Greenpeace India files Writ Petition against blocking of funds

IN THE HIGH COURT OF DELHI AT NEW DELHI

Extraordinary Original Writ Jurisdiction

W.P. ( Civil) No.  ________ of 2015

In the matter of:

Article 226 of the Constitution of India;

And in the matter of:

1.      Greenpeace India Society

A society registered under the Tamil Nadu Societies Registration Act, 1975

Bearing registration No.49/2006 having its registered office at New No.47(Old No.22), Second Cross Street, Ellaiyamman Colony, Gopaluram, Chennai – 600 086

… Petitioner

         Versus

1.      Union of India

         Through the Secretary,

         Foreigners Division

Ministry of Home Affairs

Government of India

Jaising Road, Opposite Jantar Mantar

New Delhi – 110 001

2.      IDBI Bank Limited

Through its Manager

2^nd Foor, No.7

Chevalier Sivaji Ganesan Salai

(South Boag Road) T. Nagar

Chennai – 600017

3.      Yes Bank

Through its Manager

No. 3, Ground Floor, 

Prestige Obelisk,

Kasturba Road,

Bangalore 560001

4.      ICICI Bank

         Through its Manager

         No.1329, Bull Temple Road,

Chamarajpet,

Bangalore 560018

                                                                                 …Respondents

WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA FOR QUASHING THE RESPONDENT NO.1’S ORDER U/S 13 OF THE FCRA AGAINST THE PETITIONER AND UNFREEZING OF BANK ACCOUNTS HELD BY THE PETITIONER WITH RESPONDENTS NOS.2 TO 4

Most Respectfully Showeth:

1. This is a Writ Petition under Article 226 of the Constitution of India to invoke this Hon’ble Court’s extraordinary original civil writ jurisdiction with a view to quashing by a writ of mandamus or other appropriate writ, the order u/s 13 of the Foreign Contribution Regulation Act, 2010 (hereinafter “FCRA”) dated 9^th April 2015 suspending the registration of the Petitioner for 180 days, the maximum period permitted under the Act, and collaterally, ultra vires of the Act and without reference to any order, freezing both FCRA and domestic accounts of the Petitioner (hereinafter “Impugned Order”). The Impugned Order is not only a colourable exercise of administrative power in absence of a published policy on the part of Respondent No.1, but it has also been exercised in a manner wholly arbitrary, unreasonable, disproportionate, and unconstitutional. Further, Respondent No.1’s collateral action of freezing of all domestic and foreign accounts of the Petitioner, a “taking” of movable property, is an action ultra vires of the FCRA, for which the Respondent No.1 lacks jurisdiction. A true typed copy of the order dated 9^th April, 2015, F.No.II/21022/58(0047)/2013-FCRA(MU), received by the Petitioner on 13^th April 2015 is annexed hereto and marked as Annexure P-­­.1.

1. The Petition is impugning inter alia, the order on the following grounds:

1. The Impugned Order u/s 13 of FCRA, an expropriatory order, is ex facie arbitrary and illegal for failing to record any reasons, or reach any finding, on the “necessity” for suspending FCRA registration, and for doing so for 180 days, particularly in the context of being contrary to published guidelines.
2. The Impugned Order u/s 13 of the FCRA is entirely unreasonable and erroneous, as the Petitioner acts are consistent with its aims and objectives, and is recognised in doing so by tens of thousands of Indian contributors, whose ability to continue their monthly contributions is also discontinued.
3. The Impugned Order violates the natural justice constitutional right of the Petitioners, without any patent exigency or emergency. Dissent or disagreement is not “necessity” or an exigency.
4. The Petitioner Society’s actions are consistent with the constitutional principles that should direct the actions of every citizen – in particular Article 51A(g) of the Constitution of India.
5. The collateral action of freezing funds through an undisclosed, secret order is ultra vires of FCRA and the scheme of s. 13 of FCRA, outside the jurisdiction of FCRA, and an illegal act on behalf of Respondents Nos.2 to 4, even more so in the case of the Petitioner’s non-FCRA accounts.
6. The Impugned Order and collateral actions implicates the constitutional rights of the Petitioner society and its members pursuant to Articles 14, 19(a) and (c), and 300A of the Constitution of India.
7. The Respondent No.1’s malafides are demonstrable by its directions stopping remittance of funds in the FCRA designated account, as far back as 19^th February, 2015, despite the order of this Hon’ble Court in W.P (C) 5749 of 2014 dated 20^th January, 2015, and prior to any Impugned Order.

1. The Petitioner is a society registered under Tamil Nadu Societies Registration Act, 1975, bearing registration No.49/2006. Till the issuance of the Impugned Order, dated 9^th April, 2015, and received on 13^th April, 2015, the Petitioner had permanent registration under the FCRA, allotted to it through the Respondent No.1’s letter No.II/21022/67(229)2005-FCRA-III dated 21^st September, 2005. The Petitioner is a not for profit, tax exempt organisation u/ss 12AA and 80G of the Income Tax Act, 1961. A true copy of the FCRA registration of the Petitioner, No.1’s letter No.II/21-22/67(229)2005-FCRA-III dated 21^st September, 2005, is annexed hereto and marked as Annexure P-2.
2. The Petitioner’s work is focused on public interest topics of urgent environmental concern, including: transitioning from a fossil fuel dependent energy system to one laying greater emphasis on renewable energy and energy efficiency to stop climate change; ensuring that true costs of nuclear energy are considered and safer, more economical energy choices are opted for; protecting oceans and ancient forest resources for current and future generations; preventing health risks by eliminating the release of toxic chemicals and genetically engineered organisms into the environment. The Petitioner enjoys a broad spectrum of support across India. Approximately 300,000 (three lakh) people in India have contributed financially to the Petitioner thus far and at present around two-thirds of the funds to support Petitioner’s activities are generated from voluntary donations from individuals in India. Until the Respondent No.1, with the collusion of the Respondents Nos.2, 3 and 4 froze all the bank accounts of the Petitioner, about 75,000 (seventy five thousand) donors used to contribute small sums, from Rs. 100 (one hundred) to Rs. 750 (seven hundred fifty), for which they were duly issued appropriate certificates u/s 80G of the Income Tax Act. The Petitioner employs more than 340 people, whose livelihoods are placed in jeopardy by the conduct of Respondents herein. A true copy illustrating the  Petitioner’s successful campaigns is annexed hereto and marked as Annexure P-3.

