(Prayer: Writ Petition filed under Article 226 of the Constitution of India foe issuance of a Writ of certiorari calling for the records relating to the proceedings of the First Respondent in No.11/21022/58(486) 2012-FC (MU) dated 9.2.2012 and quash the same.)

1. Whether the silence of a statute with regard to the need to follow the Principles of Natural Justice, can be construed as having exclusionary effect, and whether the Statutory Authority can rely upon the silence of the statute and dispense with the functional obligation of providing opportunity of hearing, on that ground

1.1. While passing a statutory order, if the right of a party is violated which results in Civil consequences, whether the authority passing the order is bound to follow the Principles of Natural Justice, even if the statute is silent, is the issue raised in both cases.

Question of law and fact, being common, in both the Writ Petition as well as in CMA, common judgment is pronounced.

2. This Writ Petition has been filed by Rural Uplift Centre, a Society registered under the Tamil Nadu Society Registration Act, praying for Writ of certiorari calling for the records relating to the proceedings of the First Respondent Viz. Union of India, Ministry of Home Affairs, Foreigners Division, (FRCA) Wing, New Delhi, in No. 11/21022/58 (486) 2012 FC (MU) dated 9.2.2012 and quash the same.

2.1. The impugned order dated 9.2.2012 has been issued in exercise of the powers conferred under Sections 9 & 10 of the Foreign Contribution (Regulation) Act, 2010 (FCRA ACT in short), prohibiting the Petitioner-Association to receive the foreign contribution from the date of issue of the order. This order is purported to have been issued based upon the inspection of accounts and records of the Association undertaken from 12th to 14th January 2012 under the provisions of Sections 20 & 23 of the FCRA Act. It is the case of the Government of India that the Association has violated the provisions of FCRA Act and having regard to the evidence available, the Government of India is satisfied that the acceptance of foreign contribution by the Petitioner-Association is likely to prejudicially affect the public interest.

2.2. Under the same communication, the Manager, Canara Bank, Nagercoil and the Manager, Canara Bank, Nanguneri, both functioning in Tamil Nadu, were requested to freeze the bank account of the Petitioner Association. This impugned order is under challenge.

3. It would be beneficial to advert to the facts of the case in order to understand the legal issues raised in this case.

The petitioner Association is Society by name Rural Uplift Centre with Registration No.31/81 and the registration has been made on 27.12.1999. The allotment of Registration Number as contemplated under the Foreign Contribution Regulation Act, 1976, has been given on 23.1.1985. As per the Memorandum of Association, the objectives of the Petitioner Association seems to be as under:

(a) To engage in social service activities aimed at improving the living conditions and general welfare of the poor, particularly Beedi Workers, Palmyra Workers, Coolies, Fishermen, Harijans and other people as well as poor, differently abled, transgender and indigent persons irrespective of occupation, sex and self-employment.

(b) To enable youth to acquire skills for employment and self-employment.

(c) To establish and manage educational and developmental institutions.

(d) To conduct capacity building training on the constitutional rights and rights guaranteed by the international instruments/ covenants to the people.

(e) To provide legal aid, care and support to the victims and vulnerable.

(f) To collaborate with other NGOs, corporate, Government and resource systems towards the attainment of the above objectives.

3.1. The Government of India, by communication dated 4.10.2011, informed the Petitioner Association that the Government intends to examine the details regarding foreign contribution being received by the Association, and wanted the Petitioner Association to fill up the enclosed questionnaire and to be sent to the office positively by 28.10.2011. Immediately, it was responded and the Petitioner Association by letter dated 26.10.2011, furnished all the details, along with the filled-up questionnaire. The details of information furnished is enclosed in the typed set of papers, running to 182 pages. It is the case of the Petitioner Association that they have given the list of donors of the Foreign contribution, beneficiaries and the details of activities undertaken etc.

The Government of India sent a second communication seeking some more information, to the Petitioner, by letter dated 14.11.2011. Again the Petitioner Association sent a reply dated 22.11.2011 informing them that already the required information has been furnished to them and this letter has been sent along with proof of submission of early reply. One month later, the Government issued an official memorandum informing the Petitioner Association that the Assistant Director, FCRA, Government of India i.e., one Sri. Tamal Bose has been authorized by the Government of India to inspect the accounts or records maintained by the Association for the period covering 2006-2007 to 2010-2011 at the office premises of the Association. In the communication, it is mentioned, that the Central Government has reasons to believe that the provisions of FCRA Act, 2010 appears to have been violated by the Association. (It is pointed out by the learned Counsel for the Petitioner Association that the reasons to believe that the provisions of the Act are violated, are not specifically mentioned in the communication.) By subsequent communication, the Assistant Director, who inspected the Petitioner Association wanted certain additional particulars from the Petitioner Association, which was also furnished on 23.1.2012. Feeling unsatisfied, the impugned order has been passed by the Government of India.

