Supreme Court affirms the constitutional validity of the FCRA Act, 2020
The Supreme Court of India on Friday upheld the validity of certain amendments to the provisions of the Foreign Contribution (Regulation) Act, 2010, which came into effect in September 2020, saying “the strict regime had become essential because of the past experience of abuse and mis-utilization of foreign contribution.” The apex court’s bench headed by Justice A M Khanwilkar also said that receiving foreign donations cannot be an “absolute or even a vested right” and 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.
This judgment will be a barrier for many Christian organizations that receive money from abroad churches are involved in religious conversions. Many NGOs involved in anti-India propaganda were also getting a lot of foreign donations. But the amendments of September 2020 by the Union Home Ministry made a lot of checks and balances for these organizations.
The apex court said foreign aid can create the presence of a foreign contributor and “influence” the policies of the country and may tend to influence or impose a political ideology. “There is no dearth of donors within our country,” said the bench also comprising Justices Dinesh Maheshwari and C T Ravikumar. The bench said it is open to the State to have a regime that may completely prohibit receipt of foreign donations as no right inheres in the citizen to receive foreign contributions.
Upholding the amendments meant to strictly regulate the foreign funding of the NGOs, the top court noted many recipients of foreign contributions had not utilized the same for the purposes for which they were registered or granted prior permission under the Act and that many recipients had also failed to adhere to and fulfill the statutory compliances. “…The strict regime had become essential because of the past experience of abuse and mis-utilization of the ‘foreign contribution’ and cancellation of certificates of as many as 19,000 registered organizations on the ground of being grossly non-compliant,” the apex court said. Apex court 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, it read down section 12A and construed it as permitting the key functionaries or office bearers of the associations/ NGOs, who are 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 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 bench. The 132-page verdict was delivered on pleas, including those assailing the constitutional validity of the amendments to provisions of FCRA 2010, vide the Foreign Contribution (Regulation) Amendment Act, 2020 which came into effect on September 29, 2020.
The top court, which adverted to the legislative history culminating with the 2010 Act, noted that serious concern about the impact of widespread inflow of foreign contributions on the values of a sovereign democratic Republic had been repeatedly expressed at different levels including in Parliament. “To eradicate misuse and abuse of foreign contribution in the past, despite the firm regime in place in terms of the 2010 Act, the Parliament in its wisdom has now (vide Amendment Act of 2020) adopted the path of moderation by making it mandatory for all to accept foreign contribution only through one channel and to utilize the same ‘itself’ for the purposes for which permission has been accorded,” said the Judgment.
The 3 Judge Judgment noted that the sovereignty and integrity of India ought to prevail and the rights enshrined in Part III of the Constitution must give way to the interests of the general public much less public order and the sovereignty and integrity of the nation. “The Statement of Objects and Reasons for the Amendment Act of 2020 makes it amply clear that the annual inflow of foreign contribution had almost doubled between the years 2010 and 2019 and many recipients of foreign contribution had not utilized the same for the purposes for which they were registered or granted prior permission under the Act,” the bench said.
The apex court noted that many recipients had also failed to adhere to and fulfill the statutory compliances, which resulted in the cancellation of as many as 19,000 certificates of concerned persons/ organizations during the stated period, including the initiation of the criminal investigation concerning outright misappropriation or mis-utilization of foreign contribution.
Supreme Court Judgment said 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 is incapable of looking after its affairs and the needs of its citizens.
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