The non-renewal of FCRA registration of Missionaries of Charity (“MoC”) and other non-compliant NGOs has set the cat among the pigeons. As usual, many self-righteous citizens have jumped on the bandwagon and questioned the intent and imputed different motives to the Government, sans understanding the scheme and modus operandi of the Foreign Contribution Regulation Act, 2010 (“the Act”).
A Writ Petition was also filed by a Houston-based association in the Supreme Court challenging the non-renewal of FCRA registration of some 6000 NGOs. However, the Supreme Court fittingly has declined to pass any interim order to allow continuation of FCRA licenses of these organizations and asked them to approach the concerned authorities.
Coming to the scheme and purpose of the Act: FCRAseeks to regulate the acceptance and utilization of foreign contribution or hospitality and to prohibit theiracceptance and utilization for any activity detrimental to the national interest. ‘Foreign contribution’ forms the cornerstone of the Act and is defined as a donation, delivery or transfer made by any foreign source of any article, currency, or security. The amounts received by way of fee or revenue of goods or services rendered in the ordinary course of business, trade or commerce and gifts for personal use are excluded from the purview of foreign contribution.
A ‘foreign source’, i.e. the origin of foreign contribution, inter alia encompasses the Government of any foreign country; any international agency, not being the UN or its specialized agencies; a foreign company; a corporation incorporated in a foreign country or territory; a foreign trust or a foreign foundation; a society, club or other association of individuals formed or registered outside India; or a citizen of a foreign country.
A ‘person’, i.e. the recipient of foreign contribution, could be any citizen of India, anIndian association, company, its foreign branch, subsidiary or associate. Further, certain categories of persons and associations are disentitled from receiving foreign contribution: election candidates, the editors or publisher of newspapers, judges, public servants, members of Parliament and state legislatures, and political parties, including organisations of political nature as notified by the Central Government under the Act.
Even among the persons who are eligible to receive foreign contribution, prior registration and/or permission of the Central Government are pre-requisitesfor acceptance of any foreign contribution and hospitality. The conditions for registration and permission are regulated by the Act and the FCRA rules framed thereunder. While the registration lasts for five years and can be renewed upon expiry, the permissions are valid only for the specific purpose or for the specific amount of foreign contribution proposed to be received.
The Act has often faced flak for it gives sweeping powers to the Government to prohibit the receipt of foreign contribution qua any organization on perceived threats to the sovereignty and integrity of India, the security, strategic, scientific or economic interests of India, or the public interest, or communal harmony etc. However, the safeguards provided under the Act- the appellate and revisionary forums of redressal and requirements of passing a speaking order and ‘audialteram partem’; are often lost sight of in a quest to cast insinuations against the Government. Even the Courts have consistently read the principles of natural justice into the Act. The Delhi High Court, in ‘Association of Voluntary Agency for Rural Development v. UOI’, had held that any order under the Act must be passed on objective material and facts disclosed.
Now, in the MOC’s case, its FCRA registration was originally due to expire in October of 2021, but was extended until 31.12.2021 by the Government of Indiavide public notice dated 30.09.2021 in order to ensure smoother transition to the amended legal regime.However, in the wake of some audit irregularities, the renewal application of MOC was rejected, but was late restored by the MHA on submission of the necessary documents.
It is trite that the renewal of FCRA registration is not an automatic process and can be refused in case of violation of any of the provisions of the Act or rules.The parameters specified under Section 12(4) of the Act for grant of a new FCRA registration also have a bearing on the renewal of FCRA registration, as set out in the Foreign Contribution (Regulation) Amendment Act, 2020. Any grievance or grouse about such non-renewal can be legitimately agitated in a revision application under Section 32 of the Act, even as therecourse to the Constitutional Courts is always open. Therefore, any concerns about the misuse of FCRA provisions to refuse renewal of FCRA registration are fictitious and specious, and ought not to take precedence over the intent and purpose of the Act.Recently, in ‘Indian Social Action Forum (INSAF) v. UOI’, the Supreme Court held that, “The object sought to be achieved by the Act is to ensure that Parliamentary institutions, political associations and academic and other voluntary organisations as well as individuals working in the important areas of national life should function in a manner consistent with the values of a sovereign democratic republic without being influenced by foreign contributions or foreign hospitality. The long title of the Act makes it clear that the regulation of acceptance and utilisation of foreign contribution is for the purpose of protecting national interest.”.
Albeit, the Act accouters the Central Government to put curbs on the inflow of foreign exchange into the country, but it also statutorily assuages the aggrieved recipients of the foreign contribution and provides a mode of review or appeal from the decision made by the Central Government and insists upon the observance of principles of natural justice in any proceeding.