The myriad problems in setting up NGOs in Delhi
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New Delhi: Couples come to register their marriages at Puneet Kumar’s office in Kapashera in southwest Delhi. The same office that issues domicile certificates, maintains land records and sometimes successfully resolves disputes. Kumar is the sub-divisional magistrate (SDM) of Dwarka, an ever expanding residential area with a fondness for resident welfare associations (RWAs).
Kumar is also the Registrar of Firms and Societies and holds the power to register a society under an archaic British law—The Societies Registration Act, 1860. There are 10 other SDM officials like him, one for each of the 11 districts in Delhi, with the same duties as Kumar’s.
The Act provides legal sanctity to a host of non-profits that satisfy the stipulations of Section 20, which are that they must be “charitable societies established for the promotion of social welfare, improvement of the natural environment, literature, science, sports, games or the fine arts”. This means that everything from universities, Durga Puja associations, hospitals to even the Ice Skating Association of India is registered under this Act.
Kumar’s office is currently processing more than 200 such requests to set up non-governmental organizations (NGOs) and RWAs, among others. The registration cannot be done online.
The process that begins with a mountain of paperwork that is physically submitted to the SDM’s office eventually leads to the birth of yet another society in Delhi. The last count was in 2010 when there were “69,000-plus societies”, said an officer, who did not want to be named, at the erstwhile head office of the Registrar of Societies in East Delhi’s Patparganj.
Till five years ago, the Udyog Sadan building in Patparganj was the one-stop shop to register any society in the Capital up until the Delhi government devolved powers down to SDM offices. The move has made it easier for the public to register societies in the same district in which the non-profit will operate, yet there has been no collation of the number of societies established in the city since.
Neelam is a statistical assistant who works with Kumar and has over the past three months been directly dealing with people interested in setting up societies. “There has to be seven members to form a society in Delhi,” she says, starting with the basics. She then goes into some detail on the nature of papers inside one of the many files on her desk: affidavits, rules and regulations of the society, memorandum of association, identification documents of members and utility bills, among others.
The verification process sees Kumar’s office run a quick search through the “data bank” to make sure there are no overlaps and a list is drawn up and circulated across all the 11 district offices to ensure no overlaps there too. “If we don’t receive a reply within 15-20 days, then we assume there is no other society with the same name and we can go ahead with the registration,” she says.
Ideally, a society can be registered within a month-and-a-half in Delhi. But among the reasons for an application to be rejected are the use of words like ‘Union’, ‘Reserve’ or ‘Gandhi’ as part of its name. This, officials in Kumar’s office say, may be construed as a violation of The Emblems Act, 1950, and will lead to the application being promptly sent off to higher authorities for approval.
Officials in the three SDM offices that Mint visited, however, said physical verification of the premises that non-profits indicate will be their head office is seldom carried out. “Whether it’s working as an NGO or a welfare society, we don’t know. We go by the Act and the documents submitted,” sums up the officer in Patparganj. Essentially, the SDM’s office functions as a registering authority and not a regulatory one.
This clubbing together of a wide range of societies under the generic definition of ‘NGOs’ has been flagged off by Voluntary Action Network India’s CEO Harsh Jaitli, who feels that one of the main drawbacks of the Act is that it does not differentiate between voluntary development organizations and other societies.
With the steady rise of societies in the city, advocate Premtosh Mishra, who provides advisory services to people looking to register non-profits, said the Act has also not kept pace with the burgeoning sector. “The procedure need not be this time-consuming and there is always confusion on how to go about registering a non-profit,” he said.
The “time-consuming” process was Sweety Ruhel’s experience of setting up her theatre society. “I first submitted an application two years ago to register my society but consecutive elections in Delhi kept stalling my application,” she said. It is still under process.
If Ruhel had consulted Mishra, he would have begun by asking her if there were enough members to register a society. If not, he would have suggested a trip to the sub-registrar’s office to set up a trust with just two members. Or perhaps a visit to the Registrar of Companies to set up a non-profit-making company under Section 8 of the Companies Act, 2013.
Mishra gets at least two to three cases a month asking for advice on how to set up a non-profit. “Last year, I helped register nearly 20,” he said. “But there should be a proper mechanism in place so there is some indication on how many are registered, how many are active and what is it that they are doing.”
Is it easier to register an NGO in Mumbai or Bengaluru?
While registration of societies in Delhi is carried out at the district-level, the Charity Commissioner of Maharashtra’s office in Worli in Mumbai is the place to visit to register a society in India’s business capital.
“The Registrar of Societies governed by the Mumbai Public Trust Act comes under this office,” said Noshir Dadrawala, chief executive of the Centre For Advancement of Philanthropy. “Unlike Delhi where compliance and reporting is negligible, in Mumbai, societies need permissions at every stage after registration. For accessing loans or even purchasing or selling property,” he added.
The registration process in Mumbai also requires that paperwork be submitted physically to the charity commissioner’s office, which is still awaiting computerisation of records and migration of the registration process online. The entire process could take anything between two to three months, said Dadrawala. “With the amount of paperwork involved, it feels like a semi-judicial process.”
In Bengaluru, the time it takes to register an NGO depends on the type of NGO being set up. A trust is the easiest to register, said B. Issac, senior partner at Phillipos & Co., a Bengaluru-based chartered accountancy firm. “You can walk up to any sub-registrar, submit the documents and get the trust registered like you would register a marriage or piece of land. This procedure gets done in a day’s time.”
The procedure to set up a society under the Karnataka Societies Registration Act is similar to Delhi. “If the NGO formed is a Section-8 company, the process can be done online with the Registrar of Companies, and this takes about a month. But, in all, the process is quite simple and straight-forward,” said Issac.
Arundhati Ramanathan contributed to this story.