Possession Of Permanent Registration Under FCRA Does Not Create Right To Get Foreign Donation Amount, Requires MHA Clearance- Karnataka HC

A Karnataka High Court Bench of Justice KS Hemalekha has held that the possession of a permanent registration under the Foreign Contribution (Regulation) Act of 2010 (FCRA), does not create any right in favour of a person or organisation to get the foreign donation amount credited in the bank account. The Court also clarified that the credit of the money is always subject to clearance from the Union Ministry of Home Affairs.

In that context, it was said that, "Mere possession of the permanent registration under the FCRA, 2010 does not permit the petitioner to get the amounts credited to the designated savings bank account, which is always subject to the clearance of the Ministry of Affairs".

Counsel Siji Malayil appeared for the petitioner, while Counsel VK Sreenath and DSG Shanthi Bhushan appeared for the respondents.

In this case, a petition was filed by the Manasa Centre For Development And Social Action, a registered society based in Bengaluru. The purpose of the petition was to secure the release of funds that were held by the Development Credit Bank since 2013.

The petitioner contended that the bank had rejected a cheque due to insufficient funds, even though there was enough money in the account. The bank informed that an amount exceeding ₹29 lakh was set aside, and any funds received from the foreign entity 'Dan Church Aid' could only be added to the account once approval from the Ministry of Home Affairs (MHA) was obtained.

However, the petitioner further argued that the funds in the account were not solely from 'Dan Church Aid' but also came from other sources.

The Court observed that since the mere possession of permanent registration under the FCRA, 2010 does not permit the petitioner to get the amounts credited to the designated savings bank account, which is always subject to the clearance of the Ministry of Affairs, the petitioner was not entitled to the money.

The Court also perused the letter of the Ministry of Home Affairs dated 31.10.2013, which clearly instructed the respondent-bank to not to credit the amount received from “Dan Church Aid” to the account of the petitioner till further instructions of the Ministry of Home Affairs, unless a clearance has been granted by the ministry.

With that background, the Court held that the petitioner was not entitled to the said amount.

Accordingly, the petition was dismissed as devoid of merit.

Cause Title: Manasa vs The Managing Director, The Development Credit Bank Ltd.

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