Tehmtan R. Andhyarujina: As I remember him
29 March 2017

Mr Tehmtan R Andhyarujina, Senior Advocate, Supreme Court of India,  former Solicitor General of India and former Advocate General of Maharashtra, passed away in Mumbai on 28 March 2017.  An ardent constitutionalist and an eminent jurist, the legal firmament of Indian law  has lost one of its  greatest exponents in constitutional law. I feel personally numbed and deeply shocked and saddened by his passing.

I had the honour and privilege of briefing and assisting Mr Andhyarujina in many cases in the Supreme Court of India during the last twenty years or so. His brilliance and his extraordinary command of the intricate and complex strands of legal jurisprudence that weave into our Constitution, left one in awe and admiration.

Apart from his mastery of the  Indian Constitution and his scholarship and erudition, Mr Andhyarujina was also a great visionary and a firm believer in the  rule of law. While preparing a very difficult challenge to the constitutional validity of an international treaty, and a habeas corpus petition concerning a foreign citizen in the Supreme Court of India in 2015, I consulted him and briefed him in this case for many months. He appeared pro bono and fought the case with his characteristic dedication and devotion to the law. Despite his busy schedule, he would always find the time to advise and guide me and encouraged every effort I made in this case during the last two years. Although the Supreme Court of India dismissed both these cases last year, Mr Andhyarujina with his infinite grace, dignity, and wisdom advised me: "You will face many challenges in life; we win some and we lose some....ultimately, you will succeed...."

When I wrote my book,  Foreign Direct Investment and Globalisation, I approached Mr. Andhyarujina in 2013 and requested him to write a Foreword. With his innate modesty and humility, he asked me:  "Why?" I replied: "It will be such an honour for me."  I have been privileged and blessed by his Foreword to this book. He also presided over the function in New Delhi on 11 December 2013 for the release of this book.

I recall with nostalgia my last meeting with him in the Supreme Court of India earlier this year, in 2017. I did not imagine and I still cannot believe that this was going to be the last time that I would meet him. I sought his blessings  and he  reminded me of my professional duties to the rule of law. He recalled his decades spent in this venerable institution, the Supreme Court of India; he was deeply philosophical, stoical, pensive and cheerful  and he wondered at the mystery of human life itself.

Sir: I can never ever forget your many personal kindnesses to me since I first met you in the Bombay High Court as a junior lawyer in 1980, and later, when I was privileged to brief you in many cases  in the Supreme Court of India from 1997 till 2016. The Indian Bar is bereft of its finest and greatest leader. You have left a void in our hearts and minds. 

I convey to the great and noble family of Mr Andhyarujina, my deepest and sincerest condolences. This loss is shared by all of Sir's admirers, friends and colleagues; we will always remember you with the greatest reverence, respect and affection. 

Ramni Taneja 
New Delhi, India
29 March 2017

Concept Note: NGOs in India

CONCEPT NOTE: Non-Governmental Organizations [“NGOs”] in India: Legal and Regulatory Issues
By
Ramni Taneja
Paper presented by Ramni Taneja at the
Roundtable on Best Practices in NGO Governance:
Issues and Challenges:
Organized by National Law University, Delhi in collaboration with
The Charity Commission, United Kingdom
10th February, 2010
Venue: National Law University, Delhi, Sector-14, Dwarka,
New Delhi - 110078


HISTORY AND BACKGROUND OF NGOs IN INDIA

“Be the change you want to see in the world.” – Mahatma Gandhi

These philosophical words penned by the father of the nation, Mahatma Gandhi, symbolize the spirit and rationale of the concept of an NGO. The purpose of this Concept Note is to examine the various hues and colours of an NGO in the Indian legal, political and social milieu.

In a country like India, which is the world’s largest democracy, the seventh largest country in the world in terms of land area and the second most populous country in the world, the relevance of the NGO as a concept in theory and in practice, as a vibrant means of ensuring that the concerns of the citizens of this country derive protection in terms of the rule of law, can hardly be over-emphasized. The Constitution of India, provides an extraordinary source of valuable fundamental rights for the protection of the rights of individuals. It is these rights, coupled with the Directive Principles of State Policy that are relied upon by NGOs in their pivotal role in supporting individuals for the enforcement of their rights in India.

India has a long history of civil society based on the concepts of ‘daana’ [giving] and ‘seva’ [service] . These concepts have survived over centuries and in a sense epitomize the spirit of giving and service which forms the cornerstone of an NGO. During the days of the British Empire, voluntary organizations flourished with the objective being to improve social welfare, literacy and relief projects . In a detailed and comprehensive analysis prepared by the Asian Development Bank, the history of the NGO has been traced from Mahatma Gandhi’s mission to encourage villages to be self-reliant, to post independence development, leading to the creation of the Central Social Welfare Board in 1953, the establishment of the National Community Development Programme, the National Extension Service, and the three-tier Panchayati Raj system in 1958. Subsequently, the Association for Voluntary Agencies for Rural Development [AVARD] was established as a consortium of major voluntary agencies.

India has recently celebrated sixty years as a Republic on 26th January 2010. The last sixty years have witnessed an extraordinary blossoming of NGOs, especially during the 1970s and the 1980s. The 1990s have also seen a phenomenal growth in voluntary organizations or NGOs with civil society taking an active interest in their development and progress. International funding and support from international donors has also been noteworthy during the last few decades of the 20th century. With about 1.5 million NGOs in India, this demonstrates their unique presence and existence in this country.


GOVERNMENT OF INDIA’S NATIONAL POLICY ON THE VOLUNTARY SECTOR - 2007

In May 2007, the Government of India issued its National Policy on the Voluntary Sector [the “Policy”]. The Preamble to this Policy indicates the importance given by the Government of India to this Policy:


“Preamble

1.1 This Policy is a commitment to encourage, enable and empower an independent, creative and effective voluntary sector, with diversity in form and function, so that it can contribute to the social, cultural and economic advancement of the people of India.

1.2 The voluntary sector has contributed significantly to finding innovative solutions to poverty, deprivation, discrimination and exclusion, through means such as awareness raising, social mobilization, service delivery, training, research, and advocacy. The voluntary sector has been serving as an effective non-political link between the people and the Government. This policy recognizes the important role that the voluntary sector has to play in various areas and affirms the growing need for collaboration with the voluntary sector by the Government, as well as by the private sector, at the local, provincial and national levels.”

The Scope of the Policy, defines the concept of voluntary organizations. In the Policy voluntary organizations (VOs) mean to include organizations engaged in public service, based on ethical, cultural, social, economic, political, religious, spiritual philanthropic or scientific and technological considerations. VOs include formal as well as informal groups, such as: community-based organizations (CBOs); non-governmental development organizations (NGDOs); charitable organizations; support organizations; networks or federations of such organizations; as well as professional membership associations.

To be covered under the Policy, VOs should broadly have the following characteristics:
a) They are private, i.e., separate from Government
b) They do not return profits generated to their owners or directors
c) They are self-governing, i.e., not controlled by Government
d) They are registered organizations or informal groups, with defined aims and objectives.


The Policy also sets out its objectives, it provides details with regard to establishing an enabling environment for the voluntary sector, and most importantly, the concept of “partnership in development”. Some of the relevant extracts from the Policy in the context of “Partnership in Development” are quoted hereafter:

Partnership in Development

5.1 The voluntary sector can play an important role in the development process, particularly through community participation. VOs can offer alternative perspectives; committed expertise; an understanding of the local opportunities and constraints; and perhaps most importantly, the capacity to conduct a meaningful dialogue with communities, particularly those that are disadvantaged. It is therefore essential that the Government and the Voluntary Sector work together. Where feasible, such partnership may also include other entities such as panchayati raj institutions, municipalities, academic institutions, and private sector organizations.

