Delhi High Court
Legal Initiative For Forest And ... vs Union Of India on 24 May, 2023
2023:DHC:3742
$~82
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 24th May, 2023
+ W.P.(C) 7216/2023 & CM APPL. 28121/2023
LEGAL INITIATIVE FOR FOREST AND ENVIRONMENT
THROUGH FOUNDING TRUSTEE MR. RITWICK
DUTTA ..... Petitioner
Through: Mr. Chander Uday Singh, Sr. Adv.
with Mr. Abishek Jebaraj, Ms.
Ayushma Awasthi & Ms. A Reyna
Shruti, Advocates (M- 9818998302)
versus
UNION OF INDIA ..... Respondent
Through: Mr. Asheesh Jain, CGSC with Mr.
Reshesh Mani Tripathi, Govt.
Pleader.
CORAM:
JUSTICE PRATHIBA M. SINGH
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:
Signature Not Verified
By:DEVANSHU JOSHI
Signing Date:26.05.2023
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"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
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By:DEVANSHU JOSHI
Signing Date:26.05.2023
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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 Jain, ld. CGSC appearing for the Respondent submits
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By:DEVANSHU JOSHI
Signing Date:26.05.2023
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that the investigation is continuing, and an enquiry has been initiated in the
Petitioner's case. On a specific query from the Court, he submits that no
show cause under Section 14 of the Act has been issued as yet for
cancellation of the FCRA certificate.
8. Under these circumstances, issue notice in the present application.
9. Let a reply be filed within two weeks. Rejoinder be filed within two
weeks, thereafter.
10. In terms of Section 13, if the Central Government has valid reasons, it
can temporarily suspend a FCRA certificate while considering cancellation.
The suspension can last for 180 days initially, but it can be extended for up
to another 180 days if necessary. The judgment of this Court in INSAF
(supra) is clear to the following effect:
"4. The scheme of the Act, therefore, is that if the
Central Government, after making such enquiry as it
may deem appropriate in this regard, is of the opinion
that it is necessary in the public interest to do so, it can
cancel the certificate after giving a reasonable
opportunity of hearing to the organization concerned.
If, while considering the cancellation of registration in
terms of Section 14 of the Act, the Central Government
is satisfied that it is necessary to suspend the
certificate, during such consideration, it can suspend
the certificate of the organization concerned for a
period not exceeding 180 days provided reasons for
such suspension are recorded by the Government.
5. Admittedly, by the time the suspension order dated
30.04.2013 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 initiated any enquiry in terms of the said
Section. Therefore, there was no occasion to suspend
the certificate of the petitioner in terms of sub-section
Signature Not Verified
By:DEVANSHU JOSHI
Signing Date:26.05.2023
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(1) of Section 13 of the Act. The respondents wrote to
the petitioner seeking certain information for the first
time vide letter dated 02.05.2013, i.e., after the
registration of the petitioner-society had already been
suspended. The suspension, therefore, was contrary to
the scheme of the Act which envisaged such suspension
only when the issue of cancellation is already pending
consideration of the Central Government. For this
reason alone, the impugned order dated 30.04.2013 is
liable to be quashed.
6. Yet another reason which warrants quashing of the
impugned order dated 30.04.2013 is failure of the
Central Government to record the reasons which
necessitated suspension of the certificate in terms of
sub-section (1) of Section 13 of the Act. Though on
account of use of the word 'may' in sub-section (1) of
Section 13, the respondent has taken the plea that
recording of the reasons is not a mandatory
requirement, the plea, in my view, is wholly
misconceived. A careful perusal of subsection (1) of
Section 13 would show that the requirement of
recording reasons which necessitate suspension of the
organization is a mandatory requirement and the word
'may' has been used only in the context of giving a
discretion to the Central Government whether to
suspend the registration or not. In other words, the
Central Government may or may not suspend the
certificate of an organization, pending consideration
of cancellation of the said certificate but, if the
Government decides to suspend such certificate it can
be done only for reasons to be recorded and such
reasons, in my view, need to be incorporated in the
suspension order itself so that the organization is in a
position to know what were the reasons which
impelled the Government to suspend its registration
and in case the organization feels that certificate has
been suspended for the reasons which are not
envisaged under subsection (1) of Section 13 or are
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By:DEVANSHU JOSHI
Signing Date:26.05.2023
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not otherwise cogent, objective and transparent, it can
challenge such suspension by way of appropriate
proceedings. Such reasons cannot be given, by way of
extraneous evidence at a later stage. In the absence of
reasons, it would not be possible for the organization
to challenge the suspension."
11. In terms of paragraph 5 of the above judgment, no suspension order
under Section 13 of the Act could have been issued, without notice of
hearing or show cause notice being issued under Section 14 of the Act.
12. Admittedly, in the present case, no notice has been issued under
Section 14 of the Act for cancellation - though, as per Mr. Jain, the same is
under process.
13. In view thereof, the suspension of the Petitioner's FCRA certificate is
stayed till the next date of hearing.
14. Mr. Jain submits that the reasons are contained in the original file.
The Respondent-MHA may produce the original file relating to the
Petitioner's FCRA certificate, if so advised, on the next date of hearing.
15. Mr. C.U. Singh, ld. Senior Counsel submits that the Petitioner does
not intend to receive any foreign contribution in the meantime. The said
statement is taken on record and is accepted.
16. Insofar as outward disbursements from the FCRA bank account
operated by the Petitioner are concerned, such disbursements shall only be
for the purposes of carrying out the day-to-day activities of the Petitioner
and for no other purposes. A complete statement of account of the
Petitioner's FCRA bank account, specifying the expenses incurred since the
date of suspension, shall be filed before this Court, and before the
Respondent-MHA by the next date of hearing.
Signature Not Verified
By:DEVANSHU JOSHI
Signing Date:26.05.2023
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17. It is clarified that insofar as any other investigations by the Income
Tax Department or the CBI is concerned, this Court has not passed any
directions in this regard.
18. List on 11th July, 2023.
PRATHIBA M. SINGH
JUDGE
MAY 24, 2023
Rahul/DN
Signature Not Verified
By:DEVANSHU JOSHI
Signing Date:26.05.2023
19:13:20
