Rejection Of FCRA License Renewal To Be Challenged In Revision Before Appellate Authority Not In Appeal Before HC: Karnataka High Court

The Karnataka High Court has said that an order rejecting an NGO's application for renewal of license under Foreign Contribution (Regulation) Act (FCRA) is to be challenged in revision before the appellate authority and an appeal questioning the order before high court is not maintainable.

Justice K Natarajan held thus while dismissing an appeal filed Action for Community Organisation, Rehabilitation and Development under Section 31/31(2) of the Act appealing against a March 30 order by which the Union dismissed its FCRA certificate renewal.

The bench on going through the impugned order noted the application for renewal filed by the appellant was refused under Section 16(1) read with Section 12(4)(a)(vi) and 12(4)(f)(iii) (Grant of certificate of registration) FCRA for concealment of the facts and pending case. The order is not a speaking order and the Authority has not given any proper reason for rejection of the application, it said.

It noted that under Section 31 FCRA appeal lies on any order passed by any Authority for adjudication of confiscation of the articles or currency under Section 28 and the adjudication of confiscation of the articles under Section 29 FCRA. It said that once the Central Government grants certificate, it has power to suspend the certificate under Section 13 and cancel the same under Section 14 of the FCRA.

Subsection (2) of Section 31 provides for appeal, if any order made by the Central Government under sub-section (1) of Section 14 for the purpose of cancellation of the certificate. It said that once Centre grants certificate, it has power to suspend the certificate under Section 13 and cancel the same under Section 14 FCRA; Subsection (2) of Section 31 provides for appeal, if any order made by the Central Government under sub-section (1) of Section 14 for the purpose of cancellation of the certificate. There must be some adjudication of the matter and then it is appealable, the court said.

The court said, “On perusal of Section 13 or Section 14, any such order passed for suspension or cancellation of certificates and granting certificate under Section 12, these orders are all appealable, apart from any order passed under Sections 28 read with Section 29 of the FCRA, 2010 which is appealable under Section 31(2) of the FCRA, 2010.”

Following which it held “In this case, Section 16 (renewal of certificate) of the Act is not covered under sub-section (2) of Section 31 of the FCRA, 2010, where the respondent-authority refused to renew the license. Though there is a reference available in the impugned order as per Section 12(4)(a)(vi) and 12(4)(f)(iii) of the FCRA, 2010, the renewal was refused. But, only mentioning Section 12 of FCRA, 2010, itself is not sufficient to give a right to the appellant to file an appeal under Section 31(2) of the FCRA, 2010.”

It added, “I am of the view that the impugned order is a revisable order under Section 32 of the FCRA, 2010, and not an appealable order under Section 31(2) of the FCRA, 2010.”

The court said “Whether the impugned order is a speaking or cryptic order, is to be decided by the authorities in the revision is filed by the appellant before the appropriate authorities.”

The appellant is a Society registered under the Karnataka Societies Registration Act, 1960, who has been confirmed by the Central Government under Section 12 of FCRA, 2010. It had received foreign contributions for an objective to provide health, education, economic development, housing and construction activities to some Adivasis residing in the border areas of Karnataka, Tamil Nadu and Kerala State. Feeling aggrieved by the dismissal of application for renewal by the Union, the appellant approached the court.

The Union of India questioned the maintainability of the appeal saying revision appeal is to be filed under Section 32 of the Act and the said appeal is not maintainable. Further, there is reason assigned for rejection of the application as the application was made from Karnataka State, but most of the business is done at the State of Tamil Nadu. Such being the case, the functioning of the appellant-Society itself is suspicious. It was further submitted that the amount was received from the Foreign Country, but it was being diverted for other desirable purpose. Therefore, the renewal application came to be rejected. It was contended that the order cannot be appealable and a revision has to be filed.

While the appellants contended that application was filed for renewal of licence under Section 16 (Renewal of certificate) of the FCRA, 2010. As per Section 31(2) of the FCRA, 2010, it is an appealable order. Moreover, any order passed by the Authority is deemed to be a decree, which is available under Order XLI of First Schedule of CPC. Therefore, the appeal is maintainable.

The court dismissed the appeal as not maintainable and said “Liberty is granted to the appellant to file a revision before the appropriate authority. The time consumed before this Court, in this appeal, is given exemption.”

Case Title: ACTION FOR COMMUNITY ORGANISATION, REHABILITATION AND DEVELOPMENT AND Union of India & Others

Counsel for Appellant: Advocate Subramanya S Upasana

Counsel for Respondent: Deputy Solicitor General of India Shanthi Bhushan H

Citation No: 2024 LiveLaw (Kar) 514

Case No: REGULAR FIRST APPEAL NO. 833 OF 2024

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