1. The Petitioner operates on principles exemplified by the founders of Greenpeace who in 1971 put their lives at risk by setting sail from Vancouver, Canada to a tiny island off the Alaskan coast to bear witness to US underground nuclear testing.  Their courage sparked concern that led to US ending its nuclear test program at that site a year later. Greenpeace activists continue to bear witness in non-violent direct actions, from the Arctic Circle – where drilling for fossil fuels threatens international environmental catastrophe – to the Mahan region of Madhya Pradesh where, until a few months ago, ancient forests faced destruction and indigenous people faced loss of livelihood.

1. The Petitioner society is transparent in its funding, activities, and expenditures. The details of its receipts and expenditures are voluntarily self-disclosed on its web site, for which Respondent No.1 has notice. The current-up-to date details of receipts and expenditures may be obtained at the website url:

http://www.greenpeace.org/india/en/publications/FCRA-Receipts-and-Utilisation-2013---2014/

1. The Respondent No.1 is the Secretary, Ministry of Home Affairs, the nodal ministry for administering the FCRA. Respondent No.2 is a bank regulated by the Reserve Bank of India with whom the Petitioner maintains Account No.005103000000888 which, as mandated by FCRA, is the designated FCRA account for receipt of foreign charitable contributions.  Petitioner’s FCRA utilisation account is with Respondent No.3.  Petitioner also maintains other separate accounts with Respondents Nos.3 and 4, which are the property of Petitioner. The details of the accounts are as follows:

1. The instant Writ Petition raises the following amongst other questions of law of general public importance:

8.1 Whether an order u/s 13 of the FCRA may be issued without any prior service of show cause notice, disclosure of the basis of the allegations, followed by opportunity for hearing thereon?

8.2 Whether an order u/s 13 of the FCRA is maintainable in the absence of speaking order recording the reasons for its “necessity”, and the time period for which such “necessity” must operate, including the justification for such necessity prior to a full hearing and determination of the causes of action alleged u/s 14 of the Act?

8.3 Whether freezing of accounts u/s 13 of FCRA is an unconstitutional and illegal action constituting a “taking” without prescription or authority of law, and contrary to the constitutional principles of natural justice, non-arbitrariness and reasonableness?

8.4 Whether the State is not under a duty to respect natural justice rights and due process of law as a consequence of Article 14, including the right of the affected party to have a just, fair and reasoned decision in respect of any administrative order or expropriation with a right to hearing the affected party?

8.5 Whether a “taking” of accounts may be affected without prescription of law, consistent with principles of natural justice?

1. The brief facts leading to the instant Writ Petition are as follows:

9.1 In both 2012 and 2013, the Petitioner responded satisfactorily to questionnaires required by Respondent No.1 in relation to FCRA related matters. The Petitioner, after approval of its accounts, publishes its annual report, highlighting its activities for the year and including a balance sheet of expenditures, income amounts and sources. This is publicly released on the Petitioner’s web site. A true typed copy of the extract from the Annual Return of the expenses detailed in the Campaignwise Expense for the year 2013 is annexed hereto and marked as Annexure P-4.

9.2 The Petitioner’s actions are conformant with the National Policy on the Voluntary Sector, issued by the Planning Commission, Government of India, in May, 2007, which reiterated the independence and autonomy of the voluntary sector. A true copy of the National Policy on the Voluntary Sector, as issued by the Planning Commission, Government of India, is annexed hereto and marked as Annexure P-5.

9.3 On 6^th February, 2012 the Reserve Bank of India issued Guidelines issued under Section 36(1)(a) of the Banking Regulation Act, 1949, titled “Implementation of the provisions of Foreign Contribution (Regulation) Act, 2010. It details compliance and reporting requirements of the banks, but provides no directions on freezing of accounts. Further, in paragraph 6 of the Guidelines.

“…This circular is intended only to serve as a guide to the banks and Financial Institutions for carrying out their obligations under the Act and the Rules made thereunder. In case of doubt, banks and Financial Institutions should make it a point to refer to the text of the Act and the Rules, and if found necessary, proper legal advice should be taken.”

A true copy of the FCRA Guidelines issued by the RBI: RBI/2011-12/388 dated 6^th February 2012 is annexed hereto and marked as Annexure P-6.

9.4 On 23^rd June 2014, Stitching Greenpeace Council, Amsterdam remitted Euros 235,000 to the Petitioner’s FCRA designated account maintained by Respondent No.2.

9.5 On 4^th July, 2014, after repeated attempts at clarification, the Petitioner wrote a letter to Respondent No.2, on being informed that the funds were being blocked due to a directive from Respondent No.1, enquiring whether a reference in this regard was necessary to Respondent No.1.

9.6 On 17^th  July, 2014, the Petitioner made a representation to the Respondent No.1, pointing out that the Petitioner had filed all duly required reports in compliance with FCRA. The Petitioner requested that Respondent No.1 indicate the basis of Respondent No.2’s action in not crediting the abovementioned funds, and explained the prejudice being caused to its activities on several environmental issues.

