No vested right to claim foreign funds: SC upholds validity of strict regime

The Supreme Court on Friday declared that receiving foreign donations cannot be an absolute or even a vested right, as the free and uncontrolled flow of such contributions has the potential of impacting the sovereignty and integrity of the nation, besides undermining its constitutional morality.

A three-judge bench presided over by Justice A M Khanwilkar upheld the validity of strict regulatory measures put in place concerning foreign contribution, "in the larger public interests, public order, and more particularly for safeguarding the sovereignty and integrity of the country".

The top court said the state can have a regime that may completely prohibit receipt of foreign donations, as no right inheres for the citizen to receive foreign contributions. Foreign funds may tend to influence or impose political ideology and it ought to be at the minimum level, the bench added.

The court also said the aspirations of any country cannot be fulfilled on the 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.

“Indubitably, the foreign contribution is qualitatively different from foreign investment. Receiving foreign donations cannot be an absolute or even a vested right. By its very expression, it is a reflection on the constitutional morality of the nation as a whole being incapable of looking after its own needs and problems," the bench added.

The top court upheld the constitutional validity of the Foreign Contribution (Regulation) Amendment Act, 2020, which imposed strict regulations, including on utilisation of funds received by NGOs, associations, and individuals. It, however, said applicants for FCRA clearance can also produce passports for identification.

Disposing of a batch of petitions, challenging the amendments, the bench, also comprising Justices Dinesh Maheshwari and C T Ravikumar said, "There is no fundamental right vested in anyone to receive a foreign contribution or foreign exchange”.

It noted serious concern about the impact of widespread inflow of foreign contributions on the values of a sovereign democratic republic had been repeatedly expressed at different levels including in the Parliament.

The bench said philosophically, that foreign contribution is akin to gratifying intoxicant replete with medicinal properties and may work like a nectar.

"It serves as medicine so long as it is consumed (utilised) moderately and discreetly, for serving the larger cause of humanity. Otherwise, this artifice has the capability of inflicting pain, suffering and turmoil as being caused by the toxic substance (potent tool) — across the nation," Justice Khanwilkar wrote in the 132-page judgment on behalf of the bench.

The court also pointed out there was unanimity amongst the members of both the Houses of Parliament to have such a strict regime.

“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 added.

The bench said it is open to the Parliament to change the benchmark of restriction from higher standard to lower standard or vice versa on the basis of the exigencies and experience.

Check out DH's latest videos