Voluntary organisations which have no connection with party politics and active politics cannot be denied access to foreign contributions only because they habitually engage in or employ common methods of political action, the top court held.

Television journalists are seen outside the premises of the Supreme Court in New Delhi, January 22, 2020. REUTERS/Anushree Fadnavis/Files
Television journalists are seen outside the premises of the Supreme Court in New Delhi, January 22, 2020. REUTERS/Anushree Fadnavis/Files(Reuters photo)

In a judgment that could provide relief to non-governmental organizations, the Supreme Court, on Friday, ruled that the ban on receiving foreign contributions under the Foreign Contribution Regulation Rules (FCRA Rules) should apply only to those organisations which take active part in politics .

Voluntary organisations which have no connection with party politics and active politics cannot be denied access to foreign contributions only because they habitually engage in or employ common methods of political action, the top court held.

It also read down a provision of the rules to ensure that only an organisation directly connected with politics came under their purview — and not one that was merely of a “political nature” or has “political interests”.

“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 penalized by being declared as an organisation of a political nature”, a bench headed by justice L Nageswara Rao ruled.

The bench, which also comprised justice Deepak Gupta, therefore, read down two crucial provisions in the FCRA Rules — rule 3(v) and rule 3(vi).

The court, however, made it clear that organisations used by political parties for channelling foreign funds cannot escape the rigour of the law provided there is concrete evidence to substantiate such claims.

In arriving at its decision, the court took into account the objective of the Foreign Contribution Regulation Act (Act) and FCRA Rules which is to ensure that national interest is not compromised by political organisations receiving foreign funds.

“Fine judgment by SC to prevent misuse of the Foreign Contribution Regulation Act by government which is going after any organisation which opposes the government’s policies and malafide actions. Modi government amended FCRA to allow political parties to get foreign money while going after rights NGOs”, advocate Prashant Bhushan said on Twitter in response to the judgment.

The court was called upon by petitioner Indian Social Action Forum to declare sections 5(1) and 5(4) of the Act and rules 3(i), 3(v) and 3 (vi) of FCRA Rules unconstitutional. The central government defended the provisions arguing that the right to receive funding is not a fundamental right. As per section 5(1) of the Act, the central government can, after taking into account the activities of an organisation or its ideology or programme, declare it as an organization of political nature even if it is not a political party. Such an organisation of political nature would be barred from accepting foreign contributions as per the Act.

The petitioner argued that the grounds provided in section 5 for declaring an organization as a political organisation were vague.

The court turned down the argument holding that the wordings of section 5 did not suffer from any ambiguity.

Section 5(4) provided that a representation made by an organisation against the decision to declare it as a political organization can be sent by the central government to an authority calling for a report from the authority on the same. The authority in this regard was, however, not specified by section 5(4) which was the ground for challenging the same. This challenge was also turned down. Rule 3 laid down norms for declaration of an organisation as one of “political nature”. Specifically, rule 3(v) provided that organizations of farmers, workers or students could be declared as a political organization if evidence gathered against such an organisation disclosed that its activities included steps for advancement of political interests. It was the argument by the petitioners that such organisations agitating for their legitimate claims cannot be prevented access to foreign funds by resorting to the vague term “political interests”.

The court agreed that the term political interests is vague and susceptible to misuse. It, therefore, decided that rule 3(v) should be read down so that the words “political interests” are construed to mean that the concerned organsiation has connection with active politics.

Similarly, rule 3(vi) provided that any organisation which habitually engages in or employs common methods of political action (such as a public protest or a strike) in support of public causes can also be declared as an organisation of political nature.

The court held that support to public causes by resorting to legitimate means of dissent like bandh or hartal cannot be grounds to rob an organization of legitimate foreign funding.

Thus, rule 3(vi) was also read down by the apex court which held that those organisations which are not involved in active politics or party politics do not fall within its purview.

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