4. The first submission of the learned Counsel for the Petitioner is that the provisions of Sections 9 & 10 of FCRA Act would not apply to the facts of the present case. In other words, the provisions of Sections 9 & 10 of FCRA Act would not be attracted insofar as the facts are concerned. Sections 9 & 10 the FCRA Act, would run thus:

9. Power of Central Government to prohibit receipt of foreign contribution, etc., in certain cases. The Central Government may

Prohibit any person or organization not specified in section 3, from accepting any foreign contribution;

(b) Require any person or class of persons, not specified in Section 6, to obtain prior permission of the Central Government before accepting any foreign hospitality;

(c) Require any person or class of persons not specified in Section 11, to furnish intimation within such time and in such manner as may be prescribed as to the amount of any foreign contribution received by such person or class of persons, as the case may be , and 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 utilized;

(d) Without prejudice to the provisions of sub-section (1) of Section 11, require any person or class of persons specified in that sub-section to obtain prior permission of the Central Government before accepting any foreign contribution;

(e) Require any person or class of persons, not specified in section 6, to furnish intimation, within such time and in such manner as may be prescribed, as to the receipt of any foreign hospitality, the source from which and the manner in which such hospitality was received:

Provided that no such prohibition or requirement shall be made unless the Central Government is satisfied that the acceptance of foreign contribution by such person or class of persons, as the case may be, or the acceptance of foreign hospitality by such person, is likely to affect prejudicially

The sovereignty and integrity of India ; or

(ii) Public interest; or

(iii) Freedom or fairness of election to any Legislature; or

(iv) Friendly relations with any foreign State; or

(v) Harmony between religious, racial, social, linguistic or regional groups, castes or communities

10. Power to prohibit payment of currency received in contravention of the Act. Where the Central Government is satisfied, after making such inquiry as it may deem fit, that any person has in his custody or control any article or currency or security, whether Indian or foreign, which has been accepted by such person in contravention of any of the provisions of this Act, it may, by order in writing, prohibit such person from paying, delivering, transferring, or otherwise dealing with, in any manner whatsoever, such article or currency or security save in accordance with the written orders of the Central Government and a copy of such order shall be served upon the person so prohibited in the prescribed manner, and thereupon the provisions of sub-sections (2), (3), (4) & (5) of Section 7 of the Unlawful Activities (Prevention) Act, 1967 (37 of 1957) shall, so far as may be, apply to, or in relation to such article or currency or security and reference in the said sub-sections to moneys, securities or credits shall be construed as references to such article or currency or security.

4.1. Under Section 9 (a), the Central Government may prohibit any person or organization not specified in section 3, from accepting any foreign contribution, provided the Central Government is satisfied that the acceptance of such foreign contribution is likely to affect prejudicially

(a) the sovereignty and integrity of India; or

(b) public interest; or

(c) freedom or fairness of election to any Legislature; or

(d) friendly relations with any foreign State; or

(e) harmony between religious, racial, social, linguistic or regional groups, castes or communities.

4.2. Pointing out this provision, it is pointed out by the learned Counsel for the Petitioner that the powers conferred upon the Central Government with regard to prohibition from accepting of foreign contribution is with reference to acceptance of the foreign contribution (in contravention of any of the provisions of this Act,) and not the handling of the money, after receipt of the same, by way of foreign contribution. The preliminary objection is that the impugned order nowhere speaks about the initial acceptance of foreign contribution. In support of his contention, the learned Counsel for the petitioner relies on the decision of the Honorable Supreme Court reported in Mohinder Singh v. Chief Election Commissioner, AIR 1978 SC 851 [LQ/SC/1977/331] .

4.3. It is also pointed out by the learned Counsel for the Petitioner that no reason whatsoever has been mentioned in the impugned order and only after the Petitioner filing the Writ Petition, reasons are stated in the Counter Affidavit which is impermissible in law. It is the grievance of the Petitioner that it is possible to invent or supplement or fill in the blanks depending upon the requirement, if they are permitted to take up plea which they have not taken originally in the impugned order. It has been held in Mohinder Singh v. Chief Election Commissioner, AIR 1978 SC 851 [LQ/SC/1977/331] , that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of Affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, gets validated by the additional grounds brought out.

4.4 The sum and substance of the contention of the Petitioners is that, (1) the impugned order do not satisfy the requirements of Sections 9 & 10 of the FCRA, (ii) the impugned order did not attribute any reasons and that reasons cannot be supplied after the filing of the Writ Petition, (iii) before the passing of impugned order Principles of Natural Justice were not followed.

4.5. As contended by the Petitioner the power under Section 9, can be exercised only if the acceptance of the Foreign Contribution itself is in contravention of any of the provisions of the Act. In the impugned order, it is not specifically explained as to whether the acceptance of the foreign contribution by the Petitioner was in contravention of the provisions of the Act and if so, which of the provisions of this Act has been violated. Nowhere it is detailed as to how the acceptance of foreign contribution is against public interest. Therefore the contention of the Petitioner has to be accepted.

5. The second contention of the learned Counsel for the Petitioner is that even assuming that the provisions of Sections 9 & 10 of FCRA Act applies, the impugned order is invalid as it was not passed, based upon any material and the so-called material relied upon, has not been actually furnished to the Petitioner herein. The impugned order also did not disclose any reasons for the Government having taken such a drastic decision. It is specifically pointed out any decision taken must be based only upon reasons and that the reason is the soul. Therefore, it is pointed out that unless reasons are given, the order is invalid. In order to support his contention, the learned counsel for the Petitioner relied upon the decisions of the Honorable Supreme Court reported in Union of India v. M.L. Capoor, AIR 1974 SC 87 [LQ/SC/1973/293] ; and S.N. Mukherjee v. Union of India, AIR 1990 SC 1984 [LQ/SC/1990/477] .

