Receiving foreign donation a reflection on constitutional morality of nation: SC

The bench said, by its very expression, foreign donation is a reflection on the constitutional morality of the nation, as a whole, being incapable of looking after its own needs and problems

The Supreme Court said that receiving foreign donations is "a reflection on the constitutional morality of the nation, as a whole, being incapable of looking after its own needs and problems" and said charitable associations may instead focus on donors within the country to obviate influence of foreign countries owing to foreign contribution.

A bench of Justice A.M. Khanwilkar and comprising Justices Dinesh Maheshwari and C.T. Ravikumar said the theory of possibility of national polity being influenced by foreign contribution is globally recognised. "For, foreign contribution can have material impact in the matter of socioeconomic structure and polity of the country. The foreign aid can create presence of a foreign contributor and influence the policies of the country," it said.

It added: "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 the minimum level, if not completely eschewed."

The bench said, by its very expression, foreign donation is a reflection on the constitutional morality of the nation, as a whole, being incapable of looking after its own needs and problems. "The question to be asked is: 'in normal times', why developing or developed countries would need foreign contribution to cater to their own needs and aspirations? Indisputably, the aspirations of any country cannot be fulfilled on the hope (basis) 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," it said.

It said it is open to a sovereign democratic nation to completely prohibit acceptance of foreign donations on the ground that it undermines the constitutional morality of the nation. The bench said the influence may manifest in different ways, including in destabilising the social order within the country. "The charitable associations may instead focus on donors within the country, to obviate influence of foreign country owing to foreign contribution. There is no dearth of donors within our country," it added.

It said it is required to bear in mind that 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. "Mere plea of inconvenience is not enough to attract the constitutional inhibition. The courts ought not to adopt a doctrinaire approach in construing the amended provisions and undermine the legislative intent of strengthening the regulatory mechanism concerning foreign contribution," it added.

"Introducing change for the betterment of governance is the prerogative and wisdom of the Parliament. The FCRA account operators cannot claim right of continuity of a deficient and flawed framework." The top court judgment came on petitions challenging provisions of the FCRA Amendment Act, 2020, prohibiting transfer of foreign funds (Section 7), requiring Aadhaar as identification for prior approval, registration etc (Section 12A), while also, mandating opening of an FCRA primary account exclusively in a branch of State Bank of India, New Delhi, notified by the Centre (Section 17).

The top court upheld a series of amendments made by the Centre to the Foreign Contribution (Regulation) Act, 2010, to regulate the acceptance and utilisation of foreign funds by NGOs, associations, and individuals and also to trace the utilisation of the funds.

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