No fundamental right to receive unregulated foreign contributions: Centre defends FCRA Act amendments in Supreme Court

Right to life and liberty under Article 21 does not encompass the right to receive unregulated foreign contributions, the Central government has told the Supreme Court while defending amendments made in 2020 to the Foreign Contribution (Regulation) Act (FCRA)..In an affidavit filed before the top court, the Centre said that there is no question of fundamental rights being violated through control of acceptance of foreign contribution by certain type of organisations as the said organisations or individuals are always open to operate with locally secured funds and achieve their objectives."There exists no fundamental right under which any right, legal or otherwise, can be said to include the purported right to receive foreign contributions...Right to life and liberty cannot include right to receive unregulated foreign contributions," the affidavit said.The affidavit was filed in response to three petitions, two challenging the validity of the amendments and one seeking stricter enforcement of the amendments. The plea by Noel Harper of NGO Care And Share Charitable Trust challenged Sections 7, 12A, 12(1A) and 17 inserted in the FCRA by the Foreign Contribution (Regulation) Amendment Act, 2020 as ultra vires Articles 14, 19 and 21 of the Constitution of India.The plea by Jeevan Jyothi Charitable Trusts challenged the Constitutional validity of amended Section 17 of the Foreign Contribution (Regulation) Act, 2010 on the ground that it mandates that the primary FCRA account is to be opened exclusively in a branch of State Bank of India (SBI) in New Delhi as notified by the Central government.The Centre in its affidavit defended each of the assailed provisions. Section 7Amended section 7 only restricts transfer of foreign contribution to other persons/NGOs once the foreign contribution is received in India by a particular NGO/person. "The petitioners or any entity/NGO has to utilise it for the purposes for which it has been given a certificate of registration or prior permission by Government and hence such a ban on transfer is not discriminatory," the affidavit said.The Foreign Contribution (Regulation) Amendment Act, 2020 does not bar any person who falls within the above criteria to seek FCRA registration or prior permission, it added.This amendment was necessitated since it was becoming difficult to monitor the ultimate utilisation of the foreign contribution by the transferee. The provision of transfer under erstwhile Section 7 allowed even the transferee to further transfer it to another association and that transferee could transfer it even further. "This would potentially allow endless chain of transfers and create a layered trail of money, thus making it difficult to trace the flow & utilization of foreign contribution. This creates serious vulnerability for misuse and diversion of foreign contribution," the Centre said.Thus, in order to prevent such violations and malpractices, it was considered necessary to stop the transfer of foreign contribution in order to fix the accountability and thus ensure that the recipient organization itself actually utilizes the Foreign Contribution that it receives, the government contended..Insertion of a new sub-section (1A) in Section 12 of FCRASub-section (1A) of section 12 provides that every person who makes an application for grant of certificate or giving prior permission under sub-section (1) shall be required to open “FCRA Account” in the manner specified in Section 17 and mention details of such account in his application. This, the Centre said, is a technical amendment aimed to bring compatibility with other provision..Insertion of a new section 12ASection 12A empowers the Central government to obtain Aadhaar Number issued under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 or a copy of the passport or Overseas Citizen of India Card, in case of a foreigner."The Aadhaar numbers of the office bearers, key functionaries and members would facilitate proper identification of person and associations with which the persons are connected for facilitating monitoring of activities of associations which should not be detrimental to the national interest and hence the restrictions are reasonable and proportionate," the Centre submitted. Therefore, the amendment is just, reasonable and proportional keeping in view the object of the Act, it was contended. "It is submitted that provision of sub-clause (i) of clause (a) of sub-section (4) of section 12 already mandated that the person/NGO must not be “fictitious or benami”. The existing law itself mandates that benami or fictitious activities are to be prevented under the FCRA, 2010. Hence in order to fulfil that mandate proper identity of functionaries of FCRA NGOs is essential. Hence the need for Aadhaar number," the affidavit said..Amendment to section 17(1) for receipt of foreign contribution in designated “FCRA Account” in SBIThe amended Section 17(1) of the Act inter alia provides that every person who has been granted certificate or prior permission under Section 12 shall receive foreign contribution only in an account designated as ‘FCRA Account’ by the bank, which shall be opened by him for the purpose of remittances of foreign contribution in a branch of SBI at New Delhi specified by the Central government.This amendment, the government submitted, was introduced due to the difficulties experienced in monitoring of inflow and outflow of foreign contribution when the accounts of various NGOs were spread in different banks across the country."As per the erstwhile section 17 of the Act, all these NGOs could receive foreign contribution in an exclusive bank account of their choice in any bank in India. As these FCRA accounts were opened in hundreds of branches spread across the country, massive difficulty was being experienced in monitoring of inflow & outflow of foreign contribution from these accounts and also during audit process," it was pointed out.Further, the proviso to Section 17(1) also provides that such person may also open another FCRA Account in any of the scheduled bank of his choice for the purpose of keeping or utilising the foreign contribution which has been received from his FCRA Account in the specified branch of SBI at New Delhi.Moreover, the government also said that the Home Ministry and the State Bank of India have put in place a system to enable the NGOs to open the main designated FCRA Account in SBI, New Delhi Main Branch without any need to physically come to Delhi..The affidavit said that close to 22,600 associations are registered under FCRA and about 19,000 FCRAcAccounts have already been opened at SBI, New Delhi Main Branch.