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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Legal Initiative For Forest And Environment Through Founding Trustee Mr. Ritwick – Appellant
Versus
Union of India – Respondent
W.P.(C) 7216 of 2023 & CM APPL. 28121 of 2023
Decided On : 24-05-2023
FCRA - Suspension of FCRA certificate - Section 13, Section 14 - The court discussed the provisions of Section 13 and Section 14 of the FCRA Act, 2010, which provide for the suspension and cancellation of the FCRA certificate. The court emphasized the necessity of providing a show-cause notice and recording reasons for suspension in the suspension order itself. It also highlighted the requirement for an enquiry to be initiated for cancellation before directing suspension under Section 13. The judgment in Indian Social Action Forum (INSAF) v. Union of India was referenced to support the necessity of following due process before issuing a suspension order.
Fact of the Case:
The Petitioner challenges the suspension of their FCRA certificate by the Ministry of Home Affairs under Section 13 of the FCRA Act, 2010. The Petitioner's renewal application for the FCRA registration is pending, and no show cause notice has been issued for cancellation of the certificate.
Finding of the Court:
The court stayed the suspension of the Petitioner's FCRA certificate, emphasizing the necessity of following due process and issuing a show cause notice before directing suspension under Section 13.
Issues: The issues revolved around the legality of the suspension of the FCRA certificate without following due process, including the lack of a show cause notice for cancellation.
Ratio Decidendi: The court held that the suspension of the FCRA certificate was stayed due to the absence of a show cause notice under Section 14 for cancellation, as required by the provisions of the FCRA Act, 2010.
Final Decision: The suspension of the Petitioner's FCRA certificate was stayed until the next date of hearing, and the Petitioner's statement of not intending to receive foreign contributions was accepted. The court also directed that outward disbursements from the FCRA bank account should only be for the Petitioner's day-to-day activities and required a complete statement of account to be filed.
JUDGMENT
Prathiba M. Singh, J.(Oral)
CM APPL. 28121/2023 (stay)
1. This hearing has been done through hybrid mode.
2. The Petitioner-Legal Initiative for Forest and Environment challenges the impugned suspension order bearing F. No. II/21022/58(88)/2023-FCRA(MU) dated 13th March, 2023 issued by the Respondent-Ministry of Home Affairs (`MHA'). Vide the said order, the Petitioner's Foreign Contribution (Regulation) Act (hereinafter, `FCRA') license/certificate issued on 18th June 2012 has been suspended for a period of 180 days.
3. The impugned suspension order was issued under Section 13 of the FCRA Act, 2010 (`the Act'). Section 13 of the Act provides for suspension of the FCRA certificate. The said provision reads as follows:
"13. Suspension of certificate.-
(1) Where the Central Government, for reasons to be recorded in writing, is satisfied that pending consideration of the question of cancelling the certificate on any of the grounds mentioned in sub-section (1) of section 14, it is necessary so to do, it may, by order in writing, suspend the certificate for a period of one hundred and eighty days, or such further period, not exceeding one hundred and eighty days, as may be specified in the order.
(2) Every person whose certificate has been suspended shall-
(a) not receive any foreign contribution during the period of suspension of certificate:
Provided that the Central Government, on an application made by such person, if it considers appropriate, allow receipt of any foreign contribution by such person on such terms and conditions as it may specify;
(b) utilise, in the prescribed manner, the foreign contribution in his custody with the prior approval of the Central Government".
"Section 14. Cancellation of certificate.
(1) The Central Government may, if it is satisfied after making such inquiry as it may deem fit, by an order, cancel the certificate if:
(a) the holder of the certificate has made a statement in, or in relation to, the application for the grant of registration or renewal thereof, which is incorrect or false; or
(b) the holder of the certificate has violated any of the terms and conditions of the certificate or renewal thereof; or
(c) in the opinion of the Central Government, it is necessary in the public interest to cancel the certificate; or
(d) the holder of certificate has violated any of the provisions of this Act or rules or order made thereunder; or
(e) if the holder of the certificate has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive years or has become defunct.
(2) No order of cancellation of certificate under this section shall be made unless the person concerned has been given a reasonable opportunity of being heard.
(3) Any person whose certificate has been cancelled under this section shall not be eligible for registration or grant of prior permission for a period of three years from the date of cancellation of such certificate."
4. According to Mr. C.U. Singh, ld. Senior Counsel for the Petitioner, as per the scheme of Sections 13 and 14 of the Act, the suspension of the FCRA certificate can be directed only after an enquiry has been initiated for cancellation of the FCRA certificate.
5. He relies upon the judgment of this Court in Indian Social Action Forum (INSAF) v. Union of India, [2013 SCC OnLine Del 3743]. He emphasises that according to this judgment, when issuing a suspension order under Section 13 of the Act, it is essential to provide a show-cause notice and record the reasons for suspension in the suspension order itself. It is his further submission that till date, the Petitioner has not received any show cause notice or hearing notice under Section 14 of the Act for cancellation of the FCRA certificate.
6. The Petitioner's last FCRA registration expired on 17th June 2022. It is also stated that the renewal application for the FCRA registration, filed by the Petitioner, is also pending with the Respondent.
7. Mr. Asheesh Jai
The main legal point established in the judgment is the necessity of following due process, including issuing a show cause notice under Section 14, before directing suspension of the FCRA certificate....
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....
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.
The authority can refuse renewal of FCRA registration based on safety concerns without violating natural justice, as supported by inquiry findings.
The requirement for a personal hearing before the cancellation of registration under the FCRA is essential when the consequences are severe, as outlined in Section 14(2) of the Act.
Mandamus cannot be issued for withdrawal of funds from FCRA account post-registration cancellation when statutory provisions vest authority with the government.
When a statutory body has not yet ruled on a party's pending representation regarding administrative findings, the court may direct the authority to consider the submission within a fixed timeline ra....
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