NOEL HARPER & ORS. v. UNION OF INDIA & ANR.

Citation: [2022] 19 S.C.R. 879; 2022 INSC 411

Court: Supreme Court of India

Bench: A.M. KHANWILKAR , DINESH MAHESHWARI, C.T. RAVIKUMAR

Judgment date: 2022-04-08

Case summary

2022 INSC 411. Supreme Court of India judgment dated 2022-04-08. NOEL HARPER & ORS. v. UNION OF INDIA & ANR. Read the judgment and case details on LawSphereX.

Judgment text

[2022] 19 S. C. R. 879 879 NOEL HARPER & ORS. A v. UNION OF INDIA & ANR. (Writ Petition (Civil) No. 566 of 2021) B APRIL 08, 2022 [A. M. KHANWILKAR, DINESH MAHESHWARI AND C. T. RAVIKUMAR, JJ. ] Foreign Contribution (Regulation) Act, 2010, as amended by Foreign Contribution (Regulation) Amendment Act, 2020 – ss. 7, C 12(1A), 12A and 17(1) – Constitutional validity of amendments concerning ss. 7, 12(1A), 17 (1) and s. 12A – Amended s. 7 prohibited transfer of foreign contribution to other persons while the unamended s. 7 restricted the transfer of foreign contribution, but did not completely prohibit the same unlike the amended s. 7 – s. 12(1A) envisaged that every person making an application under D sub-Section (1) of s. 12 was obliged /required to open FCRA account in the manner specified in s. 17 and mention details of such account in his application – s. 17, in particular sub-Section (1) as amended, mandated that every person granted certificate or prior permission u/s.

12 shall receive foreign contribution only in an account E designated as FCRA account in the specified bank – The unamended ss. 12 and 17 did not impose such restrictions – s. 12A inserted vide the 2020 Act empowered the Central Government to require Aadhaar number etc. , as identification document – Held: The amended provisions vide the 2020 Act, namely, ss. 7, 12(1A), 12A and 17 of the 2010 Act are intra vires the Constitution and the Foreign F Contribution (Regulation) Act, 2010 – The amended s.

7 completely rules out transfer of foreign contribution by the person who has received/accepted the same in the first place – That however does not prevent the recipient from utilising the foreign contribution “itself” for the purposes for which he has been granted a certificate G of registration or obtained prior permission under the Act – The restriction inevitably fixes the accountability of the recipient organisation and mandates maximum utilisation by itself for permitted purposes – This is the procedure established by law – It can neither be said to be arbitrary nor discriminatory much less manifestly arbitrary - within the meaning of Art. 14 or impinging upon Art. 21 H 879 880 SUPREME COURT REPORTS [2022] 19 S. C. R. A of the Constitution – The pre-amendment dispensation (unamended s.

7) was not sufficient to effectively regulate the acceptance and utilisation of foreign contribution as predicated by the Foreign Contribution (Regulation), 2010 – To overcome the mischief and to enhance transparency and accountability regarding acceptance and also utilisation of foreign contribution which is quite substantial B every financial year having proliferating effect on the economy of the nation, it became necessary to enact amended s. 7 – The fact that unamended s. 7 was less restrictive, cannot be the basis to test the constitutional validity of the amended provision on the touchstone of Art. 19(1)(c) or 19(1)(g) or Arts. 14 and 21 of the C Constitution – s. 12(1A) and s.

17(1), is a holistic approach adopted by the Parliament to provide for strict regulatory measure and for ensuring transparency and accountability in the matter of foreign contribution – Being a matter of security of the State, public order and in the interests of the general public, it is not open to question the validity of such a law on the touchstone of Art. 19(1)(c) or D 19(1)(g) of the Constitution – It is not a provision to completely prohibit forming of the associations or engaging in business of charity as such – It is a provision for regulating the manner of doing business more importantly, concerning foreign contribution – The provision became necessary for efficient regulation of foreign E contribution on real-time basis, hence, it can neither be said to be manifestly arbitrary nor irrational much less without legitimate objective of the State – Accordingly, the challenge to these provisions as being violative of Arts.

14, 19 and 21 of the Constitution is negated – Insofar as insertion of s. 12A is concerned, this amendment had been necessitated to safeguard the sovereignty and integrity of the F country, and public order, including in the interests of the security of the State and of the general public – It is not open to argue that associations desirous of obtaining certificate of registration under this Act need not furnish official identification document pertaining to its key functionaries – s. 12A is to be read down and construed as G permitting the key functionaries/office bearers of the applicant (associations/NGOs) who are Indian nationals, to produce Indian Passport for the purpose of their identification – That shall be regarded as substantial compliance of the mandate in s. 12A concerning identification – Constitution of India – Arts. 14, 19(1)(c), 19(1)(g) and 21. H NOEL HARPER & ORS. v. UNION OF INDIA & ANR.

881 Foreign Contribution (Regulation) Act, 2010 – Foreign A Contribution (Regulation) Amendment Act, 2020 – Legislative history culminating with the 2010 Act, as amended in 2020 – Adoption of strict regime for prohibiting “transfer” of foreign contribution and insistence of “utilisation” thereof by the recipient himself/itself – Discussed. B Policy – Judicial Review – Scope – Held: It is not for the Court to consider relative merits of the different political theories or economic policies including that an economic legislation may be troubled with crudities, inequities, uncertainties or the possibility of abuse cannot be the basis for striking it down. C Policy – Just law made by the Parliament – On mere plea of individual hardships, Court cannot interfere with policy matters.

