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Foreign Money Crediting Not Guaranteed by FCRA Registration; MHA Clearance Always Required: Ruling by Karnataka High Court

Case Title: Manasa Centre For Development And Social Action Vs. The Managing Director, The Development Credit Bank Ltd

Date of Order: 11/08/2023

CORAM: Justice KS Hemalekha

INTRODUCTION

The Karnataka High Court has recently stated that holding a permanent registration under the Foreign Contribution (Regulation) Act of 2010 (FCRA) does not establish any entitlement for an individual or entity to have foreign donation funds deposited into their bank account.

FACTS

The Court highlighted that mere possession of a permanent registration under the FCRA, 2010 does not grant automatic entitlement to receive foreign funds without additional clearance from the Ministry of Home Affairs.

The Government of India’s letter indicated that foreign donors could be placed under a ‘Prior Reference/Permission Category’ based on feedback from field or security agencies.

The Reserve Bank of India (RBI) had issued a directive in 2013, based on MHA’s communication, requiring banks to inform the Ministry about any fund flow from ‘Dan Church Aid’ before granting clearance.

The MHA had specifically instructed the bank not to credit the amount received from ‘Dan Church Aid’ to the account without clearance.

Given the MHA’s clear instruction in a letter dated October 31, 2013, the Court concluded that Manasa was not entitled to the funds without obtaining clearance from the ministry.

As a result, the Court found the petition lacking in merit and dismissed it.

 COURT’S ANALYSIS

The Court emphasized that merely possessing a permanent registration under the FCRA, 2010 did not confer automatic entitlement for the reception of foreign funds, and it stressed that additional clearance from the Ministry of Home Affairs (MHA) was imperative. This stance was underscored by a letter from the Government of India, which revealed the possibility of categorizing foreign donors as subject to ‘Prior Reference/Permission’ based on inputs from field or security agencies. In 2013, the Reserve Bank of India (RBI) mandated banks to notify the Ministry before granting clearance for any fund inflow from ‘Dan Church Aid’, as per communication from the MHA. Notably, the MHA specifically directed the bank not to credit funds from ‘Dan Church Aid’ to any account without proper clearance. Given the unequivocal directive provided in the MHA’s letter dated October 31, 2013, the Court reached the verdict that Manasa could not claim entitlement to the funds without obtaining clearance from the ministry. Consequently, the Court found the petition without merit and dismissed it.

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Written by- Shreya Sharma

 

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Karnataka High Court Dismisses Criminal Case Against Men Accused of Inscribing ‘Hijab Represents Our Honor’ on School Wall

Case Title: Muzammil & Anr v. State of Karnataka

Date of Order: 01/08/2023

CORAM: Justice M Nagaprasanna

INTRODUCTION

The Karnataka High Court invalidated legal actions commenced against two individuals charged with inscribing a protest slogan, “Hijab is our dignity,” on the premises of a government school in the previous year.

FACTS

In this case, the matter pertains to a complaint filed by the headmaster of the Government Girls High School in Hosapete, Karnataka. The complaint alleged that the walls of the school premises were painted with the words “Hijab is our dignity” using black paint, which the complainant considered to be unauthorised disfigurement by advertisement. The case was registered under Section 3 of the Karnataka Open Places Disfigurement (Prevention) Act, 1981, which deals with penalizing such unauthorized disfigurement.

COURT’S ANALYSIS

Justice M Nagaprasanna, presiding over the case, issued an order based on the interpretation of the relevant sections of the Act. The court pointed out that for an incident to qualify as an offence under Section 3 of the Act, Section 1 of the Act must also be applied. Section 1 of the Act specifies that a place or local area must be brought within the purview of the Act through a notification issued by the State government.

The court noted that Hosapete Town had not been officially notified to fall under the ambit of the Act, and this was an admitted fact. The absence of a notification from the State government designating Hosapete Town as covered by the Act was crucial. The court emphasized that without such a notification, any further legal proceedings conducted against the petitioners would amount to an abuse of legal process and could lead to a miscarriage of justice.

The case was based on a complaint filed by the headmaster against the unauthorized painting on the school walls. After an investigation, the police had filed a chargesheet against the petitioners, presumably the individuals responsible for the painted message. The petitioners sought the quashing of the legal proceedings, arguing that Hosapete Town had not been officially notified as an area covered by the Act. The State, on the other hand, contended that notification was not necessary for Hosapete Town to be considered covered by the Act.

In summary, the court’s judgement rested on the absence of an official notification by the State government designating Hosapete Town as being covered by the Karnataka Open Places Disfigurement (Prevention) Act, 1981. As such, the court held that the legal proceedings initiated against the petitioners were not valid, as the alleged offence occurred in an area that had not been properly notified under the Act. The court’s decision appears to lean in favor of the petitioners, stressing that legal proceedings in this case would be unjust due to the lack of a notification.

