No foreign funds to NGOs without declaration of objective, purpose: Supreme Court

New Delhi: The Supreme Court on Tuesday observed that foreign funds should not be allowed to be donated to an NGO, without the declaration of its objective and purpose, for which funds were meant.

A bench headed by Justice A.M. Khanwilkar said in this aspect, the law is not being followed in true spirit and told the Centre to ensure that there is no misutilisation of funds by NGOs, which receive foreign funds.

The bench, also comprising Justices Dinesh Maheshwari and C.T. Ravikumar, told the Centre that if it has not been able to ensure so in the past, then it should now ensure that funds are utilised for purpose they have been received.

The bench emphasised that if funds are given to NGOs without declaring the objective, then there is a possibility that it could be used for any activities, for which the NGO is not registered.

While reserving its verdict on a plea challenging constitutional validity of amendments to the Foreign Contribution Regulation Act, the bench said that the loophole needed to be plugged and asked the Centre to look into the matter.

Senior advocate Gopal Sankaranarayanan, representing the petitioner NGOs, contended before the bench that this hearing has been less about what they are challenging and more about what they have not challenged. He added that the fact that 19,000 NGOs were de-recognised is proof that the system is working.

"We are not challenging the original act but only the amendments," he added.

The Centre had told the Supreme Court that there is no fundamental right to receive unbridled foreign contributions without any regulation, in its defence to the 2020 amendments to the Foreign Contribution (Regulation) Act (FCRA).

It emphasised that the FCRA's aim was to ensure foreign contribution does not adversely impinge upon the functioning of parliamentary institutions, political associations and academic and other voluntary organisations as well as individuals in India.

The Ministry of Home Affairs (MHA), in a 355-page affidavit filed in the Supreme Court, said the Parliament has enacted the FCRA, to lay down a clear legislative policy of strict controls over foreign contributions for certain activities in the country.

It said the "legislation has also prohibited acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto".

On the aspect of violation of fundamental rights, the MHA said: "It is unequivocally submitted that there exists no fundamental right to receive unbridled foreign contributions without any regulation. It is submitted that in fact, there exists no fundamental right under which any right, legal or otherwise, can be said to include the purported right to receive foreign contributions."

The petitioners are Noel Harper and Nigel Mills of Share and Care Foundation in Andhra Pradesh and Joseph Lizy and Annamma Joachim of National Workers Welfare Trust in Telangana.