Section 10 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
If a person is holding an article, currency or security that was accepted in breach of the Act, section 10 lets the Central Government hold it where it is, in his hands, by an order in writing. The person may not pay, deliver, transfer or otherwise deal with it except as the Government directs in writing.
This article reads section 10 as per the Act as enacted, read with the Foreign Contribution (Regulation) Amendment Act, 2020 (33 of 2020), which did not change section 10. Later amendments should be checked.
Where the Central Government is satisfied, after such inquiry as it deems fit, that a person has in his custody or control any article, currency or security accepted in contravention of the Act, it may by order in writing prohibit him from paying, delivering, transferring or otherwise dealing with it, save as the Government's written orders allow. A copy of the order must be served in the prescribed manner. Breach of the order is punishable under section 34.
The conditions for an order
Section 10 can be used only where three things are present.
- Satisfaction after inquiry. The Central Government must be "satisfied, after making such inquiry as it may deem fit". The text does not prescribe the form of inquiry.
- Custody or control. The person must have in his custody or control an "article or currency or security, whether Indian or foreign". Custody or control is enough; the person need not be the owner.
- Acceptance in contravention. The item must have been "accepted by such person in contravention of any of the provisions of this Act". The prohibitions that can be contravened include section 3 (see the article on section 3), and the "subject to the provisions of section 10" words that open section 4 (see the article on section 4).
Because "foreign contribution" under section 2(1)(h) means an article, currency or security given by a foreign source, the three heads in section 10 match the three heads of that definition; see the article on foreign contribution and foreign hospitality.
| Element | What section 10 requires |
|---|---|
| Satisfaction | Central Government satisfied after such inquiry as it may deem fit |
| Subject matter | Article, currency or security, Indian or foreign, in the person's custody or control |
| Breach | Accepted in contravention of any provision of the Act |
| Form | Order in writing, copy served in the prescribed manner |
| Effect | No paying, delivering, transferring or otherwise dealing, save under the Government's written orders |
What the order does
A person who is served with an order should get legal dispute resolution advice at once. The order is in the following terms.
The Central Government "may, by order in writing, prohibit such person from paying, delivering, transferring or otherwise dealing with, in any manner whatsoever, such article or currency or security save in accordance with the written orders of the Central Government". Two points follow.
- The prohibition is wide: "otherwise dealing with, in any manner whatsoever". Selling, pledging, lending or spending would each be within the words, so a person who receives such an order should stop all dealing.
- The only way out is "in accordance with the written orders of the Central Government". A person who wants to deal with the item must ask for a written direction and wait for it.
Service of the order
A copy of the order "shall be served upon the person so prohibited in the prescribed manner". The manner is set out in rule 8, explained in the article on rule 8 on service of a prohibitory order. This article does not state the content of the rule. Service matters because section 34 punishes a person "on whom any prohibitory order has been served under section 10" who deals with the item in breach of the order.
The Unlawful Activities (Prevention) Act, 1967 applied
After service, "the provisions of sub-sections (2), (3), (4) and (5) of section 7 of the Unlawful Activities (Prevention) Act, 1967 shall, so far as may be, apply to, or in relation to, such article or currency or security". The section adds that references in those sub-sections "to moneys, securities or credits shall be construed as references to such article or currency or security".
This is incorporation by reference. Section 10 does not set out what those four sub-sections say, and this article does not describe them: they belong to another Act. If your matter involves a prohibitory order, read those sub-sections in the official text of the 1967 Act, and check whether the text has been amended since the FCRA was passed.
Example (invented). After an inquiry, the Central Government is satisfied that Shree Ram Charitable Trust holds in its bank account an amount of currency accepted in contravention of the Act. It issues a written order prohibiting the trust from paying, delivering, transferring or otherwise dealing with that amount save under its written orders, and serves a copy on the trust in the prescribed manner. If a trustee then pays the amount to a contractor, the trust has acted in breach of the order and section 34 comes into play.
The consequence of breach: section 34
Section 34 says that a person on whom a prohibitory order has been served under section 10, who pays, delivers, transfers or otherwise deals with the item in contravention of the order, shall be punished with imprisonment for a term which may extend to three years, or with fine, or with both, and the court may also impose an additional fine equivalent to the market value of the article or the amount of the currency or security in respect of which the order was contravened, or such part as the court deems fit. The detail is in the article on sections 33 and 34.
Separately, a seizure under section 25 can follow where an authorised gazetted officer has reason to believe that a person has in his possession or control any article exceeding the value specified in section 2(1)(h)(i), or currency or security, in relation to which any provision of the Act has been or is being contravened. The seizure, confiscation and adjudication scheme is covered in the article on sections 25 to 27.
What to do on receiving an order
First, stop dealing in the item and record its position as on the date of the order. Second, check that the order is in writing and that a copy has been served on you. Third, take legal advice on the content of the order and on any appeal or revision available. Section 31(2) lists the orders against which an appeal lies to the High Court and does not name an order under section 10; the text of section 31 should be read with advice before any decision is taken, and the revision power in section 32 is dealt with in its article.
Need help with a prohibitory order?
A section 10 order stops an organisation from using money it may depend on. If you are served with one, do not deal with the item and speak to our legal dispute resolution team with the order, the account statements and the history of the receipt.
Key takeaways
- Section 10 needs satisfaction after inquiry, custody or control of an article, currency or security, and acceptance in contravention of the Act.
- The order must be in writing and a copy must be served in the prescribed manner (rule 8).
- Sub-sections (2) to (5) of section 7 of the Unlawful Activities (Prevention) Act, 1967 apply so far as may be; they are not described here.
- Dealing with the item in breach of the order is punishable under section 34.
- Take advice before acting on an order.
Read next
- Section 9: power to prohibit receipt
- Sections 25 to 27: seizure and disposal
- Sections 33 and 34: false statement and breach of a prohibitory order
- Rule 8: service of a prohibitory order
Disclaimer: Based on the Foreign Contribution (Regulation) Act, 2010 as enacted, read with the Amendment Act, 2020 and the other amendments named in this article, and on the Foreign Contribution (Regulation) Rules, 2011 as amended by the notifications named (latest consulted: S.O. 3272(E) dated 22 June 2026), as consulted on 2 October 2026. No consolidated official text was available; some provisions rest on a third-party copy and are identified as such. Later amendments, notifications and Ministry of Home Affairs orders should be checked. This article is general information, not legal advice; check the official text before acting.