05 April 2024 Business Laws >> Business & Commercial Law  

The Supreme Court of India has provided some relief to an NGO facing an investigation for alleged violations of the Foreign Contribution (Regulation) Act (FCRA). The Court's order allows the organization to access frozen bank accounts for essential expenses like salaries and maintaining their educational and healthcare institutions.

Background:

In 2016, an FIR (First Information Report) was filed against the NGO accusing them of violating FCRA regulations. The Telangana CID (Crime Investigation Department) took up the investigation. However, the NGO challenged the CID's involvement and requested a transfer of the case to the CBI (Central Bureau of Investigation).

Court's Decision:

The Supreme Court order addresses the freezing of the NGO's accounts, which had restricted their ability to function. The Court has allowed the NGO to use their accounts for essential expenses like salaries and maintaining their educational institutions and health centers. However, there are conditions attached to this access.

Conditions for Accessing Funds:

• The NGO must maintain proper and complete records of all account activity.
• These account statements need to be audited by a chartered accountant on a quarterly basis.
• The audited statements will be submitted to the investigating officer or the trial court regularly.

Continuation of Legal Proceedings:

The Court's order clarifies that the investigation and other legal proceedings related to the case will continue in their respective forums. All parties involved can raise their arguments and pursue legal options as available under the law.

No Comment on Merits of the Case:

The Supreme Court has emphasized that this order is a temporary measure to ensure the continued functioning of the NGO's educational and healthcare institutions. It does not reflect any judgment on the merits of the ongoing investigation or the allegations against the NGO.

Conclusion:

This order provides some financial flexibility to the NGO while the investigation continues. Both the NGO and the investigating agencies can proceed with their legal arguments in the relevant courts.

  Foreign Contribution (Regulation) Act, 1976