'Receiving Foreign Donations Can't Be Vested Right': SC Upholds FCRA Amendments

A bench headed by Justice AM Khanwilkar said foreign aid could create the presence of a foreign contributor and 'influence the policies of the country'.

A file photo of the Supreme Court (Getty Images)

New Delhi: The Supreme Court on Friday said receiving foreign donations cannot be an absolute or even a vested right as it upheld the validity of amendments made by the Centre to the Foreign Contribution (Regulation) Act, 2010, PTI reported.

The court said that foreign contribution could have a material impact on the matter of socio-economic structure and polity of the country.

A bench headed by Justice AM Khanwilkar said foreign aid could 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, the court said. 

The judgment came on a batch of petitions that challenged the 2020 amendments while another one prayed for stricter enforcement of the provisions of the Act. The amended Act came into effect on September 29, 2020.

The bench, also comprising Justices Dinesh Maheshwari and CT Ravikumar, said it was open to the State to have a regime that may completely prohibit receipt of foreign donations.

"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 bench said in its 132-page verdict.

The Supreme Court said the aspirations of any country cannot be fulfilled on the basis of foreign donation, but by the firm and resolute approach of its own citizens by sheer dint of their hard work and industry, PTI reported.

The court observed that charitable activity was indeed a business.

"Receiving contributions within India to do a charitable activity can be and is being regulated differently and it is not possible to have a similar approach relating to foreign contributions from foreign sources," the bench said.

"No one can be heard to claim a vested right to accept foreign donation, much less an absolute right," it said.

The SC said the charitable associations may instead focus on donors within the country to obviate the influence of foreign countries.

"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 court said.

"…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," the court ruled.

The petitioners had also challenged the validity of Section 12A, which made it mandatory to provide the Aadhaar number of all its office bearers or directors or other key functionaries as an identification document for registration, PTI reported.

However, the top court 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.

(With PTI inputs)