5.2 Partnership between Government and VOs implies identifying shared goals and defining complementary roles. It must be based on the basic principles of mutual trust and respect, with shared responsibility and authority. These principles must be explicit in the terms and conditions of the partnership. They must also be evident in the formal and informal systems of collaboration.

5.3 This Policy recognizes three instruments of partnership, viz., (i) consultation, through a formal process of interaction at the Centre, State and District level; (ii) strategic collaboration to tackle complex interventions where sustained social mobilization is critical over the long term; and (iii) project funding through standard schemes. The Government will ensure that these three instruments of partnership are given due attention in Annual Plans prepared by Ministries and States. The action that will be taken in respect of each of the three instruments is discussed in the following paragraphs.

5.4 The Government will encourage setting up of Joint Consultative Groups / Forums or Joint machineries of government and voluntary sector representatives, by relevant Central Departments and State Governments. It will also encourage district administrations, district planning bodies, district rural development agencies, zilla parishads and local governments to do so. These groups will be permanent forums with the explicit mandate to share ideas, views and information and to identify opportunities and mechanisms of working together. The Government will introduce suitable mechanisms for involving a wide cross-section of the voluntary sector in these Groups / Forums.


5.4.1 The expertise of the voluntary sector will also be utilized, by including experts from VOs in the committees, task forces, and advisory panels constituted by the Government from time to time to help address important issues.

5.5 The country faces a number of complex problems that require adaptive, multi-sectoral solutions where sustained social mobilization is particularly important. These include poverty alleviation, skill promotion, entrepreneurship development, empowerment of women, population stabilization, combating HIV/AIDS, managing water resources, elementary education and forest management, to name a few. Such areas urgently require strategic collaboration between the Government and VOs, through national level programmes that are long-term in duration, and utilize multiple strategies, methodologies and activities to achieve their objectives. The Government will identify national collaborative programmes to be implemented in partnership with VOs. Each national collaborative programme will involve a finite set of reputed, medium or large VOs with a proven track record, and the ability to work on a reasonably large scale. The Government will ensure that such national collaborative programmes are given due importance in Plan documents.


5.6 The third instrument of partnership between the Government and the voluntary sector is project funding. A large number of Government agencies operate schemes for financial assistance to VOs. These schemes usually deal with activities such as surveys, research, workshops, documentation, awareness raising, training, creation and running of public welfare facilities, and so on. Project grants are a useful means for the Government to promote its activities without its direct involvement. They are also a valuable source of support to small and medium VOs. Nevertheless, there are legitimate concerns regarding the effectiveness of grant-in-aid schemes. Out-dated design of funding schemes, arbitrary procedures, selection of unsuitable VOs, poor quality of implementation, and misuse of funds are some of the reasons for the possible defeat of the objectives of such funding. Concerned Government agencies would be encouraged to ensure proper accountability and monitoring of public funds distributed to VOs.

5.6.1 Some Central agencies have achieved good results by decentralizing the process of project funding. Rather than administering various schemes directly, they appoint regional or State level intermediary organizations to do so on their behalf. This allows for closer interaction for better selection and monitoring of VOs. Intermediaries could include umbrella VOs, professional or academic institutes, State Government agencies, or multi-stakeholder standing committees. The Government will review the experience of such decentralized funding and make suitable recommendations to Central agencies.


5.6.2 There is reason to believe that accreditation of VOs will lead to better funding decisions and make the funding processes more transparent. Further, accreditation may provide incentives for better governance, management and performance of VOs. No reliable accreditation system is in place at present. The Government will encourage various agencies, including those in the voluntary sector, to develop alternative accreditation methodologies. It will allow time for such methodologies to be debated and gain acceptability in the voluntary sector, before considering their application to Government funding of VOs.”


Lastly, the Policy dwells at length on its vision of strengthening the Voluntary Sector. It recognizes that Indian society has a “well-established” tradition of philanthropy. It mentions the fact that it will encourage existing and new independent philanthropic instituitions and private foundations to provide financial assistance to deserving VOs. It stresses that accountability to all stakeholders and transparency in functioning are key issues in good governance. It also notes that it will recognize excellence in governance among VOs by publicizing best practices. Training is a crucial requirement also recognized by the Government, which also emphasizes that it will support and encourage organizations that train aspirants to enter the voluntary sector, as well as those already working in the sector. It also states that it will encourage and recognize innovative and pioneering work. It also describes its encouragement of volunteers in public services, such as family welfare centres, primary health care centres, hospitals, schools, vocational training centres, sanitation campaigns, etc.



Meaning of NGO
An excellent overview of the origin and genesis of the expression, NGO, from an international perspective is provided in the following analysis :

“The phrase ‘non-governmental organization’ came into use with the establishment of the United Nations in 1945 with provisions in Article 71 of Chapter 10 of the United Nations Charter for a consultative role for organizations that neither are governments nor member states. The definition of international NGO (INGO) is first given in Resolution 288 (X) of ECOSOC on February 27, 1950: it is defined as 'any international organization that is not founded by an international treaty'. The vital role of NGOs and other "major groups" in sustainable development was recognized in Chapter 27 of Agenda 21, leading to revised arrangements for consultative relationship between the United Nations and non-governmental organizations.”

The expression, “NGO” has also been defined in the following terms:
“A non-governmental organization (NGO) is any non-profit, voluntary citizens' group which is organized on a local, national or international level. Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information. Some are organized around specific issues, such as human rights, environment or health. They provide analysis and expertise, serve as early warning mechanisms and help monitor and implement international agreements. Their relationship with offices and agencies of the United Nations system differs depending on their goals, their venue and the mandate of a particular institution.”





LEGAL AND REGULATORY FRAMEWORK AND TAX ISSUES REGARDING NGOs

An association of persons with a non-profit motive can be established in the following manner under the relevant laws:

a) As a charitable trust [the laws are analysed below]
b) As a society under the Societies Registration Act, 1860
c) As a non-profit company under Section 25 of the Companies Act, 1956.

A ‘trust’ is defined in Section 3 of the Indian Trusts Act, 1882 as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another, or of another and the owner”. According to Section 8 of the Indian Trusts Act, 1882, the subject matter of a trust must be property transferable to the beneficiary. It must not be merely a beneficial interest under a subsisting trust. The Indian Trusts Act, 1882 is concerned with private or family trusts. In the case of an NGO, the nature of the trust will naturally have to partake a public character, as the beneficiary of a public trust is the general public. An instrument of trust, or a trust deed is the legal document that reflects the trust, whether public or private. There is also a Central or a Federal legislation which is entitled, the Charitable and Religious Trusts Act, 1920. Its Preamble states that this is “an Act to provide more effectual control over the administration of charitable and religious trusts”. This further recites the following clause as its Preamble:

“Whereas it is expedient to provide facilities for the obtaining of information regarding trusts created for public purposes of a charitable or religious nature, and to enable the trustees of such trusts to obtain the directions of a court on certain matters, and to make special provision for the payment of the expenditure incurred in certain suits against the trustees of such trusts….”

There are certain States in India, for example, Maharashtra and Gujarat which have the Bombay Public Trusts Act, 1950, whose object is “to regulate and make better provisions for the registration of public religious and charitable trusts”. Under the Bombay Public Trusts Act, 1950, all charitable and religious institutions require registration and also fall under the supervision of the Charity Commissioner of the State. Some of the other States have their own laws, for example, Bihar Hindu Religious Trusts Act, 1950, the Madras Hindu Religious and Charitable Endowments Act, 1959, Madhya Pradesh Public Trusts Act, 1951, Orissa Hindu Religious Endowments act, 1951, Travancore-Cochin Hindu Religious Institutions Act, 1970, Rajashtan Public Trusts Act, 1959, Uttar Pradesh Hindu Public Religious Institutions [Prevention of Dissipation of Properties – Temporary Powers] Act, 1962, Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1966. With reference to Muslims, there are the Wakf Act, 1995, the Mussalman Wakf Act, 1923, the Mussalman Wakf Validating Act, 1913 and the Mussalman Wakf Validating Act, 1930.

