FCRA License Suspension: Delhi High Court Allows Centre For Policy Research To Use 25% Of ‘Unutilized Funds’

The Delhi High Court on Monday allowed a plea moved by India’s leading think-tank Centre for Policy Research (CPR) seeking permission to utilise 25% of “unutilized funds” in the fixed deposits towards the payment of salaries of its employees.

Justice Subramonium Prasad allowed the application moved by CPR in the petition against the suspension of its licence under Foreign Contribution Regulation Act (FCRA) by the Union Government on February 27.

“Application allowed. List the writ petition for hearing on January 11,” the court said. Detailed order is awaited.

As per Rule 14 of FCRA Rules, when FCRA certificate is suspended, up to 25% of the unutilised amount may be spent with prior approval of the Central Government for “declared aims and objects” for which the foreign contribution was received.

The Central Government had opposed the application and said that the unutilized amount means an amount that is unspent and funds in fixed deposits are outside its ambit.

On the other hand, Senior Advocate Arvind Datar representing CPR prayed that the funds be released as an interim measure to enable the think tank to pay salaries of its employees which were unpaid from the last six months.

“This is extremely sad. It is not an ordinary NGO. This is India’s number one think tank. We started in 1973. We come under the CAG audit and the Home Ministry audit. The Home Ministry completed its audit in February 2022. The CAG audit was completed on 22.04.2022. All allegations in the show cause notice are of the year 2018, 2019 etc. Everything has been examined by CAG. Nothing wrong found,” Datar had said.

The Union Ministry of Home Affairs had suspended CPR’s FCRA license in February, months after surveys were conducted in the organisation’s official premises by Income Tax Department. 

The officials had said that the exercise was done as there was prime facie evidence that certain provisions of the enactment were not followed. After suspension, a thorough investigation will take place and further decision will be taken, the Ministry had said.

FCRA licences can be suspended for 180 days. During this time, an organisation cannot receive foreign funding and the money in foreign funding account can only be used with prior approval of the Union Government.

Case Title: Centre for Policy Research v. Union of India & Ors. 

Citation: 2023 LiveLaw (Del) 970