6. The third contention of the learned Counsel for the Petitioner is that the impugned order is invalid because the Principles of Natural Justice has not been followed. It is pointed out that by passing a statutory order, if the right of a party is violated which results in Civil consequences, the authority passing the order is bound to follow the Principles of Natural Justice. It is pointed out with reference to the facts of the case that, because of the passing of such an impugned order, the Petitioner has suffered Civil consequences, which may result in cancellation of Registration Certificate, stopping of foreign contribution and in fact stopping the entire activities of the petitioner Association. It is the grievance of the Petitioner that even though the Government of India claims that the action is based upon an Inspection Report, the Petitioner Association has not been furnished with a copy of the Inspection Report. In fact, not even a reference has been made about the report in the body of the letter. The decisions of the Honorable Supreme Court reported in Brajlal Manilal & Co. V. Union of India. AIR 1964 SC 1643 [LQ/SC/1964/73] ; and Vijay Kumar, I.A.S. v. State of Maharastra, AIR 1988 SC 2060 [LQ/SC/1988/434] , are relied upon to impress upon the possible consequences of the impugned order, when the materials relied upon are not furnished to the affected party.

6.1. With regard to the importance of disclosure of materials to the party, a book on Principles of administrative Law by M.P. Jain & S.N. Jain is relied upon, wherein the necessity for furnishing or the purpose behind supplying the copies of the report relied upon, is well explained.

6.2. The general principle is that the adjudicatory body cannot base its decision on any material unless a person, against whom it is sought to be utilized, has been appraised of it and given the opportunity to rebut, comment, criticize or explain the same. The Honorable Supreme Court has stated that no material could be relied on against a person, without his being given an opportunity of explaining them.

6.3. This contention is well founded. The adjudicatory authority relies upon certain reports to come to the conclusion that the acceptance of foreign contribution by the Petitioner would be prejudicial to national interest. In that case, opportunity should be given to the Petitioner to accept, explain, distinguish, deny, rebut, comment, criticize or repudiate those findings in the report. Hearing gives a sense of satisfaction both to the person giving the opportunity and person getting the opportunity. Unless opportunity of hearing is given, the enquiry is not complete. Therefore the contention that adjudicatory body cannot base its decision on any material unless a person against whom it is sought to be utilized, has been appraised of it and given the opportunity to rebut, comment, criticize or explain the same has to be accepted.

7. Apprehending that the contention of the other side may be that the Petitioner should be driven to the relief of seeking an effective and alternative remedy, the learned Counsel for the Petitioner contended that the Petitioner herein cannot be asked to seek alternative remedy because of the circumstances available in this case. According to the learned Counsel for the Petitioner, wherever the Principles of Natural Justice are not followed, or there is violation of the fundamental rights or the virus of the Act is challenged, the party cannot be compelled to seek alternative remedy. In support of his contention, the learned Counsel for the Petitioner relied on the decision of the Honorable Supreme Court reported in Whirlpool Corporation v Registrar of Trade Marks, Mumbai, AIR 1999 SC 22 [LQ/SC/1998/1044] , wherein the scope and powers of the High Court to issue prerogative writ under Article 226 of the Constitution of India, has been discussed. It has been held that under Article 226 of the Constitution of India, the High Court has the discretion to entertain a Writ Petition despite the availability of effective and efficacious alternative remedy in the following three circumstances:

(a) when the Writ Petition has been filed for enforcement of any fundamental right.

(b) where there has been violation of Principles of Natural Justice;

(c) where the order or proceedings are wholly without jurisdiction or the virus of the Act is challenged.

7.1. Learned Counsel for the Petitioner emphasized that the existence of other alternative remedy cannot be a bar to the issue of Writ of certiorari in appropriate cases, and it is the duty of the superior Court to issue a Writ of certiorari to correct the errors of the an inferior Court/ Tribunal/ other authorities, and hence, the Petitioner should not be relegated to other legal remedies available to him. In support of his contention, the decision of the Honorable Supreme Court reported in State of U.P. v. Mohammad Nooh, AIR 1958 SC 86 [LQ/SC/1957/99] , (Constitutional Bench judgment) is relied upon, wherein it has been held as follows:

10. In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of Appeal has been conferred by statute, (Halsburys Laws of England, 3rd Edn., Vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior Court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But his rule requiring the exhaustion of statutory remedies before the writ will be granted is a Rule of Policy, convenience and discretion rather than a rule of law and instances are numerous where a Writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies. In the King v. Postmaster General; Ex parte Carmichael, 1928-1 KB 291 (E) a certiorari was issued although the aggrieved party had an alternative remedy by way of Appeal. It has been held that the superior Court will readily issue a certiorari in a case where there has been a denial of natural justice before a court of summary jurisdiction. The case of Rex v. Wandsworth Justices; Ex parte Read, 1942-1 KB 281 (F) is an authority in point .

8. Learned Counsel representing the Government of India, at the outset, detailed the distinction between the 1976 Enactment and the 2010 Amendment and the importance of fiscal enactment with reference to opportunity to be given to the affected party. The learned Counsel pointed out that during 2004-2008, the petitioner- Association has received a sum of Rs. 31,55,00,000/- towards rehabilitation of tsunami victims. It is the duty of the Government to find out whether those funds have been mis-utilised or it is utilized for any public purpose and it became imperative by virtue of the public interest involved. The attention of the Court was drawn to the scheme of enactment, where the acceptance of foreign fund is regulated by permitting payment only through banking transaction (Section 17). The scheme of the Act also provides for power to Central Government to cause investigation into the cognizable offence that is made out by any Association which is dealing with foreign contribution.

