Dear Members,
I would like to get advice on the following issue.
A sporting organisation holding FCRA registration has established a health care center PHC type in rural area in 2007 with foreign support. For the administrative purpose the organisation has created a Trust in 2010 consisting of the selected GB members from the same organisation and the land of the PHC is given to the Trust by the said organisation. So long the cost of PHC building construction, instruments, staff are maintained by the organisation based on an notary affidavit agreement with the Trust. In August 2020 some amount of foreign grant (about 4.5 lac) is received by the organisation for rebuilding the PHC’s tin – shed completely overthrown by the severe cyclone Amphan and started to work in middle of September 2020 on request of the Trust. In the mean time the FCRA amendment bill becomes effective. Now I like to know whether the FCRA holding organisation can spend for the rebuilding of tin-shed of the Trust’s PHC though the organisation spends directly and keeping all accountability with it.
I request to give advice how the repairing and rebuilding of the shed can be possible from the grant received from abroad by the organisation?
Please let me also have the suggestion what will be the utility of the grant if it is not permissible to spend for the purpose.
With best regards.
Samir Kr. Halder
Ashakiran Hospital Trust
I agree with what Mr. Subhash says.
Case A – If the Trust is not FC registered
If the Trust doesn’t have FC registration and if the land that was transferred was acquired out of FC funds then that violates the FCRA law. If the land was acquired out of LC funds then it is not a problem. Further without the FCRA registration, any FC money provided to the Trust for whatever purpose is not as per FCRA.
Case B-If the Trust is FC registered
However if the Trust has FC registration then, amount already received for the renovation by the Trust can be used until 31st March if the Trust doesn’t open the new SBI bank account by then. Any amount lying on the existing utilisation bank account or designated bank account will be unavailable for use after 31st March if the SBI bank account is not opened. Any new amount cannot be received as a second recipient by the Trust. The FC registered organisation (the donor in this case) cannot directly implement the project since the asset is in the Trust’s name. If the Trust is FC registered then it can request the second donor to request the original donor to directly send the funds to the Trust’s account.
What I understand, is that a Trust has been created for PHC, transferring the land & building to that Trust. Thus Trust is a separate legal entity. It is not clear if the Trust is also having a FCRA registration. If not, then any transfer of FC to the sporting organisation is not as per FCRA laws. Whatever you have done should have remained in the books of FCRA registered organisation. The project than would have belonged to the sporting organisation or the Trust should have taken FCRA registration.