| Headnote |
Foreign Contribution (Regulation) Act, 2010, as amended by Foreign Contribution (Regulation) Amendment Act, 2020 – ss. 7, 12(1A), 12A and 17(1) – Constitutional validity of amendments concerning ss. 7, 12(1A), 17 (1) and s. 12A – Amended s.7 prohibited transfer of foreign contribution to other persons while the unamended s. 7 restricted the transfer of foreign contribution, but did not completely prohibit the same unlike the amended s. 7 – s. 12(1A) envisaged that every person making an application under sub-Section (1) of s. 12 was obliged /required to open FCRA account in the manner specified in s. 17 and mention details of such account in his application – s. 17, in particular sub-Section (1) as amended, mandated that every person granted certificate or prior permission u/s.12 shall receive foreign contribution only in an account designated as FCRA account in the specified bank – The unamended ss. 12 and 17 did not impose such restrictions – s. 12A inserted vide the 2020 Act empowered the Central Government to require Aadhaar number etc., as identification document – Held: The amended provisions vide the 2020 Act, namely, ss. 7, 12(1A), 12A and 17 of the 2010 Act are intra vires the Constitution and the Foreign Contribution (Regulation) Act, 2010 – The amended s.7 completely rules out transfer of foreign contribution by the person who has received/accepted the same in the first place – That however does not prevent the recipient from utilising the foreign contribution “itself” for the purposes for which he has been granted a certificate of registration or obtained prior permission under the Act – The restriction inevitably fixes the accountability of the recipient organisation and mandates maximum utilisation by itself for permitted purposes – This is the procedure established by law – It can neither be said to be arbitrary nor discriminatory much less manifestly arbitrary - within the meaning of Art.14 or impinging upon Art. 21 of the Constitution – The pre-amendment dispensation (unamended s. 7) was not sufficient to effectively regulate the acceptance and utilisation of foreign contribution as predicated by the Foreign Contribution (Regulation), 2010 – To overcome the mischief and to enhance transparency and accountability regarding acceptance and also utilisation of foreign contribution which is quite substantial every financial year having proliferating effect on the economy of the nation, it became necessary to enact amended s. 7 – The fact that unamended s.7 was less restrictive, cannot be the basis to test the constitutional validity of the amended provision on the touchstone of Art.19(1)(c) or 19(1)(g) or Arts.14 and 21 of the Constitution – s.12(1A) and s. 17(1), is a holistic approach adopted by the Parliament to provide for strict regulatory measure and for ensuring transparency and accountability in the matter of foreign contribution – Being a matter of security of the State, public order and in the interests of the general public, it is not open to question the validity of such a law on the touchstone of Art.19(1)(c) or 19(1)(g) of the Constitution – It is not a provision to completely prohibit forming of the associations or engaging in business of charity as such – It is a provision for regulating the manner of doing business more importantly, concerning foreign contribution – The provision became necessary for efficient regulation of foreign contribution on real-time basis, hence, it can neither be said to be manifestly arbitrary nor irrational much less without legitimate objective of the State – Accordingly, the challenge to these provisions as being violative of Arts. 14, 19 and 21 of the Constitution is negated – Insofar as insertion of s. 12A is concerned, this amendment had been necessitated to safeguard the sovereignty and integrity of the country, and public order, including in the interests of the security of the State and of the general public – It is not open to argue that associations desirous of obtaining certificate of registration under this Act need not furnish official identification document pertaining to its key functionaries – s. 12A is to be read down and construed 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 s. 12A concerning identification – Constitution of India – Arts. 14, 19(1)(c), 19(1)(g) and 21.Foreign Contribution (Regulation) Act, 2010 – Foreign Contribution (Regulation) Amendment Act, 2020 – Legislative history culminating with the 2010 Act, as amended in 2020 – Adoption of strict regime for prohibiting “transfer” of foreign contribution and insistence of “utilisation” thereof by the recipient himself/itself – Discussed.Policy – Judicial Review – Scope – Held: It is not for the Court to consider relative merits of the different political theories or economic policies including that an economic legislation may be troubled with crudities, inequities, uncertainties or the possibility of abuse cannot be the basis for striking it down. Policy – Just law made by the Parliament – On mere plea of individual hardships, Court cannot interfere with policy matters.Legislation – Amended provisions – Role of the Parliament – Democratic accountability – Judicial review – Held: There is presumption that the Parliament understands and reacts to the needs of its own people as per the exigencies and experience gained in the implementation of the law – The Parliament is supreme and has a final say in matters of legislation when it reflects on alternatives and choices with inputs from different quarters, with a check in the form of democratic accountability and a further check by the Courts which exercise the power of judicial review – The Courts however ought not to adopt a doctrinaire approach in construing the amended provisions and undermine the legislative intent.Words and Phrases – Expression “foreign contribution” – Meaning of – Distinction between foreign contribution and foreign investment – Held: By its very nature, foreign contribution is a donation accepted from a foreign source purportedly for definite cultural, economic, educational, religious or social programme and to serve the cause of humanity – The expression “foreign contribution” has been defined in s. 2(1)(h) of the 2010 Act to mean donation, which can be in the form of delivery or transfer made by any foreign source of any article, currency, security, etc. – Foreign Contribution (Regulation) Act, 2010 – s. 2(1)(h).Words and Phrases – Transfer and utilization of foreign contribution – Expressions “transfer” and “utilisation” – Meaning of – Discussed – Foreign Contribution (Regulation) Act, 2010. |