9.7 A Right to Information Act (RTI Act) application was sent to the Reserve Bank of India seeking details and copies of all communications and instructions from the Respondent No.1 concerning the Petitioner and Greenpeace International. In response, the Reserve Bank of India (RBI) sent a letter dated 24^th July, 2014 denying the information, claiming it was exempt from disclosure u/s 8(1)(e) of the RTI Act, on the grounds that it would “prejudicially affect the security interest of the State.” True copies of the RTI Application, dated 15^th July, 2014, and the RBI’s response, dated 24^th July, 2014, are annexed hereto and marked as Annexure P-7 Colly.

9.8 Aggrieved by the actions of Respondents Nos.1 and 2, the Petitioner filed Writ Petition (Civil) No.5749 of 2014, challenging the Respondent’s actions in not transferring / crediting the amount from Stitching Greenpeace Council to the FCRA-designated account maintained by the Petitioner with Respondent No.2, and further to set aside/quash all the letters / documents / orders / directions by which the crediting of amounts received by the Petitioner as foreign contributions had been prohibited.

9.9 On 3^rd September, 2014, this Hon’ble Court was pleased to issue notice on WP (Civil) No.5749 of 2014. The following day, 4^th September, 2014, the Respondent No.1 posted a letter to Petitioner, which letter was dated more than five weeks earlier, i.e. 28^th July, 2014. The Respondent No.1 therein requested complete details of the “project” for which inward remittance from Stitching Greenpeace Council was intended. A true copy of the communication transmitted on 3^rd September, 2014, dated 28^th July, 2014, from Respondent No.1 to the Petitioner, is annexed hereto and marked as Annexure P-8.

9.10    The Respondent No.1 issued a further letter dated 8^th September, 2014, received by the Petitioner on 12^th September, 2014, demanding inspection of the accounts and records of the Petitioner for the financial years 2008-2009 to 2012-2013. A true copy of the communication dated 8^th September, 2014, from the Respondent No.1 to the Petitioner, is annexed hereto and marked as Annexure P-9.

9.11    The Petitioner responded to the Respondent No.1 on 15^th September, 2014, submitting that the inward remittance from Stitching Greenpeace Council, like all inward remittances, would be utilised as per the Petitioner’s “aims and objects on environmental projects”, as also for meetings, office expenses, payment of salaries, contingencies, travel and other miscellaneous expenses.

9.12    The Respondent No.1, through its designated official conducted an inspection between 24^th and 27^th September, 2014 at the Petitioner’s offices.

9.13    In its Reply Affidavit filed in W.P (C) 5749 of 2014, dated 9^th October 2014, the Respondent No.1, asserted that the “Petitioner association is using foreign contribution for activities adversely impacting national interest which may likely to be prejudicial to the public interest.”(sic)

9.14    On 27^th November, 2014, Respondent No. 1 wrote to Petitioner, inviting a response to its “observations” consequent upon Respondent No.1’s on-site inspection of 24^th-27^th September, 2014. 

9.15    On 20^th December, 2014, Petitioner provided Respondent No. 1 with a detailed written response to each and every “observation” in Respondent No.1’s letter of 27^th November, 2014.

9.16    It is pertinent to the history of this matter, and to the question of the malafides of the Respondent No.1 herein, to note that, on 11^th January, 2015, just nine days before the oral argument fixed for hearing before this Hon’ble Court in WP (C) 5749 of 2014, Respondent No.1 caused Ms. Priya Pillai, an employee of Petitioner, to be removed from a flight bound for London where she was scheduled to meet with an all-party group of British MPs, and caused the word “OFFLOAD” to be stamped in her passport.  This action was purportedly based on a “Look Out Circular” allegedly issued the previous day.

9.17    In the course of oral arguments on 20^th January 2015, before this Hon’ble Court, learned counsel for Respondent No.1, without any document or explanation to substantiate the same, repeated his assertion that: “the activities undertaken by Petitioner are detrimental to the national interest.” (see Order, paragraph 8.2) He further informed this Hon’ble Court that: “a report in the matter is being prepared, which should be ready shortly.” (see Order, paragraph 6.4).

9.18    This Hon’ble Court was pleased to allow the Writ Petition No.5749 of 2014, in its order dated 20^th January, 2015, holding, inter alia, that:

“9…According to me, there is no material whatsoever, on record, which would, presently justify, declining the petitioner’s request for allowing it access to its bank account maintained with IDBI Bank (Chennai branch). The stand taken by the respondents that the donor, GPICWF, is on the “watch-list” of the Ministry of Home Affairs, is not enough, as no material of any sort has been placed on record which would warrant, respondents reaching such a conclusion.”

“9.1…There is no material placed on record, which would show, not at least at this juncture, that the activities carried out by the petitioner, as claimed by the respondents, are detrimental to national interest. The petitioner’s disagreement with the policies of the Government of India, could not, per se be construed as actions which are detrimental to national interest. Non-Governmental Organizations often take positions, which are contrary to the policies formulated by the Government of the day. That by itself, in my view, cannot be used to portray, petitioner’s action as being detrimental to national interest. The government is free to execute its policies as it has the mandate of the people behind it, notwithstanding a different point of view of Non-Governmental Organizations, such as the petitioner.

“9.2 What makes the stand of the respondents even more untenable is, the position taken in the counter affidavit that they have not exercised the powers vested in it, under Section 9 of FCRA; which is, perhaps, the only provision whereby, if at all, it could have prohibited the petitioner from accessing its accounts maintained with the IDBI Bank…”

Thus, vide the said order at paragraph 10 thereof, this Hon’ble court permitted the Petitioner:

“…to access its FCRA Account No. 005103000000888 maintained with IDBI Bank (Chennai). The fixed deposits created pursuant to the order dated 03.09.2014 shall stand dissolved and the money reflected in the F.D.R will be credited to the said account along with the interest accrued thereon.”