Legislation – Amended provisions – Role of the Parliament – Democratic accountability – Judicial review – Held: There is presumption that the Parliament understands and reacts to the needs D of its own people as per the exigencies and experience gained in the implementation of the law – The Parliament is supreme and has a final say in matters of legislation when it reflects on alternatives and choices with inputs from different quarters, with a check in the form of democratic accountability and a further check by the Courts E which exercise the power of judicial review – The Courts however ought not to adopt a doctrinaire approach in construing the amended provisions and undermine the legislative intent.

Words and Phrases – Expression “foreign contribution” – Meaning of – Distinction between foreign contribution and foreign investment – Held: By its very nature, foreign contribution is a F donation accepted from a foreign source purportedly for definite cultural, economic, educational, religious or social programme and to serve the cause of humanity – The expression “foreign contribution” has been defined in s. 2(1)(h) of the 2010 Act to mean donation, which can be in the form of delivery or transfer made by G any foreign source of any article, currency, security, etc. – Foreign Contribution (Regulation) Act, 2010 – s. 2(1)(h). Words and Phrases – Transfer and utilization of foreign contribution – Expressions “transfer” and “utilisation” – Meaning of – Discussed – Foreign Contribution (Regulation) Act, 2010. H 882 SUPREME COURT REPORTS [2022] 19 S. C. R.

A Disposing of the writ petitions, the Court HELD: Validity of Section 7 of the Foreign Contribution (Regulation), 2010, as amended vide the 2020 Act 1. The amended provision completely rules out transfer of B foreign contribution by the person who has received/accepted the same in the first place. That does not prevent the recipient from utilising the foreign contribution “itself” for the purposes for which he has been granted a certificate of registration or obtained prior permission under the Act. [Para 44][958-D-E] C 2. There is no restriction regarding utilisation of foreign contribution, leave alone complete prohibition. The rationale of Section 7 as amended, inter alia, is that the donor (foreign source) is made fully aware of the definite purposes already declared by the recipient and permitted by the competent authority and D corresponding obligation upon the recipient regarding utilisation of the funds itself for stated purposes and none else. [Para 46][959- C] 3.

The legislative intent for which the amendment has been effected is to introduce strict dispensation qua the recipient of E foreign contribution to utilise the same “itself” for the purposes for which it has been permitted as per the certificate of registration or permission granted under the Act by the Central Government. In addition, by the same Amendment Act, utilisation of foreign contribution for administrative purpose by the recipient has been lowered to twenty per cent only with a view to ensure maximum F spending on the purposes for which the foreign contribution has been accepted by the recipient having certificate of registration.

Absent such stringent provision, some of the recipient organisations were reportedly indulging in successive chain of transfers to other organisations, thereby creating a layered trail G of money and also utilisation of funds towards administrative costs of successive transfers upto fifty per cent leaving very little funds for spending on the purposes for which it was permitted. Hence, providing complete restriction on transfer simplicitor, was the just option to fix accountability of the recipient organisation and H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 883 maximise utilisation for the permitted purposes. Such being the A avowed objective and purpose of the amendment, the challenge to the amended Section 7 must fail. [Paras 50 and 51][961-H; 962-A-D] 4. The fact that earlier transfer of foreign contribution was permitted as per the unamended provision, that by itself cannot B be the basis to challenge the validity of the amended provision.

For, 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 gained during the implementation of the applicable provision at the relevant time. C [Para 52][962-D-E] 5. Indubitably, foreign contribution is qualitatively different from foreign investment. Receiving foreign donation cannot be an absolute or even a vested right. No one can be heard to claim a vested right to accept foreign donation, much less an absolute D right. This is so because the theory of possibility of national polity being influenced by foreign contribution is globally recognised. For, foreign contribution can have material impact in the matter of socioeconomic structure and polity of the country. The foreign aid can create presence of a foreign contributor and influence the policies of the country. It may tend to influence or impose E political ideology.

Such being the expanse of the effect of foreign contribution coupled with the tenet of constitutional morality of the nation, the presence/inflow of foreign contribution in the country ought to be at the minimum level, if not completely eschewed. The influence may manifest in different ways, including F in destabilising the social order within the country. [Paras 53 and 54][962-E-F, H; 963-A-C] 6. One fails to understand as to how such a provision (amended Section 7) can be regarded as discriminatory or so to say vague or irrational much less manifestly arbitrary. The G restriction therein applies to a class of persons who are permitted to accept foreign donation for being utilised by themselves for the definite purposes, without any discrimination and it is so done to uphold the objective of the Foreign Contribution (Regulation) Act, 2010.

Thus, there is clear intelligible differentia with a direct nexus sought to be achieved with the intent of the Foreign H 884 SUPREME COURT REPORTS [2022] 19 S. C. R. A Contribution (Regulation) Act, 2010. Such strict regime had become inevitable because of the experience gained by the concerned authorities over a period of time, including about the abuse of the earlier dispensation under the unamended provision. [Para 57][963-H; 964-A-B] B 7. The restriction inevitably fixes the accountability of the recipient organisation and mandating maximum utilisation by itself for permitted purposes. This is the procedure established by law. It can neither be said to be arbitrary nor discriminatory much less manifestly arbitrary — within the meaning of Article 14 or impinging upon Article 21 of the Constitution.

