The Supreme Court on Tuesday declined to pass an interim order directing the government to extend the validity of licences of NGOs under the Foreign Contribution Regulation Act (FCRA) which expired on September 30 last year, instead opting to pronounce its judgment first in a pending case challenging the very constitutionality of the amendments to the law on the flow of foreign funds into India.
A Bench led by Justice A.M. Khanwilkar was hearing a plea made by a U.S.–based organisation, Global Peace Initiative, represented by senior advocate Sanjay Hegde, which challenged the expiry of the FCRA licences of nearly 6,000 NGOs. The organisation urged the court to let these NGOs continue with their licences until further orders.
Countering the plea, Solicitor General Tushar Mehta said the government had extended the licences of 11,594 NGOs which applied within time. Mr. Mehta further questioned the locus standi of the petitioner, asking how an organisation based in Houston was concerned with the FCRA licences in India.
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The court refused to intervene in the issue though it allowed the petitioner to approach the authorities with a representation which would be considered on its merits.
The court said the petition would be taken up after it had pronounced its judgment in the pending Noel Harper versus Union of India case on the validity of the amendments made to the FCRA in 2020.
The apex court had reserved its verdict on the question of validity of the amendments on November 9, last year. The government, through the Ministry of Home Affairs, had maintained that the NGOs had no fundamental right to receive “unbridled foreign contributions”.
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The petitioners had contended in court that the amendments were choking flow of foreign funds to NGOs engaged in philanthropic activities in India.
During the hearing, the court had questioned the role of the Home Ministry in regulating foreign funding of NGOs.
But the government had warned about how foreign funds could be used to finance activities detrimental to national security and interests.
Mr. Mehta had referred to intelligence inputs which indicated that the money from abroad was used to feed activities meant to destabilise national peace and security. It was even going to the Naxals.
“There is an element of national security, integrity of the nation involved here... Every transaction is watched by the MHA, from the very beginning,” Solicitor General Tushar Mehta had explained the MHA’s involvement.
Mr. Mehta had justified that the amendments were introduced to “strengthen the mechanism, enhance transparency and accountability”. Prior to the amendments, he had claimed, only a miniscule portion of the foreign funds was actually used by the NGOs for their registered objectives.
The Solicitor General had said the amendments were introduced to prevent NGOs from acting as ‘middlemen’ between foreign contributors and local, unregistered NGOs.
However, on March 2020, in a separate judgment, the court had already declared that the Centre cannot brand an organisation ‘political’ and deprive it of its right to receive foreign funds for using “legitimate forms of dissent” like bandh, hartal, “road roko” or “jail bharo” to aid a public cause.
“Support to public causes by resorting to legitimate means of dissent like bandh, hartal, etc, cannot deprive an organisation of its legitimate right of receiving foreign contribution… Any organisation which supports the cause of a group of citizens agitating for their rights without a political goal or objective cannot be penalised by being declared as an organisation of a political nature,” a Bench of Justices L. Nageswara Rao and Deepak Gupta had observed in its 23-page judgment.
This judgment in 2020 was based on a petition filed by the Indian Social Action Forum (INSAF) challenging certain provisions of the Foreign Contribution Regulation Act (FCRA), 2010 and the Foreign Contribution (Regulation) Rules of 2011, both of which gave the Centre “unguided and uncanalised power” to brand organisations ‘political’ and shut down their access to foreign funds.