This Hon’ble Court further observed in paragraph 9.2 of its Order that, even if action were to be taken u/s 9 of FCRA:

“I have no doubt in my mind that principles of natural justice would have to be taken recourse to, as denying access to funds in the instant circumstances, would result in civil consequences.”

A true copy of the order of this Hon’ble Court dated 20^th January, 2015, of this Hon’ble Court in W.P. (C) 5749 of 2014 is annexed hereto and marked as Annexure P-10.

9.19    Following upon, and acting in reliance upon the above Order, Stichting Greenpeace Council, Amsterdam (“SGC”) transferred Euros 235,000 to Petitioner’s FCRA account, above-referenced, which sum was duly credited on 2^nd February 2015.  A further sum of Euros 25500 from SGC was duly credited to that FCRA account on 16^th February 2015.

9.20    It is pertinent that, on 12^th March, 2015, this Hon’ble Court ruled in respect of Writ Petition (Civil) No.774 of 2015, Priya Parmeshwaran Pillai v. Union of India & Ors.  In that matter, the “Look Out Circular” issued against the Petitioner therein, an employee of Petitioner society, was quashed and Respondent No.1 was ordered to remove the endorsement “OFFLOAD” entered in the passport of Petitioner therein, and Respondent No.1 was ordered to remove her name from any data bases maintained by the Respondent No.1.  This Hon’ble Court held, inter alia, that:

“15.5 Therefore, the action of the respondents, in issuing an LOC qua Ms. Pillai with the object of preventing her from propagating and disseminating her views on development activities in the Mahan coal block area, cannot be construed as a reasonable restriction, which would pass muster of the provisions of clause (2) of Article 19 of the Constitution. That the right to freedom of speech and expression includes the right to propagate ones views, which cannot be stifled or impeded, except on grounds alluded to in clause (2) of Article 19, is a constitutional principle recognised by our courts in a long line of judgements. It is a right so well entrenched in our Constitution that, it cannot be dislodged, at this point in time our of nation’s history.”

A true copy of the Judgement of this Hon’ble Court in W.P. (C) No.774 / 2015 dated 12^th March, 2015, is annexed hereto and marked as Annexure P-11.

9.21     Eleven days after the aforementioned judgement, when Stichting Greenpeace Council, Amsterdam on 23^rd  March 2015 remitted approximately Euros 148000 to Petitioner’s FCRA account aforementioned, this time, notwithstanding the clear direction of the 20^th January Order of this Hon’ble Court in Writ Petition (Civil) No.5749 of 2014 , the funds were not credited as before to the Petitioner society.  After repeated queries from Petitioner, Respondent No.2 replied by email dated 27^th March 2015 that “your transaction has been taken up with MHA for approval.” Another email on the same day stted that “the matter has been taken up with MHA as per the instruction dated 19-02-2015 from the Regulatory Authority in the regard.” A true copy of the e-mail trail ending on 28^th March 2015 between the Petittioner and Respondent No.2 is annexed hereto and marked as Annexure P-12.

9.22    Despite repeated requests to Respondents Nos.2 and 3, these banks have consistently refused to allow Petitioner society to open new accounts. As a result, all the Petitioner's existing direct debit mandates, upon which it relies for a substantial portion of its income, have either been cancelled or currently lie dormant. The Petitioner has already sustained a loss of contributions promised by way of direct debit of approximately 1.25 crore for the first month of Respondents' actions complained of herein, which losses are likely to continue on a monthly basis for so long as Respondents' conduct herein is permitted to continue.   Even if the Petitioner were enabled to open a new account with Respondent No.2, Petitioner would continue to suffer loss of income and incur heavy administrative costs and inconvenience in order to effect all necessary changes to each of the direct debit mandates involved.

9.23    On 8^th April, 2015, the Petitioner wrote to the Respondent No.1, stating its view that Respondent’s action amounted to a gross violation of this Hon’ble Court’s Order of 20^th January 2015, and requesting compliance with said Order. A true copy of the letter dated 8^th April 2015 from the Petitioner to the Respondent No.1 is annexed hereto and marked as Annexure P-13.

9.24    Instead of providing a response to Petitioner’s letter as above, on 9^th April, 2015, without notification to the Petitioner, the Respondent No.1 released to the media the Impugned Order that Petitioner’s FCRA registration be suspended for a period of 180 days. Petitioner received a copy of the Impugned Order on the 13^th April, 2015. (Annexure P-1: Impugned Order)

9.25    Simultaneously, on 9^th April, 2015, the Respondent No.1 also released to the media a show cause notice u/s 14 of FCRA, subsequently received by Petitioner on the 13^th April 2015, alleging, inter alia,:

(a) that monies had been transferred from the FCRA designated bank to the FCRA utilisation account and from there to five other undeclared utilisation bank accounts without informing the authority,

(b) there were reporting errors with regard to FCRA opening balances;

(c) usage of more than 50% of funds for “administrative expenses”;

(d) funding of legal costs, for seeking bail, and filing writ petitions of an associated Indian NGO and activists of the association;

(e) payment to employees of Greenpeace Environmental Trust;

(f)   non-disclosure of salary paid by Greenpeace International to a GPI employee on secondment to GPIS;

(g) shift of “functioning and activities from its registered address”

(h) replacement of “50% or more the executive committee members”

(i)   acting “against the public interest” and the “economic interest of the State.”