As a matter of law, C since the subject Act deals with a distinct class of persons (accepting/receiving foreign contribution) and it is founded on an intelligible differentia having object sought to be achieved by the Foreign Contribution (Regulation) Act, 2010, it fulfils the test predicated in Shayara Bano. For the same reason, the amended D provision under challenge is neither capricious, irrational or lacking determining principle, nor suffers from the vice of excessiveness and being disproportionate. [Para 58][964-D-F] 8. 1. There is presumption that the Parliament understands and reacts to the needs of its own people as per the exigencies and experience gained in the implementation of the law. Mere E plea of inconvenience is not enough to attract the constitutional inhibition. The Courts ought not to adopt a doctrinaire approach in construing the amended provisions and undermine the legislative intent of strengthening the regulatory mechanism concerning foreign contribution.

The legislature enjoys F considerable latitude while exercising its wisdom on the basis of inputs collated from different quarters. There is intrinsic evidence to indicate that the change effected by the amendments is to serve the legitimate Government purpose and has a rational nexus to the object of the Foreign Contribution (Regulation), 2010 and the amendments, and that the pre-amendment dispensation G (unamended Section 7) was not sufficient to effectively regulate the acceptance and utilisation of foreign contribution as predicated by the Foreign Contribution (Regulation), 2010. [Para 59][964- F-G; 965-A-B] H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 885 8. 2.

While examining the issue as to whether the amended A provision is a reasonable restriction, the Court cannot be oblivious to the concern of the Parliament/Legislature backed by the past experiences including cancellation of registration of substantial number of registration certificates after due inquiry and for tangible reasons owing to abuse and misutilisation of foreign B contribution (donation); and especially when receipt or acceptance of foreign exchange or be it foreign contribution, is otherwise understood to be ordinarily prohibited. The subject enactment is essentially conceived in the interests of public order and also general public as the intent is to prevent misuse and misutilisation of foreign contribution coming from foreign sources to safeguard C the values of a sovereign democratic republic. [Para 63][966-D- E; 967-G-H] 8. 3.

The restriction or complete prohibition on transfer to third party, by no standards deprive acceptance of foreign contribution and utilisation thereof in the manner permitted for D definite purposes, such as cultural, economic, educational or social programme. Such a provision must be understood as being procedure established by law in the interests of the general public and in the interests of sovereignty and integrity of the country, including public order. Resultantly, there is no infraction even of E Article 19(1)(c) or 19(1)(g) of the Constitution as urged by the writ petitioners, including Articles 14 and 21 of the Constitution. Consistent with this view, the challenge to the amended Section 7 must be rejected on all counts. [Para 65][967-B-D] 8. 4. For the same reason, the argument of the writ F petitioners about lack of rational nexus with the object sought to be achieved by the Principal Act much less the Amendment Act, must also fail.

The rationale is of larger public interests and more particularly to obviate adverse impact on the economy, public order, sovereignty and integrity of the country. Such amendment has been necessitated because of the past experience consequent G to implementation of the unamended Section 7 of the 2010 Act. It is so highlighted in the objects and reasons and the introduction of the Amendment Act. It can also be culled out from the debates in the Parliament whilst considering the Amendment Bill in the H 886 SUPREME COURT REPORTS [2022] 19 S. C. R. A respective Houses. To overcome the mischief and to enhance transparency and accountability regarding acceptance and also utilisation of foreign contribution which is quite substantial every financial year having proliferating effect on the economy of the nation, it had become necessary to enact amended Section 7.

In other words, there is a clear rationale behind the amendment B which is consistent with the purpose of the Principal Act and the object sought to be achieved under the enactments. The fact that unamended provision was less restrictive, cannot be the basis to test the constitutional validity of the provision on the touchstone of Article 19(1)(c) or 19(1)(g) or Articles 14 and 21 of the C Constitution. The amended Section 7, being plain and clear and having nexus with the object sought to be achieved and is necessitated because of sovereignty and integrity of India or security of the State, public order and in the interests of the general public. It is unfathomable as to how the amended provision can be regarded as unconstitutional on any parameter. [Para D 66][967-D-H; 968-A-B] Validity of Section 12(1A) and Section 17(1) of the Foreign Contribution (Regulation), 2010, as amended vide the 2020 Act 9.

Section 12(1A) has been inserted by Act 33 of 2020, which envisages that every person who makes an application under sub- E Section (1) of Section 12 is obliged/required to open FCRA account in the manner specified in Section 17 and mention details of such account in his application. Section 17, in particular sub-Section (1) as amended, mandates that every person who had been granted certificate or prior permission under Section 12 shall receive F foreign contribution only in an account designated as FCRA account in the specified bank. The unamended Sections 12 and 17 did not impose such restriction. Notably, as per the new regime foreign remittances are being received through SWIFT platform by international banking wherein certain mandatory fields are required to be captured apart from other details transaction wise. G Further, foreign remittances do not have structured framework, including disclosures regarding purposes.

All these deficiencies will stand resolved thereby enhancing the monitoring mechanism in real-time basis, remittance wise by adopting the new dispensation predicated in the amended provisions. Once again, H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 887 the need to strictly regulate the inflow of foreign funds and to A oversee utilisation thereof for the purposes for which it has been received having been recognised and being the rationale behind the Amendment Act, including owing to the experience regarding abuse of the regime under the unamended provision, the challenge to such amendment cannot be taken forward. [Paras B 68 and 69][968-D-H; 969-A] 10. Section 17 came to be amended in the aftermath of realisation of clear and discernible lacunae having cropped in due to the presence of FCRA accounts of scores of registered organisations, in different scheduled banks across the country.

