster Management Authority the duty to frame guidelines for a minimum standard of relief that the Central and State governments must provide to victims. One of the reliefs that Section 12 contemplates “shall” be included is ex-gratia payment to the families of those deceased due to the disaster. The petitioners argued that the word “shall” in Section 12 must be interpreted as “must”. Such an interpretation would lead to the understanding that the minimum standard of relief planned by the NDMA must mandatorily include ex-gratia payments.

The Central Government argued that “shall” must be interpreted as “may”, in this case. It argued that the nature of the COVID-19 pandemic is unlike anything imagined by the drafters of the Act. To match this unprecedented disaster, the NDMA had made the reasoned decision that the resources of the Government would be better utilized in relief measures such as vaccination drives, supply of ration, and advancement of healthcare infrastructure, rather than in ex-gratia payments. In light of this, the Government argued that while Section 12 mandated that the NDMA draft guidelines for minimum standards of relief, it could choose to disinclude ex-gratia payments from these guidelines. Since the nature of disasters differs across time and place, the content of the minimum standards of relief must be allowed for these differences.

The Court recognized that questions of utilisation of public money call for limited scope of judicial review. The Court observed that economic policy is made by a Government authority in consultation with various experts and stakeholders. The Court has no power to investigate the soundness of an economic policy decision, or to evaluate whether a policy decision is better than its alternative. The Court observed that it had limited power to interfere in the economic decision of a government authority only to review that the authority was acting legally, i.e. as prescribed for it in the legislation that granted it power. So, the Court in this case undertook to answer the following question- Is the NDMA acting illegally by not framing guidelines for the payment of ex-gratia relief to families of the deceased?

To answer this question, the Court had to decide whether the Act cast an obligation for framing guidelines for ex-gratia payment upon the NDMA. In this relation, the Court held that the objective of the Act was to mitigate the suffering caused by disaster. The Court observed that in case the objective of a statute was welfare,interpretation must be done to aid the distribution of benefits, and not to frustrate the objective. Accordingly, it interpreted that Section 12 was clear and unambiguous in its wording, and so, the “shall” would be read to mean “must”. The NDMA, hence, was statutorily obligated to include ex-gratia payment in its guidelines for minimum standards of relief. Since the NDMA had failed its obligation, it was appropriate for the Court to issue directions to force compliance with the Act.

The Court, hence, did not engage in any discussion about the social need for ex-gratia payment as a relief measure, or their effectiveness as an economic policy. It issued directions for the framing of these guidelines solely to ensure that a statutory body fulfilled its statutory obligations. It rejected the petitioners’ plea for fixing the amount of payment to 4 lakh rupees for every affected family by stating that it did not have the jurisdiction to dictate the quantum of relief.

On 16th August, 2021, the Court granted the Union Government an additional 4 weeks to frame the ex-gratia payment guidelines.