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The Madras High Court allowed the respondents to seek withdrawal of the deposited amount while the challenge to their arbitral award was being considered

DATED: 25.08.2023
CORAM :THE HON’BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE AND
THE HON’BLE MR.JUSTICE P.D.AUDIKESAVALU
W.A.Nos.1672, 1676, 1681, 1686 and 1687 of 2023

Introduction:
This case revolves around appeals filed under Clause 15 of the Letters Patent against orders of the learned Single Judge in writ petitions related to compensation disbursement as per an arbitral award. The appellants are the National Highways Authority of India (NHAI) and the respondents are landowners seeking enhanced compensation for land acquisition for a national highway project. The dispute involves the question of whether the writ petitions are maintainable and whether the compensation should be deposited pending an arbitration challenge.

Background: The appellants acquired land for a national highway project and an arbitrator determined the compensation amount. The respondents, landowners, filed writ petitions seeking directions for the appellants to deposit the enhanced compensation as per the arbitral award. The appellants challenged the maintainability of the writ petitions, arguing that the respondents could resort to execution proceedings under Section 36 of the Arbitration and Conciliation Act, 1996 (the Act).

Key Arguments:
The appellants contended that the writ petitions should not have been entertained as an alternative remedy for execution existed under Section 36 of the Act. They further argued that the arbitral award’s merits should be considered by the court where the challenge under Section 34 of the Act was pending. The appellants claimed that the award was not registered due to administrative reasons and sought a fair assessment of their contentions.
The respondents argued that they had the right to seek payment of the enhanced compensation as per the award. They relied on a previous Division Bench judgment where similar writ petitions were held maintainable. They highlighted that the appellants had already paid the enhanced compensation to other claimants, suggesting selective treatment.

Court Proceedings:
The court began by acknowledging the respondents’ right to execution proceedings under Section 36 of the Act. However, it refrained from commenting on the merits of the arbitral award since its challenge was pending before the District Judge.

Court’s Decision:
While recognizing the respondents’ desire to receive enhanced compensation, the court found that the appellant’s challenge to the arbitral award’s validity needed consideration. In the interest of justice and equity, the court passed the following orders:
1. The appellants were directed to transfer 50% of the enhanced compensation already deposited to the concerned District Judge’s court where the challenge under Section 34 of the Act was pending.
2. The original petitioners (respondents) were granted the liberty to apply for withdrawal of the deposited amount, subject to the District Judge’s decision.
3. The appellants were allowed to seek further orders on their stay petition before the District Judge.
4. Depending on the District Judge’s order on withdrawal and stay, steps could be taken regarding the deposited amount.
5. The District Judge was urged to expedite the decision on the application under Section 34 of the Act.

Conclusion:
This case highlights the balancing act that courts often engage in when dealing with matters of alternative remedies, equitable distribution of compensation, and the pendency of arbitration challenges. The court recognized the importance of both parties’ interests and attempted to provide a fair solution. By allowing the respondents to seek withdrawal of the deposited amount while the challenge to the arbitral award was being considered, the court upheld justice and ensured that neither party was unduly disadvantaged. This case emphasizes the courts’ role in maintaining a fair and efficient legal process while addressing the complexities of arbitration and compensation issues.

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The Madras High Court directed the appellate court to dispose of the appeal related to a revision petition filed under Article 227 within eight weeks from the date of the order

DATED: 25.08.2023
CORAM : THE HONOURABLE MR.JUSTICE V. LAKSHMINARAYANAN
C.R.P.(PD)No.677 of 2014
Introduction:
This case involves a civil revision petition filed under Article 227 of the Constitution of India against the order of vacating the stay in CMP.No.1202 of 2012 in CMA.No.83 of 2012. The petitioner, Mrs. A. Ramatulasi, represented herself, while the respondents were represented by legal counsel. The dispute revolves around the petitioner’s claim to be considered an authorized occupant under the Protection of Women from Domestic Violence Act, 2005, in relation to a government quarters property.

Background:
The petitioner is the estranged wife of Mr. A. Venkateswara Rao, an Income Tax Department employee. They had lived together in a government quarters property allocated to Venkateswara Rao as part of his service entitlement. Due to their marital discord, they filed divorce and restitution of conjugal rights proceedings. During this period, Venkateswara Rao was transferred to a different location.

Key Arguments:
The petitioner claimed that since she had lived with Venkateswara Rao in the government quarters, it should be considered a “matrimonial home” under the Domestic Violence Act, and she should be protected under the Act. She contended that she should not be treated as an “unauthorized occupant” under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. However, the Estate Officer attached to CPWD deemed her an unauthorized occupant and initiated eviction proceedings.

