[BREAKING] Receiving foreign donation cannot be an absolute right: Supreme Court upholds constitutional validity of FCRA Amendment Act, 2020

The Supreme Court on Friday upheld the Constitutional validity of the Foreign Contribution (Regulation) Amendment Act, 2020 (FCRA Amendment Act), which imposed restrictions on the way foreign contributions are handled by organisations based in India (Noel Harper v. Union of India)..Pertinently, the Bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar said that citizens do not have any right to receive foreign contribution and permitting the same is a matter of State policy."It is open to the State to have a regime which may completely prohibit receipt of foreign donation, as no right inheres in the citizen to receive foreign contribution (donation)," the Court held.The Court observed that there is "no dearth of donors" in India and asked charitable associations to focus on donors within the country, to obviate influence of foreign country owing to foreign contribution..Permitting inflow of foreign contribution, which is a donation, is a matter of policy of the State backed by law, the Court underscored."Indisputably, no absolute right inheres in any one, much less to receive foreign contribution outside the framework delineated by the Parliament and implemented by the executive," the judgment said..The Court held that foreign donations can influence policies of the country and lead to imposition of political ideology and hence they should be reduced."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 107 the minimum level, if not completely eschewed," the Supreme Court stated. .The Court, however, held that Aadhaar numbers may not be given for FCRA clearance and said that applicants should be allowed to produce passports instead..The judgment was delivered on a batch of petitions challenging provisions of the FCRA Amendment Act prohibiting transfer of foreign funds (Section 7); requiring Aadhaar as identification for prior approval, registration etc (Section 12A) and mandating opening of an FCRA primary account exclusively in a branch of State Bank of India in New Delhi notified by the Centre (Section 17)..As per amended Section 7, a person who is registered and granted a certificate or has obtained prior permission under the Act to receive foreign contribution will henceforth be required to utilise the amount “itself” and not through any other person.The top court held that "transfer within the meaning of Section 7, therefore, would be a case of per se (simplicitor) transfer by the recipient of foreign contribution to third party without requiring to engage in the definite activities of cultural, economic, educational or social programme of the recipient of foreign contribution, for which the recipient had obtained a certificate of registration from the Central Government.""On this interpretation, it must follow that the argument regarding amended Section 7, being ultra vires, must fail," the judgment said..The Court made a distinction between foreign contribution and foreign investment. "Foreign contribution is qualitatively different from foreign investment. 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," the judgment states. .The Bench opined that the aspirations of any country cannot be fulfilled on the hope of foreign donation, but by firm and resolute approach of its own citizens to achieve the goal by sheer dint of their hard work and industry."Indeed, charitable activity is a business. 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," the Supreme Court held. .Upholding the validity of Sections 12A and 17, the top court held that "Parliament must be credited with for having taken recourse to corrective dispensation for eradicating the mischief, which any sovereign country can ill-afford." .The top court, however read down Section 12A and construed it as permitting the key functionaries/office bearers of the applicant (associations/NGOs) who are Indian nationals, to produce Indian Passport for the purpose of their identification. "That shall be regarded as substantial compliance of the mandate in Section 12A concerning identification," the judgment reads. .Senior Advocate Gopal Sankaranarayanan and advocate Gautam Jha represented the petitioners. Solicitor-General Tushar Mehta and Additional Solicitor General Sanjay Jain appeared for the respondents.[Read Judgment].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.