C The challenge became more pronounced due to doubling of foreign contribution inflow in the last decade which had impacted the efficiency of monitoring and achieving the object of the Principal Act. The amended provision now mandates that FCRA accounts of all the registered persons/organisations are required to be opened in one particular branch in the country providing for D essential information and fields, thereby ensuring a complete and transparent check on the inflow and utilisation of foreign contribution towards a single point source on real-time basis. [Para 70][969-B-C] 11. The fact that earlier FCRA account could be opened in E any scheduled bank, cannot preclude the Parliament from legislating a law which requires inflow of foreign contribution in some other manner specified by law. Merely because the framework of acceptance of foreign contribution had been changed cannot be the basis to question the validity of the amended F provisions.

Introducing change for the betterment of governance is the prerogative and wisdom of the Parliament. The FCRA account operators cannot claim right of continuity of a deficient and flawed framework. Ordinarily, convenience of business and persons engaged in doing business must be uppermost in the mind of the Parliament/Legislature — to effectuate the goal of G ease of doing business. However, the strict regime had become essential because of the past experience of abuse and misutilisation of the “foreign contribution” and cancellation of certificates of as many as 19,000 registered organisations on the ground of being grossly noncompliant. A fortiori, it would certainly H 888 SUPREME COURT REPORTS [2022] 19 S. C. R.

A justify the need to have a holistic approach to ensure that the objective of the Principal Act is fulfilled, namely, of strict regulation of the inflow and utilisation of foreign contribution for the purposes for which it is so permitted, such as only cultural, economic, educational or social programme. [Para 71][969-D-H; 970-A-B] B 12. In fact, the Parliament must be credited with for having taken recourse to corrective dispensation for eradicating the mischief, which any sovereign country can ill-afford. The Parliament is supreme and has a final say in matters of legislation when it reflects on alternatives and choices with inputs from C different quarters, with a check in the form of democratic accountability and a further check by the Courts which exercise the power of judicial review. It had become necessary for the Parliament to step in and provide a stringent regime for effectively regulating the inflow and utilisation of foreign contribution.

Hence, D there had been legitimate goal for amending the subject provisions of acceptance of funds through one channel. Concededly, despite the requirement of opening FCRA account in the designated bank, it is open to the organisation to utilise the amount so received in the FCRA account through multiple accounts in the scheduled branches. In that sense, it is a balanced E approach. [Para 72][970-B-D] 13. A priori, opening of main FCRA account in the designated bank as per the law made by the Parliament in that regard, cannot be brushed aside on the specious argument of some inconvenience being caused to the registered associations. F Assuming that some inconvenience is likely to be caused to few applicants, but the constitutionality of a statute cannot be assailed on the basis of fortuitous circumstances and more so when it being only a one-time exercise to ensure inflow of foreign contribution through one channel only, being a precondition for grant of permission.

[Para 73][970-E-G] G 14. As a matter of law, the validity of the amendments must be tested on the touchstone of tenets underlying Articles 14, 19 and 21 of the Constitution. The permission is a precondition for acceptance and utilisation of foreign contribution. Such persons H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 889 are a separate class and engage in specified activity. It cannot be A a usual or ordinary business for everyone and anyone wanting to accept foreign contribution. Permitting inflow of foreign contribution, which is a donation, is a matter of policy of the State backed by law. In this case, it is governed by the 2010 Act as amended. It is open to the State to have a regime which may B completely prohibit receipt of foreign donation, as no right inheres in the citizen to receive foreign contribution (donation). [Para 74][971-A-C] 15.

The provision such as Section 12(1A) and Section 17(1) introduced by the Amendment Act, is a holistic approach adopted C by the Parliament to provide for strict regulatory measure and for ensuring transparency and accountability in the matter of foreign contribution. Notably, there was unanimity amongst the members of both the Houses cutting across party lines to have such a strict regime as indiscriminate receipt/inflow and more so utilisation of foreign contribution had been threatening the D sovereignty and integrity of the country itself. Being a matter of security of the State, public order and in the interests of the general public, it is not open to question the validity of such a law on the touchstone of Article 19(1)(c) or 19(1)(g) of the Constitution. It is not a provision to completely prohibit forming E of the associations or engaging in business of charity as such.

It is a provision for regulating the manner of doing business more importantly, concerning foreign contribution. The provision became necessary for efficient regulation of foreign contribution on real-time basis, hence, it can neither be said to be manifestly arbitrary nor irrational much less without legitimate objective of F the State. Accordingly, the challenge to these provisions as being violative of Articles 14, 19 and 21 of the Constitution is negated. [Paras 75 and 80][971-C-F; 973-E-F] 16. The fact that the registered associations were already complying with the statutory formalities of furnishing of accounts, G intimation, audit and disposal of assets to the satisfaction of the concerned Authorities, it would not follow that the Parliament/ Legislature is denuded of its power of changing the regulatory mechanism or framework to make it more effective and to make it real-time regarding the inflow or receipt of foreign contribution H 890 SUPREME COURT REPORTS [2022] 19 S. C. R.

A and utilisation thereof for the purposes for which it has been so permitted. [Para 81][973-F-H] Validity of Section 12A of the Foreign Contribution (Regulation), 2010, as amended vide the 2020 Act 17. Section 12A, which was inserted vide the Amendment B Act of 2020, mandates that the person concerned who seeks prior permission or prior approval under Section 11, or makes an application for grant of certificate under Section 12, including for renewal of certificate under Section 16, to provide as identification document, the Aadhaar number of all its office bearers or Directors C or other key functionaries. The Statement of Objects and Reasons of the Amendment Act are testimony about the past experience of abuse of foreign contribution receipts and spending on activities not connected with the purposes for which it was so permitted.

