NGOS SUPPORTING PUBLIC CAUSES THROUGH LAWFUL MEANS CANNOT BE REFUSED FOREIGN CONTRIBUTION UNDER FOREIGN CONTRIBUTION (REGULATION) ACT, 2010

The Bench of Hon’ble #Supreme Court of India comprising of Justices L. Nageswara Rao and Deepak Gupta, held in the case of Indian Social Action Forum v. Union of India, CA No.1510/2020 decided on 06.03.2020, that any #not-for profit organisation, which has no connection with party politics or active politics, but supports public causes having political interests, vide legitimate means of dissent like protests or strikes, etc., cannot be deprived of its legitimate right of receiving foreign funds under the Foreign Contribution (Regulation) Act, 2010 (#FCRA).

In this case, the Appellant filed a Writ Petition in the High Court of #Delhi for a declaration that Sections 5 (1) and 5 (4) of the FCRA and Rules 3 (i), 3 (v) and 3 (vi) of the Foreign Contribution (Regulation) Rules, 2011 (Rules), are violative of Articles 14, 19 (1) (a), 19 (1) (c) and 21 of the Constitution of India 1950 as amended thereof. But as the High Court dismissed the said Writ Petition, the Appellant filed an appeal in the Supreme Court.

The Hon’ble Supreme Court explained and held that the purpose for which the statute prevents organisations of a political nature from receiving foreign funds is to ensure that the administration is not influenced by foreign funds. It further observed that it is clear from the provision itself that bandh, hartal, rasta roko etc., are treated as common methods of political action. Any voluntary organisation which habitually engages and/or supports the cause of a group of citizens agitating for their social, economic or cultural rights, etc., without a political goal or objective cannot be penalized by being declared as an organisation of a political nature and thus, they cannot be denied access to foreign contributions under FCRA. Therefore, only those organisations which have connection with active politics or take part in party politics, are covered by Rule 3 (vi) of the Rules and are thus, denied access to foreign contributions under FCRA.

The Apex Court further said that the Rules would, however, apply to organisations used by political parties for channeling foreign funds, provided there was concrete material to prove the same and that in such cases, the Central Government shall have to follow the procedure strictly in ensuring that such organisations are deprived of their right to receive foreign contributions.

Lakshmi Vishwakarma

Associate

The Indian Lawyer