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Delhi High Court allows Centre for Policy Research utilize 25% of the total foreign contribution funds to pay salaries

In the major relief to Centre For Policy Research, the Delhi High Court has allowed the utilization 25% of the total foreign contribution amount/funds held by the Petitioner under Section 13(2)(b) of the Foreign Contribution (Regulation) Act, 2010 (FCRA) read with Rule 14 (a) of the Foreign Contribution (Regulation) Rules, 2011 (FCRR).

The single judge bench of Justice Subramonium Prasad observed that Section 13(2) of the FCRA permits utilization of foreign contribution which is in custody of the person whose certificate has been suspended. There is no occasion to restrict the term “his custody” only to the current account. The amounts which are held in fixed deposits or in government bonds etc. are also unutilized foreign contributions which can be made available to the person whose account has been suspended pending the inquiry under Section 14 of the FCRA.
The Petitioner has been granted certificate of registration under the FRRA. Allegations surfaced to the effect that the foreign contribution received by the Petitioner has been utilised for purposes other than for what it was registered and that the said amount is being used for undesirable purposes which amounts to violation of the FCRA.
The respondent suspended the certificate of registration of the Petitioner pending consideration for cancellation of certificate of registration granted to the Petitioner.
Section 13(2) of the FCRA provides that every person whose certificate has been suspended shall not receive any foreign contribution during the period of suspension and can utilize in the prescribed manner the foreign contribution in his custody with the prior approval of the Central Government.
Rule 14 of the FCRR provides that in case of suspension of certificate of registration 25% of the unspent amount can be utilized for the declared aims and objects for which the foreign contribution has been received. Certain clarifications had been sought by the Respondent/Union of India regarding the application made by the Petitioner for utilising the unspent amount and this Court while considering the interim application on 29.08.2023 observed that it is expected that the application given by the Petitioner for utilization of the unspent amount will be decided by the Central Government on or before 05.09.2023.
The Petitioner that the Respondent has calculated the 25% of the contribution held by the Petitioner only of the current bank accounts. It is stated that the total available balance in the current bank accounts was Rs.7,16,40,945/- and the Petitioner has not taken into account the unutilized amount which is lying in different deposit accounts/schemes like FDs, Government Bonds etc. which also ought to be taken into consideration.

Arvind Datar, Senior Counsel for the Petitioner, contended that the Orderis contrary to Section 13(2)(b) of the FCRA. Section 13(2)(b) of the FCRA permits the utilization of the foreign contribution which is in the custody of the Petitioner. He states that at this juncture, the Petitioner is only praying that it may be permitted to utilize the 25% of the whole unutilized foreign contribution including that which is lying in fixed deposits, government bonds etc. There are 113 employees of the Petitioner and the salaries and other expenses which are payable till September, 2023, is Rs.6,60,83,370/-.

Arunima Dwivedi, CGSC for the Respondent, contends that 25% of the amount which is available in the current account alone can be taken into consideration.

The court held, “There is no reason for this Court to disbelieve the statement that the Petitioner has already utilized the figures given by it regarding the expenses to be incurred for its survival pending consideration of the cancellation of registration under Section 14 of the FCRR.”


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