The Delhi High Court has allowed the Centre Policy for Research (CPR) to utilize 25% of total FCRA funds held in fixed deposits, government bonds, etc. saying that the outward disbursement of amounts shall only be for the purpose of carrying out daily activities.

An application was filed by the petitioner for a direction to the respondent to release/permit CPR to utilize 25% of the total foreign contribution amount/funds held by it under Section 13(2)(b) of the Foreign Contribution (Regulation) Act, 2010 (FCRA) read with Rule 14 (a) of the Foreign Contribution (Regulation) Rules, 2011 (FCRR).

A Single Bench of Justice Subramonium Prasad said, “In view of the fact that there is nothing in the said Section which restricts that only the amounts lying in the current account can be permitted to be utilized, this Court is inclined to allow the Petitioner to utilize the 25% of the total FCRA funds held it in fixed deposits, government bonds etc. pending consideration of the cancellation of registration under Section 14 of the FCRR. … Needless to state that the outward disbursement of the amounts shall only be for the purpose of carrying out the day-to-day activities and for no other expenses.”

The Bench directed that a complete statement of the petitioner’s FCRA account and the amounts deposited in fixed deposits and government bonds etc. along with expenses incurred from the date of suspension shall be submitted to the Respondent periodically.

Senior Advocate Arvind Datar appeared for the petitioner while CGSC Arunima Dwivedi appeared for the respondent.

A writ petition was filed challenging the order and all consequential proceedings issued by the respondent suspending the registration of the petitioner under the FRRA, pending consideration of the cancellation of certificate of registration granted to it. The petitioner was granted a certificate of registration under the FRRA and the allegations surfaced to the effect that the foreign contribution received by the petitioner was utilised for purposes other than for what it was registered and that the said amount was being used for undesirable purposes which amounted to violation of the FCRA.

It was stated that the respondent passed an order suspending the certificate of registration of the petitioner pending consideration for cancellation of certificate of registration granted to the petitioner.

The High Court in the above context noted, “This Court at this juncture is not entering into the debate as to whether a show cause notice is necessary to be issued to the entity before an order under Section 13 of the FCRA is passed. … Section 13(2) of the FCRA permits utilization of foreign contribution which is in custody of the person whose certificate has been suspended. There is no occasion to restrict the term “his custody” only to the current account.”

The Court observed that the amounts which are held in fixed deposits or in government bonds etc. are also unutilized foreign contributions which can be made available to the person whose account has been suspended pending the inquiry under Section 14 of the FCRA.

“There is no reason for this Court to disbelieve the statement that the Petitioner has already utilized the figures given by it regarding the expenses to be incurred for its survival pending consideration of the cancellation of registration under Section 14 of the FCRR”, said the Court.

Accordingly, the High Court allowed the application.

Cause Title- Centre for Policy Research v. Union of India (Neutral Citation: 2023:DHC:7582)

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