A vindictive state at the very highest
level at the Centre is bent on using repressive, even extra legal means: Teesta
Setalvad & Javed Anand
By:
LiveLaw | June 23, 2016
On
February 12, 2015, within 40 minutes of the Gujarat High Court order denying
anticipatory bail to social activists, Teesta Setalvad and Javed Anand, the
Gujarat police arrived at their residence in Mumbai. Thanks to the Supreme
Court issuing a stay on the high court order on the same day, and extending
this stay from time to time, the couple have been able to evade arrest and
custodial interrogation.
On
June 16, 2016, with the Central Government cancelling the registration under
Foreign Contribution Regulation Act, of the Sabrang Trust, an association run
by Setalvad and Anand, a fresh controversy has arisen, although the grounds for
doing so are unclear.
In
this interview to LiveLaw, Setalvad and Anand answer specific questions
concerning this controversy.
Q: So,
what triggered the controversy in the first place?
A: It
is only after February 12, 2015, when the Gujarat Government failed to arrest
us in Mumbai, that Government of Gujarat’s Home department wrote to MHA and the
MHA round of inspections of the trusts and then Sabrang Communications began.
The Gujarat Government’s letter to MHA dated March 10, 2015, which started it
all, makes it very clear.
Q: The
order cancelling the FCRA registration of Sabrang Trust says more than 50% of
the foreign contribution obtained under the FCRA has been spent on admin
expenses without prior permission of the Central Government.
A. In
response to this alleged violation, we had submitted a detailed worksheet along
with copies of our annual returns to show that admin expenses during FY 2010-11
was 30% of the total, and during FY 11-12 was 31.5% of the total. Apart from
the blanket claim that our admin expenses during these two years were 64.23%
and 55.14% respectively, MHA has chosen not to explain how their figures were
arrived at. MHA’s response to our detailed explanation was simply three words
in the beginning of their suspension order: “found not satisfactory”.
The
relevant FCRA provision which prescribes the 50% limit is under Section 8(1)(b)
of FCRA, 2010. Rules 5 (i) and (ii) of FCRR 2011 reads as follows:
“The following shall constitute
administrative expenses: (i) salaries, wages, travel expenses, or any
remuneration realized by members of the Executive Committee or Governing
Council of the person; (ii) all expenses towards hiring of personnel for
management of the activities of the person and salaries, wages or any kind of
remuneration paid, including cost of travel of such personnel;
However,
the last two paragraphs of the same Rule 5 read as follows:
“Provided that the expenditure incurred
on salaries or remuneration of personnel engaged in collection or analysis of
field data of an association primarily engaged in research or training shall
not be counted as administrative expenses”.
“Provided further that the expenses
incurred directly in furtherance of the stated objectives of the welfare
oriented organization shall be excluded from the administrative expenses such as salaries to doctors of hospital, salaries
to teachers of schools etc.”
It
is our contention that FCRA department has chosen to ignore the latter part of
Rule 5 which clearly states that expenses directly related towards furtherance
of stated objectives are NOT to be treated as admin expenses.
Q.
How did you explain the payment of Rs. 50 lakh, out of the foreign
contributions under the Act, to Sabrang Communications which is not registered
with FCRA?
A: We
see no veil that needs piercing here. Our contention is simple: Between FY
2009-10 and 2011-12, Sabrang Trust received grants from Ford Foundation in
annual instalments for a 3-year project – Conflict Resolution and Peace
Building.
For
the execution of the project, the Trust needed office space, office equipment
(computers, printers, photocopier, cable internet etc) and staff. The Trust had
none of these for executing the project. The Trust could have purchased or
rented office space and equipment, hired staff for this 3-year period except
that it did not have enough funds to purchase; even rent/hiring is an expensive
proposition in Mumbai as is well known.
For
the Trust, therefore, entering into an expenses sharing arrangement with
Sabrang Communications, an organisation which was formed in 1993 (years before
Sabrang Trust came into existence and became active) and which had invested
lakhs over the years in furnishing office space, purchasing equipment, hiring
and training staff to address the issues of communalism and caste.
Such
a cost-saving arrangement for the Trust was based on resolutions passed by 4 of
the 6 Trustees of Sabrang Trust (with trustees Teesta Setalvad and Javed Anand
abstaining from this decision-making as both were directors of Sabrang
Communications (SC).
It
may be noted that not even a rupee was paid by the Trust to SC by way of rent
for office space. The amounts reimbursed to SC on a monthly basis as per
resolutions of Board of Trustees were towards the furtherance of Objects of SC
and as per the project/budget sanctioned by Ford Foundation.
Not
a rupee received by SC from ST was subsequently paid by SC to Javed Anand or
Teesta Setalvad. Both received remuneration directly from the trust for their
executive responsibilities as Project Director/Project Administrator of the
Ford Foundation-supported project. Again, there is no veil that needs piercing
here.
Section
3 of FCRA 2010 prohibits certain persons, including editors, publishers etc. of
a registered newspaper, from receiving foreign contribution.
However,
section 4 titled ‘Person to which section 3 shall not apply states: “Nothing contained in Section 3 shall apply
to the acceptance, by any person specified in that section, of any foreign
contribution received by him, subject to the provisions of section 10 [Note:
not applicable in our case] -, (a) by way of salary, wages or other remuneration
due to him or to any group of persons working under him, from any foreign
source or by way of payment in the ordinary course of business transacted in
India by such foreign source”.
For
example, take the case of an MP who too is prohibited from receiving any
foreign contribution under section 3. But as clearly stipulated under section
4, he/she can charge and accept fee for legal services provided to a foreign
source without FCRA violation. The provisions of FCRA under section 4 being
abundantly clear, where is the question of need to hide behind any veil. SC was
not paid a rupee to publish Communalism Combat, Javed Anand and Teesta Setalvad
was not paid a rupee as editors of the same journal.
