ORDER
Elipe Dharma Rao, J
1. Jagdish
and Kamala Mittal Museum of Indian Arts, represented by its Trustee Secretary filed this writ petition to issue a writ of certiorari or any other order or writ quashing the impugned letter dated 5-5-1997 issued by the Ministry of Home Affairs, Government of India as illegal, arbitrary and to declare that the petitioner’s trust is deemed to have been granted registration under the provisions of Section 11 of the Foreign Contributions (Regulations) Act, 1976 and pass such other orders which are deemed fit and proper in the circumstances of the case.
2. The petitioner is a public charitable trust constituted under the trust deed dated 13-3-1976 by Sri Jagdish Candra Mittal and Smt. Kamala Devi Mittal and there are other ten trustees and is registered with the Sub-Registrar on 30-3-1976 with the main object to run the museum for the benefit of the public to appreciate and enjoy the aesthetics quality of the traditional arts and crafts of India and promote the understanding of the stylistic characteristics and to promote, initiate and undertake studies and research in various fields and aspects of the traditional arts and crafts of India and to impart and disseminate knowledge of the same. Accordingly the trust made application for registration to receive foreign contributions, by application dated 4-6-1994 with a covering letter dated 20-6-1994 addressed to the respondent No.1, which was made under the provisions of the Foreign Contribution (Regulations) Act, 1976 (for brevity the Act) and the same was acknowledged by the respondent on 24-6-1994. After receipt of the said application by the respondent, they informed through their letter dated 7-3-1995 asking for additional information. After receipt of the said letter, the petitioner personally furnished the information on 5-4-1995 to one Ramachari, the Field Officer of the Ministry of Home Affairs and also by speed post by letter dated 25-4-1995. Nothing was communicated to the petitioner by the respondents upto 5-3-1997 on which date, the respondent No.2 addressed letter enclosing Revised Form No.FC (8) to the petitioner requiring them to furnish the information in the said Form No.FC(8) within 15 days from the date of receipt of the said letter. The petitioner wrote a letter dated 11-3-1997 pointing out that the initial application was received by the first respondent on 24-6-1994 and after the issue of letter dated 7-3-1995, the Field Officer of Ministry of Home Affairs, stationed at Hyderabad, Mr. Ramachari contacted the petitioner personally and obtained all the required information. Thereafter the
petitioner was informed by the respondent through their letter dated 25-4-1995 that after careful consideration of the petitioner’s , application, it was not found possible to register the petitioner as an association under Section 6(1) of the Act.
3. Assailing the correctness of the said order, the present writ petition is filed contending that the letter does not indicate as to who is the competent authority and with whose approval the said letter was issued, that before rejecting the application no opportunity of hearing was given to the petitioner, that after receiving the impugned order, a letter dated 10-6-1997 was addressed to the respondent to recall the impugned order as the same is opposed to the provisions of sub-section (2) of Section 11 of the Act and since no reply was received from the respondent,’ the present writ petition is filed.
4. In reply to the assertions made by the petitioner, the Assistant Director in the Ministry of Home Affairs, filed counter-affidavit stating that the petitioner is not entitled to any relief inasmuch as the petitioner has contravened the provisions of the Act. The submission of application dated 4-6-1994 by the petitioner through covering letter 20-6-1994 is admitted, but denied that the petitioner has furnished additional information as requested by the respondents. By letter dated 5-3-1997, the petitioner was directed to furnish additional information in prescribed proforma FC (8) which was enclosed thereto. But the petitioner informed vide letter dated 11-3-1997 that he received foreign contribution to the tune of $ 4000, in contravention of the provisions of the Act and the said receipt of the contribution was without registration and prior permission and as such the registration was refused for violation of the said provisions and it was accordingly communicated to the petitioner on 5-5-1997. The respondent further submitted that
Section 11 of the Act is attracted for all the applications seeking prior permission from the Central Government under Section 6(1 -A) of the Act for acceptance of foreign contributions and not to the applications seeking registration under Section 6(1) of the Act. Since the petitioner has made application for registration after receiving foreign contribution, in contravention of the provisions of the Act, the respondents have refused to register the same and communicated the decision which is valid and proper.
5. For better appreciation of the contentions raised in this writ petition, let us have a glance of the relevant provisions of the Act, having a bearing on the subject-matter of this writ petition.