A true typed copy of the show cause notice issued from Respondent No.1 to the Petitioner on 9^th April, 2015, received on 13^th April, 2015, is annexed hereto and marked as Annexure P-14.

9.26    Again without notice to the Petitioner, all of the bank accounts of the Petitioner society, FCRA-designated or otherwise, maintained by the Petitioner with Respondents Nos.2, 3 and 4, were frozen, despite the Impugned Order making no mention of such freezing. The Petitioner through its letter dated 16^th April, 2015 to the Respondent No. 1 therefore sought clarification as to any legal basis pursuant to which the Ministry of Home Affairs had frozen the account of the Petitioner, notwithstanding the order of this Hon’ble Court dated 20^th January, 2015 in W.P. (C) No.5749 of 2014. It was pointed out to the Respondent No.1 that freezing of all accounts “risks needless suffering to the dedicated staff of [Petitioner] and deprives the Indian supporters of [Petitioner’s] work, whose sole purpose is to protect the public interest, and ensure we have clean air, water, standing forests, and a clean and sustainable energy system to ensure the health and well being of the current and future generations.” A true copy of the representation dated 16^th April, 2015 from the Petitioner to the Respondent No.1 is annexed hereto and marked as Annexure P-15.

9.27    Due to the freezing of the accounts, the Petitioner society is unable to access any of its Fixed Deposit held with Respondent Nos.3 and 4, due to the accounts through which they must be encashed being illegally frozen. The details of the Fixed Deposits held are as follows:

9.28    Beginning on or about the 13^th April 2015, Petitioner became aware of a series of articles appearing in India’s national media in which journalists cited directly to a report entitled “MHA Inspection of Greenpeace India Society.” Since it appeared that Respondent No.1 had released said report to the media in an attempt to justify its conduct in issuing the show cause notice and order of 9^th April, the Petitioner wrote another letter to Respondent No.1 on 21^st April, 2015, requesting copies of said investigation report, together with any and all other reports and documents relied upon by Respondent No.1 in issuing the Show Cause Notice dated 9^th April, 2015, so that Petitioner might have an adequate opportunity to respond thereto.  No response has been received to this letter, a true copy of the Petitioner’s letter to the Respondent No.1 dated 21^st April 2015 is annexed hereto and marked as Annexure P-16..

9.29    In a letter dated 23^rd April, 2015, the Respondent No.1 stated that the FCRA Account 005103000000888 maintained with Respondent No.2 has been frozen along with 5 other accounts, maintained with Respondents Nos.2 to 3, for the period of 180 days i.e. for the period for which the suspension order dated 09.04.2015 was issued. It is pertinent to observe that the notice u/s 13 of the FCRA Act, dated 9^th April, 2015, made no mention of freezing any bank accounts, still less the freezing of all Petitioner’s bank accounts. A true typed copy of the Respondent No.1’s letter dated 23^rd April, 2015, to the Petitioner is annexed hereto and marked as Annexure P-17.

9.30    It is further pertinent to mention that each and every allegation made in the Section 13 Impugned Order dated 9^th April, 2015 appears to be identical in sum and substance to allegations made in Respondent No.1’s “observations” dating back to 27^th November 2014 and to which Petitioner had responded on 20^th December 2014.  If Respondent No.1 today considers those allegations so substantial as to justify its conduct as above, it is to say the least surprising that Respondent No.1 failed and neglected to bring any one or more of these same allegations to the attention of this Hon’ble Court on 20^th  January 2015 when Writ Petition (C) No. 5749 of 2014 was under consideration and adjudication. 

9.31    The Petitioner responded to the Respondent No.1’s letter dated 23^rd April, 2015, with a detailed representation dated 30^th  April, 2015, requesting the legal basis for the freezing order, answering the letter in substance, as well as seeking an oral hearing. No response to the request for an oral hearing has yet been received. A true copy of the letter of the Petitioner to the Respondent No.1 dated 30^th  April 2015 is annexed hereto and marked as Annexure P-18.

9.32    On 8^th May, 2015, the Petitioner submitted a detailed 26-page response to the show cause notice, while reiterating the request for the basis of the allegations, and reserving Petitioner’s right to file a more detailed response on receipt of the documents relevant to the show cause notice. (A separate response to s. 13 order was also submitted) A true typed copy of the preliminary response to the show cause notice dated April, 2015 from the Respondent No.1 to the Petitioner dated 7^th May, 2015, is annexed hereto and marked as Annexure P-19.

9.33    It is pertinent that the apparent attempt to force the Petitioner to cease operations has not been limited to the Respondent No.1, but extends to other instrumentalities of the State. The Petitioner No.1 has been subject to attempts at punitive action by the Income Tax Department. In March, 2014, the Assessment Officer assessed substantial tax liabilities for FY 2010-2011, disallowing exemptions for items that had never previously been queried. The Assessing Officer also referred the Petitioner’s tax-exempt status to the Chief Commission of Income Tax u/s 12aa(3) of the Income Tax Act, 1961. For FY 2011-2012, the Assessment Officer has raised similar queries. The Petitioner has filed an appeal against the FY 2010-2011 assessment order, and had sought liberty to file 25% as a deposit, instead of the usual 50%. However, after 20^th January 2015 order of this Hon’ble Court, the Commissioner of Income Tax reneged on the oral agreement to file 25%, and froze the account until a further 25% deposit had been seized. Currently, Rs. 2,00,00,000 (Two crores) have been deposited with the Income Tax authorities on a malafide tax assessment.

