Supreme Court upholds constitutional validity of 2020 modification to FCRA provisions

By PTI

NEW DELHI: The Supreme Court Friday upheld the validity of sure amendments to the provisions of the Foreign Contribution (Regulation) Act, 2010, which got here into impact in September 2020, saying “the strict regime had become essential because of the past experience of abuse and misutilisation of foreign contribution.”

Observing that receiving overseas donations can’t be an “absolute or perhaps a vested proper”, the apex court docket stated nobody will be heard to assert a vested proper to just accept the overseas donation as a result of the idea of the opportunity of the nationwide polity being influenced by overseas contribution is globally recognised.

Upholding the amendments meant to strictly regulate the overseas funding of the NGOs, the highest court docket famous many recipients of overseas contributions had not utilised the identical for the needs for which they had been registered or granted prior permission below the Act and that many recipients had additionally failed to stick to and fulfil the statutory compliances.

“…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,” the apex court docket stated.

A bench headed by Justice A M Khanwilkar declared that the amended provisions specifically, sections 7, 12(1A), 12A, and 17 of the 2010 Act, are “intra vires” the Constitution and the principal Act.

However, it learn down part 12A and construed it as allowing the important thing functionaries or workplace bearers of the associations/NGOs, who’re Indian nationals, to provide Indian passports for the aim of their identification.

Section 12A mandates an individual, who seeks prior permission or prior approval below part 11 or makes an software for grant of certificates below part 12 of the Act, together with for renewal of a certificates below part 16, to offer the Aadhaar variety of all its workplace bearers or administrators or different key functionaries as an identification doc.

“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,” stated the bench, additionally comprising Justices Dinesh Maheshwari and C T Ravikumar.

The 132-page verdict was delivered on pleas, together with these assailing the constitutional validity of the amendments to provisions of FCRA 2010, vide the Foreign Contribution (Regulation) Amendment Act, 2020 which got here into impact on September 29, 2020.

The prime court docket, which adverted to the legislative historical past culminating with the 2010 Act, famous that severe concern concerning the influence of widespread influx of overseas contributions on the values of a sovereign democratic Republic had been repeatedly expressed at completely different ranges together with 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 utilise the same ‘itself’ for the purposes for which permission has been accorded,” it stated.

It famous that the sovereignty and integrity of India must prevail and the rights enshrined in Part III of the Constitution should give solution to the pursuits of most of the people a lot 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 utilised the same for the purposes for which they were registered or granted prior permission under the Act,” the bench stated.

It famous that many recipients had additionally failed to stick to and fulfil the statutory compliances, which resulted within the cancellation of as many as 19,000 certificates of involved individuals/organisations in the course of the acknowledged interval, together with initiation of the felony investigation regarding outright misappropriation or misutilisation of overseas contribution.

It famous it’s open to a sovereign democratic nation to utterly prohibit acceptance of overseas donation on the bottom that it undermines the constitutional morality of the nation, as it’s indicative of the nation being incapable of taking care of its affairs and the wants of its residents.

The bench stated amended part 7 postulates full prohibition on the switch of overseas contribution to different individual, not even to an individual having the certificates of registration below the Act.

“Absent such stringent provision, some of the recipient organisations were reportedly indulging in the successive chain of transfers to other organisations, thereby creating a layered trail of money and also utilisation of funds towards administrative costs of successive transfers up to fifty per cent leaving very little funds for spending on the purposes for which it was permitted,” it stated.

The bench stated overseas contribution can have a fabric influence on the matter of socio-economic construction and polity of the nation.

“Receiving foreign donation 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 stated.