6. The Act was enacted with the objects and reasons to regulate the acceptance and utilisation of foreign contributions or foreign hospitality by certain categories of persons or associations. An ordinance to amend the Act was promulgated by the President on 20-10-1984 and inserted Section 6(1) of the Act provided that every association having a definite cultural, economic, educational, religious and social programmes may receive foreign contribution but was required to sent intimation regarding such receipt to the Central Government within such time and in such manner to be prescribed by the rules made under the Act. The Act enables the Central Government to inspect the accounts of certain persons or associations, but did not provide for power to audit the accounts of any organisation if it is considered necessary to do so. A new Section 25-A was inserted in the Act to provide that where any person is convicted of an office relating to the acceptance or utilisation of foreign contribution for a second time, he shall be prohibited from accepting any foreign contribution for a period of three years from the date of the second conviction. Section 3 of the Act
does not bar any other law for the time
being in force.
7. Chapter II of the Act deals with regulation of foreign contribution and foreign hospitality. Section 4 under this Chapter reads that no foreign contribution shall be accepted by any candidate for election, correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper; (Judge), Government Servant or employee of any Corporation, member of any Legislature, political party or office bearer thereof. Section 5 says that no organisation of a political nature, not being a political party, shall, accept any foreign contribution except with the prior permission of the Central Government.
8. Section 6, which is a vital provision of the Act, says that no association, other than an organisation referred to Section 5(1) having a definite cultural, economic, education, religious or social programme shall accept foreign contribution unless such association registers itself with the Central Government in accordance with the rules made under the Act and agrees to receive such foreign contribution only through one of the branches of the bank as it may specify in its application for such registration. It further says that every association so registered shall give within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of each foreign contribution received by it, the source from which and the manner in which such foreign contribution was utilised by it. Sub-section (1-A) of Section 6 says that every association referred to above, may, if it is not registered with the Central Government under that sub-section, accept any foreign contribution only after obtaining the prior permission of the Central Government and shall also give, within such time and in such manner as may be prescribed, as intimation to the Central
Government as to the amount of foreign contribution received by it, the source from which and the manner in which such foreign contribution was received and the purpose for which and the manner in which such foreign contribution was utilised by it. Thus Section 6 mandates that no association which is having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution unless it registers itself with the Central Government in accordance with the Rules made under the Act Sub-section (1-A) enables association which is not registered to accept the foreign contribution only after obtaining prior permission of the Central Government and this sub-section, casts a duty on the associations to give intimation to the Central Government as to the amount of foreign contribution received by it and the source from which and the manner in which such contribution was received and the purpose for which and the manner in which such foreign contribution was utilised by it.
9. Another relevant provisions is Section 11 of the Act, which says that when an application is made in prescribed form for obtaining prior permission to accept foreign contribution or hospitality. It says every individual, association, organisation or other person, who is required by or under this Act to obtain prior permission of the Central Government to accept any foreign contribution or foreign hospitality, shall, before the acceptance of any such contribution or hospitality, make an application for such permission to the Central Government in such form and in such manner as may be prescribed. Subsection (2) hereof reads that if an application referred to in sub-section (1) is not disposed of within ninety days from the date of receipt 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. Section 11 further provides that when 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.
10. The Act further empowers the Central Government for the seizure of accounts and records, after inspection ofaccounts or records referred to in Section 14, the Authorised Officer has any reasonable cause to believe that any provision of the Act or of any other law relating to foreign exchange has been or is being contravened, he may seize such account or record and produce the same before the Court in which any proceedings is brought for such contravention. It also empowers any Gazetted Officer, authorised by the Central Government by general or special order, has any reason to believe that any person has in his possession or control any article exceeding rupee one thousand in value, or currency whether Indian or foreign, in relation to which any provision of this Act has been or is being contravened, he may seize such article or currency in accordance with the provisions of the Code of Criminal Procedure, 1973. It also provides for confiscation or articles or currency obtained in contravention of the Act after giving an opportunity to the person. Appeal is provided to the Court of Sessions or the High Court to which such Court is subordinate.
11. Section 22 of the Act gives power to the Government to imposed penalty for obtaining articles or currency in contravention of Section 12 and punishment for the contravention of the provisions of the Act is provided in Section 23. Section 24 empowers the Government to impose
additional fine where article or currency is not available for confiscation. Section 25-A prohibits acceptance of foreign contribution and the prosecution has to be launched with the prior sanction of the Central Government or any Officer authorised by the Government. Section 30 empowers the Central Government to make rules.