An NGO can also be formed as a society under the Societies Registration Act, 1860. Section 1 of this law states that “any seven or more persons associated for any literary, scientific or charitable purpose, or for any such purpose as is described in Section 20 of this Act [the Societies Registration Act], may, by subscribing their names to a memorandum of association, and filing the same with the Registrar of Joint Stock Companies form themselves into a society under this Act.”

A society provides a corporate structure to the NGO; however, the formalities concerning its formation are rather elaborate, as compared with a trust.


The third option for the formation of an NGO is what is popularly described as a “Section 25 company” under the Companies Act, 1956. Section 25 is relevant and is quoted hereafter:

“25: Power to dispense with "Limited" in name of charitable or other company
(1) Where it is proved to the satisfaction of the Central Government that an association:-
(a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and

(b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members,

the Central Government may, by licence, direct that the association may be registered as a company with limited liability, without the addition to its name of the word "Limited" or the words "Private Limited".
(2) The association may thereupon be registered accordingly; and on registration shall enjoy all the privileges, and (subject to the provisions of this section) be subject to all the obligations, of limited companies.

(3) Where it is proved to the satisfaction of the Central Government-
(a) that the objects of a company registered under this Act as a limited company are restricted to those specified in clause (a) of sub-section (1), and

(b) that by its constitution the company is required to apply its profits, if any, or other income in promoting its objects and is prohibited from paying any dividend to its members,

the Central Government may, by licence, authorise the company by a special resolution to change its name, including or consisting of the omission of the word "Limited" or the words "Private Limited"; and section 23 shall apply to a change of name under this sub-section as it applies to a change of name under section 21.
(4) A firm may be a member of any association or company licensed under this section, but on the dissolution of the firm, its membership of the association or company shall cease.

(5) A licence may be granted by the Central Government under this section on such conditions and subject to such regulations as it thinks fit, and those conditions and regulations, shall be binding on the body to which the licence is granted, and where the grant is under sub-section (1), shall, if the Central Government so directs, be inserted in the memorandum, or in the articles, or partly in the one and partly in the other.

[(6) It shall not be necessary for a body to which a licence is so granted to use the word "Limited" or the words "Private Limited" as any part of its name and, unless its articles otherwise provide, such body shall, if the Central Government by general or special order so directs and to the extent specified in the directions, be exempt from such of the provisions of this Act as may be specified therein.]

(7) The licence may at any time be revoked by the Central Government, and upon revocation, the Registrar shall enter the word "Limited" or the words "Private Limited" at the end of the name upon the register of the body to which it was granted; and the body shall cease to enjoy the exemption granted by this section:

Provided that, before a licence is so revoked, the Central Government shall give notice in writing of its intention to the body, and shall afford it an opportunity of being heard in opposition to the revocation.

[(8)(a) A body in respect of which a licence under this section is in force shall not alter the provisions of its memorandum with respect to its objects except with the previous approval of the Central Government signified in writing.
(b) The Central Government may revoke the licence of such a body if it contravenes the provisions of clause (a).

(c) In according the approval referred to in clause (a), the Central Government may vary the licence by making it subject to such conditions and regulations as that Government thinks fit, in lieu of, or in addition to, the conditions and regulations, if any, to which the licence was formerly subject.

(d) Where the alteration proposed in the provisions of the memorandum of a body under this sub-section is with respect to the objects of the body so far as may be required to enable it to do any of the things specified in clauses (a) to (g) of sub-section (1) of section 17, the provisions of this sub-section shall be in addition to, and not in derogation of, the provisions of that section.]
(9) Upon the revocation of a licence granted under this section to a body the name of which contains the words "Chamber of Commerce", that body shall, within a period of three months from the date of revocation or such longer period as the Central Government may think fit to allow, change its name to a name which does not contain those words; and-
(a) The notice to be given under the proviso to sub-section (7) to that body shall include a statement of the effect of the foregoing provisions of this sub-section; and

(b) Section 23 shall apply to a change of name under this sub-section as it applies to a change of name under section 21.
(10) If the body makes default in complying with the requirements of sub-section (9), it shall be punishable with fine which may extend to [five thousands rupees] for every day during which the default continues”.


Taxation of NGOs: This is a very vast and complex area and it may be naturally beyond the scope of this Concept Note to elucidate the salient provisions of the Income-tax Act, 1961 insofar as these pertain to NGOs. Briefly stated, an important principle under the Income-tax Act, 1961 is that NGOs in India that have a public charitable purpose are not liable for the payment of income tax, provided certain statutory conditions are fulfilled. The taxation of an NGO formed or created for a charitable or a religious purpose or for the promotion of science, literature, education sports, fine arts is governed mainly by Sections 11, 12, 12A, 12AA and 13 and some clauses of Section 10 of the Income-tax Act, 1961 . NGOs which are not covered under any of these sections are assessable under Section 164.


ROLE OF NGOs IN INDIA ESPECIALLY IN THE AREA OF PUBLIC INTEREST LITIGATION

There has been a plethora of decisions by the Supreme Court of India in the realm of what is popularly described as “Public Interest Litigation”. The role of the NGO as an instrument of reform, a catalyst for change and a key player in the battle for human rights in the jurisprudence of the Supreme Court is central to the development of Public Interest Litigation in India. In Public Union for Civil Liberties vs. State of Tamilnadu and others , the Supreme Court considered the sensitive issue relating to the rehabilitation of bonded labour. The court notes the role of the NGO in the following trenchant quotation :

“In modern days, civil society is playing a greater role in nation-building exercise. The commendable roles played by NGOs in very many situations strengthen the confidence of general public in NGOs. The State may not always be in a position to reach out to the needy. As we have experienced in the past, civil society could efficiently fill up this gap. Now it is time for more interaction between civil society and State machinery in implementing social-service schemes. The services of philanthropic organizations or NGOs could very well be utilized for rehabilitating released bonded labourers. The State could give necessary financial assistance under proper supervision.”

The case of Vishaka and others vs. State of Rajasthan and others is one of the most celebrated cases in India especially in the context of prevention of sexual harassment of working women in the workplace. The Supreme Court has laid down salutary guidelines in this regard. It is equally significant that this case was filed in the Supreme Court by social activists and an NGO, with the aim of “focusing attention towards this social aberration and assisting in finding suitable methods for realization of the true concept of ‘gender equality’ and to prevent sexual harassment of working women in all workplaces through judicial process, to fill the vacuum in existing legislation.”

In Council For Environment Legal Action vs Union Of India a Public Interest Litigation was filed by a registered voluntary organization regarding economic degradation in coastal areas. In this case the Supreme Court issued appropriate orders and directions for enforcing the laws to protect the ecology.

In a recent case that dealt with the laws of surrogacy, Baby Manji Yamada vs Union of India , the Supreme Court considered the case of a habeas corpus petition filed by the petitioner, a surrogate child through her Japanese grandmother. What is interesting in this case is that the Supreme Court noted that there was an earlier writ petition filed by an NGO, called Satya, in the Rajasthan High Court in the form of a habeas corpus petition as well. In the proceedings before the Supreme Court, the Solicitor General took exception to certain statements made in the counter affidavit of Satya, [respondent No. 3 in the petition before the Supreme Court] and urged that the NGO’s stand in the High Court was not in good faith and was not in the public interest. The Supreme Court stated that it did not wish to “go into the locus standi of Respondent No. 3, [Satya], and/or whether bona fides are involved or not.” It disposed of the petition filed by the baby through her grandmother, with certain directions.

