Understanding ‘prior permission’ under FCRA

An association or an organisation can receive foreign contribution even without registration with prior permission from the FCRA department. Foreign funds and materials can only be received under two circumstances-

i) the organisation has obtained permanent registration from the FCRA department.

ii) the association or the organisation obtains prior permission from the FCRA department on case to case basis.

Generally prior permission will be required under the following circumstances:

i) the organisation does not have permanent FCRA registration number.

ii) the FCRA registration number has been cancelled by the Government.

iii) the association is instructed by the Central Government to take prior permission where power have been provided to prohibit any organisation from receiving foreign funds.

iv) the FCRA number is suspended due to violation of the provisions and conditions specified under the FCRA.

v) the organisation is of political nature, not being a political party.

vi) any person resident in India or any citizen of India resident outside India, receiving foreign funds on behalf of an organisation of political nature.

The relevant statutory provisions: The expression of prior permission appears in Section 11(2) and 11(3). The relevant extract of Section 11(2) and 11(3 )is reproduced as under :

(2) Every person referred to in sub-section (1) 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 such prior permission shall be valid for the specific purpose for which it is obtained and from the specific source:
Provided that if the person referred to in sub-sections (1) and (2) has been found guilty of violation of any of the provisions of this Act or the Foreign Contribution (Regulation) Act, 1976, the unutilized or unreceived amount of foreign contribution shall not be utilized or received, as the case may be, without the prior approval of the Central Government.

(3) Notwithstanding anything contained in this Act, the Central Government may, by notification in the Official Gazette, specify—

(i) the person or class of persons who shall obtain its prior permission before accepting the foreign contribution; or
(ii) the area or areas in which the foreign contribution shall be accepted and utilized with the prior permission of the Central Government; or
(iii) the purpose or purposes for which the foreign contribution shall be utilized with the prior permission of the Central Government; or
(iv) the source or sources from which the foreign contribution shall be accepted with the prior permission of the Central Government.

Procedure for obtaining ‘prior permission’

The Organisation is required to apply in Form FC-4 for prior permission to the FCRA department along with the following documents-:

i. Audited statement of accounts of past three years.
ii. Activities Report of past 3 years.
iii. If the association is a registered Trust or Society a certified copy of the registration certificate.
iv. Copy of the Memorandum of Association and/or the Articles of Association as applicable.
v. A copy of the latest commitment letter from the donor.
vi. A copy of the proposal / project which has been approved by the foreign source for funding, including projected outlays, budget breakups.
vii. Details of names and addresses of the members of the Executive Committee/Governing Council etc. of the Association.
viii. Copy of any prior permission granted to the organization.
ix. List of present members of the Governing Body of the organisation and the office bearers.
x. Copy of any Journal or other publication of the organization.
xi. If the association is having any parent or sister or subsidiary organisation which is registered under the FCRA then the registration number along with Ministry of Home Affairs file number should be mentioned.
xii. If the association has submitted any application earlier then its reference number should be mentioned.
xiii. If the association has received any foreign contribution with or without the prior approval of the Central Government, then the detail should be given.
xiv. Details of Bank along through which the foreign contribution shall be received.
xv. A recommendation certificate from any competent authority, if any.
Copy of certificates of exemption or registration issued by the Income Tax Department u/s 12A, if any

Time Limit for making application

An application for prior permission under Form FC-4 can be made any time after the legal constitution of an organisation. Though clause 10 & 11 of Form FC-3 requires submission of details of activities of past three years and three years audited statements. Where the organisation is less than three years old, it can submit the documents for lesser number of years as may be available.

Prior Permission for receiving Foreign Hospitality

Under FCRA, the following are prohibited from accepting foreign hospitality except with prior permission:

- member of a legislature
- office bearer of a political party
- Judge
- Government servant or employee of any corporation

The above-mentioned persons are required to apply in Form FC-2 for availing any foreign hospitality. In this Form, details regarding the nature of hospitality, the approximate amount of expenses, the specific dates and countries is required to be provided.

The exceptional situation - Further, it has been provided that no such prior permission would be necessary in case of an emergency medical aid on account of a sudden illness. In such cases, the person receiving such hospitality can give, within one month from the date of receipt of such hospitality, an intimation to the Central Government, regarding the receipt of such hospitality and the source and the manner in which such hospitality was received. Section 6 and rule 7 are relevant in this regard.

Certificate of Recommendation

Foreign Contribution (Regulation) Act, 2010 has clause in Form FC-4 requiring the insertion of a certificate from a competent authority. This certificate can be given by any one of the following :

(1) Collector of District
(2) Department of the Statement Government
(3) Ministry or Department of the Government of India

In this certificate the competent authority certifies the address and the field of activities in which the organisation is working. It also states that there are no adverse antecedents of the organisation, the proposed activities will be beneficial to the people living in that area and the detail of prior permission if taken earlier.

Field Enquiry

The FCRA department may ask the intelligence bureau for a report. Some authorities from the intelligence bureau may visit the office and the project area of the organisation and inspect the books of account and other records available. On the basis of the reports submitted by the intelligence bureau the FCRA department decides whether to accept or reject the application.

The FCRA department issues a registration certificate and provides a permanent registration number. This registration number is required to be quoted in all future correspondences and filling of returns and forms.

Time limit for granting ‘prior permission’

After making inquiry, the Central Government may grant him prior permission, ordinarily within ninety days from the date of receipt of application.

In case the Central Government does not grant, within the said period of ninety days, prior permission, it shall communicate the reasons there for to the applicant.

Refusal and appeal

Section 12(4)(a) states the grounds or the reasons on the basis of which an application can be rejected. If the Central Government after making the necessary inquiry is of the opinion that the person making an application for prior permission is fictitious or benami; has been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another; has been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country; has been found guilty or diversion or mis-utilisation of its funds; is engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends; is likely to use the foreign contribution for personal gains or divert it for undesirable purposes; has contravened any of the provisions of this Act; has been prohibited from accepting foreign contribution.

Where the Central Government refuses the grant of certificate, it shall record in its order the reasons therefor and furnish a copy to the applicant. The Central Government may not communicate the reasons for refusal for grant of certificate to the applicant in cases where is no obligation to give any information or documents or records or papers under the Right to Information Act, 2005.

If an application is rejected and the applicant believes that an unjust order was passed against him, then he can appeal to High Court within a period of sixty days from the date of the order of rejection. The period of sixty days should be counted from the date of the order and not the date of receipt of the order.

The statutory provision - The provision for appeal is provided as per section 31 which is an under:

(2) Any organisation referred to in clause (f) of sub-section (1) of section 3, or any person or association referred to in section 6 or section 9, aggrieved by an order made in pursuance of section 5 or by an order of the Central Government refusing to give permission under this Act, or by any order made by the Central Government under sub-section (2) or sub-section (4) of section 12, or sub-section (1) of section 14, as the case may be, may, within sixty days from the date of such order, prefer an appeal against such order to the High Court within the local limits of whose jurisdiction the appellant ordinarily resides or carries on business or personally works for gain, or, where the appellant is an organisation or association, the principal office of such organisation or association is located.

(3) Every appeal preferred under this section shall be deemed to be an appeal from an original decree and the provisions of Order XLI of the First Schedule to the Code of Civil Procedure, 1908, shall, as far as may be, apply thereto as they apply to an appeal from an original decree.