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TMI Blog2011 (6) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to section 11(2) FCRA 1976 regarding deemed permission in respect of applications for prior permission cannot be defeated by the Central Government by simply keeping applications pending beyond the outer limit within which such applications were required to be disposed of in terms of the FCRA 1976. Writ petition is allowed - W.P.(C) NO. 566 OF 2011 - - - Dated:- 1-6-2011 - S. MURALIDHAR, J. Rakesh Kumar Khanna and Rajiv Tyagi for the Petitioner. Ms. Maneesha Dhir and Ms. Preeti Dalal for the Respondent. JUDGMENT 1. This petition involves the interpretation of section 11(2) of the Foreign Contribution (Regulation) Act, 1976 ('FCRA 1976') read with section 6(1A) thereof and the effect of the repeal of the FCRA 1976 by the Foreign Contribution (Regulation) Act, 2010 ('FCRA 2010'). Factual background 2. The Petitioner, Sarvajan Unnati Bodhini, is a trust registered under the Indian Trusts Act, 1882 and was created by a Trust Deed dated 4-5-2007. The Petitioner states that its objects include the provision of education and medical care to the under privileged. It also collaborates with non-governmental organizations (NGO's) functioning in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter on 25-3-2010, the MHA wrote the following letter to the Petitioner : "I am directed to refer to your application dated 3-12-2009 seeking grant of prior permission for receiving foreign contribution under section 6(1A) of the Foreign Contribution (Regulation) Act, 1976 and to inform that the permission of Central Government cannot be granted at present under the said Act as it will take further time to dispose of your case. 2. Further you are advised that no foreign contribution should be accepted by you till prior permission for receiving foreign contribution is issued by this Ministry ." [Emphasis supplied] 6. It is stated that further information was sought by the MHA from the Petitioner by letters dated 5-4-2010 and 9-4-2010 with respect to the Petitioner's application dated 3-12-2009. According to the Petitioner, it did not hear anything on the said application thereafter. 7. The Petitioner received a communication from another donor - Deutscher Gennossenschaffts und Raiffeisenverband E.V. (DGRV), stated to be a renowned economic organization in Germany, expressing its commitment to contribute an amount of Euros 80,000 to the Petitioner. The Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-2009 and 16-6-2010 respectively. According to her, the deeming provision under the Proviso to section 11(2) FCRA 1976 was not attracted. It is further submitted that in terms of section 54(2) of the FCRA 2010 all applications pending as on the date of coming into force of the FCRA 2010, i.e., 26-9-2010, must be treated as pending under the corresponding provisions of the FCRA 2010 and therefore, if at all, would have to be processed under the FCRA 2010. Ms. Dhir submitted that under section 12 of the FCRA 2010 (which corresponds to section 11 of the FCRA 1976) there was no deemed grant of permission on the expiry of ninety days. According to her, since the amounts for which prior permission was sought by the Petitioner was substantial and since reports of the State Government on the activities of the Petitioner were not forthcoming despite reminders, the prior permission could not be granted within the prescribed time limit. Ms. Dhir reiterated the stand taken in the counter affidavit that during the course of processing of the applications for receipt of foreign contributions under the FCRA 1976, unless it was convinced that the verification reports are in order and the target ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of such application, the permission prayed for in such application shall, on the expiry of the said period of ninety days, be deemed to have been granted by the Central Government. Provided that, where, in relation to an application, the Central Government has informed the applicant the special difficulties by reason of which his application cannot be disposed of within the said period of ninety days, such application shall not, until the expiry of a further period of thirty days, be deemed to have been granted by the Central Government." 14. Under section 11(2) of FCRA 1976 if an application for prior permission is not disposed of within ninety days from the date of receipt of such application, the permission prayed for in such application is, on the expiry of the said period of ninety days, deemed to have been granted by the Central Government. The Proviso to section 11(2) FCRA 1976 states that if the Central Government has informed the applicant about the "special difficulties by reason of which his application cannot be disposed of within the said period of ninety days" such application shall not "until the expiry of a further period of thirty days, be deemed to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med permission automatically came into effect. Therefore, in terms of the Proviso to section 11(2) FCRA 1976, it must be held that insofar as the Petitioner's application dated 3-12-2009 is concerned there was a deemed permission of the Central Government for the Petitioner to receive foreign contribution covered by the said application. The second application dated 16th June, 2010 17. As regards the second application dated 16-6-2010, the period of ninety days came to an end on 15-9-2010. After the expiry of the ninety day period, the Central Government on 6-10-2010 simply stated that the permission could not be granted 'at present' and that 'it will take further time to dispose of the case'. Importantly, the Central Government did not invoke the provisions of the FCRA 2010 which came into effect on 26-9-2010. In terms of the Proviso to section 11(2) FCRA 1976, the central government failed to inform the Petitioner of the special difficulties because of which the application could not be disposed of within a period of ninety days. 18. The Central Government has to necessarily inform the applicant of the 'special difficulties' in not granting the permission within ninet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 6 or granted prior permission under that section of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976), as it stood immediately before the commencement of this Act, shall be deemed to have been registered or granted prior permission, as the case may be, under this Act and such registration shall be valid for a period of five years from the date on which this section comes into force." 21. The above Proviso to section 11(1) FCRA 2010 makes it clear that if there was a deemed permission that was already granted under the FCRA 1976 at the time of the FCRA 2010 coming into effect, such deemed permission should be taken to have been granted under the FCRA 2010. Viewed from the perspective of the FCRA 2010 as well, the deemed permission in respect of the two applications of the Petitioner dated 3-12-2009 and 16-6-2010 in terms of the Proviso to section 11(2) FCRA 1976 remains unaffected. Also, the proviso to section 11(2) FCRA 1976 regarding deemed permission in respect of applications for prior permission cannot be defeated by the Central Government by simply keeping applications pending beyond the outer limit within which such applications were required to be dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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