The recent judgment in the case of Naz Foundation vs Union of India passed by the Delhi High Court decriminalizing homosexuality, was also filed by an NGO. This has been a path breaking decision, and although a Special Leave Petition has been filed in the Supreme Court of India challenging the judgment, there remains no manner of doubt about the role of the NGO in spearheading this sensitive litigation.

What emerges from the catena of cases decided by the Supreme Court is the fact that the NGOs have galvanized and moved the public conscience of India and have been responsible for bringing about “change” even in the legal jurisprudence of India. These reflect the truth of Mahatma Gandhi’s vision when he spoke those famous words, “Be the change you want to see in the world.”

FUNDING FOR THE NGOs

Funding for the NGOs can be done through grants-in-aid from the Central or State Governments, private institutional support or grants from companies, family foundations, et al. External funding from overseas is reflected in the Foreign Contribution Regulation Act, 1976, which is briefly considered below.





FOREIGN CONTRIBUTION REGULATION ACT, 1976 AND ITS IMPLICATIONS VIS-A-VIS NGOs

The Foreign Contribution Regulation Act, 1976 lays down strict regulations with regard to ‘foreign contributions’ which expression has been defined in Section 2(1)[c] of this law in the following terms:

2(1)(c) "foreign contribution" means the donation, delivery or transfer made by any foreign source,)
(i) of any article, not being an article given to a person as a gift for his personal use, if the market value, in India, of such article, on the date of such gift, does not exceed one thousand rupees;
(ii) (ii) of any currency, whether Indian or foreign-
(iii) (iii) of any foreign security as defined in clause (i) of section 2 of the' Foreign Exchange Regulation Act, 1973; (46 of 1973.) Explanation.-A donation, delivery or transfer of any article, currency or foreign security referred to in this clause by any person who has received it form any foreign, source, either directly, or through one or more persons, shall also be deemed to be foreign contribution within the meaning of this clause”.

The expression, “foreign source” has also been defined in the following terms:

2(1)(e) "foreign source” includes-
(i) the Government of 'any foreign country or territory and any agency of such Government,
(ii) any international agency, not being the United Nations or any of Its specialised agencies, the World, Bank, International Monetary Fund or such other agency as the Central Government may, by notification in the Official Gazette, specify in this behalf,
(iii) a foreign company within the meaning of section 591 of the Companies Act, 1956, (1 of 1956.) and also includes- (a) a company which is a subsidiary of a foreign company, and (b) a multi-national corporation within the meaning of this Act,
(iv) a corporation, not being a foreign company, incorporated in a foreign country or territory,
(v) a multi-national corporation within the meaning of this Act,
(vi) a company within the meaning of the Companies Act, 1956, (1 of 1956.) if more than one-half of the nominal value of its share capital is held, 'either singly or in the aggregate, by one or more of the following, namely: - (a) Government of a foreign country or territory, (b) citizens of a foreign country or territory, (C) corporations incorporated in a foreign country or territory, (d) trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory,
(vii) a trade union in any foreign country or territory, whether or not registered in such foreign country or territory,
(viii) a foreign trust by whatever name called, or a foreign foundation which is either in the nature of trust or is mainly financed by a foreign country or territory,
(ix) a society, club or other association of individuals formed or registered outside India,
(x) a citizen of a foreign country,

but does not include any foreign institution which has been permitted by the Central Government, by notification in the Official Gazette, to carry on its activities in India”

The most important section in the present context is Section 6 of the Foreign Contribution Regulation Act, 1976, which is relevant for an NGO. It is quoted in its entirety:


6 Certain associations and persons receiving foreign contribution to give intimation to the Central Government.
1[(1) No association [other than an organization referred to in sub-section (1) of section 5] having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution unless such association,-- (a) registers itself with the Central Government in accordance with the rules made under this Act; and (b) agree to receive such foreign contributions only through such one of the branches of a bank as it may specify in its application for such registration,

and every association so registered shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of each foreign contribution received by it, the source from which and the manner in which such fore such foreign contribution was received and the purposes for which and the manner in which such foreign contribution was utilised by it:

Provided that where such association obtains any foreign contribution through any branch other than the branch of the bank through which it has agreed to receive foreign contribution or fails to give such intimation within the prescribed time or in the prescribed manner, or give any intimation which is false, the Central Government may, by notification in the Official Gazette, direct that such association shall not, after the date of issue of such notification, accept any foreign contribution without the prior permission of the Central Government.

(1A) Every association referred to in sub-section (1) may, if it is not registered with the Central Government under that sub- section, accept any foreign contribution only after obtaining the prior permission of the Central Government and shall also give, within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of foreign contribution received by it, the source from which and the manner in which such foreign contribution was received and the purposes for which and the manner in which such foreign contribution was utilised by it.]

(2) Every candidate for election, who had received any foreign contribution, at any time within one hundred and eighty days immediately preceding the date on which he is duly nominated as such candidate, shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of foreign contribution received by him, the source from which and the manner in which such foreign contribution was received and the purposes for which, and the manner in which, such foreign contribution was utilised by him.”

There are also special rules, entitled, the Foreign Contribution (Regulation) Rules, 1976, which accompany the above law and are helpful in laying down the procedure for the implementation of the Act.





FINANCIAL ACTION TASK FORCE [FATF] AND INDIA
PREVENTION OF MONEY LAUNDERING ACT, 2002
While it is beyond the scope of this Concept Note to discuss in detail the implications of FATF and India, it may just be worthwhile briefly adverting to this very significant international body. FATF is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. The FATF is therefore a 'policy-making body' created in 1989 that works to generate the necessary political will to bring about legislative and regulatory reforms in these areas.
India is a Member of the APG (the Asia Pacific Group on Money Laundering), a FATF-style regional body. India is working with the FATF towards becoming a FATF Member. India became an FATF Observer in February 2007.
India has the Prevention of Money Laundering Act 2002, whose object is described in its Preamble as “An Act to prevent money laundering and to provide for confiscation of property derived from or involved in, money-laundering and for matters connected therewith or incidental thereto”. It has recently been amended by the Amendment Act No. 21 of 2009. The Reserve Bank of India, has, on 22nd December 2009 issued stringent guidelines, appended below which set out inter alia the RBI’s concerns and efforts to combat the financing of terrorism.


CONCLUSION: IS THE ROLE OF THE NGO CRITICAL IN INDIA?
Undoubtedly, in a country that is replete with paradox and enigma as is India, the NGO retains a crucial and critical role. In a speech delivered at a conference of the Asia Pacific Jurists’ Association, former Chief Justice of India, Justice Y K Sabharwal has pithily summarized the role of the NGO in the following passage, which is quoted hereafter :


“The emergence of NGOs represents an organised response by the civil society, especially in those areas in which the State has either failed to reach or done so inadequately. The importance of Public Awareness and NGOs involvement in environmental protection is acknowledged worldwide. It was also highlighted in Rio-Conference in 1992. UNCED supported NGO involvement in an unprecedented manner.


On 29 April 1999, the United Nations Secretary General, Kofi Annan, while addressing the NGOs Forum on Global Issues, specifically recognized the importance and role of NGOs and said that NGOs have a long and proud history of fighting against tyranny and providing humanitarian assistance to the victims of conflict and natural disasters. NGOs armed with e-mail and Internet have been proved more powerful than landmine. The Nobel Committee has recognized their work, awarding its peace prize to NGOs, the Church and academic groups and others. But NGOs have also come in for a less welcome sort of recognition. They have been denied access to meetings and information.

