Delhi High Court refuses to quash suspension of Commonwealth Human Rights Initiative's FCRA registration

The Delhi High Court on Monday refused to quash an order suspending the Foreign Contribution Regulation Act (FCRA) registration of the Commonwealth Human Rights Initiative (CHRI) [Commonwealth Human Rights Initiative v. Union of India]..Justice V Kameswar Rao held that Section 13(1) of the FCRA gives discretion to the Central government to suspend the certificate if it is satisfied that it is necessary to do so, and this can be exercised considering the gravity of violations, nature of evidence available and effect on public interest.“The scope of judicial review is very limited and should be exercised only when it is a case of mala fide, arbitrariness, or an ulterior motive,” the judge observed while dismissing the matter. The Court noted that the suspension order recorded several violations of the FCRA on the part of CHRI, and that the satisfaction of Central government on the same cannot be substituted by that of the Court, unless the reasons for such satisfaction are perverse..CHRI is a Non-Governmental Organisation (NGO) working in the field of human rights, and has produced several reports drawing attention to the progress and setbacks to human rights in Commonwealth countries.The NGO’s FCRA registration had been suspended by the Centre in June 2021 for 180 days. Though it was communicated by the NGO that there was no violation of the FCRA or FCRA Rules, and therefore the suspension should be revoked, the Centre in December 2021 extended the suspension by another 180 days.That same month, a show-cause notice was served to CHRI, and it was communicated that an audit of their books of accounts revealed multiple FCRA violations.In a nutshell, the alleged violations were:- The activities/projects for which foreign contribution was received and utilised by CHRI have not been disclosed;- A bank account opened in Delhi in February 2016, to which there is a flow of foreign contribution, has not been intimated online to the Ministry;- One account through which the Association has been utilizing foreign contribution has not been intimated in annual reports for the Financial Years 2016-2017 and 2017-2018;- CHRI refunded some foreign contributions back to the donor in FYs 2013-2014 and 2014-2015 in violation of Section 8(1)(a) of the FCRA, 2010..The Court rejected the argument of CHRI that it is impermissible for the Central government to suspend its registration and conclude that provisions of the FCRA have been violated without an inquiry and without giving the organisation an opportunity of hearing.However, the Court held that the Act does not contemplate any inquiry to be undertaken before suspension. If reasons exist that the utilisation of the contribution is not in accordance with the mandate of the FCRA, the Central government can suspend the certification by recording said reasons in writing, it added.“Wherever the legislature intended to stipulate inquiry/opportunity, it had said so, like in Section 14(1) and 14(2) of the FCRA, 2010. Not prescribing inquiry/opportunity to the holder of the certificate before suspension under Section 13(1) of the FCRA, 2010 has also to be understood from the perspective, that the FCRA, 2010 is to consolidate the law, to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or association or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith,” the Court held..Senior Advocates Arvind Datar and Chander Uday Singh along with Advocate Kabir Dixit and Illa Sheel appeared for the petitioners. The Central government was represented by Additional Solicitor General Aishwarya Bhati, Central Government Standing Counsel Anil Soni and Advocates Devesh Dubey and Aman Sharma..[Read Judgment]