Plea alleges “Several NGOs Misusing the FCRA regime to siphon off Foreign Funds taking shield of Covid Pandemic”: Supreme Court issues notice
Supreme Court has issued notice in plea which avers that taking shield of the Covid pandemic, several NGOs and individuals are misusing the relaxation being provided by the Ministry of Home Affairs under the Foreign Contribution Regulation (Amendment) Act, 2020 (FCRA).
A bench of Justice AM Khanwilkar, Justice Hrishikesh Roy and Justice CT Ravikumar issued notice in the petition filed through Advocates Gautam Jha & Pankaj Kumar.
The petitioner, namely Vinay Vinayak Joshi alleged that he had an apprehension that taking the shield of the Covid pandemic and their work for covid relief, several NGOs and individuals are actually misusing the FCRA regime to siphon off funds obtained from abroad for purposes other than those permitted under FCRA.
The petitioner filed a petition before the Apex Court for being aggrieved by the notification issued by the Ministry of Home Affairs (MHA), Government of India extending the last date for NGOs and individuals, who receive foreign funds, to open the mandatory FCRA Bank Account till June 30, 2021, and thereby extending the validity of the Registration Certificate of all FCRA license holders till September 2021.
He prayed the court for issuing a Peremptory Writ of Mandamus directing the MHA to not extend the compliance deadline any further.
The petition reads that in response to the representations made by several NGOs to relax the dates for complying with the FCRA requirements in view of the covid times, the MHA first extended the date for compliance under FCRA regarding opening of FCRA bank account till March 31, 2021, and then on May 18, 2021, the MHA once again extended the deadline to June 30, 2021.
The petition adds that similarly, the MHA also extended the validity of the Registration Certificate of all FCRA license holders till September 2021.
The petition also states that both these decisions were taken only on the ground of Covid exigency, as many NGOs are involved in covid relief work.
He highlighted the significance of the FCRA Amendment Act, 2020 stating that due to previous instances of misappropriation of funds by NGOs, the Parliament of India enacted the Amendment Act, 2020 which made strict provisions for strict compliance with the legislation. He stresses that due to the exponential increase in infractions of FCRA, strengthening compliance mechanisms became the need of the hour.
The petitioner raised the following issues before the court:
- Petitioner urged that in the past, there have been many instances where cases of alleged misappropriation of funds by NGOs have been highlighted and acted upon. He alleged that there is urgent need of the directions sought on the basis that due to menace of misuse of foreign fund by Indian NGOs and individuals, which they receive from abroad as per the provisions of the FCRA, there is a potential danger to sovereignty and integrity of India.
- He also highlighted that the National Commissions for Protection of Child rights has itself raised concerns about the issue of forceful religious conversion carried out by the NGO namely "Persecution Relief. It is pertinent to mention here that NGO "Persecution Relief" receives foreign contributions and subsequently grants it to another NGO namely "Abundant life", he submitted.
- He also stated that several NGOs are running campaigns on fundraising platforms to collect funds for Covid-19 relief and collecting foreign funds without FCRA registration. He alleged that to receive foreign donation for non-registered organizations, prior permission of the Central Government is the sine qua non condition but in this ongoing pandemic situation many NGOs are somehow circumventing these provisions of FCRA.
It is to be noted here that under section 11 of FCRA, 2010, it is mandatory for the NGOs to register themselves under if they're going to receive foreign funds. Only organizations registered under FCRA can receive funds for social, educational, religious, economic and cultural purposes. It is also mandatory for such organization to file annual returns to the Central Government.
- He alleged that there is a widespread design by many such NGOs who are involved in dubious activities, to keep the implementation of the FCRA getting delayed, on the pretext of this Covid Pandemic.
Therefore, stating that it cannot be denied that there are several NGOs that are genuinely working in the public interest, and that he is not challenging the already issued notification by the MHA, the petitioner urged the court to issue the directions sought.
Case Title: Vinay Vinayak Joshi v. Union of India and Ors.