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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Helping Hands Jaipur Society – Appellant
Versus
Union of India & Anr. – Respondents
W.P.(C) 948 of 2022 and CM Appls. 2724 of 2022, 24305 of 2023
Decided On : 11-05-2023
FCRA - NGO Registration Renewal - Section 11, 12, 16, 17(1) - The court discussed the FCRA Amendment Act, 2020, specifically Section 17(1) which mandated the opening of an 'FCRA bank account' with the State Bank of India branch at SBI Sansad Marg, Parliament Street, New Delhi. The court also highlighted the difficulties faced by the petitioner in uploading the FCRA annual return due to delayed opening of the designated bank account and the subsequent penalty imposed. The court's decision was influenced by the interpretation of the amended provisions and the petitioner's actions in opening the bank account.
Fact of the Case:
The petitioner, an NGO, faced difficulties in uploading the FCRA annual return due to delayed opening of the designated bank account. The court was informed that the penalty amount was deposited by the petitioner, and the annual return was subsequently uploaded.
Finding of the Court:
The relief sought for in the petition became infructuous as the petitioner had opened the FCRA bank account, deposited the penalty, and uploaded the annual return. The court found that none of the previous cases decided by the court would be applicable in the present case.
Issues: The issues involved the delayed opening of the FCRA bank account, difficulties in uploading the FCRA annual return, and the penalty imposed on the petitioner.
Ratio Decidendi: The court's decision was influenced by the petitioner's delayed opening of the bank account, deposit of penalty, and subsequent uploading of the annual return. The court also considered the inapplicability of previous cases to the present situation.
Final Decision: The court rejected the prayer for refund of the penalty amount, but validated the uploaded FCRA FC-4 annual return for the F.Y 2019-2020 without further penalties. The petition, along with all pending applications, was disposed of.
JUDGMENT
Prathiba M. Singh, J. (Oral)
W.P.(C) 948/2022 and CM APPL. 2724/2022 (interim stay), 24305/2023 (condonation of delay)
1. This hearing has been done through hybrid mode.
2. The Petitioner-M/s. Helping Hands Jaipur Society is an NGO operating in Jaipur, Rajasthan. It obtained its Foreign Contribution Regulation Act, 2010 (hereinafter, `FCRA') registration in terms of Section 11 and 12 of the FCRA on 15th May 2011.
3. The Petitioner had applied for renewal of the FCRA registration on 2nd February 2016 under Section 16 of the FCRA, and the same was renewed by Respondent No. 2- Ministry of Home Affairs (hereinafter, MHA) on 15th October 2016.
4. The Foreign Contribution (Regulation) Amendment Act, 2020 (`the Amendment Act'), which amended the FCRA, was introduced in September, 2020. The said Amendment Act vide Section 17(1) of the FCRA mandated the opening of an "FCRA bank account" with the State Bank of India (`SBI') branch at SBI Sansad Marg, Parliament Street, New Delhi. The amended Section 17(1) of the FCRA, is as follows:
"17. Foreign contribution through scheduled bank.
(1) Every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as "FCRA Account" by the bank, which shall be opened by him for the purpose of remittances of foreign contribution in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify in this behalf:
Provided that such person may also open another "FCRA Account" in any of the scheduled bank of his choice for the purpose of keeping or utilising the foreign contribution which has been received from his "FCRA Account" in the specified branch of State Bank of India at New Delhi:
Provided further that such person may also open one or more accounts in one or more scheduled banks of his choice to which he may transfer for utilising any foreign contribution received by him in his "FCRA Account" in the specified branch of the State Bank of India at New Delhi or kept by him in another "FCRA Account" in a scheduled bank of his choice:
Provided also that no funds other than foreign contribution shall be received or deposited in any such account."
5. In the present petition, the Petitioner faced difficulties in uploading the FCRA annual return under Form FC-4 under Rule 17 of the Foreign Contribution (Regulation) Rules, 2011 for F.Y 2019-2020, due to the fact that the bank account details were being sought as of 31st March, 2020. It is also submitted that the Petitioner opened the designated FCRA bank account with the SBI only on 4th October 2021. The prayer in this writ petition is, thus, as under:
"a) Pass any writ, order or direction in the nature of mandamus directing the Respondent to allow the Petitioner to file and upload the Form FC-4 on the Respondent's portal for the Financial Year 2019-20 beyond the schedule date of 30th June 2021, without the levy and payment of any penalty amount.
b) Pass any writ, order or direction thereby directing the Respondents to, not to, resort to any adverse measures in the present case, as stipulated in section 13 or section 14 of the FCRA Act or any other similar sections which may be attracted, due to non-filing of the FC-4 return for the F.Y. 2019-20 in the case of the Petitioner.
c) Pass any other order/ directions in. the interests of justice as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
6. Vide order dated 17th January, 2022, the Petitioner was asked to file an affidavit giving the steps that were taken by it for opening of the bank account. The said order is as follows:
"In substance, the submission of Mr. Ruchesh Sinha, learned counsel appearing for the petitioner is, the petitioner could not upload the FC-4 Form on the respondent's portal within the scheduled time period of June 30, 2021 as there was delay in opening the designated account in the main Branch of the State Bank of Ind
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.
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 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.
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....
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....
The court upheld the suspension of the FCRA registration under Section 13, ruling that no prior inquiry or hearing is required, affirming the necessity of statutory compliance over natural justice.
Compounding a violation under the FCRA Act rectifies the applicant's status, and vague basis for rejection violates principles of natural justice.
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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