Section 8 of FCRA Act is dealing with restriction to utilize foreign contribution for administrative purpose and Section 9 is dealing with power of Central Government to prohibit receipt of foreign contribution and the provision for grant of certificate has also been pointed out.

8.1. The learned Counsel for the Respondent pointed out that only when the Government proposes to cancel the certificate, the opportunity of being heard is provided for and that opportunity is not available when the action is taken under Sections 9, 10 & 11 (Suspension of certificate). According to the learned Counsel, if prior opportunity is given when action is proposed to be taken under Sections 9,10 & 13, there is a possibility of persons dealing with foreign contribution, to take away the money and once that is allowed to happen, there is no chance of redeeming the situation. The sum and substance of the contention is that the process of investigation is an on-going process and only by way of interim measure, the Government has issued the impugned order and therefore, the opportunity given is sufficient opportunity and when the Act do not contemplate granting of opportunity (in contravention of Section 14), the Petitioner has no cause to complain.

9. The learned Counsel representing the Government, sternly contended that the Principles of Natural Justice would be applicable depending upon the facts and circumstances of each case and insofar as the nature of the case projected, it does not warrant invoking of the Principles of Natural Justice. The learned Counsel re-emphasised the point that only for cancellation of certificate, notice is contemplated.

9.1. In order to support the contention that the Principles of Natural Justice have many facets, and circumstantial Flexibility is contemplated in the application of those principles, and the circumstances available in this case do not warrant application of Principles of Natural Justice, the learned Counsel for the Respondents relied upon the decision of the Honorable Supreme Court reported in Ashok Kumar Sonkar v. Union of India, 2007 (4) SCC 54 [LQ/SC/2007/238] , wherein, it has been held as follows:

31. In Punjab National Bank v. Manjeet Singh this Court opined: (SCC pp. 653 54, para 17)

The Principles of Natural Justice were also not required to be complied with as the same would have been an empty formality. The Court will not insist on compliance with the Principles of Natural Justice in view of the binding nature of the award. Their application would be limited to a situation where the factual position or legal implication arising thereunder is disputed and not where it is not in dispute or cannot be disputed. If only one conclusion is possible, a writ would not issue only because there was a violation of the Principles of Natural Justice.

32. In P.D. Agrawal v. State Bank of India this Court observed: (SCC p. 791, para 30)

30. The Principles of Natural Justice cannot be put in a straitjacket formula. It must be seen in circumstantial flexibility. It has separate facets. It has in recent time also undergone a sea change.

It was further observed: (SCC pp. 793-94, para 39)

39. Decision of this Court in S.L.Kapoor v. Jagmohan whereupon Mr.Rao placed strong reliance to contend that non-observance of the Principles of Natural Justice itself causes prejudice or the same should not be read as it causes difficulty of prejudice, cannot be said to be applicable in the instant case. The Principles of Natural Justice, as noticed hereinbefore, have undergone a sea change. In view of the decisions of this Court in State Bank of Patiala v. S.K. Sharma and Rajendra Singh v. State of M.P. the principle of law is that some real prejudice must have been caused to the complainant. The Court has shifted from its earlier concept that even a small violation shall result in the order being rendered a nullity. To the principle/doctrine of audi alteram partem, a clear distinction has been laid down between the cases where there was no hearing at all and the cases where there was mere technical infringement of the principle. The Court applies the Principles of Natural Justice having regard to the fact situation obtaining in each case. It is not applied in a vacuum without reference to the relevant facts and circumstances of the case. It is no unruly horse. It cannot be put in a straitjacket formula. (See Viveka Nand Sethi v. Chairman. J & K Bank Ltd. and State of U.P. v. Neeraj Awasthi. See also Mohd. Sartaj v. State of U.P.)

The principles of equity in a case of this nature, in our opinion, will have no role to play. Sympathy, as is well known, should not be misplaced.

9.2. In view of the decision cited it is necessary to consider whether Principles of Natural Justice ought to have been followed when the provisions under Section 9 & 10 of FCRA do not expressly provide for an opportunity of hearing. It is to be found out whether the violation would be a mere technical impeachment of the principle or a violation affecting the right of the Petitioner

The contention of the Government that the Principles of Natural Justice need not be followed was answered by the learned Counsel for the Petitioner. The learned Counsel for the Petitioner contended that this argument of the Government is contra to the averments made in the Counter Affidavit. In the Counter Affidavit, the case of the Government is that sufficient opportunity has been given to the Petitioner. The argument before the Court was that there is no need to give opportunity to the Petitioner except when the Government proposes to issue cancellation of certificate.

