Delhi High Court Issues Notice On Plea Moved By Centre For Policy Research Against Suspension Of FCRA License By Union Govt

The Delhi High Court on Tuesday issued notice on a plea moved by India’s leading think-tank Centre for Policy Research (CPR) against the suspension of its licence under Foreign Contribution Regulation Act (FCRA) by the Union Government on February 27.

Justice Subramonium Prasad also asked the Union Government to decide the application seeking release of 25% of funds, which was moved by CPR after suspension of the FCRA license, before September 05.

As per Rule 14 of FCRA Rules, when FCRA certificate is suspended, up to 25% of the unutilised amount may be spent with prior approval of the Central Government for “declared aims and objects” for which the foreign contribution was received.

During the hearing, the counsel representing the Union Government said that after the impugned order was passed on February 27, the think tank was given a show cause notice on August 01 to which a reply was received on August 25. CPR had then moved the application under Rule 14 during suspension of the FCRA license.

“They filed application before us for getting 25% amount when it was under suspension within 180 days. Then we asked them we have to be satisfied…..We asked for records and replies. They gave a reply on May 15…. We only have to pass an order seeing the documents…From February 2023, they were sitting over this,” the counsel said.

She also submitted that procedure is being followed and that the government is carrying out the exercise in a diligent manner.

On the other hand, Senior Advocate Arvind Datar representing CPR prayed that the funds be released as an interim measure to enable the think tank to pay salaries of its employees which were unpaid from the last six months.

“This is extremely sad. It is not an ordinary NGO. This is India’s number one think tank. We started in 1973. We come under the CAG audit and the Home Ministry audit. The Home Ministry completed its audit in February 2022. The CAG audit was completed on 22.04.2022. All allegations in the show cause notice are of the year 2018, 2019 etc. Everything has been examined by CAG. Nothing wrong found,” Datar said.

Regarding the application seeking interim stay of the impugned order, Datar submitted that without foreign contributions, CPR will be forced to shut down.

“The operation have faced a grinding halt in the last six months. 83 scientists and employees have left,” he said.

Asking the Union Government to decide CPR’s application for release of 25% funds, Justice Prasad said that no order has been passed in the said application even though five months have been passed.

The Union Ministry of Home Affairs had suspended CPR’s FCRA license in February, months after surveys were conducted in the organisation’s official premises by Income Tax Department. 

The officials had said that the exercise was done as there was prime facie evidence that certain provisions of the enactment were not followed. After suspension, a thorough investigation will take place and further decision will be taken, the Ministry had said.

FCRA licences can be suspended for 180 days. During this time, an organisation cannot receive foreign funding and the money in foreign funding account can only be used with prior approval of the Union Government.

Last week, a division bench had stayed the Income Tax Department’s order cancelling the tax exemption status of FCRA.

Case Title: Centre for Policy Research v. Union of India & Ors.