Suspension, Cancellation & Surrender Of Registration
Could the Government suspend the certificate of registration granted to a person under FCRA?
Answer: Yes. In terms of Section 13(1) of FCRA, 2010, “Where the Central Government, for reasons to be recorded in writing, is satisfied that pending consideration of the question of cancelling the certificate on any of the grounds mentioned in sub-section (1) of Section, 14, it is necessary so to do, it may, by order in writing, suspend the certificate for a period of one hundred and eighty days, or such further period, not exceeding one hundred and eighty days, as may be specified in the order.”
Will an Association, whose registration has been suspended, be able to receive any FC and/or utilise any FC it its possession?
Answer: As per Section 13(2) of FCRA, 2010, every person whose certificate has been suspended shall not receive any foreign contribution during the period of suspension of registration certificate. However, if such person makes an application, the Central Government, if it considers appropriate, may allow that person to receive FC and utilise in the prescribed manner any FC in its custody on any specified terms and conditions. For utilisation of the FC in his custody in the manner prescribed, such person shall require prior approval of the Central Government. In terms of Rule 14 of FCRR, 2011, the unspent amount that can be utilised in case of suspension of a certificate of registration may be as under‒
(a) In case the certificate of registration is suspended under Section 13(1) of FCRA, 2010, up to 25% of the unutilised amount may be spent, with the prior approval of the Central Government, for the declared aims and objects for which the foreign contribution was received.
(b) The remaining 75% of the unutilised foreign contribution shall be utilised only after revocation of suspension of the certificate of registration.
Could the Government cancel the certificate of registration granted to a person under FCRA? If so, for what reasons?
Yes. The conditions for cancellation of certificate, as prescribed under section 14(1) of FCRA, 2010 are ‒
“The Central Government may, if it is satisfied after making such inquiry as it may deem fit, by an order, cancel the certificate if —
(a) the holder of the certificate has made a statement in, or in relation to, the application for the grant of registration or renewal thereof, which is incorrect or false; or
(b) the holder of the certificate has violated any of the terms and conditions of the certificate or renewal thereof; or
(c) in the opinion of the Central Government, it is necessary in the public interest to cancel the certificate; or
(d) the holder of the certificate has violated any of the provisions of this Act or rules or order made thereunder.
(e) if the holder of the certificate has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive years or has become defunct.
Could the Government cancel an Association’s registration without assigning any reason and providing an opportunity to present its case?
Answer: No. Before cancellation of registration on any of the grounds mentioned in Section 14(1) of FCRA, 2010, the Government has to suspend the registration, duly recording the reasons for suspension in writing, and follow the procedure of holding an inquiry, as it may deem fit and, only if any of the conditions for cancellation is satisfied, the Government will cancel the registration. The Association concerned will also be given a reasonable opportunity of being heard during the course of inquiry vide Section 14(2) of FCRA, 2010.
Could an Association whose registration has been cancelled in terms of Section 14 of FCRA, 2010 again apply for grant of registration or prior permission?
Answer: Yes, but it can apply for registration or prior permission only after 3 years from the date of cancellation of its registration. In terms of Section 14(3) of FCRA, 2010, “Any person whose certificate has been cancelled under this section shall not be eligible for registration or grant of prior permission for a period of three years from the date of cancellation of such certificate.”
Could an Association whose registration has been cancelled make a representation to MHA for revocation of the order for cancellation?
Answer: The correct course of action in such a case is to seek revision of the order for restoration of registration in terms of Section 32 of FCRA, 2010. As per MHA’s Order dated 12/08/2022 issued in exercise of the powers under Rule 20 of FCRR, 2011, any organization that wants to file an application under section 32 of FCRA, 2010 for revision of an order passed by the competent authority, i.e., MHA (FCRA Wing), may upload a scanned copy of its application on the FCRA web portal (https://fcraonline.nic.in/) under main heading “Services under FCRA”, Sub heading “Revision Application against Section 32, FCRA 2010”. There is no format of revision application and there is no need to send physical copy of revision application or any related document to MHA. Scanned copy of the duly signed application in plain paper is acceptable. Justification for revision of Order must be submitted online along with the supporting documents, if any. A fee of Rs.3000/- (Three Thousand only) must be paid through the payment gateway specified by the Central Government. According to Section 32(3) of FCRA, 2010, such application for revision of an order must be made within 1 year from the date on which the order in question was communicated to the person or the date on which he otherwise came to know of it, whichever is earlier; provided that the Central Government may, if it is satisfied that such person was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period.
What will happen to the unutilised FC and assets created out of FC after the registration of an Association is cancelled?