9.3. The next contention of the learned counsel for the Petitioner is that the contention of the Government that the Principles of Natural Justice need not be followed, lies contra to the decision of the Honorable Supreme Court reported in Maneka Gandhi v. Union of India, AIR 1978 SC 597 [LQ/SC/1978/27] . It is vehemently contended by the learned Counsel for the Petitioner that wherever the Legislature omitted to provide an opportunity of hearing, the Honorable Supreme Court directed the Government to provide opportunity by following the Principles of Natural Justice. Therefore, the contention of the Government that the Principles of Natural Justice need not be followed cannot be accepted in the light of Maneka Gandhis case (cited supra), wherein it has been held that the consequence of not following equality and adopting arbitrariness has been explained. When there is arbitrariness and one exercises the whims and caprice, it leads to absolute monarch. But when there is equality, it leads to the rule of law. Pointing out this distinction, the learned Counsel for the Petitioner relies upon paragraph 56 of the above decision in Maneka Gandhis case, which runs thus:

56. Now, the question immediately arises as to what is the requirement of Article 14: what is the content and reach of the great equalizing principle enunciated in this article There can be no doubt that it is a founding faith of the Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all-embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits. We must reiterate here what was pointed out by the majority in E.P. Royappa v. State of Tamil Nadu, 1974 (2) SCR 348 [LQ/SC/1973/358] : AIR 1974 SC 555 [LQ/SC/1973/358] , namely, that from a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic, while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14..

9.4. Moreover, when a statutory body passes an order, which end in violating the rights of the party with Civil consequences the Principles of Natural Justice ought to be followed is the settled legal principle.

What is a Civil consequence has been succinctly stated by the Honorable Supreme Court in the decision reported in Mohinder Singh Gill v. Chief Election commissioner, 1978 (1) SCC 405 [LQ/SC/1977/331] , Justice V.R. Krishna Iyer, speaking for the majority has stated:

The word Civil is derived from the Latin Civilie, a citizen.

Civil is defined by Black (Law Dictionary 4th Edn.) at p.311, Ordinary, pertaining or appropriate to a member of a civitas of free political community ; natural or proper to a citizen . Also, relating to the community, or to the policy and government of the citizens and subjects of a state.

Civil Consequence undoubtedly cover infraction of not merely property or personal rights but of Civil liberties, material deprivations and non-pecuniary damages. In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a Civil consequence. A democratic right, if denied inflicts civil consequences.

In a democratic set up power has to be exercised in accordance with law. When a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of Affidavit or otherwise.

There is yet another, bearings, on the, play of Natural Justice, its nuances, non-applications, contours, colour and content. Natural Justice is no mystic testament of judge-made juristics but the pragmatic, yet principled, requirement of fairplay in action as the norm of a civilized justice-system and minimum of good government-crystallised clearly in our jurisprudence by a catena of cases here and elsewhere.

9.5. Emphasising the utility of following the Principles of Natural Justice towards securing justice and towards preventing miscarriage of justice, the Honorable Supreme Court observed as follows:

The Rule of Natural Justice are rooted in all legal systems and are not any new theology. They are manifested in the twin principles of nemo index in sua causa and audi alteram partem. It has been pointed out that the aim of Natural Justice is to secure justice, or, to put it negatively to prevent miscarriage of justice. These rights can operate only in areas not covered by any law validly made; they do not supplant the law of the land but supplement it. The Rules of Natural Justice are not embodied rules. What particular Rule of Natural Justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the inquiry is held and the constitution of the Tribunal or body of per-sons appointed for that purpose. Whenever a Complaint is made before a Court has to decide whether the observation of that rule was necessary for a just decision on the facts of that case. Further, even if a power is given to a body without Specifying that Rules of Natural Justice should be observed in exercising it, the nature of the power would call for its observance.

The philosophy behind Natural Justice is participatory justice in the process of democratic rule of law.. In situations of quick dispatch, it may be minimal, even formal. Fair hearing is a postulate of decision making, although fair abridgement of that process is permissible. It can be fair without the rules of evidence or forms of trial.

Therefore, the contention that there is no need to follow Principles of Natural Justice as Section 9/10 of FCRA Act is silent cannot be accepted. It is not shown that following the Principles of Natural Justice would be an empty formality. Nor it is shown that even if the principle is followed, even then only one conclusion is possible and that one conclusion is the conclusion reached by the authority. It is not proved that the violation would amount to technical impeachment of the principle. Therefore, the impugned order cannot be sustained.

10. Facts and contentions in CMA:

(a) The order dated 9.2.2012 passed by the Deputy Secretary to the Government of India, Foreigners Division, Ministry of Home Affairs, Government of India, who is the respondent herein, prohibiting the Appellant-Mano Thangaraj from receiving foreign contribution is under challenge in this Civil Miscellaneous Appeal.

(b) The brief facts arising out of this Civil Miscellaneous Appeal are as under:

The Appellant herein is a social worker and he is the Chief Functionary of the Trust called Good Vision. The objective of the Trust is to promote community development activities aiming for the growth of the people, more especially of the downtrodden community, irrespective of caste, religion etc. It is a Society registered under the provisions of the Societies Registration Act. The Trustees are maintaining various bank accounts including FCR bank account. The Trust was registered under the provisions of Foreign Contribution (Regulation) Act, 1976 as amended by Act 2010.

