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Foreign Contributions Can Influence National Polity; Govt Can Completely Prohibit Acceptance Of Foreign Aid : Supreme Court
Srishti Ojha
8 April 2022 5:46 PM IST
"The charitable associations may instead focus on donors within the country, to obviate influence of foreign country owing to foreign contribution. There is no dearth of donors within our country"
While upholding the 2020 amendments made to the Foreign Contribution (Regulation) Act 2010, the Supreme Court on Friday observed that 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".A bench comprising Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar...
While upholding the 2020 amendments made to the Foreign Contribution (Regulation) Act 2010, the Supreme Court on Friday observed that 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".
A bench comprising Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar observed that it is open to a nation, which is committed and enduring to be self-reliantm to opt for a policy of complete prohibition of inflow or acceptance of foreign contribution from foreign source.
In the judgment, the Court compared foreign contribution to a "gratifying intoxicant" with medicinal properties if consumed moderately.
"Philosophically, foreign contribution (donation) is akin to gratifying intoxicant replete with medicinal properties and may work like a nectar. However, it serves as a medicine so long as it is consumed (utilised) moderately and discreetly, for serving the larger cause of humanity. Otherwise, this artifice has the capability of inflicting pain, suffering and turmoil as being caused by the toxic substance (potent tool) — across the nation. In that, free and uncontrolled flow of foreign contribution has the potentials of impacting the sovereignty and integrity of the nation, its public order and also working against the interests of the general public", the Bench said.
Legislation Be understood in Context of Underlying Intent of Insulating Democratic Party From Adverse Influence:
According to the court, it must be borne in mind that the legislation must be understood in the context of the underlying intent of insulating the democratic polity from the adverse influence of foreign contribution remitted by foreign sources.
Through 2020 Amendment, Parliament Stepped In To Restructure Dispensation Of Foreign Contribution:
According to the bench, the Parliament brought in the amendment in the backdrop of the following developments:
- 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.
- Many recipients had also failed to adhere to and fulfil the statutory compliances — which resulted in cancellation of as many as 19,000 certificates of concerned persons and organisations including initiation of criminal investigation for outright misappropriation or misutilisation of foreign contribution.
- Some of the NGOs as reported were primarily involved in routing of foreign contribution accepted by them and not utilising the same itself for the purposes for which certificate of registration was issued. Such transfer created several operational issues bordering on malpractices impacting the very intent of the Principal Act.
- There had been cases of successive transfers and creation of a layered trail of money making it difficult to trace the flow and final utilisation.
It is open to a nation to prohibit 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 third world countries may welcome foreign donation, but it is open to a nation, which is 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/acceptance of foreign contribution (donation) from foreign source".
No one can claim an absolute right to recieve foreign contribution; Foreign contributions can influence political ideology and should be at the minimum level
"Receiving contribution within India to do charitable activity can be and is being regulated differently. It is not possible to have a similar approach relating to foreign contribution from foreign source. In short, no one can be heard to claim a vested right to accept foreign donation, much less an absolute right"
"We say so because the theory of possibility of national polity being influenced by foreign contribution is globally recognised. For, foreign contribution can have material impact in the matter of socio- economic structure and polity of the country. The foreign aid can create presence of a foreign contributor and influence the policies of the country. It may tend to influence or impose 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. The influence may manifest in different ways, including in destabilising the social order within the country. The charitable associations may instead focus on donors within the country, to obviate influence of foreign country owing to foreign contribution. There is no dearth of donors within our country"
The Bench made the observations while pronouncing the judgment in PILs challenging the Foreign Contriubtion(Regulation) Amendment Act 2020(Noel Harper and others versus Union of India and connected cases).
However, the Bench read down the condition that Aadhaar numbers should be given for FCRA clearance and said that applicants should be allowed to produce Passports.
While the petitioners challenged the amendments as arbitrary and stringent and making the functioning of NGOs extremely difficult, the Central Government said that the changes in the law were necessary to prevent malpractices and diversion of funds by NGOs.
Case Title : Noel Harper and others versus Union of India
Citation : 2022 LiveLaw (SC) 355
