Why the High Court Ruling on Teesta Setalvad’s Bail is a Big Blow to the CBI

Civil rights activist Teesta Setalvad after recording her statement before the Central Bureau of Investigation in Mumbai earlier this month. The agency is accused of using allegations of minor foreign exchange violations to harass Setalvad because of her role in a case against Narendra Modi. Credit: PTI Photo by Santosh Hirlekar

SEE YOU, CAGED PARROT: Civil rights activist Teesta Setalvad waves at an art installation representing the CBI after recording her statement before the agency in Mumbai earlier this month. The CBI is accused of using allegations of minor foreign exchange violations to harass Setalvad because of her role in a case against Narendra Modi. Credit: PTI Photo by Santosh Hirlekar

Apart from granting anticipatory bail to Teesta Setalvad and Javed Anand in the case against them for violating foreign funding rules, the Bombay High Court has obliquely warned the Modi government and its agencies not to allow a citizen’s “different point of view” to colour the investigation process.

In her written judgment, released in writing on Wednesday, Justice Mridula Bhatkar held that “A citizen may conduct social activities and may have a different point of view, which may not be liked by the government. However, in a democratic state, a citizen may have his or her point of view.”

The court also made it clear that the activist couple’s remaining free would not amount to a threat to “national security and public interest” as the Central Bureau of Investigation had charged.

The judge said there was in fact no need for custodial interrogation of Setalvad and Anand at all since the CBI’s case was based entirely on documents which they said they already had in their possession.

Organisations led by Setelvad which have been at the forefront of the fight to secure justice for the victims of the 2002 riots in Gujarat. They became the target of close financial scrutiny by the CBI after an FIR was lodged against them following a letter from the Gujarat government to the Union Home and Finance ministries alleging violations of the Foreign Contributions Regulation Act.

Among the allegations levelled against them is a case of fraud related to a proposed plan to build a memorial for the victims of the Gulberg Society killings, as well as embezzlement of funds, none of which have been proven despite the raid conducted on Setalvad’s premises on July 8, 2015.

Setalvad and her supporters have alleged that the CBI was seeking her custodial interrogation in order to ensure she was not able to devote time to the crucial Zakia Jafri case, in which the widow of a former MP killed by riotous mobs in Ahmedabad in 2002 has demanded the prosecution of Narendra Modi, who was Chief Minister of Gujarat at the time. The Special Investigation Team set up by the Supreme Court to probe the charges decided there was not enough evidence to charge Modi; Jafri and Setalvad are currently appealing this finding, and a lower court’s decision to close the matter, before the Gujarat High Court.

Additional Solicitor General Anil Singh argued in court that Sabrang Trust run by Setalvad was not only acting against the interest of the state but was also receiving foreign contributions to do the same. This, he stated, was a “threat to national security”, and therefore both Setalvad and her husband should be detained for custodial interrogation.

In its verdict, the court stated that “Prima facie it appears that there is some misuse of amount they received from the (Ford) Foundation for which (Teesta and Javed) are undoubtedly answerable”, but went on to reject the CBI’s claim that their activities amounted to any threat to sovereignty and integrity of the nation. It further declared that since the case is largely based examination of accounts and documents, custodial interrogation of the accused was not necessary.

What are the charges?

The following charges have been levelled against three organisations run by Setalvad and AnandCitizens for Justice and Peace, Sabrang Trust and Sabrang Communications

a) Violation of Section 3, Foreign Contributions Regulations Act, 2010

In mid-June, both Citizens for Justice and Peace and Sabrang Trust received notices from the Finance ministry alleging a number of violations. The main allegation against the trusts are that Teesta and Javed, who are the main office bearers of Citizens for Justice and Peace and Sabrang Trust are also editors of Communalism Combat magazine published by Sabrang Communications and Publishing Pvt Ltd (SCPPL). This, it is alleged, is a violation of FCRA Act 2010.

b) Sabrang Trust has transferred lakhs of rupees to SCPPL, a private, non-FCRA company

The government has suggested that a large amount of foreign funds received by Sabrang Trust has been transferred from to Sabrang Communications in violation of norms.

c) Sabrang Communications has violated the FCRA by accepting a foreign grant

A third allegation is that Sabrang Communications, which is registered as a private company and therefore not authorized to accept foreign funds, accepted a grant from Ford Foundation in violation of the FCRA.

In addition, the chargesheet alleges that Sabrang has not been registered with the Centre under FCRA regulations, and that the organisation has been accepting Ford Foundation money to keep the Gujarat riots case alive.

Teesta’s rebuttal

Teesta Setalvad and her lawyers have repeatedly stated that these violations are a matter of interpretation of the FCRA. On the charge of receiving foreign contributions illegally, she had earlier said that the Act clearly recognizes that an association and its board members/office bearers are independent legal entities. The Act doesn’t bar any FCRA registered association from having any editor, publisher or any other designation of a newspaper/news magazine from being on its board of governors or an office bearer.

The registration certificate issued by FCRA dept to CJP and Sabrang Trust only prohibits the trusts themselves from publishing any newspaper/news magazine or the trust acting as editor, correspondent or any other designation of any newspaper/news magazine.

Regarding the usage of the funds received by Sabrang Communications from Ford Foundation, she has pointed out that it was received under a consultancy agreement. While the FCRA forbids a private company from receiving donations/grants from foreign sources under section 3 of the Act, section 4 makes it clear that payments may be accepted for consultancy services. They further point to the fact that each time Ford Foundation paid Sabrang, it deducted tax at source (TDS), which demonstrates that the payment was not made as a donation or grant.

Further, Teesta has pointed out that neither CJP nor Sabrang Trust have transferred any money to Sabrang Communications. “It is a well recognised and common practice among organisations big and small, to share office space, equipment, expenses and staff on a shared expenses basis. Since CJP and Sabrang Trust did not have sufficient funds, both of them independently requested SCPPL and the latter agreed to a shared expenses arrangement. As per the resolutions passed by the trustees of CJP and Sabrang Trust from time to time, both trusts paid a mutually agreed amount each month to SCPPL towards reimbursement of shared expenses”. She further stresses that SCPPL did not make any profit out of this expense sharing arrangement with the two trusts.

Overall, Setalvad and Anand insist that the so-called violations rest on interpretation of the law. The court, while granting bail to the couple, has included a condition that the couple cooperate with further investigations.