9.34    The fate of Petitioner’s project is uncertain due to inability to meet operational and other costs. For instance, the Petitioner society’s collaborative projects with the Bihar Government for a solar powered micro grid is now in jeopardy. Costing Rs. 3 crore, the solar powered micro-grid is a comprehensive, first-of-its kind enterprise that provides 24x7 electricity to more than 450 households and 50 commercial establishments. About 70kW is supplied to them and 30kW to 10 water pumping systems of three horsepower each. Built within three months and on test-run since last March, the micro-grid also takes care of 60 street lights, energy requirements of two schools, one health centre, one Farmers’ training Centre and 50 commercial establishments.

9.35    Another instance of a project hindered and prejudiced is the kisan maati yatra, which was to create demand for support for creating infrastructure to make biomass based eco-fertilisers. The yatra was scheduled for 11^th to 18^th April, 2015, and was supposed to cover 21 panchayats of 7 blocks of Jamui District of Bihar where living spoils model village for biomass based eco-fertilisation and rejuvenating rural livelihoods is being implemented by the Petitioner society. The yatra has been indefinitely postponed. Local organisers have sought to carry on regardless of the support, but the project stands in jeapordy.

9.36    The Petitioner is unable to meet its salaries, rent, statutory liabilities, such as TDS, provident fund, graturity payments, and professional taxes, and third party payments.

1. G R O U N D S

The impugned Order as well as collateral actions impugned are ultra vires, in violation of the Petitioner’s constitutional rights under Articles 14 and 19 (fundamental right to freedom of speech and freedom of association), and 300A of the Constitution of India, and thus liable to be quashed for the following among other grounds:

1. The Impugned Order, u/s 13 of the FCRA, is ex facie arbitrary and illegal for failing to record any reasons, or reach any finding, on the necessity of suspending the FCRA registration of the Petitioner for 180 days. As prescribed in s. 13 (1) of the FCRA:

“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 such period not exceeding one hundred and eighty days as may be specified in the order.”

1. The Impugned Order is ex facie unmaintainable as it records no explanation or justification in writing as to the necessity of passing the suspension order, or the necessity of doing so for the maximum period of one hundred and eighty days (180 days) permitted by statute. The Impugned Order’s failure to record the reasons which necessitated suspension of the certificate warrants its quashing. See Indian Social Action Forum (INSAF) v. Union of India, 2013 SCC OnLine Del 3743. Beyond a recounting of the allegations contained in the simultaneously issued show cause notice u/s 14 of the FCRA, there is no speaking order as to the “necessity” of a suspension of the Petitioner’s FCRA registration, nor the finding of such significant violations of the FCRA as would necessitate suspending the Petitioner’s registration. There is not even the pretence of compliance with the strictures of s.13 of the Act. The order does not indicate any finding, any reasoning, or any material relied upon, as to the necessity of suspending the registration, particularly in doing so without any prior notice whatsoever. It does not even constitute a mechanical order, but one that is deficient entirely in its finding of necessity.
2. The Impugned Order is further unmaintainable for not following the prescriptions of s. 13 of FCRA strictly, as required for any expropriatory action. As held in Hemaji Waghaji Jat v. Bhikabhai Khengarbhai Harijan & Ors., AIR 2008 SC 103, expropriatory action must withstand strict scrutiny and follow the statutory prescriptions of law and natural justice. See also Indore Vikas Pradhikaran v. Pune Industrial Coke and Chemicals Ltd. And Ors., (2007) 8 SCC 705. The suspension of registration from foreign contribution impinges and prejudices the Articles 14, 19 and 300A rights of the Petitioner society. Its ability to receive contributions since the 9^th April 2015 Impugned Order and for the future is negatively impacted, while others’ is not. Its ability to use funds already received is taken away, constituting a taking of movable property. In this case, the interpretation of Respondent No.1 in freezing accounts constitutes a further ultra vires taking.
3. The Impugned Order is a colourable exercise of administrative power in the absence of a published policy on the basis of undisclosed material, and per se arbitrary and violative of Article 14 of the Constitution of India. See Akhil Bhartiya Upbhoka Congress v. State of M.P., AIR 2011 SC 1834. The Respondent No.1’s actions are inconsistent with the only published policy (Annexure P-5) wich regardless does not define “necessity” or “economic interest of the state”, but does mention that autonomy is consistent with “public interest” in the context of FCRA.
4. The Impugned Order is not maintainable in view of the National Policy on the Voluntary Sector (Annexure P-5) that reiterated that organisations in the voluntary sector, i.e. non-commercial organisations must be autonomous and that “laws policies, rules, and regulations relating to [them] categorically safeguard their autonomy, while simultaneously ensuring their accountability the objectives as well as creation of enabling environment for the voluntary sector.” The Impugned Order and collateral action of freezing accounts is opposite – it attempts to scuttle any autonomy of the Petitioner society in acting consonant to its aims and objectives with regard to the environment.
5. The Impugned Order is entirely arbitrary and non maintainable on any grounds whatsoever. The Petitioner society action’s are in keeping with their aims and objectives. The Respondent No.1 has a general duty to act fairly in fairness founded on reason that is the essence of the right to equality. There is no basis or evidence disclosed of any substantive misuse of funds or malafides on the part of the organisation. Disagreement with the Petitioner society’s advocacy on behalf of the environment do not constitute “necessity” to suspend its operations. Disagreement with the government’s view are not contrary to the “public interest” or prejudicial to the “economic interest of the state”.
6. The Impugned Order is not maintainable for being contrary to the constitutional principles of natural justice, and thus a violation of the constitutional rights of the Petitioner society, under Article 14, 19 and 300A of the Constitution of India. Natural justice is implicit in any administrative action, certainly one that is expropriatory in nature. Principles of natural justice are fetters to any actions which have civil consequences. As held in Maneka Gandhi v. Union of India, AIR 1978 SC 597, “even in an administrative proceeding, which involves civil consequences, the doctrine of natural justice must be held to be applicable.” See Mohinder Singh Gill v. CEC, (1978) 1 SCC 405. As held by this Hon’ble Court in W.P. (C) No. 5749 of 2014, on 20^th January, 2015:

“…principles of natural justice, which are implicit in such like provisions, would have to be taken to recourse to, as denying access to funds in the instant circumstances will result in civil consequences.”