Court Proceedings:
The petitioner appealed against the eviction order, obtaining an interim stay in CMP.No.1202 of 2012. However, during a hearing, she expressed loss of confidence in the court and refused to argue the case, leading to the vacation of the stay. Subsequently, she filed the present civil revision petition under Article 227 against the order vacating the stay.

Court’s Decision:
Justice C.V. Karthikeyan carefully analyzed the facts, focusing on the implications of vacating the stay in an eviction proceeding. The court emphasized that eviction proceedings would lose their purpose if a stay was not granted pending the appeal. It was pointed out that the issue of whether the government quarters property should be considered a matrimonial property or not was a matter for the appellate court (CMA.No.83 of 2012) to decide.

Justice Karthikeyan acknowledged that the proceedings had been pending since 2012, and due to the petitioner’s interim stay from the court, she had been occupying the property for 11 years. Considering this, the court set aside the order vacating the stay and made the stay granted by the Principal Judge, City Civil Court, Chennai, absolute. The appellate court was directed to dispose of the appeal (CMA.No.83 of 2012) within eight weeks from the date of the order or by November 6, 2023, at the latest. The court requested a report on the appeal’s completion.

Conclusion:
The court’s decision in this case underscores the importance of balancing the interests of parties in eviction proceedings. It recognizes the significance of maintaining the status quo during the appeal process to avoid rendering the appeal ineffective. While refraining from making a definitive ruling on the property’s characterization as matrimonial, the court ensured that the eviction process would proceed fairly and that the appeal would be decided promptly. This case demonstrates the court’s role in safeguarding the rights of parties and maintaining a just and efficient legal process.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”
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The Madras High Court directed the appellate court to dispose of the appeal related to a revision petition filed under Article 227 within eight weeks from the date of the order

 

 

DATED: 25.08.2023

CORAM : THE HONOURABLE MR.JUSTICE V. LAKSHMINARAYANAN

C.R.P.(PD)No.677 of 2014

Introduction:

This case involves a civil revision petition filed under Article 227 of the Constitution of India against the order of vacating the stay in CMP.No.1202 of 2012 in CMA.No.83 of 2012. The petitioner, Mrs. A. Ramatulasi, represented herself, while the respondents were represented by legal counsel. The dispute revolves around the petitioner’s claim to be considered an authorized occupant under the Protection of Women from Domestic Violence Act, 2005, in relation to a government quarters property.

Background:

The petitioner is the estranged wife of Mr. A. Venkateswara Rao, an Income Tax Department employee. They had lived together in a government quarters property allocated to Venkateswara Rao as part of his service entitlement. Due to their marital discord, they filed divorce and restitution of conjugal rights proceedings. During this period, Venkateswara Rao was transferred to a different location.

Key Arguments:

The petitioner claimed that since she had lived with Venkateswara Rao in the government quarters, it should be considered a “matrimonial home” under the Domestic Violence Act, and she should be protected under the Act. She contended that she should not be treated as an “unauthorized occupant” under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. However, the Estate Officer attached to CPWD deemed her an unauthorized occupant and initiated eviction proceedings.

Court Proceedings:

The petitioner appealed against the eviction order, obtaining an interim stay in CMP.No.1202 of 2012. However, during a hearing, she expressed loss of confidence in the court and refused to argue the case, leading to the vacation of the stay. Subsequently, she filed the present civil revision petition under Article 227 against the order vacating the stay.

 

Court’s Decision:

Justice C.V. Karthikeyan carefully analyzed the facts, focusing on the implications of vacating the stay in an eviction proceeding. The court emphasized that eviction proceedings would lose their purpose if a stay was not granted pending the appeal. It was pointed out that the issue of whether the government quarters property should be considered a matrimonial property or not was a matter for the appellate court (CMA.No.83 of 2012) to decide.

Justice Karthikeyan acknowledged that the proceedings had been pending since 2012, and due to the petitioner’s interim stay from the court, she had been occupying the property for 11 years. Considering this, the court set aside the order vacating the stay and made the stay granted by the Principal Judge, City Civil Court, Chennai, absolute. The appellate court was directed to dispose of the appeal (CMA.No.83 of 2012) within eight weeks from the date of the order or by November 6, 2023, at the latest. The court requested a report on the appeal’s completion.

Conclusion:

The court’s decision in this case underscores the importance of balancing the interests of parties in eviction proceedings. It recognizes the significance of maintaining the status quo during the appeal process to avoid rendering the appeal ineffective. While refraining from making a definitive ruling on the property’s characterization as matrimonial, the court ensured that the eviction process would proceed fairly and that the appeal would be decided promptly. This case demonstrates the court’s role in safeguarding the rights of parties and maintaining a just and efficient legal process.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Written by- Shreeya S Shekar

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