NGOs have been taking a number of steps to promote discussion and debate about environmental issues, outside the broad spheres of popular media and the educational system. Advocacy and awareness is especially crucial in promoting concepts such as sustainable development, natural resource conservation and the restoration of ecosystems. NGOs can sensitize policy makers about the local needs and priorities. They can often intimate the policy makers about the interests of both the poor and the ecosystem as a whole. In providing training facilities, both at community and government levels, NGOs can play a significant role. They can also contribute significantly by undertaking research and publication on environment and development related issues. It is necessary to support and encourage genuine, small, local level NGOs in different parts of the country which can provide much needed institutional support specific to the local needs. NGOs can make the following contributions:

conducting education and citizen awareness programmes in the field of environment;

fact-finding and analysis;

filing public interest litigations;

innovation and experimenting in areas which are difficult for government agencies to make changes in;

providing expertise and policy analysis

providing factual and reliable information with a network of professional expert staff;

remaining independent while passing relevant information to the public and governmental bodies;


solidarity and support to environmental defenders;

working in collaboration with the government for capacity building and promotion of community participation in environmental awareness and protection; and

working out at the grassroots level and reaching far-flung areas with or without the government invitation.”


In the ultimate analysis, India needs NGOs to keep a watchful and vigilant eye on the growth of this economic and political giant called India, a country that is undoubtedly a world player in the 21st century. To echo the sage words of our venerable Mahatma Gandhi, the NGOs represent the “change” that we wish to see in the world, and especially in India.

http://halsburys.in/foreign-direct.html
Foreign Direct Investment in the Media, by Ramni Taneja, published in Halsbury's Law Monthly, August 2009

http://halsburys.in/international-crime-and-extradition.html
International crime and extradition: “an obligation resulting from the international solidarity in the fight against crime" by Ramni Taneja
published in Halsbury’s Law Monthly, [LexisNexis], April 2009

http://halsburys.in/judicialperspectives.html

Judicial Perspectives regarding Foreign Direct Investment and Globalisation: by Ramni Taneja: published in Halsbury’s Law Monthly, [LexisNexis], January 2009

http://halsburys.in/conflict-of-laws.html
Conflict of Laws: An Overview of Enforcement of Foreign Judgments and Foreign Awards in India by Ramni Taneja
published in Halsbury’s Law Monthly, [LexisNexis], September 2008

THE HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW:
INDIA’S MEMBERSHIP AND ACCESSION TO SOME HAGUE CONVENTIONS
by Ramni Taneja


Private International Law: meaning and scope
In a fascinating description of the meaning of Private International Law, Cheshire and North’s famous treatise entitled Private International Law provides a close glimpse into this complex area of law, which is inextricably linked to the advancing pace of globalization and modern developments both in law and in society. In the trenchant words of the authors[1]:
“The raison d’etre of private international law is the existence in the world of a number of separate municipal systems of law – a number of separate legal units – that differ greatly from each other in the rules by which they regulate the various legal relations arising in daily life. Courts in one country must frequently take account of some rule of law that exists in another. A sovereign is supreme within his own territory and according to the universal maxim of jurisprudence, he has exclusive jurisdiction over everybody and everything within that territory and over every transaction that is affected there. He can, if he chooses, refuse to consider any law but his own. Although the adoption of this policy of indifference might have been common enough in other ages, it is impracticable in the modern civilized world. Consequently, nations have long found that they cannot, by sheltering behind the principles of territorial sovereignty, afford to disregard foreign rules of law merely because they happen to be different from their own internal system of law. Moreover…. it is no derogation of sovereignty to take account of foreign law.”

The same authors[2] graphically set the tone and scene for the scope of private international law:

“Private international law is not a separate branch of law in the same sense, as say the law of contract or of tort. It is all pervading.
‘It starts up unexpectedly in any court and in the midst of any process. It may be sprung like a mine in a plain common law action, in an administrative proceeding in equity, or in a divorce case, or a bankruptcy case, in a shipping case or a matter of criminal procedure………..The most trivial action of debt, the most complex case of equitable claims, may be suddenly interrupted by the appearance of a knot to be untied only by Private International Law’[3].”


The Hague Conference on Private International law
The Hague has been appropriately described as the “Legal Capital of the World”[4]. In the words of the website of the Hague Conference on Private International Law[5], it has since 1893, been a “melting pot of different legal traditions”. It has also developed and serviced Conventions which respond to global needs in various areas of law, including international protection of children, family and property relations, international legal cooperation and litigation and international commercial and finance law.

The Hague Conference is the oldest of the international legal institutions in the Hague. It is unique in that it is the only intergovernmental organization with a ‘legislative’ mission. However, its ‘laws’ take the form of multilateral treaties or conventions and are primarily aimed at facilitating not the relations between States, but rather the lives of their citizens, private and commercial, in cross-border relationships and transactions.[6]



Globalization and India’s admission as a member of the Hague Conference on Private International Law

With the advent of globalization which is considered as one of the pivotal factors that have propelled India on the world stage, there is a growing awareness of the need for India to be considered as an integral part of the international legal community as well. In a Press Release issued on 3rd May 2007, the Union Cabinet approved of India becoming a Member of the Hague Conference on Private International Law. This Press Release further notes that the Hague Conference on Private International Law is an inter-governmental organization. The main purpose of the Conference is to work for the progressive unification of the rules of private international law by finding internationally agreed approaches to issues such as jurisdiction of courts, applicable law, and recognition and enforcement of judgments in a wide range of areas such as commercial laws, international civil procedures and matters relating to child protection, marriage and personal issues. The issues dealt with and the Conventions adopted by the Hague Conference are of great practical relevance to India in view of its large diaspora, increasing trade relations and travel abroad by Indian citizens. As a Member State, India would be entitled to participate in all the meetings and conferences.India would also have a role in deciding on the future work programme[7]. On Thursday, 13 March 2008, India deposited its instrument of acceptance of the Statute of the Hague Conference on Private International Law and became the 69th Member of the Organization[8].

Hague Conventions: India’s accession to certain Hague Conventions
India is already a Party to the following Hague Conventions:
Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents[9]: This is popularly described as the Hague Apostille Convention. India acceded to this Convention on 26th October 2004 and it entered into force on 14th July 2005[10].
Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters[11]: India acceded to this Convention on 23rd November 2006 and this Convention entered into force on 1st August 2007.
Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters[12]: India acceded to this Convention on 7th February 2007 and this Convention entered into force on 8th April 2007.
Convention of 29 May 1993 on Protection of Children and Co-operation in respect of Inter-country Adoption[13]: India acceded to this Convention on 6th June 2003 and this Convention entered into force on 1st October 2003.

Ministry of External Affairs of India[14]: Implementation of the Hague Apostille Convention
With India’s accession to the Hague Convention of October 5, 1961 abolishing the requirement of legalization of foreign public documents (www.hcch.net) the Government of India, Ministry of External Affairs at CPV Division, Patiala House, New Delhi, has started issuing Apostilles with effect from August 29, 2007. Apostille stickers will be issued on the following documents: i.e. personal documents like birth, death, affidavits, powers of attorney, marriage etc and educational documents like degrees, diplomas, matriculation and secondary level certificates. However, commercial documents are excluded from the purview of this Convention. Procedure: All documents should be first authenticated by the designated agencies in the State from where the document has been issued. In case of personal documents, Home Department/General Administration Department are the designated authorities. In case of educational documents, State Governments have now opened Regional Authentication Centers (RACs) at various States from where the document should first be attested. Documents attested by these authorities then need to be presented to MEA for issue of Apostilles. Fee: A fee of Rs. 50/- in the form of Postal/Pay Order drawn in favour of PAO, MEA, New Delhi is payable for each Apostille sticker.