12. Rule 3 of the Foreign Contribution (Regulation) Rules, 1976, contemplates that an application for obtaining prior permission of the Central Government to receive foreign contribution or hospitality. Rule 3-A states that an application has to be made for registration of an Association referred to in sub-section (1) of Section 6 for acceptance of foreign contribution in Form No.FC(8).
13. The scheme of the Act makes it clear that before accepting such contribution or hospitality, the association has to be registered itself with the Central Government after making application in Form FC (8) and if it is not registered, an application has to be made for prior permission of the Central Government to receive such contribution or hospitality and a duty is cast on the association or the individual to inform the Central Government, how much contribution they are receiving and from which source.
14. Therefore, as seen from the facts and circumstances of the case, the petitioner association is not registered, in consonance of Section 6(1) of the Act read with Rule 3-A of the rules and no application was made for grant of prior permission by the Central Government to receive foreign contribution and without such permission or registration, the petitioner has received $ 4000/- and after receipt of the said sum, the petitioner has made an application for registration. Therefore, the receipt of foreign contribution is in utter violation of the provisions of the Act and as such, the law has to take its own course for prosecution of the petitioner. Even
though the petitioner association is not registered, Section 6(1-A) of the Act enables the petitioners to accept foreign contribution after obtaining prior permission of the Central Government by submitting an application for obtaining such permission in such time and in such form in such manner as may be prescribed and intimation to the Central Government has to be given with the amount of contribution it has received. After acceptance of foreign contribution, the petitioner made an attempt to get the association registered and made an application in wrong provision of law. As stated earlier, first the association has to be registered. If the application of the petitioner for registration is not disposed of by the Central Government, within a period of 90 days, then the permission prayed for in such application shall on expiry of the said period of ninety days, shall be deemed to have granted by the Central Government. Otherwise, if any order is passed by the Central Government informing the petitioner that for special difficulties the application cannot be disposed of within 90 days, such application shall be deemed to haVe been disposed of after expiry of 30 days. Though the application was made by the petitioner on 4-6-1994, he was directed to furnish additional information and he has furnished additional information, but not as required under Rule 3-A of the rules. Therefore, the respondents have rightly rejected the application of the petitioner and intimated the same to the petitioner through the impugned proceedings, which are valid and legal under the provisions of the Act. When the petitioner’s association is not registered, the petitioner should have obtained prior permission from the Central Government for acceptance of the foreign contribution and should have informed to the Central Government with regard to the source from which and the manner in which the foreign contribution is received and the purpose for which and the manner in which such contribution shall be utilised.
15. Section 6 of the Act starts with a negative clause that No Association which is having a definite cultural, economic, educational, religious and social programme shall accept foreign contribution unless such association is registered. The Central Government, under Section 6(1-A) of the Act enable the associations which are not registered to accept foreign contribution with the prior permission of the Central Government. Prima faice, it is evident that the petitioner has not followed any one of the provisions of the Act before accepting foreign contribution, but after accepting the same, it took steps to get the association registered with any specific provisions of law. Since the petitioner has received foreign contribution without prior permission of the Central Government, the question of granting prior permission under Section 11 of the Act read with Rule 3-A does not arise. Therefore, the petitioner is liable for prosecution under the provisions of the Act for accepting the foreign contribution without registration or obtaining prior permission of the Central Government.
16. When the Central Government has required the petitioner to furnish additional information alongwith Form No.FC (8), the petitioner has failed to furnish the additional information. Therefore, requiring the petitioner to furnish additional information is nothing but giving an opportunity to the petitioner before rejecting the application, inasmuch as the application was not in accordance with the provisions of the Act. Therefore, the petitioner cannot attack the impugned order alleging that it is passed in violation of principles of natural justice.
17. It is needless to mention that if the petitioner intends to register the association, it can make application according to the provisions of the Act and it is for the Central Government to consider the
application and pass appropriate orders with regard to the registration or rejection. Therefore, we do not see any reason to entertain the writ petition and interfere with the impugned order passed by the respondents in rejecting the application of the petitioner for registration. The writ petition accordingly fails and is dismissed. No order as to costs.