Saturday 21 May 2022
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Supreme Court snubs foreign-funded NGOs

'Receiving foreign donations cannot be an absolute or even a vested right,' the Supreme Court bench of Justices Khanwilkar, Maheshwari and Ravikumar ruled

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The Supreme Court said today that receiving foreign donations could not be an “absolute or even a vested right” and by its very expression, it was a reflection on the constitutional morality of the nation as a whole being incapable of looking after its own needs and problems. The apex court said foreign aid could create the presence of a foreign contributor and “influence” the policies of the country and might tend to influence or impose a political ideology.

“There is no dearth of donors within our country,” a bench headed by Justice AM Khanwilkar said while upholding the validity of certain amendments to the provisions of the Foreign Contribution (Regulation) Act, 2010, which had come into effect in September 2020.

The bench, also comprising Justices Dinesh Maheshwari and CT Ravikumar, said it was open to the state to have a regime that might completely prohibit receipt of foreign donations as no right “inheres” in the citizen to receive foreign contributions.

(of rights, powers, etc.) be vested in a person or group or attached to the ownership of a property.

Usage of “inhere” in legalese

“In fact, the parliament must be credited with for having taken recourse to corrective dispensation for eradicating the mischief, which any sovereign country can ill-afford,” the apex court said.

The Supreme Court delivered its judgement on a batch of pleas, including those assailing the constitutional validity of the amendments to the provisions of the FCRA 2010, vide the Foreign Contribution (Regulation) Amendment Act, 2020 which came into effect on 29 September 2020.

“Indubitably, the foreign contribution is qualitatively different from foreign investment. 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,” the Supreme Court said in its 132-page verdict.

The highest court of the country said permitting the inflow of foreign contribution, which is a donation, is a matter of policy of the state, backed by law.

“The question to be asked is: ‘in normal times, why developing or developed countries would need foreign contribution to cater to their own needs and aspirations? Indisputably, the aspirations of any country cannot be fulfilled on the hope (basis) of foreign donation, but by the firm and resolute approach of its own citizens to achieve the goal by sheer dint of their hard work and industry,” the bench said.

“Indeed, charitable activity is a business,” the Supreme Court observed, adding that receiving contributions within India to do a charitable activity could be and was being regulated differently and it was not possible to have a similar approach relating to foreign contributions from foreign sources.

“In short, no one can be heard to claim a vested to accept foreign donation, much less an absolute right,” the Supreme Court said.

The bench observed it is saying so because the theory of the possibility of the national polity being influenced by foreign contribution is globally recognised. It said foreign contribution can have a material impact on the matter of socio-economic structure and polity of the country.

“The foreign aid can create the presence of a foreign contributor and influence the policies of the country. It may tend to influence or impose a political ideology. Such being the expanse of the effect of foreign contribution coupled with the tenet of constitutional morality of the nation, the presence/inflow of foreign contribution in the country ought to be at the minimum level, if not completely eschewed,” said the Supreme Court.

The apex court said the charitable associations might instead focus on donors within the country to obviate the influence of foreign countries owing to foreign contributions.

“It is open to a sovereign democratic nation to completely prohibit acceptance of foreign donation on the ground that it undermines the constitutional morality of the nation, as it is indicative of the nation being incapable of looking after its own affairs and needs of its citizens,” the bench said, noting that third world countries might welcome foreign donation, but it was open to a nation, which was committed and enduring to be self-reliant and variously capable of shouldering its own needs, to opt for a policy of complete prohibition of inflow or acceptance of foreign contribution (donation) from a foreign source.

“This was the first option noted by the parliament while considering the bill concerning the 1976 Act,” it said.

The bench declared that the amended provisions namely, Sections 7, 12(1A), 12A, and 17 of the 2010 Act, are “intra vires” the constitution and the principal Act.

However, the Supreme Court read down Section 12A and construed it as permitting the key functionaries or office bearers of the associations/NGOs, who were Indian nationals, to produce Indian passports for the purpose of their identification.

Section 12A mandates 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 card number of all its office bearers or directors or other key functionaries as an identification document.

“To sum up, we declare that the amended provisions vide the 2020 Act, namely, Sections 7, 12(1A), 12A, and 17 of the 2010 Act are intra vires the Constitution and the Principal Act, for the reasons noted hitherto,” said the Supreme Court.

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