Law Commission of India: its recommendations
In its commendable 65th Report on the Recognition of Foreign Divorces[15], the Law Commission of India has given an elaborate overview of the legal position in this regard. It has also analyzed at length and in considerable detail, the provisions of the Hague Convention on the Recognition of Divorces and Legal Separations[16] and it has also examined the legal position in different parts of the world, including the United States of America and England, United Kingdom. The Law Commission has also considered the Indian legal position and the position in terms of private international law as well. It has recommended the enactment of a special law in India for the purpose of the recognition of foreign divorces and separations.

In its 218th Report[17] explaining the Need to Accede to the Hague Convention with regard to the Civil Aspects of International Child Abduction[18], the Law Commission has strongly recommended that India must become a party to this Convention. This is a salutary recommendation, particularly since the great Indian Diaspora which is spread all over the world, invariably faces problems in marriages, divorces and also in the very sensitive issue pertaining to the custody of children.


Supreme Court of India: The treaty making powers under the Constitution of India
One of the finest expositions of the power to enter a treaty has been illuminatingly analysed by the Supreme Court of India in Union of India and another vs Azadi Bachao Andalon and another[19]. By this judgment, the Supreme Court of India upheld the validity of the Circular dated 13th April 2000 issued by the Central Board of Direct Taxes by which certain instructions were given to the Chief Commissioners/Directors of Income-tax with regard to the assessment of cases in which the Indo-Mauritius Double Taxation Avoidance Convention, 1983 was applied. The Supreme Court’s observations with regard to the provisions of the Constitution of India containing the powers to enter into treaties are quoted hereafter:

”20. The power of entering into a treaty is an inherent part of the sovereign power of the State. By Article 73, subject to the provisions of the Constitution, the executive power of the Union extends to the matters with respect to which the Parliament has power to make laws. Our Constitution makes no provision making legislation a condition for the entry into an international treaty in time either of war or peace. The executive power of the Union is vested in the President and is exercisable in accordance with the Constitution. The Executive is qua the State competent to represent the State in all matters international and may by agreement, convention or treaty incur obligations which in international law are binding upon the State. But the obligations arising under the agreement or treaties are not by their own force binding upon Indian nationals. The power to legislate in respect of treaties lies with the Parliament under entries 10 and 14 of the List I of the Seventh Schedule. But making of law under that authority is necessary when the treaty or agreement operates to restrict the rights of citizens or others or modifies the law of the State. If the rights of the citizens or others which are justiciable are not affected, no legislative measure is needed to give effect to the agreement or treaty [See in this connection Maganbhai Ishwarbhai Patel and Others vs. Union of India and another)”.
Another path-breaking decision on the reliance by the Supreme Court of international conventions in the absence of such laws in domestic law, is the judgment of the Supreme Court in the case of Vishaka and others vs State of Rajasthan and others[20]. In this leading authority on the issue of prevention of sexual harassment at the workplace, the Supreme Court relied on the ratification by the Government of India of a resolution passed in June 1993, at the Fourth World Conference on Women held in Beijing concerning the formulation of a national policy on women, including the defence of women’s rights and declared that these ought to be read into the Constitution. In the eloquent words of the court:

“Before we refer to the international conventions and norms having relevance in this field and the manner in which they assume significance in application and judicial interpretation, we may advert to some other provisions in the Constitution which permit such use. These provisions are:Article 51:
"51. Promotion of international peace and security - The State shall endeavour to - (c) foster respect for international law and treaty obligations in the dealings of organised people with one another; andArticle 253:
253. Legislation for giving effect to international agreements - Notwithstanding anything in the foregoing provisions of this Chapter, Parliament has power to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body .

"Seventh Schedule:" List I - Union List: 14. Entering into treaties and agreements with foreign countries and implementing of treaties, agreements and conventions with foreign countries.In the absence of domestic law occupying the field, to formulate effective measures to check the evil of sexual harassment of working women at all work places, the contents of International Conventions and norms are significant for the purpose of interpretation of the guarantee of gender equality, right to work with human dignity in Articles 14, 15 19(1)(g) and 21 of the Constitution and the safe guards against sexual harassment implicit therein. Any International Convention not inconsistent with the fundamental rights and in harmony with its spirit must be read into these provisions to enlarge the meaning and content thereof, to promote the object of the constitutional guarantee. This is implicit from Article 51(c) and enabling power of the Parliament to enact laws for implementing the International Conventions and norms by virtue of Article 253 read with Entry 14 of the Union List in Seventh Schedule of the Constitution. Article 73 also is relevant. It provides that the executive power of the Union shall extend to the matters with respect to which Parliament has power to make laws. The executive power of the Union is, therefore, available till the Parliament enacts to expressly provide measures needed to curb the evil. Thus, the power of this Court under Article 32 for enforcement of the fundamental rights and the executive power of the Union have to meet the challenge to protect the working women from sexual harassment and o make their fundamental rights meaningful. Governance of the society by the rule of law mandates this requirements as a logical concomitant of the constitutional scheme.
The meaning and content of the fundamental rights guaranteed in the Constitution of India are of sufficient amplitude to compass all the facets of gender equality including prevention of sexual harassment or abuse. Independence of Judiciary forms a part of our constitutional scheme. The international conventions and norms are to be read into them in the absence of enacted domestic law occupying the fields when there is no inconsistency between them. It is now an accepted rule of judicial construction that regard must be had to international conventions and norms for construing domestic law when there is noinconsistency between them and there is a void in the domestic law.


Supreme Court of India on the Hague Conventions
In certain important judgments dealing with custody of children and other related matrimonial issues, including divorce, the Supreme Court has noted the existence and relevance of the Hague Conventions. In Dhanwanti Joshi vs Madhav Unde[21], the Supreme Court has held as follows:
“32. In this connection, it is necessary to refer to the Hague Convention of 1980 on "Civil Aspects of International Child Abduction". As of today, about 45 countries are parties to this Convention. India is not yet a signatory. Under the Convention, any child below 16 years who had been "wrongfully" removed or retained in another contracting State, could be returned back to the country from which the child had been removed, by application to a central authority. Under Article 16 of the Convention, if in the process, the issue goes before a court, the Convention prohibits the court from going into the merits of the welfare of the child. Article 12 requires the child to be sent back, but if a period of more than one year has lapsed from the date of removal to the date of commencement of the proceedings before the court, the child would still be returned unless it is demonstrated that the child is now settled in its new environment. Article 12 is subject to Article 13 and a return could be refused if it would expose the child to physical or psychological harm or otherwise place the child in an intolerable position or if the child is quite mature and objects to its return. In England, these aspects are covered by the Child Abduction and Custody Act, 198533. So far as non-Convention countries are concerned, or where the removal related to a period before adopting the Convention, the law is that the court in the country to which the child is removed will consider the question on merits bearing the welfare of the child as of paramount importance and consider the order of the foreign court as only a factor to be taken into consideration as stated in McKee v. McKee unless the Court thinks it fit to exercise summary jurisdiction in the interests of the child and its prompt return is for its welfare, as explained in L., Re (CA). As recently as 1996-1997, it has been held in P (A minor) (Child Abduction : Non-Convention Country), Re ( 1996 (3) FCR 233, CA) by Ward, L.J. (1996 Current Law Year Book, pp. 165-166) that in deciding whether to order the return of a child who has been abducted from his or her country of habitual residence - which was not a party to the Hague Convention, 1980, - the courts' overriding consideration must be the child's welfare. There is no need for the Judge to attempt to apply the provisions of Article 13 of the Convention by ordering the child's return unless a grave risk of harm was established. See also A (A minor) (Abduction : Non-Convention Country) (Re, The Times 3-7-97 by Ward, L.J. (CA) (quoted in Current Law, August 1997, p. 13). This answers the contention relating to removal of the child from USA”