It had been noticed that the inflow of foreign contribution had almost doubled between the years 2010 and 2019 and many of the D registered associations had failed to comply with basic statutory formalities necessitating cancellation of certificates of registration of more than 19,000 registered organisations. This is a staggering (substantial) number indicative of gross violations by large number of registered associations. More so, this amendment had been necessitated to safeguard the sovereignty and integrity of the E country, and public order, including in the interests of the security of the State and of the general public. It is a law made by the Parliament which is competent to make such a law concerning the activities related to foreign donations and more particularly about its acceptance in prescribed manner and utilisation for the F purposes defined in the certificate/permission granted by the competent authority.

It has a legitimate purpose and nexus sought to be achieved with the objective underlying the Principal Act and the subject amendment. It is not open to argue that associations desirous of obtaining certificate of registration under this Act need not furnish official identification document pertaining G to its key functionaries. [Para 83][974-C-H; 975-A] 18. Regardless of the above, the provision (Section 12A) envisages that a copy of the Passport can also be provided as identification document of all its office bearers or Directors or H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 891 other key functionaries or Overseas Citizen of India Card, in A case of a foreigner. The underlying purpose of this provision is merely to identify the key functionaries of the registered association so that they can be made accountable for violations, if any.

As the Passport in case of a foreigner is accepted as sufficient identification document, there is no reason why such B Passport of Indian national cannot be relied upon for the same purpose. Thus understood, the challenge to this provision is unreasonable. Whereas, the provision needs to be construed as permitting furnishing of the Indian Passport of the key functionaries of the applicant who are Indian nationals, for the purpose of their identification. [Para 84][975-B-D] C Conclusion 19. The amended provisions vide the 2020 Act, namely, Sections 7, 12(1A), 12A and 17 of the 2010 Act are intra vires the Constitution and the Principal Act. As regards Section 12A, the D said provision is to be read down and construed as permitting the key functionaries/office bearers of the applicant (associations/ NGOs) who are Indian nationals, to produce Indian Passport for the purpose of their identification.

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v. State of T. N. & Ors. (1994) 2 SCC 691 : [1994] 1 SCR 579; Delhi Science Forum & Ors. v. Union of India & Anr. (1996) 2 SCC 405 : [1996] 2 SCR 767; BALCO Employees’ Union (Regd. ) v. Union of India & Ors. (2002) 2 SCC B 333 : [2001] 5 Suppl. SCR 511; State of Madhya Pradesh v. Narmada Bachao Andolan & Anr. (2011) 7 SCC 639 : [2011] 6 SCR 443; Charanjit Lal Chowdhury v. The Union of India & Ors. AIR 1951 SC 41 : [1950] SCR 869; The State of Bombay & Anr. v. F. N. Balsara AIR 1951 SC 318 : [1951] SCR 682; Kathi Raning C Rawat v. State of Saurashtra AIR 1952 SC 123 : [1952] SCR 435; Gurbachan Singh v. State of Bombay & Anr. AIR 1952 SC 221 : [1952] SCR 737; The State of Punjab v. Ajaib Singh & Anr. AIR 1953 SC 10 : [1953] SCR 254; Habeeb Mohamed v. The State of Hyderabad D AIR 1953 SC 287 : [1953] SCR 661; Kedar Nath Bajoria v. The State of West Bengal AIR 1953 SC 404 : [1954] SCR 30; Baburao Shantaram More v. Bombay Housing Board & Anr.

AIR 1954 SC 153 : [1954] SCR 572; Harman Singh & Ors. v. Regional Transport Authority, Calcutta Region & Ors. AIR 1954 SC 190 : E [1954] SCR 371; Sakhawant Ali v. State of Orissa AIR 1955 SC 166 : [1955] 1 SCR 1004; Budhan Choudhry & Ors. v. State of Bihar AIR 1955 SC 191 : [1955] 1 SCR 1045; D. P. Joshi v. State of Madhya Bharat & Anr. AIR 1955 SC 334 : [1955] 1 SCR 1215; Hans Muller F of Nurenburg v. Superintendent, Presidency Jail, Calcutta & Ors. AIR 1955 SC 367 : [1955] 1 SCR 1284; Kishan Singh & Ors. v. State of Rajasthan & Ors. AIR 1955 SC 795 : [1955] 2 SCR 531; P. Balakotaiah v. Union of India & Ors. AIR 1958 SC 232 : [1958] SCR 1052; Shri Ram Krishna Dalmia v. G Shri Justice S. R. Tendolkar & Ors. AIR 1958 SC 538 : [1959] SCR 279; Express Newspaper (Private) Ltd. , & Anr. v. Union of India & Ors. AIR 1958 SC 578 : [1959] SCR 12; Khandige Sham Bhat v. Agricultural Income-tax Officer, Kasaragod & Anr. AIR 1963 SC 591 : H 894 SUPREME COURT REPORTS [2022] 19 S. C. R.