There is nothing in s. 13 of the FCRA that expressly rules out giving notice as to the reasons, and in particular, the necessity of why FCRA registration must be suspended, the basis of such reasons, with an opportunity to respond in writing and in person. There is no patent exigency or emergency in the s. 13 Impugned Order that warrants waiver of the right to natural justice.

1. The Impugned Order is thus not maintainable as being per se arbitrary and unreasonable for failing to give notice as to the allegations for suspending registration pending inquiry on the cancellation, the basis and relevant documents that formed the basis of the allegations, and an opportunity to respond and be heard. The violation of due process rights, as enshrined in Articles 14 and 19 of the Constitution of India, and on these facts and circumstances, impinging on Article 300A of the Constitution of India render the Impugned Order liable to be set aside. As held by the Hon’ble Supreme Court in Chairman, Board of Mining Examination and Chief Inspector of Mines v. Ramjee, AIR 1977 SC 965, 969 – “[n]o man should be hit below the belt.”
2. It is respectfully submitted that the right to be heard includes the right to know and, pursuant to that right, Petitioner is entitled to a reply to its letter of 21^st April 2015 seeking disclosure (Annexure P-16).  Petitioner thereby requested of Respondent No.1 a copy of the alleged Inspection Report, together with any and all other documents and reports relied upon by Respondent No.1 in in issuing the Impugned Order as well as the Show Cause Notice dated 9^th April, 2015, so that Petitioner might have an adequate opportunity to respond thereto. Further, an apparently secret Intelligence Bureau report, though leaked to the media, has not been wholly or partly been disclosed to the Petitioner society.  Petitioner society must rebut shadows, and the process of determination of suspension by the Respondent No.1 stands vitiated in the absence of disclosure of documents and materials that detail the nature and details of the charges against it.
3. The prejudice in the Impugned Order being non-speaking, violative of natural justice, and arbitrary and unreasonable in addition is clear on the face of the order itself. The Petitioner’s society’s FCRA registration stands suspended for 180 days. Its image as a law abiding society is sullied in the media. Its freedom of speech and its freedom of association are impinged upon without fair and full deliberations on the malafide and motivated allegations against the Petitioner society. The Petitioners society’s constitutional rights and movable property have been taken away. It is being forced to seek legal assistance on a pro bono basis, to inform its staff that they are subject to termination if funds are not released within 30 days and to cease and desist from its actions in support of the Fundamental Duties imposed on all Indians by Article 51A of our Constitution, while that same article is violated by the Respondent No.1’s conduct herein.
4. The Petitioner society’s members’ constitutional right to associate pursuant to Article 19(c) of the Constitution of India is implicated without any compelling reason which can withstand strict scrutiny or even prescription of law.
5. The Petitioner society and its members’ right to freedom of speech and expression is prejudiced without any justification, let alone justification, for the rationale in doing so, which can withstand the test of constitutionality.
6. The Impugned Order is demonstrably malafide and replete with malice. Although there had been no further official notice, on 23^rd March, 2015, despite this Hon’ble Court’s order on 20^th January, 2015, in W.P. (C) 5749 of 2014, and a valid FCRA registration, funds remitted by Stichting Greenpeace Council were never remitted to the Petitioner society’s accounts maintained with Respondent No.2. In view of the abovementioned order of this Hon’ble Court, the Petitioner society, on 8^th April, 2015, sought the funds remitted on 23^rd March 2015 to be credited to their FCRA-designated account forthwith. Respondent No.1, as an afterthought, and in a retroactive attempt to justify their action in freezing the funds remitted by Stichting Greenpeace Council, issued the Impugned Order on 9^th April, 2015.
7. The collateral action of “freezing” of all the accounts, FCRA and otherwise, held by the Petitioner with Respondents Nos.2 to 4, is entirely ultra vires of the FCRA and finds no mention in the Impugned Order. The Respondent No.1 wholly lacks jurisdiction to freeze any account u/s 13 of the Act, even more so when the accounts are not FCRA-designated or utilization accounts. The Respondent No.1 has no powers to freeze accounts u/s 13 of the Act, and none may be assumed.
8. The actions of the Respondents are also malafide and contrary to the order of this Hon’ble Court in Writ Petition (Civil) No. 5749/2014 whereby this Hon’ble Court had held that the funds received from SGC be remitted to the Petitioner’s FCRA account maintained by Respondent No.2. Without the passing of any further orders prescribed by law, and in keeping with the constitutional rights of the Petitioner society, including the right to natural justice, the Respondent No.1 apparently issued a direction dated 19^th February, 2015, itself to not remit further funds received by the Respondent society on behalf of the Petitioner society to the credit of the Petitioner societies FCRA designated account.
9. The Respondents Nos.2, 3 and 4’s acceptance of what is apparently a secret communication, oral or written, from the Respondent No.1 is chilling. The RBI’s Guidelines (Annexure P-6) are purely advisory in nature, make no mention of freezing accounts, and directs banks under its regulation u/s 36(a)(1) of the Banking Regulation Act, 1949, to follow its guidelines subject to the caveat that:

“In case of doubt, banks and Financial Institutions should make it a point to refer to the text of the Act and the Rules, and if found necessary, proper legal advice should be taken.”

