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Supreme Court upholds FCRA laws, says ‘sovereignty, the integrity of India’ must prevail

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New Delhi. The Supreme Court on Friday (April 8) upheld the validity of the Foreign Contribution (Regulation) Amendment Act, 2020, saying it’s open to a sovereign democratic nation to completely prohibit acceptance of foreign donations. The court was categorical that the sovereignty and integrity of India ought to prevail.

This can be seen as a setback to the NGO lobby, especially those thriving on foreign funding, and often indulge in questionable activities like political protests and conversion.

The judges noted that there is no “paucity of donors” in India and asked charitable organisations and NGOs to seek donations from within the country, obviating the influence of foreign countries owing to foreign contributions.

“It is open to the State to have a regime which may completely prohibit receipt of foreign donation, as no right inheres in the citizen to receive foreign contribution (donation),” a bench of Justices AM Khanwilkar, Dinesh Maheshwari and C T Ravikumar observed.

The court said the mere plea of ‘Inconvenience’ could not be ground to challenge the Constitutional validity of legislation.

The bench was hearing on the constitutional validity of the Foreign Contribution (Regulation) Amendment Act (FCRA), 2020, which imposes ‘several new conditions on the receipt and use of funds by the NGOs’.

The new provisions of the law also make it mandatory for the NGOs and ‘charitable bodies’ to receive foreign funds only from an SBI account.

“There is no restriction regarding utilisation of the funds only through that (primary) FCRA account. For, it is open to the recipient to operate multiple accounts in other scheduled banks for its utilisation,” the bench observed.

The court opined that citizens ‘do not have any right’ to receive foreign contributions, and allowing the same is a matter of State policy. Meaning the government of the day has the right to decide on the same.

An FCRA license is mandatory to receive foreign donations in India.

The official stand of the Union Ministry of Home is that the FCRA norms are liable to be reviewed from time to time.

In 2015, the government cancelled the FCRA licenses of about 10,000 organisations, including Green Peace, Ford Foundation and some 20 Christian organisations. Another 1,807 NGOs lost theirs in 2019.

In 2020, a government order said these organisations would not be eligible to apply for a fresh license for three years. The government took action against several NGOs last year as well.

A Bench led by Justice A M Khanwilkar, which had reserved its verdict on three petitions challenging various provisions of the FCRA Amendment Act on November 9, 2021 – said there was no absolute right to receive foreign contributions.

“Receiving foreign donations cannot be an absolute or even a vested right,” the apex court said.

“By its very expression, it is a reflection on the constitutional morality of the nation as a whole being incapable of looking after its own needs and problems,” it said, adding allowing liberal foreign funding can have a material impact on socio-economic structure and polity of the country.

The Bench declared that the amended sections 7, 12(1A), 12A, and 17 of the 2010 Act were “intra vires” the Constitution and the principal Act even as it read down Section 12A.

The Bench interpreted Section 12A, permitting the key functionaries or office-bearers of NGOs who are Indian nationals to produce Indian passports for the purpose of their identification.

The court said, “The strict regime had become essential because of the past experience of abuse and misutilisation of the ‘foreign contribution’ and cancellation of certificates of as many as 19,000 registered organisations on the ground of being grossly non-compliant.”

It’s open to a sovereign democratic nation to completely prohibit acceptance of foreign donations on the ground that it undermines the constitutional morality of the nation, the bench said.

Noting that receiving foreign donations can’t be an “absolute or even a vested right”, the Bench said no one could be heard to claim a vested right to accept the foreign donation because the theory of the possibility of the national polity being influenced by foreign contribution is ‘globally recognised’.

There were three petitions – two of which challenged the validity of the amendment, and the third one demanded stricter enforcement of the new FCRA norms that required a primary FCRA account to be opened exclusively in an SBI Main Branch in New Delhi.

Care and Share Charitable Trust chairman Noel Harper and Jeevan Jyoti Charitable Trust challenged the amendment of FCRA for alleged violation of Articles 14, 19 and 21 of the Constitution.

They had contended the compulsion to open an account with an SBI Branch was arbitrary and violated the right to equality, and served no reasonable purpose.

The Ministry of Home Affairs (MHA) had filed an affidavit in the apex court, stating that the Foreign Contribution (Regulation) Act passed by Parliament lays down a clear legislative policy of strict controls over foreign contributions for certain activities in the country and the manner in which they are utilised by the beneficiaries.

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