COVID- Can Deadline For Opening FCRA Accounts By NGOs Getting Foreign Aid Be Extended?: Delhi High Court Asks Centre

The Delhi High Court last week asked the Ministry of Home Affairs to consider extending the deadline (April 1, 2021) for opening the Foreign Contribution (Regulation) Act (FCRA) account by NGOs who seek to receive foreign funds.

The Bench of Justice Prathiba M. Singh was hearing two Petitioners (who are NGOs operating out of Telangana and Andhra Pradesh) who raised an issue related to the opening of the FCRA account in the SBI, New Delhi.

The submissions made by the NGOs

They submitted that amendment to Section 17 of the Foreign Contribution Regulation Act, 2010 [w.e.f. September 2020] read with a public notice issued by the Ministry of Home Affairs in October 2020 made it mandatory for NGOs that receive foreign contributions to open an FCRA account in the State Bank of India, New Delhi Main Branch

NGOs submitted that they are facing tremendous difficulty both in the opening of the FCRA account, as also in the subsequent approval which is to be obtained from the MHA as, without the approval of the MHA, no foreign contributions can be received by them.

Hence, a prayer was made for extending the deadline of 1st April, 2021 permitting receiving of foreign contributions by a period of six months, and for directing the MHA to grant FC6C certificates to the Petitioners in an expeditious manner.

Court's observations

The Court noted that there are several organizations, including NGOs, who have been approaching the Court in respect of the opening of their FCRA accounts and the approvals by the MHA.

Importantly, the Court said,

"The amendment to Section 17 is not under challenge in these petitions, however, owing to the second wave of the Covid-19 pandemic and various difficulties which the organizations are stated to be facing, the MHA shall consider as to whether the deadline of 1st April, 2021 can be extended and if so, till when."

The Counsel for the Respondents was also directed to seek instructions on whether, while the MHA's approval is pending, the Petitioners could be allowed to receive the foreign contributions, so long as they maintain records of the same, in accordance with the provisions of the Foreign Contribution Regulation Act, 2010, inasmuch as non-receipt of this contribution would lead to non-rendering of services, especially during the pandemic situation where there is an enormous need for such services.

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