Y Narasimha Rao and others vs Y. Venkata Lakshmi and others[22]
This is a controversial judgment of the Supreme Court of India, dealing with various aspects of private international law, the Hague Conventions and the recognition of foreign divorces. Some of the conclusions that have been reached in this judgment have given rise to considerable debate, especially from the perspective of private international law.
It is the author’s humble view that the Indian legal landscape has been metamorphosed since 1991 which is when this judgment was passed by the Supreme Court of India. The metamorphosis is occasioned due to the liberalization by the Government of India of the policy of Foreign Direct Investment. There is a large Indian Diaspora in the world now. The ratio of the judgment, especially in the context that the foreign court’s divorce decree must be in accordance with the law of the parties under which they were married so as to afford recognition under Indian law, is with the utmost respect and deference to the court, rather impracticable. The conclusions of the court concerning jurisdiction and other crucial factors are of course laudatory. However, there are situations which do arise in certain cases in which both the parties are permanently domiciled and/or habitually resident overseas. There may be matrimonial differences between these parties. Inevitably the cause of action with reference to these matrimonial differences would arise within the overseas matrimonial home. The foreign court is obligated to apply its own laws and not the laws of the parties under which they were married. Indian matrimonial statutes do not have extra-territorial jurisdiction. These are practical and legal conundrums that may arise if the ratio of the decision in Narasimha Rao vs Venkata Lakshmi is applied in cases being considered by Indian courts. There is therefore an urgent necessity for the Supreme Court to carefully re-consider the ratio of this decision, as the present ratio is bound to lead to complications of interpretation in existing and future cases that deal with recognition of foreign divorce decrees. Since this is perhaps one of the most far reaching decisions in the present context, some of its pertinent paragraphs are quoted verbatim hereafter:

“11. The rules of Private International Law in this country are not codified and are scattered in different enactments such as the Civil Procedure Code, the Contract Act, the Indian Succession Act, the Indian Divorce Act, the Special Marriage Act etc. In addition, some rules have also been evolved by judicial decisions. In matters of status or legal capacity of natural persons, matrimonial disputes, custody of children, adoption, testamentary and intestate succession etc. the problem in this country is complicated by the fact that there exist different personal laws and no uniform rule can be laid down for all citizen. The distinction between matters which concern personal and family affairs and those which concern commercial relationships, civil wrongs etc. is well recognised in other countries and legal systems. The law in the former area tends to be primarily determined and influenced by social, moral and religious considerations, and public policy plays a special and important role in shaping it. Hence, in almost all the countries the jurisdictional, procedural and substantive rules which are applied to disputes arising in this area are significantly different from those applied to claims in other areas. That is as it ought to be. For, no country can afford to satisfies its internal unity, stability and tranquillity for the sake of uniformity of rules and comity of nations which considerations are important and appropriate to facility international trade, commerce, industry, communicator, transport, exchange of services, technology, manpower etc. This glaring fact of national life has been recognised both by the Hague Convention of 1968 on the Recognition of Divorce and Legal Separations as well as by the Judgments Convention of the European Community of the same year. Article 10 of the Hague Convention expressly provides that the contracting States may refuse to recognise a divorce or legal separation if such recognition is manifestly incompatible with their public policy. The Judgments Convention of the European Community expressly excludes from its scope (a) status or legal capacity of natural persons, (b) rights in property arising out of a matrimonial relationship, (c) wills and succession, (d) social security, and (e) bankruptcy. A separate convention was contemplated for the last of the subjects12. We are in the present case concerned only with the matrimonial law and what we state here will apply strictly to matters arising out of and ancillary to matrimonial disputes. The courts in this country have so far tried to follow in these matters the English rules of Private International Law whether common law rules or statutory rules. The dependence on English law even in matters which are purely personal, has however time and again been regretted. But nothing much has been done to remedy the situation. The labours of the Law Commission poured in its 65th Report on this very subject have not fructified since April 1976, when the Report was submitted. Even the British were circumspect and hesitant to apply their rules of law in such matters during their governance of this country and had left the family law to be governed by the customary rules of the different communities. It is only where there was a void that they had stepped in by enactments such as the Special Marriage Act, Indian Divorce Act, Indian Succession Act etc. In spite, however, of more than 43 years of independence we find that the legislature has not though it fit to enact rules of Private International Law in this area and in the absence of such initiative from the legislature the courts in this country have been forced to fall back upon precedents which have taken their inspiration, as stated earlier, from the English rules. Even in doing so they have not been uniform in practice with the result that we have some conflicting decisions in the area13. We cannot also lose sight of the fact that today more than ever in the past, the need for definitive rules for recognition of foreign judgments in personal and family matters, and particularly in matrimonial disputes has surged to the surface. Many a man and woman of this land with different personal laws have migrated and are migrating to different countries either to make their permanent abode there or for temporary residence. Likewise their is also immigration of the nationals of other countries. The advancement in communication and transpiration has also made it easier for individuals to hop from one country to another. It is also not unusual to come across cases where citizens of this country have been contracting marriages either in this country or abroad with nationals of the other countries or among themselves, or having married here, either both or one of them migrate to other countries. There are also cases where parties having married here have been either domiciled or residing separately in different foreign countries. This migration, temporary or permanent, has also been giving rise to various kinds of matrimonial disputes destroying in its turn the family and its peace. A large number of foreign decrees in matrimonial matters is becoming the order of the day. A time has, therefore, come to ensure certainly in the recognition of the foreign judgments in these matters. The minimum rules of guidance for securing the certainty need not await legislative initiative. This Court can accomplish the modest job within the framework of the present statutory provisions if they are rationally interpreted and extended to achieve the purpose. It is with this intention that we are undertaking this venture. We are aware that unaided and left solely to our resources the rules of guidance which we propose to lay down in this area may prove inadequate or miss some aspects which may not be present to us at this juncture. But a beginning has to be made as best as one can, the lacunae and the errors being left to be filled in and corrected by future judgments14. We believe that the relevant provisions of Section 13 of the Code are capable of being interpreted to secure the required certainty in the sphere of this branch of law in conformity with public policy, justice, equity and good conscience, and the rules so evolved will protect the sanctity of the institution of marriage and the unity of family which are the cornerstones of our societal life15. Clause (a) of Section 13 states that a foreign judgment shall not be recognised if it has not been pronounced by a court of competent jurisdiction. We are of the view that this clause should be interpreted to mean that only that court will be a court of competent jurisdiction which the Act or the law under which the parties are married recognises as a court of competent jurisdiction to entertain the matrimonial dispute. Any other court should be held a court without jurisdiction unless both parties voluntarily and unconditionally subject themselves to the jurisdiction of that court. The expression "competent court" in Section 41 of the Indian Evidence Act has also to be construed likewise.16. Clause (b) of Section 13 states that if a foreign judgment has not been given on the merits of the case, the courts in this country will not recognise such judgment. This clause should be interpreted to mean (a) that the decision of the foreign court should be on a ground available under the law under which the parties are married, and (b) that the decision should be a result of the contest between the parties. The latter requirement is fulfilled only when the respondent is duly served and voluntarily and unconditionally submits himself/herself to the jurisdiction of the court and contests the claim, or agrees to the passing of the decree with or without appearance. A mere filing of the reply to the claim under protest and without submitting to the jurisdiction of the court, or an appearance in the court either in person or though a representative for objecting to the jurisdiction of the court, should not be considered as a decision on the merits of the case. In this respect the general rules of the acquiescence to the jurisdiction of the court which may be valid in other matters and areas should be ignored and deemed inappropriate17. The second part of clause (c) of Section 13 states that where the judgment is founded on a refusal to recognise the law of this country in cases in which such law is applicable, the judgment will not be recognised by the courts in this country. The marriages which take place in this country can only be under either the customary or the statutory law in force in this country. Hence, the only law that can be applicable to the matrimonial disputes is the one under which the parties are married, and no other law. When, therefore, a foreign judgment is founded on a jurisdiction or on a ground not recognised by such law, it is a judgment which is in defiance of the law. Hence, it is not conclusive of the matters adjudicated therein and, therefore, unenforceable in this country. For the same reason, such a judgment will also be unenforceable under clause (f) of Section 13, since such a judgment would obviously be in breach of the matrimonial law in force in this country18. Clause (d) of Section 13 which makes a foreign judgment unenforceable on the ground that the proceedings in which it is obtained are opposed to natural justice, states no more than an elementary principle on which any civilised system of justice rests. However, in matters concerning the family law such as the matrimonial disputes, this principle has to be extended to mean something more than mere compliance with the technical rules of procedure. If the rule of audi alteram partem has any meaning with reference to the proceedings in a foreign court, for the purposes of the rule it should not be deemed sufficient that the respondent has been duly served with the process of the court. It is necessary to ascertain whether the respondent was in a position to present or represent himself/herself and contest effectively the said proceedings. This requirement should apply equally to the appellate proceedings if and when they are filed by either party. If the foreign court has not ascertained and ensured such effective contest by requiring the petitioner to make all necessary provisions for the respondent to defend including the cost of travel, residence and litigation where necessary, it should be held that the proceedings are in breach of the principles of natural justice. It is for this reason that we find that the rules of Private International Law of some countries insist, even in commercial matters, that the action should be filed in the forum where the defendant is either domiciled or is habitually resident. It is only in special cases which is called special jurisdiction where the claim has some real link with other forum that a judgment of such forum is recognised. This jurisdictional principle is also recognised by the Judgments Convention of the European Community. If, therefore, the courts in this country also insist as a matter of rule that foreign matrimonial judgment will be recognised only if it is of the forum where the respondent is domiciled or habitually and permanently resides, the provisions of clause (d) may be held to have been satisfied19. The provisions of clause (e) of Section 13 which requires that the courts in this country will not recognise a foreign judgment if it has been obtained by fraud, is self-evident. However, in view of the decision of this Court in Smt. Satya v. Teja Singh (1975 1 SCC 120) it must be understood that the fraud need not be only in relation to the merits of the matter but may also be in relation to jurisdictional facts20. From the aforesaid discussion the following rule can be deduced for recognised a foreign matrimonial judgment in this country. The jurisdiction assumed by the foreign court as well as the grounds on which the relief is granted must be in accordance with the matrimonial law under which the parties are married. The exceptions to this rule may be as follows : (i) where the matrimonial action is filed in the forum where the respondent is domiciled or habitually and permanently resides and the relief is granted on a ground available in the matrimonial law under which the parties are married; (ii) where the respondent voluntarily and effectively submits to the jurisdiction of the forum as discussed above and contests the claim which is based on a ground available under the matrimonial law under which the parties are married; (iii) where the respondent consents to the grant of the relief although the jurisdiction of the forum is not in accordance with the provisions of the matrimonial law of the parties21. The aforesaid rule with its stated exceptions has the merit of being just and equitable. It does no injustice to any of the parties. The parties do and ought to know their rights and obligations when they marry under a particular law. They cannot be heard to make a grievance about it later or allowed to bypass it by subterfuges as in the present case. The rule also has an advantage of rescuing the institution of marriage from the uncertain maze of the rules of the Private International Law of the different countries with regard to jurisdiction and merits based variously on domicile, nationality, residence - permanent or temporary or ad hoc, forum, proper law etc. and ensuring certainty in the most vital field of national life and conformity with public policy. The rule further takes account of the needs of modern life and makes due allowance to accommodated them. Above all, it gives protection to woman, the most vulnerable section of our society, whatever the strata to which they may belong. In particular it frees them from the bondage of the tyrannical and servile rule that wife's domicile follows that of her husband and that it is the husband's domiciliary law which determines the jurisdiction and judges the merits of the case22. Since with regard to the jurisdiction of the forum as well as the ground on which it is passed the foreign decree in the present case is not in accordance with the Act under which the parties were married, and the respondent had not submitted to the jurisdiction of the court or consented to its passing, it cannot be recognised by the courts in this country and is, therefore, unenforceable”.