Answer: Section 15 of FCRA, 2010 is reproduced below:
“(1) The foreign contribution and assets created out of the foreign contribution in the custody of every person whose certificate has been cancelled under section 14 or surrendered under section 14A shall vest in such authority as may be prescribed.
(2) The authority referred to in sub-section (1) may, if it considers necessary and in public interest, manage the activities of the person referred to in that sub-section for such period and in such manner, as the Central Government may direct and such authority may utilise the foreign contribution or dispose of the assets created out of it in case adequate funds are not available for running such activity.
(3) The authority referred to in sub-section (1) shall return the foreign contribution and the assets vested upon it under that sub-section to the person referred to in the said sub-section if such person is subsequently registered under this Act.“
Rule 15 of FCRR, 2011 prescribes that,
“If the certificate of registration of a person who has opened an FCRA Account under section 17 is cancelled, the amount of foreign contribution lying unutilised in that Account shall vest with the prescribed authority under the Act.“
In terms of the Gazette Notification [S.O. 5650(E), dated the 5th November 2018], the Central Government has prescribed that the Additional Chief Secretary or Principal Secretary (Home) of the concerned State Government or Union territory (where the assets of the person whose registration has been cancelled under section 14 of the said Act are physically located), as competent authority for the purposes of section 15 of the Act.
Could the registration of an Association be cancelled if it had been filing ‘nil’ return for two consecutive years?
Answer: As per Section 14(1)(e) of FCRA, 2010, the Central Government may cancel the registration of an Association if such Association has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive years or has become defunct. Submission of a ‘nil’ return under FCRA, 2010 for two consecutive years means that the Association concerned has not received any FC for two those years. It does not necessarily mean that the Association was not engaged in its field of activity because it could have continued with its programme with local donations. Further, the Act does not expressly say that to remain engaged in its field of activity, a FCRA registered Association should utilise only FC. However, if the Government takes the view that since the Association concerned has been unable to mobilise any foreign donation for running its activities for two consecutive years, it may cancel the registration of that Association after following the due procedure where the Association should be given the opportunity of being heard.
Could an Association voluntarily apply for surrender of its registration under FCRA for whatever reason?
Answer: Yes. Section 14A of FCRA, 2010 prescribes that “On a request being made in this behalf, the Central Government may permit any person to surrender the certificate granted under this Act, if, after making such inquiry as it deems ﬁt, it is satisfied that such person has not contravened any of the provisions of this Act, and the management of foreign contribution and asset, if any, created out of such contribution has been vested in the authority as provided in sub-section (1) of section 15.“ In terms of Rule 15A, application for surrendering a registration certificate has to be submitted in electronic form online in Form FC-7. The following details are to be furnished in the prescribed online Form-6D:
(i) DARPAN ID of the Association;
(ii) FCRA registration number;
(iii) Name of the Association in full;
(iv) Official telephone number of the Association;
(v) Official E-mail address of the Association;
(vi) Landline (with STD code)/ mobile number of the Chief Functionary;
(vii) PAN of the Association;
(viii) Aadhaar number of Chief Functionary;
(ix) Details of registration of the Association under an existing statute with registration number, date and place of registration;
(x) Details of designated FCRA Account in SBI, NDMB, ‘another FCRA Account, if any, and Utilisation Account(s), if any, with name of the bank, its branch address, e-mail address, IFSC Code, account number(s) and date of opening the account(s).
A declaration/affirmation is to be signed to the effect that (i) the information furnished in the application is true and correct and, (ii) no accounts other than those mentioned in the application has been opened for receipt and utilisation of FC. The following would be required for submitting the online Form:
(i) Self certified scanned copy of the registration certificate under an existing statute;
(ii) Scanned Image of signature of the Association’s Chief Functionary [JPG/JPEG format / Dimension – 140(Width) * 60(Height) Pixel & Size-50 KB (Max.)]; and
(iii) Scanned Image of the Seal of the Association [JPG/JPEG format / Dimension – 140(Width) * 60(Height) Pixel & Size-100 KB (Max.)].
In terms of Section 14A of FCRA, 2010, the management of FC and assets, if any, created out of such FC (where the assets of the Association that has been permitted to surrender its registration are physically located) would be vested in the authority of the Additional Chief Secretary or Principal Secretary (Home) of the concerned State Government or Union territory, as competent authority for the purposes of section 15(1) of the Act. The validity of certificate surrendered under section 14A of the Act shall be deemed to have expired on the date of acceptance of the request by the Central Government vide Rule 10(2) of FCRR, 2011.