(c) The Government of India by communication dated 14.11.2011, required the Appellant to give certain details as required in the questionnaire issued by the Ministry of Home Affairs (Page No.26). (Questionnaire Page No.27). The Appellant gave all the details as required in the questionnaire and submitted it to the Government of India (Page No.31). The details of foreign contribution received has been fully furnished as required under Item No.8 of the questionnaire. The Government of India issued a second communication intimating the Appellant that the Authorized Officer of the Ministry of Home affairs will inspect the Accounts/Records of the Appellant Association for the period from 2006-2007 to 2010-2011. It was also informed that the Authorised Officer shall exercise powers conferred on him under Sections 24 to 26 & 42 of FCR Act, 2010. Accordingly, an inspection was conducted and subsequently the Government issued the impugned order dated 9.2.2012. In the impugned order, the Government, in exercise of the powers conferred under Sections 9 & 10 of the Foreign Contribution (Regulation) Act, 2010, prohibited (in public interest) the Association from receiving foreign contribution from the date of receipt of the order. Under the impugned order, the Government claimed that the Government is satisfied from the information received and the evidence in its possession, that the acceptance of foreign contribution by the Appellant- Association is likely to prejudicially affect public interest and accordingly, the bank accounts were freezed. This impugned order is under challenge.

(d) Before commencing the arguments, the learned Counsel for the Appellant filed the reply Affidavit.

(e) The first submission of the learned Counsel for the Appellant is that when the Appellant is made to suffer with an order involving Civil consequences, the Government which is a democratic limb, ought to have provided an opportunity of hearing to the Appellant. It is pointed out that the impugned order itself is not a speaking order. The impugned order is under challenge on the following grounds:

(a) The impugned order did not disclose from which material the Government happened to pass the order.

(b) When it is mentioned that having regard to the information and evidence in the possession of the Government, the Government is satisfied that the acceptance of foreign contribution by the Association is likely to prejudicially affect the public interest, the Government ought to have disclosed as to (i) Nature and content of information received; (ii) Nature and type of evidence available in the possession of the Government; (c) In what way the acceptance of contribution is likely to prejudicially affect public interest; (d) What is the public interest which is likely to be affected ; (e) In what way the public interest expected to be affected would be prejudicial.

(f) According to the learned Counsel for the Appellant these aspects are silent in the impugned order. When the Appellant is prohibited and prevented from receiving the foreign contribution which is a very serious Civil consequence, not only affecting the Petitioner but also the beneficiaries, present and future, it is the duty of the Government to communicate in what way the receipt of foreign contribution would prejudicially affect the public interest. In other words, the contention is that the Principles of Natural Justice having been violated, the impugned order has to be set aside.

(g) In support of this contention, the learned Counsel for the Appellant relied on the decision of this Court made in W.P. No.2031 of 2005 dated 31.1.2011, wherein an obligation to act fairly on the part of the administrative authorities and the necessity of following Principles of Natural Justice in order to prevent failure of justice has been emphasized by relying on the decision of the Honorable Supreme Court in the case of Nagarjuna Construction Co. Ltd. v. Government of Andhra Pradesh and others, 2009 (3) MLJ 493 (SC).

(h) Relying upon this decision, it is pointed out that neither the Government issued notice calling upon the Appellant herein to offer explanation as to details of expenditure made by the Association nor the Government seems to have conducted any enquiry based upon the Inspection Report. A copy of the Inspection Report is neither provided to the Appellant, nor even it is cited as a reference material in the impugned order. The Government has not even issued notice as to why the proposed action should not be taken against the Appellant-Association. It is pointed out that the Rule of fair play requires that all these steps ought to have been followed or all these steps ought to have been taken by the Government before passing the impugned order.

(i) It is pointed out that the Government failed in its duty to follow the Principles of Natural Justice not only by omitting to follow the Principles of Natural Justice but also by violating the Principles of Natural Justice. The Principles of Natural Justice, one among them, is nobody should be taken by surprise. The first principle of law is that when no reason has been adduced in the impugned order, it is not open to the Government to put forth their case surprisingly first time in the Counter Affidavit filed herein. In other words, the contention is that the Government is not entitled to supply the reasons in the Counter Affidavit when no reason has been stated in the impugned order. This also is alleged to be the violation of Principles of Natural Justice.

(j) Learned Counsel for the Appellant relied upon the decision of the Delhi High Court in the case of Association of Voluntary v. Union of India, 1991 (43) DLT 67, wherein it has been held that satisfaction should be proved to be founded on objective material and the order should furnish proper reasons for non-acceptance of the explanation of the Association against which the order is to be passed.

(k) Pointing out this decision, the learned Counsel for the Appellant contends that the case on hand is a worst case than the reported one because, in the case on hand, the Government did not even call for the explanation of the Association. It is settled law that in administrative matters also, Principles of Natural Justice has to be followed.

(l) Learned Counsel for the Appellant contended that the most crucial loss to the Association is the loss of reputation. When the Association is extending a helping hand to the Government by participating in the upliftment programme for the poor people, and all of a sudden, when the bank accounts are frozen, then the people will not be able to understand the reason for the stopping of the activities of the Association. The Association has suffered adverse consequences because of the accounts being frozen. Therefore, it is contended that the Government ought to have provided an opportunity which could have enabled the Association to put forth their explanation which could have enabled the Government to take an informed decision.

(m) It is contended that the impugned order claims to have been passed under Section 9 of the FCR Act is against the provisions of Section 9 of the Act. Under Section 9, the Central Government may prohibit any person from accepting any contribution. But this power is not an unrestricted power. This power can be exercised subject to the proviso in Section 9. As per the proviso to Section 9, such prohibition can be made only after the satisfaction that the acceptance of foreign hospitality is not likely to affect prejudicially,

(i) the sovereignty and integrity of India; or

(ii) public interest; or

(iii) freedom or fairness of election to any Legislature; or

(iv) friendly relations with any foreign State; or

(v) harmony between religious, racial, social, linguistic or regional groups, castes or communities.