A [1963] 3 SCR 809; Raja Bira Kishore Deb, Hereditary Superintendent, Jagannath Temple v. The State of Orissa AIR 1964 SC 1501 : [1964] 7 SCR 32; Ganga Ram & Ors. v. Union of India & Ors. (1970) 1 SCC 377 : [1970] 3 SCR 481; Anant Mills Co. Ltd. v. State of Gujarat & Ors. (1975) 2 SCC 175 : [1975] 3 SCR 220; B Mohan Kumar Singhania & Ors. v. Union of India & Ors. (1992) 1 Supp SCC 594 : [1991] 1 Suppl. SCR 46; Venkateshwara Theatre v. State of Andhra Pradesh & Ors. (1993) 3 SCC 677 : [1993] 3 SCR 616; Dharam Dutt & Ors. v. Union of India & Ors. (2004) 1 SCC C 712 : [2003] 6 Suppl. SCR 151; Basheer @ N. P. Basheer v. State of Kerala (2004) 3 SCC 609 : [2004] 2 SCR 224; O. K. Ghosh & Anr. v. E. X. Joseph AIR 1963 SC 812 : [1963] Suppl. SCR 789; Saghir Ahmad & Anr. v. State of U. P. & Ors. AIR 1954 SC 728 : [1955] 1 SCR 707; Babulal Parate v. The State of Maharashtra D & Ors. AIR 1961 SC 884 : [1961] 3 SCR 423; Daya v. Joint Chief Controller of Imports & Exports & Anr.

AIR 1962 SC 1796 : [1963] 2 SCR 73; Akadasi Padhan v. State of Orissa & Ors. AIR 1963 SC 1047 : [1963] 2 Suppl. SCR 691; Municipal Committee, Amritsar & Ors. E v. State of Punjab & Ors. (1969) 1 SCC 475 : [1969] 3 SCR 447; Madhu Limaye v. Sub-Divisional Magistrate, Monghyr & Ors. (1970) 3 SCC 746 : [1971] 2 SCR 711; Daruka & Co v. Union of India & Ors. (1973) 2 SCC 617 : [1974] 1 SCR 570; Md. Serajuddin & Ors. v. State of Orissa (1975) 2 SCC 47 : [1975] Suppl. F SCR 169; Municipal Corporation of the City of Ahmedabad & Ors. v. Jan Mohammed Usmanbhai and Anr. (1986) 3 SCC 20 : [1986] 2 SCR 700; Sushila Saw Mil v. State of Orissa and Ors. (1995) 5 SCC 615 : [1995] 2 Suppl. SCR 426; Krishnan Kakkanth v. G Government of Kerala & Ors. (1997) 9 SCC 495 : [1996] 7 Suppl. SCR 487; Laxmikant v. Union of India & Ors. (1997) 4 SCC 739 : [1997] 3 SCR 861; Indian Handicrafts Emporium & Ors. v. Union of India & Ors. (2003) 7 SCC 589 : [2003] 3 Suppl. SCR 43; Om Prakash & Ors. v. State of U. P.

& Ors. (2004) 3 SCC H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 895 402 : [2004] 2 SCR 900; People’s Union for Civil A Liberties & Anr. v. Union of India (2004) 9 SCC 580 : [2003] 6 Suppl. SCR 860; State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat & Ors. (2005) 8 SCC 534 : [2005] 4 Suppl. SCR 582; Kerala Bar Hotels Association & Anr. vs. State of Kerala & Ors. (2015) B 16 SCC 421; K. S. Puttaswamy & Anr. v. Union of India & Ors. (2017) 10 SCC 1 : [2017] 10 SCR 569; Gobind vs. State of Madhya Pradesh & Anr. (1975) 2 SCC 148 : [1975] 3 SCR 946; Chintamanrao & Anr. v. The State of Madhya Pradesh AIR 1951 SC 118 : [1950] SCR 759; The State of Madras v. V. G. Row AIR 1952 SC C 196 : [1952] SCR 597; Teri Oat Estates (P) Ltd. v. U. T. , Chandigarh & Ors. (2004) 2 SCC 130 : [2003] 6 Suppl. SCR 1235; Ramlila Maidan Incident, In re (2012) 5 SCC 1 : [2012] 4 SCR 971; Sahara India Real Estate Corporation Limited & Ors. v. Securities and Exchange D Board of India & Anr.

(2012) 10 SCC 603 : [2012] 12 SCR 256; Excel Crop Care Limited v. Competition Commission of India & Anr. (2017) 8 SCC 47 : [2017] 5 SCR 901; A. K. Gopalan v. State of Madras AIR 1950 SC 27 : [1950] SCR 88; and Manohar Lal Sharma v. Union of India & Ors. [2021] 6 SCR 1006 – referred E to. Joseph Lochner v. People of the State of New York 198 U. S. 45 (1905); New State Ice Company v. Ernest A. Liebmann 285 U. S. 262 (1932); West Coast Hotel Company v. Ernest Parrish 300 U. S. 379 (1937); United F States of America v. Carolene Products Company 304 U. S. 144 (1938); American Federation of Labor, Arizona State Federation of Labor et al. v. American Sash & Door Company et al. 335 U. S. 538 (1949) and Ferguson v. Skrupa 372 U. S. 726 (1963) – referred G to. Case Law Reference [2018] 8 SCR 1 distinguished Para 2 (d) [2004] 2 Suppl. SCR 64 referred to Para 3 (a) H 896 SUPREME COURT REPORTS [2022] 19 S. C. R.

A [1954] SCR 1 referred to Para 3 (b) [1978] 2 SCR 621 referred to Para 3 (b) [1981] 2 SCR 79 referred to Para 3 (b) (1992) 3 Supp SCC 217 referred to Para 3 (b) B (2002) 8 SCC 481 referred to Para 3 (b) [1992] 2 Suppl.

