High Court of Karnataka Quashed the Order Cancelling the NGO's registration under the Foreign Contribution (Regulation) Act, 2010. The court emphasized the importance of a personal hearing when an organization faces severe consequences like a multi-year ban on registration.

The High Court of Karnataka, in its order dated June 25, 2024, set aside the cancellation of the Centre for Wildlife Studies' registration under the Foreign Contribution (Regulation) Act, 2010. The court determined that the petitioner's right to a "reasonable opportunity of being heard" under Section 14(2) of the Act necessarily includes a personal hearing, particularly given the severe consequences of cancellation.

Breif of the Case: Dr. K. Shivarama Karanth the Chief Functionary for the Centre for Wildlife Studies registered a trust deed under the name, Centre for Wildlife Studies. The Trust was established on 23-01-1990, is dedicated to the scientific study and conservation of wildlife habitats, as well as the rehabilitation of endangered species and ecosystems and includes internationally recognised scientists.

On 05-03-2021, the petitioner applied for and received permission to change the Trust's bank account. The funds received by the trust are strictly used for social and educational purposes according to the Act's norms, with 20% of foreign contributions allocated for Trust expenses.The key events began on 05-03-2021, when the respondent, issued an order suspending the petitioner's registration for six months. The petitioner received a questionnaire as communication but claims it was never delivered. On 11-04-2021, the petitioner responded to the suspension order, providing detailed information, including account maintenance.

Subsequently, on 03-12-2021, the petitioner received a show-cause notice asking why their registration should not be cancelled under sub-section (2) of Section 14 of the Act. The petitioner replied in detail, refuting all allegations. Despite this, on 04-09-2023, an order was issued cancelling the registration, claiming violations of the Act without considering the petitioner's extensive objections. These actions have led the petitioner to file the current petition in court.

The petitioner, Centre for Wildlife Studies, had its registration suspended on March 5, 2021, following allegations of financial mismanagement. A show cause notice, issued on December 3, 2021, outlined violations related to the handling of foreign contributions. Despite the petitioner's 25-page rebuttal, the registration was ultimately cancelled on September 4, 2023.

Central to the court's decision was the interpretation of "Reasonable Opportunity of Being Heard" within Section 14(2) of the Act. The court emphasized the gravity of cancellation, which under Section 14(3) renders an organization ineligible for registration for three years. This, the court stated, creates significant civil and economic hardships.

Referencing its own precedents and a judgment from the High Court of Madhya Pradesh, the court rejected the respondent's argument that a show cause notice sufficiently satisfied the requirement for a hearing. The court clarified that while a blanket requirement for personal hearings in all cases could create logistical challenges, as highlighted by the Supreme Court in various judgments, it doesn't preclude personal hearings when circumstances demand it, the court further held that "The words depicted in the Act ‘reasonable opportunity of being heard’ cannot be restricted to issuance of a show cause notice but a personal hearing in the peculiar facts of the case owing to the peculiarity of sub-section (3) of Section 14 of the Act must have been afforded to the petitioner."

CASE: WRIT PETITION No.27301 OF 2023 (GM - RES)
CORAM: THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
BETWEEN: CENTRE FOR WILDLIFE STUDIES (R) v. UNION OF INDIA
ODER DATE: 25.06.2024