(n) It is contended that in this case there is absolutely no proof to show that public interest is affected and therefore, the impugned order prohibiting the Association from receiving foreign contribution is unjustified. It is also contended that apart from FCR Act, the money from Central Government and State Government are deposited in the account and since the account has been frozen, it has caused great prejudice to the interest of the Appellant Association.

(o) The contention of the learned Senior Counsel representing the Government of India are:

1. The provisions of the FCRA, i.e. 9 & 20 of the Act do not contemplate opportunity of hearing ;

2. There is no scope for following the Principles of Natural Justice;

3. The Civil Miscellaneous Appeal is not maintainable when there is an efficacious alternative remedy available.

As the question of law raised in the Writ Petition as well as the Civil Miscellaneous Appeal are one and the same, common order has been passed for both the C.M.A. and Writ Petition. Therefore, the order passed in the Writ Petition (MD) No.3867 of 2012 shall form part of this order.

(p) The next contention is that, only when the Central Government is satisfied after making such enquiry, as it deems fit, that the foreign contribution has been received in contravention of the provisions of the Act, it may pass order prohibiting a person from paying, delivering, transferring or otherwise dealing with, in any manner whatsoever, such article or currency or security save in accordance with the written orders of the Central Government. It is contended that insofar as this case is concerned, there is absolutely no material to come to the conclusion that the Appellant Association has contravened any of the provisions of the Act while accepting the foreign contribution. In other words, it is contended that the Regulations, Rules and modalities prescribed by the Government for accepting foreign contribution have been followed and it is also not pointed out in the order as to whether there was any violation while receiving or accepting the foreign contribution. Hence the impugned order is claimed to be illegal.

(q) The answers given for the similar question raised in the Writ Petition applies to this CMA also. So far as the contention raised by the Respondent as to the maintainability of the Writ Petition in the availability of alternative remedy is answered in the following part of the judgment.

(r) One more contention raised by the learned Counsel for the Appellant is that the Civil Miscellaneous Appeal should not be dismissed on technical grounds and that it should be treated as a Writ Petition. Further contention is that it is for the Court to apply the correct provision of law and correct principles of law even if incorrect provision of law is quoted by the Appellant. The sum and substance of the contention is that it is only the content that matters and not the form.

(s) The learned Counsel for the Respondent contended that the Civil Miscellaneous Appeal should be dismissed on two grounds, i.e., (i) filing of Writ Petition is permissible in the facts and circumstances and not the Civil Miscellaneous Appeal; (ii) the Writ Petition not be maintainable on account of availability of alternative remedy.

(t) So far as the first contention is concerned, this court is dealing with the claim of two citizens on the same set of facts and circumstances. Common question of fact and law has arisen in both the cases. Common judgment is pronounced. Under such circumstances, Court cannot rely upon technicalities and the Court is expected to render justice treating the Civil Miscellaneous Appeal as the Writ Petition.

(u) So far as the second issue is concerned, the grounds substantiating the contentions alleged are as follows:

11. Alternative remedy: The learned Counsel for the Respondents is of the view that the Writ Petition itself is not maintainable and that the Petitioner has to file an effective and alternative remedy of filing a Revision before the Government, invoking the provisions under Section 32 of the FCRA Act.

Section 32 of the FCRA Act is extracted as under:

32. Revision of orders by Central Government.

(1) The Central Government may, either of its own motion or on an application for revision by the person registered under this Act, call for and examined the record of any proceeding under this Act in which any such order has been passed by it and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereon as it thinks fit.

(2) The Central Government shall not of its own motion revise any order under this section if the order has been made more than one year previously.

(3) In the case of an application for Revision under this section by the person referred to in sub-section (1), the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier.

Provided that the Central Government may, if it is satisfied that such person was prevented by the sufficient cause from making the application within that period, admit an application made after the expiry of that period.

(4) The Central Government shall not revise any order where an Appeal against the order lies but has not been made and the time within which such Appeal may be made has not expired or such person has not waived his right of Appeal or an Appeal has been filed under this Act.

(5) Every application by such person for revision under this section shall be accompanied by such fee, as may be prescribed.

11.1. In support of his contention, the learned Assistant Solicitor General, relied on the decision of the Honorable Supreme Court reported in United Bank of India v. Satyawati Tondon, 2010 (8) SCC 110 [LQ/SC/2010/728] , wherein the appropriate circumstances in which the High Court should exercise the jurisdiction under Article 226, have been pointed out. It would be relevant to extract paragraph 52 of the decision, which runs thus:

52. In City and Industrial Development Corpn. V. Dosu Aardeshir Bhiwanidiwala, the Court highlighted the parameters which are required to be kept in view by the High Court while exercising jurisdiction under Article 226 of the Constitution. Paras 29 & 30 of that judgment which contain the views of this Court read as under: (SCC pp. 175-76)

29. In our opinion, the High Court while exercising its extraordinary jurisdiction under Article 226 of the Constitution is duty-bound to take all the relevant facts and circumstances into consideration and decide for itself even in the absence of proper Affidavits from the State and its instrumentalities as to whether any case at all is made out requiring its interference on the basis of the material made available on record. There is nothing like issuing an ex parte writ of mandamus, order or direction in a public law remedy. Further, while considering the validity of impugned action or inaction the Court will not consider itself restricted to the pleadings of the State but would be free to satisfy itself whether any case as such is made out by a person invoking its extraordinary jurisdiction under Article 226 of the Constitution.