SCR 454 referred to Para 3 (b) [2016] 3 SCR 579 referred to Para 3 (b) [2017] 9 SCR 797 relied on Para 3 (b) C [2018] 7 SCR 379 referred to Para 3 (b) [2020] 1 SCR 812 distinguished Para 3 (b) AIR 2020 SC 1363 clarified Para 3 (b) [2017] 12 SCR 774 referred to Para 4 (a) D [1977] 2 SCR 611 referred to Para 4 (a) [1981] 3 SCR 92 relied on Para 5 (l) [2009] 3 SCR 859 relied on Para 5 (l) [2011] 5 SCR 533 referred to Para 5 (p) E [2016] 9 SCR 373 referred to Para 5 (p) [2017] 1 SCR 658 referred to Para 5 (p) [2018] 3 SCR 649 referred to Para 5 (p) [2019] 12 SCR 30 relied on Para 5 (p) F [1970] 3 SCR 530 relied on Para 5 (q) [1982] 1 SCR 947 relied on Para 5 (q) [1992] 1 SCR 406 referred to Para 5 (q) G [1994] 1 SCR 579 referred to Para 5 (q) [1996] 2 SCR 767 referred to Para 5 (q) [2001] 5 Suppl. SCR 511 referred to Para 5 (q) [2011] 6 SCR 443 referred to Para 5 (q) H [1950] SCR 869 referred to Para 5 (r) NOEL HARPER & ORS. v. UNION OF INDIA & ANR.

897 [1951] SCR 682 referred to Para 5 (r) A [1952] SCR 435 referred to Para 5 (r) [1952] SCR 737 referred to Para 5 (r) [1953] SCR 254 referred to Para 5 (r) B [1953] SCR 661 referred to Para 5 (r) [1954] SCR 30 referred to Para 5 (r) [1954] SCR 572 referred to Para 5 (r) [1954] SCR 371 referred to Para 5 (r) C [1955] 1 SCR 1004 referred to Para 5 (r) [1955] 1 SCR 1045 referred to Para 5 (r) [1955] 1 SCR 1215 referred to Para 5 (r) [1955] 1 SCR 1284 referred to Para 5 (r) D [1955] 2 SCR 531 referred to Para 5 (r) [1958] SCR 1052 referred to Para 5 (r) [1959] SCR 279 referred to Para 5 (r) [1959] SCR 12 referred to Para 5 (r) E [1963] 3 SCR 809 referred to Para 5 (r) [1964] 7 SCR 32 referred to Para 5 (r) [1970] 3 SCR 481 referred to Para 5 (r) [1975] 3 SCR 220 referred to Para 5 (r) F [1991] 1 Suppl. SCR 46 referred to Para 5 (r) [1993] 3 SCR 616 referred to Para 5 (r) [2002] 2 SCR 902 relied on Para 5 (r) [2003] 6 Suppl.

SCR 151 referred to Para 5 (r) G [2004] 2 SCR 224 referred to Para 5 (r) [1963] Suppl. SCR 789 referred to Para 5 (u) [1955] 1 SCR 707 referred to Para 5 (v) [1961] 3 SCR 423 referred to Para 5 (v) H 898 SUPREME COURT REPORTS [2022] 19 S. C. R. A [1963] 2 SCR 73 referred to Para 5 (v) [1963] 2 Suppl. SCR 691 referred to Para 5 (v) [1969] 3 SCR 447 referred to Para 5 (v) [1971] 2 SCR 711 referred to Para 5 (v) B [1974] 1 SCR 570 referred to Para 5 (v) [1975] Suppl. SCR 169 referred to Para 5 (v) [1986] 2 SCR 700 referred to Para 5 (v) [1995] 2 Suppl. SCR 426 referred to Para 5 (v) C [1996] 7 Suppl. SCR 487 referred to Para 5 (v) [1997] 3 SCR 861 referred to Para 5 (v) [2003] 3 Suppl. SCR 43 referred to Para 5 (v) [2004] 2 SCR 900 referred to Para 5 (v) D [2003] 6 Suppl. SCR 860 referred to Para 5 (v) [2005] 4 Suppl.

SCR 582 referred to Para 5 (v) (2015) 16 SCC 421 referred to Para 5 (v) [2017] 10 SCR 569 referred to Para 5(y) E [1975] 3 SCR 946 referred to Para 5(y) [1950] SCR 759 referred to Para 5(y) [1952] SCR 597 referred to Para 5(y) [2003] 6 Suppl. SCR 1235 referred to Para 5(y) F [2012] 4 SCR 971 referred to Para 5(y) [2012] 12 SCR 256 referred to Para 5(y) [2017] 5 SCR 901 referred to Para 5(y) G [1950] SCR 88 referred to Para 8 (a) [2015] 5 SCR 963 distinguished Para 8 (d) [2021] 6 SCR 1006 referred to Para 8 (e) H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 899 CIVIL ORIGINAL JURISDICTION: Writ Petition (C) No. 566 A of 2021. Under Article 32 of The Constitution of India With Writ Petition (Civil) Nos. 634 and 751 of 2021. B Gopal Sankaranarayanan, Sr. Adv. , Abishek Jebaraj, Ms. Srishti Agnihotri, Ms. Nupur Raut, Ms. Ishita Chaudhary, Gautam Jha, Pankaj Kumar, Ms. Sweta Jha, Subhash Chandra, Subhash Chhabra, Bijendra Singh, Shishit Kumar Saxena, Mosim Ahmed, Ms. Neha Duhoon, Ms.

