Indian Kanoon - Search engine for Indian Law

23. In the counter affidavit, the respondent has stated, that it administers the FCRA, 2010 to regulate receipt and utilisation of foreign contribution by Indian entities like NGOs, Non-Profit Organisations, Voluntary Organisations, etc.

24. That FCRA, 2010 is internal security legislation that casts an obligation on the Central Government to ensure that receipt and utilisation of foreign contributions do not in any way affect, prejudicially, the governance structure and processes of all the organs of the State. The entities that receive and utilise foreign contributions have to fulfill various conditions provided under Section 12(4) of the FCRA, 2010. They are also required to maintain an exclusive and proper account of utilisation of foreign contribution which is auditable as per Section 20 of the FCRA, 2010 and is also liable for inspection of their records and activities by authorised officers of the Central Government as provided under Section 23 of the FCRA, 2010.

25. The FCRA registration of the petitioner was granted vide letter dated September 03, 1993, and was subsequently renewed on October 28, 2016, and was valid up to October 31, 2021. It is submitted that the grant of FCRA registration to NGOs / Associations under Section 12 of the FCRA, 2010 and its subsequent renewal / continuation under Section 16 of the FCRA, 2010 is subject to fulfillment of terms and conditions as envisaged under the FCRA, 2010. In the present matter, the petitioner's association has come under adverse notice of the respondent through the inputs of the security agency. It is stated by the respondent that the security agency inputs in a sealed cover are submitted before this Court at the time of the preliminary hearing on June 26, 2021, which suggests that the petitioner's association is involved in such other activities, that are grave in nature and carry potentially serious violation of the provisions of the FCRA, 2010 and rules made thereunder.

c. That the petitioner's association had not intimated FCRA utilisation bank account in the Annual Return for the FYs 2016-2017 and thereby violating Section 19 of the FCRA, 2010.

d. That the petitioner association has refunded some unspent foreign contribution back to the donor in the FYs 2013-2014 and thereby violating Section 8(1)(a) of the FCRA, 2010. e. That the petitioner's association has mixed local / domestic and foreign donation in the FCRA utilisation bank account and thereby violating the third proviso to Section 17(1) of the FCRA, 2010.

33. It is submitted by Ms. Aishwarya Bhati, learned Additional Solicitor General reiterating the above stand:

i. That the power under Section 13 of the FCRA, 2010 for suspension of certificate is not predicated on the issuance of Show Cause Notice under Section 14(2) of the FCRA, 2010. Moreover, Section 13 empowers the Central Government to suspend the certificate of registration of a defaulting organisation "pending consideration of the question of cancelling the certificate on any of the grounds mentioned in Section 14(1)" after recording reasons in writing. That the period for suspension cannot exceed 180 days at first instance or for a further period not exceeding 180 days. ii. It is submitted that during the period of suspension, the Central Government may permit receipt and / or utilisation of foreign contribution if considered appropriate. Further, under Rule 14 of the FCRR, 2011 up to 25% of the unutilised amount may be spent during suspension with prior approval of the Central Government, whereas the remaining 75% only after revocation of suspension. Vide order dated July 29, 2021, of this Court, the petitioner has been permitted to utilise 25% of the amount lying in its custody as foreign contribution. Section 14(1) of the FCRA, 2010 empowers the Central Government to, after making "such enquiry as it may deem fit", cancel the certificate of a defaulting organisation for the reasons prescribed. Moreover, Section 14(2) of the FCRA, 2010 mandates that no order for cancellation of the certificate under this section shall be made unless the person concerned has been given a reasonable opportunity of being heard. iii. It is also submitted that it is therefore clear that consideration under Section 14 of the FCRA, 2010 starts as soon as an inquiry is initiated, as deemed appropriate by the Central Government under Section 14(1), and not when the Show Cause Notice is issued under Section 14(2). The mandate of Show Cause Notice is contemplated as the penultimate stage before an order of cancellation is passed.