30. The Court while exercising the jurisdiction under Article 226 is duty-bound to consider whether:

(a) adjudication of Writ Petition involves any complex and disputed question of facts and whether they can be satisfactorily resolved;

(b) the Petition reveals all material facts;

(c) the Petitioner has any alternative or effective remedy for the resolution of the dispute;

(d) person invoking the jurisdiction is guilty of unexplained delay and laches;

(e) ex facie barred by any law of limitation;

(f) grant of relief is against public policy or barred by any valid law; and host of other factors.

The Court in appropriate cases in its discretion may direct the State or its instrumentalities as the case may be to file proper affidavits placing all the relevant facts truly and accurately for the consideration of the Court and particularly in cases where public revenue and public interest are involved. Such directions are always required to be complied with by the State. No relief could be granted in a public law remedy as a matter of course only on the ground that the State did not file its counter-affidavit opposing the Writ Petition. Further, empty and self-defeating affidavits or statements of Government Spokesman by themselves do not from basis to grant any relief to a person in a public law remedy to which he is not otherwise entitled to in law.

11.2. The next decision relied on by the learned Counsel for the respondents is the decision of the Honorable Supreme Court reported in Raj Kumar Shivhare v. Directorate of Enforcement, 2010 (4) SCC 772 [LQ/SC/2010/385] . Paragraphs 31 & 32 of the said decision would run thus:

31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a Writ Petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under Writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the Writ Petition on the ground of lack of territorial jurisdiction.

32. No reason could be assigned by the Appellants Counsel to demonstrate why the Appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the Appellate forum.

11.3. The decisions relied on by the learned Counsel for the Respondent is on the general rule that when there is an alternative remedy available, Writ Petition will not be maintainable. But, there are circumstances as explained in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, AIR 1999 SC 22 [LQ/SC/1998/1044] , by which, there will not be a bar for the filing of the Writ Petition when the Principles of Natural Justice are not followed while passing the impugned order. It has been found as a matter of fact that Principles of Natural Justice has not been followed while passing the impugned order. Therefore the contention that the Writ Petition is not maintainable cannot be sustained.

12. The learned Assistant Solicitor General of India produced the Inspection Report titled as Brief Outcome of Inspection dated 24.1.2012. The production of the Inspection Report before the Court at the stage of argument, was seriously opposed by the learned Counsel for the Petitioner on the contention that furnishing of report cannot be done after taking a decision and it must be pre-decisional production of report to the party himself. The learned Counsel for the Petitioner also contended that when a specific stand has been taken that the allegation in the Counter Affidavit which is not stated in the impugned order, is objectionable, the action of the Government in producing the report before the Court is highly unwarranted. This objection is recorded at the request of the learned Counsel for the petitioner. On such objection, a copy of the report was also furnished to the other side.

12.1. The learned Assistant Solicitor General highlighted the important observations made in the report which runs thus:

(i) Irregularity in the construction of 183 houses, for the benefit of tsunami victims. The allegation is that instead of inviting tenders, work was assigned based on quotations, received by hand instead of post. Constructions were not up to mark and the materials used were of a poor quality. Houses have been allotted to the Christian community, confining to a single locality.

(ii) Irregularity in the supply of fibre glass boards. Payment made without obtaining bill from suppliers.

(iii) Irregularity in the procurement of 498 fishnets.

(iv) Diversion of fund from one project to another project.

(v) Several fishnet beneficiaries around the locality Kanayakumari participated in agitations in Kudankulam requiring further investigations.

12.2. This inspection report was not furnished to the Writ Petitioner and their explanations were not called for. This is the main grievance of the Writ Petitioner. Before passing the order, the Respondent ought to have furnished the copy of the same and after getting the explanation of the Petitioner the order could have been passed. That has not been done. It is open to the available under the FCRA Act. But when the impugned order violates the rights of the Petitioner involving Civil consequences and when it is proved the Principles of Natural Justice has not been followed, then the impugned order is unsustainable. However, it is open to the Respondent to furnish a copy of the Enquiry Report to the Petitioner, after getting necessary explanation from him and to pass appropriate orders.

13. In the result, the Writ Petition is allowed. The proceedings of the First Respondent viz. Union of India, Ministry of Home Affairs. Foreigners Division, (FRCA) Wing, New Delhi, in No.11/21022/58(486) 2012-FC (MU) dated 9.2.2012 is quashed. However it is made clear that it is open to the Respondent to take any action (if need be), after following the Principles of Natural Justice. No costs.

14. In the result, the Civil Miscellaneous Appeal, which is treated as the Writ Petition, is allowed. The proceedings dated 9.2.2002 prohibiting the Petitioner (T. Mano Thangaraj) from receiving foreign contribution is hereby set aside. However it is made clear that it is open to the Respondent to take any action (if need be), after following the Principles of Natural Justice. No costs. Consequently the connected M.P.s are closed.