Receiving foreign funds not absolute right: Supreme Court

New Delhi, April 8

Maintaining that sovereignty and integrity of India ought to prevail, the Supreme Court today 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.

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

“Receiving foreign donations cannot be an absolute or even a vested right. 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. It could have a material impact on socio-economic structure and polity of the country, the court said.

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. Section 12A mandated a person, who seeks prior permission or prior approval under Section 11 or makes an application for grant of certificate under Section 12 of the Act, including for renewal of a certificate under Section 16, to provide the Aadhaar number of all its office-bearers or directors or other key functionaries as identification document.

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

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 had challenged the FCRA amendment for alleged violation of Articles 14, 19 and 21 of the Constitution.

However, asserting that there was no fundamental right to receive unbridled foreign contributions without any regulation, the Centre had defended the amendment, saying it aimed to check fraudulent transfer of funds and misuse of foreign money to influence democratic polity and public institutions. —