Respondents Nos.2, 3 and 4 are fiduciaries of the movable property of the Petitioner society, subject to lawful orders passed by the regulatory authorities, primarily the Reserve Bank of India. Property may not be subject to taking save by authority of law, as prescribed in the Constitution in Article 300A. The Respondent No.1 was acting without authority of law, and the Respondents Nos.2, 3 and 4 were in breach of their fiduciary responsibilities in freezing the accounts.

1. Freezing of accounts is a taking of property that may not be permitted absent a decree of a court pursuant to a procedure established by law. The operational part of s. 13 of FCRA, under which the Impugned Order and collateral actions are passed do not provide for any freezing of accounts, for which no notice of its existence, grounds, basis, or opportunity to reply have been provided to the Petitioner society, with regard to the freezing of the accounts.
2. The scheme of s. 13 of FCRA is entirely contrary to freezing of accounts. S. 13(2) proscribes an organisation from receiving any foreign contribution “during the period of suspension of certificate; Provided that the Central Government, on an application made by such person, if it considers appropriate, allow receipt of any foreign contribution by such person on such terms and conditions as it may specify.” Thus, it is self-evident that s. 13 of the FCRA Act does not contemplate any freezing of accounts.
3. Further, and in addition, the collateral action of freezing of accounts is evidently not contemplated in s. 13(2)(b) of FCRA, whereby the suspended organisation is permitted to “utilise, in the prescribed manner, the foreign contribution in his custody with the prior approval of the Central Government.”
4. The Respondent No.1 has simpliciter no jurisdiction to freeze non FCRA accounts, and its actions are illegal and contrary to the operation of the law. The alleged receipt of funds from a FCRA designated account does not extend the Respondent No.1’s jurisdiction over the monies received, and certainly not over the entirety of the account. 
5. The malafide, ultra vires and unconstitutional conduct of Respondents herein is further demonstrated with regard to the freezing of non-FCRA accounts, where the monies contributed in India by Indian donors are deposited, and from which expenditures are met.  By depriving Petitioner of access to said non-FCRA accounts, Respondents will force Petitioner society to shut down operations imminently, to cease payment of salaries, benefits and expenses to all of its 340 employees, and to suspend all of its programs.  Due to the actions of the Respondents herein, the Petitioner will not even be able fulfil its statutory commitments of paying gratuity, provident fund, etc., in addition to taxes of those it is being forced to terminate.
6. The illegal and unconstitutional prejudice and injuries being caused as a direct cause of the Respondents’ acts are manifest from the fact that the Petitioner is not able to realise a substantial amount of money conserved in fixed deposits with Respondents Nos.2 and 3 due to the fact that no bank account is available for encashing these Fixed Deposits due to their illegal freezing.
7. Taking of movable property, such as the accounts of the Petitioner society held with Respondent Nos.2 to 4, who act as fiduciaries. The Petitioner’s movable property could not be seized based merely on suppositions, undisclosed and unpublished orders, and the Respondents Nos.2 to 4 acted illegally in compliance of such orders.

1. The Petitioner respectfully craves leave to alter/amend or add to the ground set out hereinabove.

1. The Petitioner is left with no other alternate efficacious remedy, except to approach this Hon’ble High Court, by way of the present Writ Petition pursuant to Article 226 of the Constitution of India.

1. This Hon’ble Court has territorial jurisdiction to entertain the instant Petition as the impugned notifications have been issued at New Delhi and the Respondent No.1 is located at New Delhi, and the relevant records are also located at New Delhi.

1. The Petitioner has not earlier filed any such or similar writ petition, either in this Hon’ble Court or in any other court, including the Hon’ble Supreme Court of India. However, it is pertinent to consider that this matter is closely, if not inextricably, related to the Order passed by this Hon’ble Court in Writ Petition (C) 5749 of 2014 on 20^th January, 2015, concerning the non-crediting of funds received on 23^rd June, 2014, from Stichting Greenpeace Council in the FCRA account maintained by the Petitioner with Respondent No.2.

PRAYER

It is, therefore, most respectfully prayed that this Hon’ble Court may be pleased to:

1. Issue an appropriate writ, order, or direction, of mandamus or other order of similar nature, with regard to the order of Respondent No.1 F.No.II/21022/58(0047)/2013-DCRA(MU) u/s 13 of FCRA dated 9^th April, 2015, and consequent and incidental orders setting aside the same as being unmaintainable, arbitrary, ultra vires and unconstitutional;
2. Issue an appropriate writ, order, or direction, or mandamus or other order of similar nature, unfreezing the bank accounts, or part thereof, held by the Petitioner with Respondents Nos.2, 3 and 4;
3. Issue an appropriate writ, order, or direction, of mandamus or other order of similar nature, calling for the entirety of the record pertaining to FCRA registration, compliance, inspection, and any other relevant records, held by Respondent No.1;
4. Issue an appropriate writ, order, or direction, of mandamus or other order of similar nature, calling for the entirety of the record with Respondents Nos.2 to 4 with regard to freezing of the accounts held by the Petitioner society with them;
5. Direct an appropriate writ, order, or direction, of mandamus, or other order of similar nature, for Respondents, jointly to severely to compensate the Petitioner society for injuries suffered, including loss of reputation, violation of the fundamental rights of the Petitioner society.
6. Direct the Respondents to pay the legal and other costs of the Petitioner society to the satisfaction of this Hon’ble Court;
7. Issue such further and/or other order(s) as may be deemed just and necessary in the facts and circumstances of the case.

Dated: ________2015                                     for Petitioner

THROUGH

                                                  Advocate for the Petitioners

CICERO CHAMBERS

Advocates Supreme Court & High Courts