Current based PRELIMS QUESTION 14 May 2020

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1. Consider the following statements regarding the Foreign Contribution Regulation Act (FCRA), 2010.
1. It prohibited acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest.
2. Under this act, foreign contribution cannot be accepted by any member of any legislature, any candidate for election, Judge, etc.
3. A contribution made by a NRI citizen of India from his personal savings, through the normal banking channels, is treated as foreign contribution.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-b
Explanation
Foreign Contribution Regulation Act (FCRA), 2010
The Supreme Court recently held that the central government cannot brand an organisation political and deprive it of its right to receive foreign funds for using legitimate forms of dissent to aid a public cause. This move comes in the background of a petition filed by the Indian Social Action Forum (INSAF) challenging certain provisions of the Foreign Contribution Regulation Act (FCRA), 2010 and the Foreign Contribution (Regulation) Rules of 2011.
The FCRA 2010 prohibited acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest.
Both, the Act and the rules confer the Centre with ‘unguided and uncanalised power’ to brand organisations political and shut down their access to foreign funds.
Section 5(1) of the FCRA was challenged for being vague as it allowed the Centre to decide freely whether a seemingly non-political organisation was actually political in nature. The Court said that the provision was expansive and not vague.
Section 5(4) of the FCRA was also questioned as it did not exactly identify the authority before which an organisation could represent its grievance. This contention was dismissed by the apex court.

Various clauses of Rule 3 of the 2011 Rules were also challenged. This provision identified the various types of ‘political’ activities for which/organisations whose foreign funding could be stopped by the government.
Key Points
SC observed that an organisation, which supports the cause of a group of citizens agitating for their rights without a political goal or objective, cannot be penalised by being declared as an organisation of a political nature. However, foreign funding could be stopped if an organisation took recourse to these forms of protest to score a political goal.
Organisations with political objectives in their memorandum of association or bye-laws cannot be permitted access to foreign funds because of their clear political nature.
Justifications behind the move:
It is to make sure that the administration is not influenced by foreign-funded political organisations.
A prohibition from receiving direct or indirect foreign aid ensures that the values of a sovereign democratic republic are protected.
It will also protect the interests and fundings of voluntary organisations having no connection with either party politics or active politics.
Foreign funding can continue for organisations of farmers, workers, students, youth based on caste, community, religion, language, etc as long as they work for the social and political welfare of society and not to further political interests.
Salient features of FCRA 2010:
The FCRA was enacted in 1976 in order to maintain strict control over voluntary organisations and political associations that received foreign fundings. In the year 1984, an amendment was made to the act requiring all the Non Governmental Organisations to register themselves with the Home Ministry. In 2010, the act was repealed and a new act with strict provisions was enacted.
Here is a brief introduction to the provisions of the FCRA 2010:
• A provision was made for the cancellation of registrations of NGOs if the Home Ministry believes that the organisation is political and not neutral.
• The registration certificate granted to the NGOs under the 2010 act came with a five year validity.
• A provision was inserted stating that the assets of the person who has become defunct needs to be disposed off in a manner stated by the government.
• A separate account needs to be maintained by the organisations to deposit the Foreign Contributions received and no other funds except for Foreign Contributions shall be deposited in that account.
• Every bank would be obligated to report to the prescribed authority, the amount of foreign remittances received and other related details such as the source, manner of receipt etc.