Conclusion
There is an urgent need to bring about a true and proper unification of the rules of private international law in India. As India is fully poised in her capacity as a nation whose economy is steadily growing, despite a world recession, it is equally critical for India to ensure that its pace of economic growth is accompanied by a healthy and viable legal visibility in the international arena and particularly in the realm of private international law. This is poignantly relevant in the case of private international law in terms of matrimonial disputes as discussed hereinabove. It is therefore imperative that the Government of India may consider enacting appropriate legislation which will ensure that the great Indian Diaspora is fully protected both in the letter and the spirit of the law. Apart from the Indian Diaspora, it is equally relevant that India has a proper role to play in the Hague Conference on Private International Law. As a responsible Member State of the Hague Conference on Private International law, it must demonstrate its willingness to ensure that any creases or wrinkles in the realm of private international law, need to be ironed out. The anomalies and the very obvious inconsistencies that are prevalent in the judgment of Narasimha Rao vs. Venkata Lakshmi can be properly rectified either by a re-consideration by the Supreme Court of the ratio of this decision or by India’s accession to the appropriate and specific Hague Conventions concerning the recognition of foreign divorces and separations or by Parliament passing appropriate legislation under Indian law. This is the need of the hour so that India too emerges as a key player in the area of private international law, with the purpose of properly uniting and reconciling the legal and judicial strands that form an integral part of the tapestry of various legal systems, culminating in a proper and judicious harmonization of the principles of private international law.









[1] Chapter 1: Definition, nature and scope of Private International Law, Cheshire and North’s Private International Law, 13th edition, page 4, published by LexisNexis Butterworths
[2] Chapter 1, page 7, Cheshire and North’s Private International Law 13th Edition, 2004, published by LexisNexis Butterworths
[3] Frederic Harrison, Jurisprudence and the Conflict of Laws, pp 101-102, quoted in Chapter 1, on page 7 in Cheshire and North’s Private International Law 13th Edition, 2004, published by LexisNexis Butterworths
[4] The Hague: Legal Capital of the World, Editors: Peter K. van Krieken, David McKay, TMC, Asser Press, The Hague
[5] http://www.hcch.net/index_en.php



[6] Chapter 14: The Hague Conference on Private International Law, by J.H.A. van Loon , fromThe Hague: Legal Capital of the World, Editors: Peter K. van Krieken, David McKay, TMC, Asser Press, The Hague

[7] Press Information Bureau
[8] http://hcch.evision.nl/index_en.php?act=events.details&year=2008&varevent=142&zoek=statute

[9] http://www.hcch.net/index_en.php?act=conventions.text&cid=41

[10] http://www.hcch.net/index_en.php?act=conventions.status&cid=41

[11] http://www.hcch.net/index_en.php?act=conventions.text&cid=17

[12] http://www.hcch.net/index_en.php?act=conventions.text&cid=82

[13] http://www.hcch.net/index_en.php?act=conventions.text&cid=69

[14] http://meaindia.nic.in/apostille.htm

[15] http://lawcommissionofindia.nic.in/51-100/Report65.pdf, April 1976
[16] http://www.hcch.net/index_en.php?act=conventions.text&cid=80

[17] http://lawcommissionofindia.nic.in/reports/report218.pdf , March 2009
[18]http://www.hcch.net/index_en.php?act=conventions.text&cid=24

[19] 2004 (10) SCC 1
[20] 1997 (6) SCC 241
[21] 1998 (1) SCC 112
[22] 1991 (3) SCC 451