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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Shree Swaminarayan Mandir – Petitioner
Versus
Union of India – Respondent
W.P. (C) No. 8442, 9118, 9564/2021, C.M. APPL. No. 26155, 28372, 29593/2021
Decided On : 18-04-2023
FCRA - Foreign Contribution Regulation Act - Section 17(1) - Summary: The court addressed the issue of compliance with the amended Section 17(1) of the FCRA, which required organizations to receive foreign contributions only in an account designated as 'FCRA Account' by the bank. The court considered the timing of the amendment and the requirement to provide account details 'as on 31st March of the year ending' in Form FC-4. It held that organizations that opened their FCRA accounts after the amendment came into effect could still fill up the account details in Form FC-4 and submit the same without facing coercive action or penalty.
Fact of the Case:
The petitioners sought directions to the Ministry of Home Affairs to allow them to fill and upload Form FC-4 for filing annual returns for the financial year 2019-2020. They faced a technical deficiency as the form required the SBI account number 'as of 31st March 2020', which they could not provide due to opening their accounts after the amendment of the FCRA.
Finding of the Court:
The court found that organizations that opened their FCRA accounts after the amendment came into effect could still fill up the account details in Form FC-4 and submit the same without facing coercive action or penalty.
Issues: The main issue was whether the requirement to provide the SBI account number 'as of 31st March 2020' in Form FC-4 applied to organizations that opened their accounts after the amendment of the FCRA.
Ratio Decidendi: The court held that organizations that opened their FCRA accounts after the amendment came into effect could still fill up the account details in Form FC-4 and submit the same without facing coercive action or penalty.
Final Decision: The court permitted the petitioners to upload their annual returns for the year 2019-2020 by specifying the SBI account number of the account which was subsequently opened by them. No penalty would be charged if the returns were uploaded within one month from the date of the judgment. The petitions were disposed of accordingly.
JUDGMENT :
PRATHIBA M. SINGH, J.
1. This hearing has been done through hybrid mode.
2. The present petitions have been filed by Shree Swaminarayan Mandir, Kutch Nav Nirman Abhiyan and Shri. Swaminarayan Dwishatabdi Medical & Charitable Trust seeking directions to the Respondent - Ministry of Home Affairs, Union of India to allow the Petitioners to fill and upload Form FC-4 on the Respondent's portal in order to enable them to file the annual returns for the financial year 2019-2020.
3. The Foreign Contribution Regulation Act, 2010 (FCRA) was amended by the Foreign Contribution Regulation (Amendment) Act, 2020, under which substantial changes were brought. The same was notified with effect from 29th September, 2020. Section 17(1) of the FCRA was amended to provide as follows:
4. Pursuant to the said amendment of the FCRA, notification was issued by the Respondent on 7th October, 2020 specifying that the State Bank of India (SBI), New Delhi Main Branch, 11, Sansad Marg, would be the branch for opening of FCRA account as per amended Section 17 of the FCRA. Correspondingly, on November 10, 2020, the FCRA Rules were also amended vide Foreign Contribution (Regulation) (Amendment) Rules, 2020 such that the Form FC-4 (Annual Returns) reflected the amended Section 17. The said FCRA account was to be opened at the latest by March 31, 2021 which was extended till 30th June, 2021 by way of a notification dated 18th May, 2021.
5. The case of the Petitioners is that the SBI accounts with the SBI, Sansad Marg Branch were opened by them on the following dates:
(ii) Kutch Nav Nirman Abhiyan - 23rd March, 2021
(iii) Shri. Swaminarayan Dwishatabdi Medical and Charitable Trust - 25th March, 2021
6. However, in view of the fact that the annual returns for the years 2019-2020 were to be uploaded in Form FC-4 for which SBI account as of 31st March, 2020 was needed, the details of the SBI bank account could not be given. The submissions of the Petitioners is that the FCRA amendment itself came into effect in September, 2020 and six months extension was also given for the purposes of opening the bank accounts in SBI. Thus, the SBI account opened later could not be filled by them ‘as of 31st March 2020’, which was the requirement as per the Portal.
7. Thus, the Form FC-4 had a technical deficiency as it was asking for the account number in SBI prior to the introduction of the amendment itself.
8. In the present petition, vide order dated 16th August, 2021, notice was issued in this matter and a direction was given to the Respondent that no coercive action shall be taken against the Petitioner for non-filing of the returns.
9. Since then, a short affidavit has been filed by the Respondent. As per the Respondent, the FCRA amendment required all organisations which were receiving foreign exchange to comply with the same. Pursuant thereto, in terms of the affidavit 826 NGOs of Gujarat have already filed their returns for 2019-2020 within the prescribed period. From all across the country, 14,775 NGOs have filed their annual returns for the said year. Therefore, according to the Respondents, there was no glitch or error in the Form FC-4 thus the writ petitions are not maintainable.
10. The Court has heard the ld. Counsels for the parties. The short issue is whether the SBI bank account could have been sought for as of 31st March 2020, when the amendment itself came into effect later i.e., in September 2020. It is noticed
Organizations that opened their FCRA accounts after the amendment came into effect could still fill up the account details in Form FC-4 and submit the same without facing coercive action or penalty.
The delayed opening of the FCRA bank account and subsequent actions of the petitioner influenced the court's decision in validating the uploaded annual return without further penalties.
The court's decision was influenced by the interpretation of FCRA 2010, Section 12(4) and previous case law regarding the timing of bank account openings and filing of returns.
Mandamus cannot be issued for withdrawal of funds from FCRA account post-registration cancellation when statutory provisions vest authority with the government.
Delay in filing annual returns under the Foreign Contribution (Regulation) Act constitutes non-compliance and is subject to penalties; however, penalties cannot be imposed retrospectively for actions....
Point of law : By the time suspension order was passed, the Central Government had neither issued any notice of hearing / Show Cause notice in terms of sub-section (2) of Section 14 nor had it initia....
An appeal under Section 31(2) of the FCRA, 2010 is maintainable against the rejection of a renewal application, emphasizing the necessity for clear reasoning in rejection orders.
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