2. Consider the following statements regarding the the Indian Ocean Commission (IOC).
1. IOC is an intergovernmental body created in 1997 to defend the interests of the Western Indian Ocean islands.
2. It includes five nations i.e. Madagascar, Comoros, Seychelles, Mauritius and French Reunion.
3. India recently joins Indian Ocean Commission as observer.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-A
Explanation
Indian Ocean Commission (IOC)
India has been accepted as an observer of the Indian Ocean Commission (IOC).
India’s joining of the IOC as an observer has strategic importance as the Commission is an important regional institution in the Western/African Indian Ocean.
Indian Ocean Commission
The Indian Ocean Commission (IOC) is an intergovernmental body created in 1984 to protect the interests of the Western Indian Ocean islands.
It consists of Madagascar, Comoros, La Réunion (French overseas territory), Mauritius and Seychelles.
The Commission has five observers — India, China, European Union (EU), Malta and International Organisation of La Francophonie (OIF).
OIF is a 54 french speaking nations collective.
Significance of an Observer Status of India
Engagement with the Western Indian Ocean:
It will facilitate collective engagement with the islands in the Western Indian Ocean that are becoming strategically significant.
Given China’s growing presence in the region, India will be able to increase its naval presence and gain support for its maritime projects across the Indo-Pacific.
The Western Indian Ocean (WIO) is also a strategic location of the Indian Ocean linking the Southeastern coast of Africa to the wider Indian Ocean and beyond.
Opportunity in the Mozambique Channel:
The IOC islands are situated around one of the key chokepoints in the Indian Ocean- the Mozambique Channel.
The Mozambique Channel is an arm of the Indian Ocean located between the African countries of Madagascar and Mozambique.
The Mozambique Channel lost its significance post the opening of the Suez Canal, but the recent hostilities near the Strait of Hormuz brought the channel back into focus as the original route for bigger commercial vessels (especially for oil tankers).
Potential of natural gas reserves in the Mozambique Channel further increases the significance of the region.
Cooperation with France:
It will also help to boost cooperation with France that has a strong presence in the western Indian ocean.
SAGAR Policy:
It will help to extend India’s SAGAR (Security and Growth for all in the Region) policy in the region.
SAGAR is an articulation of India’s vision for the Indian Ocean which aims for enhancement of capacities to safeguard land and maritime territories & interests; deepening economic and security cooperation in the littoral; action to deal with natural disasters and maritime threats like piracy, terrorism.

3. Consider the following statements regarding the Banking Regulation Act, 1949.
1. RBI has power to impose a moratorium on bank under section 45 of the Banking Regulation Act, 1949.
2. Section 35A of this act vests power in the RBI to give directions to banks and can take action, to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company.
3. Section 56 of the act is applicable to cooperative societies.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-d
Explanation
The Reserve Bank of India (RBI) superseded the board of Yes Bank and imposed a month-long moratorium, it said in an announcement late on Thursday. It expects to arrive at a credible restructuring plan in the next few days. Depositors will be restricted to a maximum withdrawal of Rs 50,000 even if they have multiple accounts, a government gazette notification said. RBI will relax the withdrawal limit in the event of medical emergencies, higher education fees or marriage expenses — up to a cap of Rs 5 lakh.
After taking into consideration developments, the Reserve Bank came to the conclusion that in the absence of a credible revival plan, and in public interest and the interest of the bank’s depositors, it had no alternative but to apply to the Central Government for imposing a moratorium under section 45 of the Banking Regulation Act, 1949. Accordingly, the Central Government has imposed moratorium effective from today.
The Reserve Bank assures the depositors of the bank that their interest will be fully protected and there is no need to panic. In terms of the provisions of the Banking Regulation Act, the Reserve Bank will explore and draw up a scheme in the next few days for the bank’s reconstruction or amalgamation and with the approval of the Central Government, put the same in place well before the period of moratorium of thirty days ends so that the depositors are not put to hardship for a long period of time.
The Reserve Bank has also issued certain directions to the bank under section 35A of the Act.
Banking Regulation Act, 1949
Section 35A of the Banking Regulation Act:
The Banking Regulation Act legislated in the year 1949 comprises a set of rules which govern the banking sector in India. The act vests powers in the RBI to grant licenses to banks as well as work as a banking regulator in India.
Section 35A of the Banking Regulation Act, 1949 vests power in the RBI to give directions to banks and can take action, “to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company”.
The RBI under the act can also impose restrictions on banks to ensure better governance and control.
Meanwhile, Section 56 of the act is applicable to cooperative societies.