Q. Did
MHA offer any reasons to reject this explanation?
A: No
reason was given, except the same “found not satisfactory” mentioned in the
suspension order. The cancellation order now has laced the MHA’s
non-application of mind with the following: “The reply of the Association along
with the records made available by them as also that available with us was
examined in detail and it was found that the same was not satisfactory; that
the same did not provide adequate explanation vis-a-vis the violations found…”
Q: The
cancellation order also alleges mixing of domestic and foreign funds.
A: Sabrang
Trust had an agreement with the FCRA-registered Centre for the Promotion of
Social Concerns (CPSC), Tamil Nadu, to introduce human rights education in
schools in Maharashtra. A budget was approved by the latter for the project
period June-December 2010.
Accordingly,
the programme started in June but the first instalment of the agreed amount was
received from CPSC only in October 2010. By then ST had already spent an amount
of Rs. 2,46,954 from its domestic account. This same amount was reimbursed
to the domestic account from the FCRA a/c.
During
their inspection of ST accounts in April 20015, the 4-member FCRA’s inspection
team headed by a deputy secretary had readily admitted that such a situation is
common with many NGOs where FCRA amount arrives late and that reimbursing the
domestic account for actual expenses on the FCRA funds-supported project does
not mean mixing of accounts. A book, “FCRA, 2010 Made easy — 300 Q & A”,
written by a former deputy secretary from FCRA department, J. K. Chattopadhyay also
clearly states that such reimbursement does not mean mixing of accounts. Why
MHA now insists this is mixing of accounts is best known to its officials.
Q. Payment
to SC which purchased bulk SMS facility from Sandesha Online Services, out of
the foreign contribution to ST, is another allegation levelled against you.
A: This
refers to payment of an amount of Rs.6,617. During FY 2010-11, on a request
from the then Secretary, Minorities Development Department, Maharashtra
Government, Sabrang Trust agreed to help publicise the government’s educational
scholarship schemes for minorities in the state. One of the means for publicity
was to send bulk sms messages to educational centres whose mobile numbers were
made available to the Trust by a government department.
For
this purpose, ST spent a total of around Rs.10,000 to purchase bulk sms
facility. One of the bills, from Sandesha, was wrongly made in the name of
Sabrang Communications and inadvertently paid for by the accountant out of
petty cash. Since these bulk sms-es were exclusively for ST, the same
amount was reimbursed to SC. Publicising a government scheme for educational
scholarships is most certainly part of the Objects of the Trust and also among
the approved activities proposed to be undertaken as part of the Ford
Foundation supported project.
Q: Another
allegation is that out of the foreign contribution, Rs 12 lakh paid to Javed
Anand and Teesta Setalvad for expenses incurred through their personal credit
cards.
A: In
this respect, MHA’s cancellation order states, “The Association [ST] has made
direct payments of approximately Rs. 12 lakh from the designated FCRA account
to Citibank and Union Bank of India on account of credit cards belonging to Ms.
Teesta Setalvad and Mr. Javed Anand. The cards are issued in the name of
individuals and the above mentioned payments of the foreign contribution shall
be treated to have been used for personal gain” [our emphasis].
To
the best of our knowledge, except in case of large private corporations which ask
for credit cards in the company’s name for use by its top executives, most
credit cards are issued in individual names.
As
is a universal practice, card holders working for some organisation use their
personal card both for personal expenses as also for organisational expenses.
ST
has provided to FCRA monthly credit card bills of both Javed Anand and Teesta
Setalvad, along with worksheets and monthly bank statements [both of the trust
and personal] clearly indicating that the Trust has only been charged for
expenses related to the organisation’s activities. That personal expenses have
not been charged may clearly be seen from the worksheets and the monthly bank
statements of Javed Anand and Teesta Setalvad. Despite this, MHA has thought it
fit to treat all expenses through credit cards as being “for personal gain”.
Q: The
MHA has alleged that ST received foreign contribution for “activities of
cultural nature”, though registration is only for “activities of
Educational/social nature” and that this constitutes another violation.
A: ST
received its FCRA registration in November 2007 and towards the end of the
financial year it received a foreign contribution amount of Rs.50,000 for the
proposed building of a Memorial at Gulberg Society, Ahmedabad. While filing its
annual return for this first year of receipt of foreign contribution in the
prescribed Form F-3, being new to this form, we inadvertently showed this
amount as having been received for ‘Maintenance of Places of Historical and
Cultural Importance’. We realised our mistake and since then this same amount,
which till date remains unspent, is shown in annual returns under an
appropriate column.
While
it is a matter of common sense that the proposed memorial, which had to be
abandoned in 2012 due to insufficient donor response, cannot/should not be
treated as meant for ‘Maintenance of Places of Historical and Cultural
Importance.’ This was explained to the FCRA inspection team in April 2015 and
the corrections in subsequent years pointed out to them. But it appears that
our “original sin” cannot be forgiven.
Q. Is
the pending appeal in SC against denial of anticipatory bail by Gujarat
government now infructuous?
A: In
our view, the investigations have long been concluded, not much has been found
and now that what was initiated by the Gujarat police and aggressively followed
by the MHA (post March 2015) has ‘concluded’ in the cancellation of Sabrang
trust’s license, it would appear so. CJP has been put in the prior permission
category.
The
next date of hearing in the Supreme Court is July 11, so let’s see. We are not
dealing with normal legal procedures here. But a vindictive state at the very
highest level at the Centre bent on using repressive, even extra legal means.