USMANIA TRUST REGISTERED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner has come up to this Court to quash the order of the respondent dated 7.3.1990, refusing permission under Sec.6(lA) of the Foreign Contribution (Regulation) Act, 1976 for acceptance of foreign contribution amounting to Rs.20 lakhs from the Islamic Development Bank, Jeddah.

(2.) THE facts leading to the filing of the writ petition are: THE petitioner/trust was formed in terms of registered trust deed dated 5.1.1979 for establishing schools, hostels, etc., and encouraging Arabic language. It is a public charitable Trust and donations under Sec.80-G to the trust are exempted from tax. THE trust acquired about one acre of land in Podanur Road, Coimbatore, for establishing an educational Institution and construction of 7,500 sq.ft. has been made, spending Rs.12 lakhs received through donations from public. THE trust wants to name the institution as ?Jamia-thul Muhsinath Arabic College for Women?, since it teaches women, tailoring, embroidery, general education, carpentry, etc. apart from Arabic language. For construction of a self-contained hostel with other infrastructural facilities, a plan was drawn and the cost worked out to Rs.26 lakhs. THE trust learnt that since it intended to teach Arabic and Urudu, donations from Islamic Development Bank would be given., provided registration or permission under the Foreign Contribution (Regulation) Act, 1876, was obtained, Accordingly, the trust made application under Sec.6(1) on 22.4.1988 but no reply was given. After many reminders and representations, by order dated 2.1.1990, the respondent rejected the application for registration, but stated that the trust could receive foreign contribution, after obtaining prior permission of the Central Government under Sec.6(1A). Application made in this regard was rejected by the impugned order dated 7.3.1990. Aggrieved by the said order, the petitioner/trust has come forward with the present writ petition.

(3.) CONSIDERING the arguments of learned counsel appearing on both sides and after going through the records produced before me, I am satisfied that the impugned order cannot stand for a minute's scrutiny under Art.225 of the Constitution. I have gone through the entire file. There is no piece of paper which shows anything against the petitioner trust excepting a statement that the trust is purely a private association started in 1979 by one Usman Koya and family members and that the proceeds of the trust would be enjoyed by the said family. I think this is a statement which could be made against any trust. It is not as if the respondent is helpless in such a situation. The Indian Trust Act has to be enforced, if the property of the trust is misapplied. Apart from that, even the provisions contained in the Central Act 49 of 1975, provide for sufficient security. Sec.13 provides for maintaining accounts by the Association which receives foreign contribution, Sec.14 provides for inspection of accounts or records, Sec.15 provides for seizure of accounts or records, and power to impose penalty is also found in the Act. Sec.10 empowers the Central Government to prohibit receipt of foreign contribution, etc. in certain cases. On a reading of Sec.10, in my view, it cannot apply to the facts of this case. This is not a case where it could be said that if permission is granted, it will affect the sovereignty and integrity of India, or public interest or freedom or fairness of election to any Legislature or friendly relations with any foreign State or harmony between religious, racial, linguistic or regional groups, castes or communities. It is seen from the file that the State Government has given report that a College is being run by the trust. The trust, in addition, wants to start a hostel for which huge amount is necessary. Sec.6(1A) of the Act was introduced by the Amendment Act, 1985 and it prescribes that every association may, if it is not registered with the Central Government, accept any foreign contribution only after obtaining prior permission of the Central Government and shall also give within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of foreign contribution received by it the source from which and the manner in which such contribution was received and the purpose for which and the manner in which such foreign contribution was utilised by it. As such, the granting of permission would not entail any loss to the respondent. The contention of Mr.Narasimhan, learned Senior Central Government Standing Counsel, that the satisfaction is purely subjective and this court cannot sit over it is not available to him. Any administrative Authority has to pass an order in a fair manner, is the settled position of law nowadays. After going through the files and after going through the order, it seems the respondent has passed a cryptic or laconic order, without assigning any reasons for the rejection of the application. In my view, this is a fit case where the respondent has to consider granting permission under the Act, taking note of the object and purpose of the Trust and for what purpose the amount is sought from the foreign country. If it is not considered, than in my view, the whole purpose of the Act is lost. It is not correct on the part of Mr.Narasimhan to contend that the petitioner has got no right to insist on such a permission being accorded to it. It is not a question of right. The statute gives a right to petitioner to apply for sanction to get foreign contribution which is regulated under the Act. The respondent cannot deny this claim arbitrarily and say that the petitioner has no right at all. It is not as if the petitioner has got a fundamental right to claim the same and it is not the argument of the learned Senior Counsel, also. All that is contended before me is that an application has been made, which has not been considered properly, and a cryptic order has been passed without assigning any reason. In such circumstances, the impugned order is set aside and the writ petition is allowed. The respondent is directed to consider the issue after giving an opportunity to the petitioner and pass orders on merits within two months from the date of receipt of a copy of this order. No costs.