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NGOs cannot be denied foreign funds even if they indulge in bandhs, agitations for public causes: Supreme Court

However, the court did not declare the provision under the law unconstitutional but ruled that it will be applicable only to those organisations which are involved in active politics.

In a ruling that could open floodgates pertaining to the functioning of non-governmental organisations (NGO) in the country, the Supreme Court on Friday ruled that the Centre cannot prevent NGOs and civil society groups from receiving foreign funds if they indulge in agitations, bandhs or hartals in support of public causes, saying such action could not be termed political in nature.

On Friday, the Supreme Court ruled that the ban on receiving foreign contributions under the Foreign Contribution Regulation Rules (FCRA rules) should apply only to those organisations which take an active part in politics.

A Supreme Court bench of Justices L Nageswara Rao and Deepak Gupta stated that organisations of farmers, workers, students, which are not directly aligned to any political party but work towards the advancement of political interests of these sections, are entitled to receive foreign funds under the Foreign Contribution (Regulation) Act.

Examining various provisions of the law and the rules framed under the FCRA, the apex court said such voluntary organisations cannot be penalised under the act for getting foreign funds.

“Any organisation which habitually engages itself in or employs common methods of political action like ‘bandh’ or ‘hartal’, ‘rasta roko’, ‘rail roko’ or ‘jail bharo’ in support of public causes can also be declared as an organisation of political nature, according to the guideline prescribed in Rule 3 (vi). 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 the foreign contribution,” said Justice Rao, who wrote the judgment for the bench.

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However, the court did not declare the provision under the law unconstitutional but ruled that it will be applicable only to those organisations which are involved in active politics. “We hold that it is only those organisations which have connection with active politics or take part in party politics, that are covered by Rule 3 (vi). To make it clear, such of those organisations which are not involved in active politics or party politics do not fall within the purview of Rule 3 (vi),” the judgement said.

The court also clarified that political parties can’t receive foreign fund using non-political NGOs. The court said, “we make it clear that organisations used for channelling foreign funds by political parties cannot escape the rigour of the Act provided there is concrete material”. The bench added that the “Central Government shall follow the procedure prescribed in the Act and Rules strictly before depriving such organisation the right to receive foreign contributions”.

The top court bench was hearing a plea filed by the Indian Social Action Forum (Insaf), a voluntary organisation, challenging the validity of various provisions of the act and rules.

Senior advocate Sanjay Parikh, representing the petitioners contended the act confers “unguided and uncanalised power” to the centre to specify an organisation as an outfit of political nature, though not being a political party, to prevent it from accessing foreign funds. The words “political interests” used in the rule are vague and susceptible to misuse, he said.

The court held that a balance has to be drawn between the object that is sought to be achieved by the legislation and rights of the voluntary organisations to have access to foreign funds.

“The purpose for which the statute prevents organisations of a political nature from receiving foreign funds is to ensure that the administration is not influenced by foreign funds. A prohibition from receiving foreign aid, either directly or indirectly, by those who are involved in active politics is to ensure that the values of a sovereign democratic republic are protected,” the apex court added.

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Staff reporter at OpIndia

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