Can CBI Investigate Offences Regarding Foreign Contributions? Supreme Court To Hear Plea Challenging Validity Of S.43 FCRA

The Supreme Court has agreed to hear a petition challenging the constitutional validity of Section 43 of the Foreign Contribution (Regulation) Act, 2010 (FCRA), which allows central government to appoint any agency, such as CBI, to investigate into matters of foreign contribution.

The development comes as a bench of Justices MM Sundresh and Aravind Kumar recently granted leave in a plea filed by M/s Advantage India against a Delhi High Court judgment of 2019, whereby the vires of Section 43 FCRA as well as the corresponding Rule 22 of Foreign Contribution (Regulation) Rules, 2011 (FCRR) was upheld and it was said that CBI is empowered to investigate in matters of foreign contribution.

The matter has been listed on November 6, 2024.

Background

Petitioner-M/s Advantage India was accused of obtaining foreign contributions worth Rs. 90 crores for the personal use of its office bearers, under the garb of undertaking social/educational activities. In this regard, an authorized officer inspected the organization's records under Section 23 of FCRA.

Later, the Monitoring Unit of Foreigners Division of the Ministry of Home Affairs directed a CBI probe in the matter and an FIR was registered. The Petitioner assailed the said investigation order of the central government and the FIR by challenging the constitutional validity of Section 43 of FCRA.

Notably, when Central Government exercises power under Section 43 FCRA to appoint an authority to investigate offences committed under the Act, the authority is vested with all the powers which an officer-in-charge of a police station has while making an investigation into a cognizable offence.

Observations by the High Court

The High Court firstly held that there was a set principle and/or policy for guidance of exercise of discretion by the Government in the matter of selection of an investigative agency and there was no parallel investigation or arbitrary, vague and uncontrolled power with the Government to claim violation of fundamental rights.

Secondly, it said that though there was no statutory prohibition on inquiry and investigation being carried out by the same authority, yet it was known to law that inquiry and investigation can be carried out by different authorities.

The court further held that Sections 33, 35 and 37 of FCRA essentially relate to mis-utilization of Foreign Contribution and giving false information whereas external penal provisions like Sections 199, 468, 471 and 511 IPC relate to forging of the documents for purpose of cheating. Hence, they relate to different offences and can be proceeded with.

Relying on Section 2(c) of CrPC, the court also held that not all offences punishable with imprisonment or fine or both were non-cognizable offences.

Ultimately, the constitutional validity of Section 43 FCRA as well as the corresponding Rule 22 of FCRR was upheld and the Court refrained from interfering in the central government's order of directing CBI probe.

Case Title: Advantage India v. Union of India, SLP(Crl) No.8111/2019

Click here to read the order