New Delhi: The Supreme Court on Thursday flayed the Modi government for discouraging the activities of NGOs through the 2020 amendments in the Foreign Contribution (Regulation) Act, 2010.
A Bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar was hearing a batch of petitions challenging provisions of the 2020 amendment act prohibiting transfer of foreign funds (Section 7); requiring Aadhaar as identification for prior approval, registration etc (Section 12A) and mandating opening of FCRA primary account exclusively in a branch of State Bank of India in New Delhi notified by the Centre (Section 17). It adjourned he matter for further hearing on November.
Senior Advocate Gopal Sankaranarayanan, appearing for the NGOs, said the Central government cannot get a free pass by raising the national security issue.
Citing the apex court's judgment in the Pegasus case on Wednesday by a Bench headed by Chief Justice of India N V Ramana, Sankaranarayanan argued:
"...if national security is applied then the clear restriction is on me. Supreme Court makes it very clear [in the Pegasus judgment] that Centre cannot get a free pass every time it is raised. They have to satisfy, and not me. They have to show that since double donation has come, those funds are being used for terror activities."
When the court noted that the funds coming in were double and rules are important if they are invested properly and not otherwise, Sankaranarayanan said: "But asking a remote person from anywhere in India to open an account in Delhi is not working."
On the court observing that the NGOs can open account in Delhi digitally, the senior lawyer replied: "Not everyone is technological savvy. Even I have to visit banks for transfer of funds."
As regards transfer of foreign funds from one NGO to another NGO, which is banned in the amendments, Sankaranarayanan said: "Earlier the line was that funding by larger organisations can be sent to the smaller ones who are doing the groundwork like Bachpan Bachao Andolan etc. Now, it's a complete and outright ban. No person who is registered can transfer such foreign contribution. As soon as such prohibition comes into force, it becomes an absolute prohibition. Now goods and services are stuck with me even if the other person is registered."
He pointed out that good work is facilitated through foreign funding, including provision of relief for droughts, floods and sending migrants to their homes during Covid-19 pandemic.
The court asked him: "Can an affidavit explain the wisdom of the Parliament? We have to judge the statute as it is, whether on basis of doctrine of necessity...affidavit will not discredit the law made by Parliament."
Additional solicitor general Sanjay Jain defended the amendments "based on ground situation." On the bar on transfer of foreign funds, the court asked: "The object of NGOs is to also fund the subsidiary NGOs, why it is prohibited?"
"But one of the activities could be to finance other smaller NGOs," the court said. The ASG said: "It will be subject to public policy and it will not be permitted."
On the mandatory opening of an SBI account in Delhi by NGOs getting foreign funds, the ASG said: "SBI account opening as a basic umbrella account is only one requirement and after that any number of accounts can be opened."
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