D.A.V. College Trust and Managing Society & Ors. vs. Director of Public Instructions

In this case, the Supreme Court held that non-governmental organisations fall within the ambit of ‘public authority’ under Section 2(h) of the Right to Information Act, 2005 if they were substantially financed by the appropriate government.

  • Under this section of the RTI Act, ‘public authority’ is “any authority or body or institution of self-government established or constituted by or under the Constitution and includes – any non-government organizations substantially financed directly or indirectly by funds provided by the appropriate government.”
  • The court held that ‘substantial’ means a large portion which can be both, direct or indirect and it need not be a major portion or more than 50%.

Provision

What the 2010 Act says?

Amendments

PrProhibition to accept foreign contribution

Under the Act, certain persons are prohibited to accept any foreign contribution.These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties, among others.

It adds public servants (as defined underthe Indian Penal Code) to this list.

Transfer of foreign contribution

Foreign contribution cannot be transferred to any other person unless such person is also registered to accept foreign contribution (or has obtained prior permission under the Act to obtain foreign contribution).

It amends this to prohibit the transfer of foreign contribution to any other person.The term ‘person’ under the Act includes an individual, an association, or a registered company.

Aadhaar for registration

A person may accept foreign contribution if they have: (i) obtained a certificate of registration from central government, or (ii) not registered, but obtained priorpermission from the government to accept foreign contribution.

It adds that any person seeking prior permission, registration or renewal ofregistration must provide the Aadhaar number of all its office bearers, directors or key functionaries, asan identification document.

FCRA account

A registered person must accept foreign contribution only in a singlebranch of a scheduled bank specified by them. However, they may open more accounts in otherbanks for utilisation of the contribution.

It amends this to state that foreign contribution must be received only in an account designated by the bank as “FCRA account” in such branch of the State Bank of India, New Delhi, as notified by the central government.

Restriction in utilisation of foreign contribution

If a person accepting foreign contribution is found guilty of violating any provisions of the Act or the Foreign Contribution (Regulation) Act, 1976, the unutilised or unreceived foreign contribution may be utilised or received, only with the prior approval of the central government.

The government may also restrict usage of unutilised foreign contribution for persons who have been granted prior permission to receive such contribution. This may be done if, after an inquiry, the government believes that such person has contravened provisions of the Act.

Renewal of license
Every person who has been given a certificate of registration must renew the certificate within six months of expiration.

The government may conduct an inquiry before renewing the certificate to ensure that the person making the application: (i) is not fictitious or benami, (ii) has not been prosecuted or convicted for creating communal tension or indulging in activities aimed at religious conversion, and (iii) has not been found guilty of diversion or misutilisation of funds, among others conditions.

Reduction in use of foreign contribution for administrative purposes

A person who receives foreign contribution must use it only for the purpose for which the contribution is received. Further, they must not use more than 50% of the contribution for meeting administrative expenses.

It reduces this limit to 20%.

Surrender of certificate

    A new provision has been added, allowing the central government to permit a person to surrender their registration certificate.

    Suspension of registration

    Under the Act, the government may suspend the registration of a person for a period not exceeding 180 days.

    It adds that such suspension may be extended up to an additional 180 days.