4. Consider the following statements regarding the Katchatheevu Island.
1. It is an uninhabited off-shore island in the Palk Strait originally owned by a king of Ramnad.
2. Sri Lanka claimed territorial ownership over the islet, so in 1974 India ceded the island to Sri Lanka, through a joint agreement.
3. St. Antony’s Church festival is famous festival of this island.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-d
Explanation-
Katchatheevu Island
It is an uninhabited off-shore island in the Palk Strait originally owned by a king of Ramnad (present-day Ramanathapuram, Tamil Nadu).
The island is used by fishermen to dry their nets.
During the British rule, it was administered jointly by India and Sri Lanka.
In the early 20th century, Sri Lanka claimed territorial ownership over the islet, so in 1974 India ceded the island to Sri Lanka, through a joint agreement.
Two years later through another accord, India further gave up its fishing rights in the region.
St. Antony’s Church festival is famous festival of this island.

5. Consider the following statements regarding the Land Acquisition, Rehabilitation and Resettlement Act, 2013.
1. This Act replaced the Land Acquisition Act, 1894 and provides for higher compensation to those deprived of land by the government for both public and private sector projects.
2. It also mandates consent of a majority of land-owners and contains provisions for rehabilitation and resettlement.
Which of the following statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer-c
Explanation-
SC Order on Land Acquisition
Recently, the Supreme Court of India reaffirmed its February 2018 ruling on Section 24 on land acquisition compensation awards in the Indore Development Authority case. The five-judge Bench also overruled an earlier 2014 ruling under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013.
Background
The 2013 Act replaced the Land Acquisition Act, 1894 (1894 Act) and provides for higher compensation to those deprived of land by the government for both public and private sector projects.
It also mandates consent of a majority of land-owners and contains provisions for rehabilitation and resettlement.
Under Section 24(2) of the 2013 Act, land acquisition made under the old law of 1894 lapses if the award of compensation had been made five years before the new Act came into force, but has not been paid.
In such situations, the process will start afresh under the new Act, which mandates higher compensation.
However, there are cases of farmers and landowners refusing compensation which delays the possession by the government. In such cases, the compensation is deposited in the government treasury and according to one interpretation, the acquisition process is saved.
This interpretation has been contended on the basis that such cases will fall under the new Act because compensation has not been paid to the landowners, and the lapsing clause in Section 24 should be applied.
If a long-pending land acquisition process closes under the old law and fresh acquisition proceedings start under the new one, the land-owners will benefit and project proponents will have to pay higher compensation.
In the Pune Municipal Corporation vs Harakchand Misirimal Solanki case 2014, a three-judge bench held that acquisition proceedings initiated under the 1894 Act, which were initiated five years before the 2013 law was enacted (in 2014), would lapse if the land in question was not taken control of or if compensation was not paid to displaced farmers.
The judgment came as a relief for landowners.
However, in the Indore Development Authority vs Shailendra (D) Through LRS & Ors case 2018, another three-judge bench declared the 2014 judgment “per incuriam”.
It held that if a landowner refuses to accept the compensation offered by the developer, they cannot take advantage of their own wrongdoing and have the acquisition proceedings lapse under the old law.
This judgement was a relief for developers.
Per Incuriam
It literally translates as “through lack of care”.
A judgment can be declared per incuriam if it does not follow a statutory provision or a binding precedent that may have been relevant.
Such judgments can be declared to be without any legal force and are not treated as a valid precedent.
Key Points
In the latest ruling, the Bench was interpreting Section 24 (2) of the 2013 Act.
The provision said that if the physical possession of land has not been taken or the compensation is not paid for five or more years prior to 1st January 2014, the acquisition proceeding is “deemed to have lapsed”.
The judgment said that the compensation would be considered paid if the amount is put in the Treasury.
There was no obligation that the amount should be deposited in the court in order to sustain the land acquisition proceedings.
Thus, there is no lapse if possession has been taken and compensation has not been paid. Similarly, there is no lapse if compensation has been paid and possession not taken of the land.
Further, it was also held that Section 24(2) of the 2013 Act does not give rise to a new cause of action to question the legality of concluded proceedings of land acquisition.