Himanshi Bhowal, Udit Thakran, Jagdamba Prasad, Praveen Swarup, C Advs. for the Petitioners. Tushar Mehta, SG, Sanjay Jain, ASG, Udai Khanna, Kanu Agrawal, Balaji Srinivasan, Rajat Nair, Mrs. Deepabali Dutta, B. V. Balaram Das, Sanjay Kapur, Arjun Bhatia, Ms. Megha Karnwal, Mrs. Subhra Kapur, Mrs. Swarupama Chaturvedi, Ms. Saumya Kapoor, Advs. for the D Respondents. The Judgment of the Court was delivered by A. M. KHANWILKAR, J. 1. These petitions under Article 32 of the Constitution of India E primarily assail the constitutional validity of the amendments to the 1 provisions of the Foreign Contribution (Regulation) Act, 2010 vide the 2 Foreign Contribution (Regulation) Amendment Act, 2020 , which has come into effect on 29. 9. 2020, in particular, Sections 7, 12(1A), 12A and 17(1), being manifestly arbitrary, unreasonable and impinging upon the fundamental rights guaranteed to the petitioners under Articles 14, 19 F and 21 of the Constitution. 2. Re: Writ Petition (Civil) No.

566 of 2021 (a) Petitioner No. 1 in this petition along with Carol Faison founded a trust in the name of “The Care and Share Charitable Trust” in G Vijayawada, India (bearing Registration No. 242/1997), in the year 1997. It is the case of the petitioners that the Trust is also registered with the Income Tax authorities and Ministry of Home Affairs, Government of 1 for short, “the 2010 Act” or “the Principal Act”, as the case may be 2 for short, “the 2020 Act” or “the Amendment Act”, as the case may be H 900 SUPREME COURT REPORTS [2022] 19 S. C. R. 3 A India including under the Foreign Contribution (Regulation) Act, 1976 for receipt of foreign funds (FCRA No. 010260151 dated 8. 12. 1998 and renewed on 10. 8. 2016 under the 2010 Act). Petitioner No. 1 is serving as one of the trustees of the said Trust and petitioner No. 2 (Nigel Mills) is a social worker and one of the trustees of the stated Trust.

The Trust is engaged in the social upliftment activity such as helping children below B the poverty line in Vijayawada (Andhra Pradesh, India), street children, children of sex workers, physically challenged kids, shelter orphans, abandoned babies and assisting juveniles detained in the observation home (local reformatory). The Trust has built and is running nine schools in different slums. It has rescued over 1000 street children, 165 infants, HIV positive and AIDS orphans of Vijayawada. The Trust also engages C in daily milk program for 500 kindergarten children since year 2000. The Trust has been awarded National Award for Child Welfare by the Government of India, Ministry of Women and Child Development in the year 2007, for its exceptional work and contribution in the field of child welfare. D (b) The petitioner Nos. 3 and 4 are also trustees of National Worker Welfare Trust (NWWT), which is registered under the Indian Trusts 4 Act, 1882 in Secunderabad, Telangana on 17. 5. 2016.

Even this trust is registered with Ministry of Home Affairs, Government of India under the 2010 Act for receipt of foreign funds (FCRA Registration No. 010230883). It is engaged in rehabilitation of migrant workers, with E International Labour Organisation (ILO) and addresses the concerns of women workers from the marginalised communities and prospective migrant workers (interstate and oversees), families of migrants, communities, leaders of communities, returnees, women organisations, trade unions, local panchayats, Mandal, district and State department F connected with labour and administration and governance related to these workers. Both these trusts, it is urged, are dependent upon foreign contributions to meet their day-to-day expenses. However, with the amendments effected in year 2020 to the provisions of the 2010 Act, a new dispensation has been set forth, which in their opinion, is manifestly 5 arbitrary.

For, it entails in cancellation of certificate of the trust permitting G 3 for short, “the 1976 Act” 4 for short, “the 1882 Act” 5 The expression “certificate” as defined in Section 2(1)(e) of the 2010 Act as amended, reads thus: “2. Definitions. —(1) In this Act, unless the context otherwise requires,— (a) to (e) xxxxxx xxx (e) “certificate” means certificate of registration granted under sub-section (3) of H section 12;” NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 901 [A. M. KHANWILKAR, J. ] receipt of foreign contributions for being utilised towards the activities A of the concerned trust. Similarly, the operational “FCRA account” will be barred from receiving foreign contribution. The petitioner-Trusts and 6 similarly placed persons (individuals/non-profit organisations) shall mandatorily have to shift to new regime and open FCRA account(s) in the specified branch on or before the designated date.

There is no tangible B justification forthcoming for introducing such a change in the dispensation. (c) The petitioners have referred to the Circular issued by the Reserve Bank of India (RBI) dated 6. 2. 2012 in exercise of its power under Section 36(1)(a) of the Banking Regulation Act, 1949, containing detailed guidelines for implementation of the provisions of the 2010 Act C including the opening of FCRA accounts in all scheduled commercial banks (excluding Regional Rural Banks/RRBs) throughout India. Public notice dated 3. 10. 2020 issued by the respondent No. 2 after advent of the changed dispensation owing to the amendment of the provisions of the 2010 Act in the year 2020 is, therefore, excessive and without jurisdiction and, thus, unenforceable in law.

Further, the amendment of D Section 7 of the 2010 Act prohibits the registered person from transferring any foreign contribution irrespective of whether such person is duly registered or not, which was otherwise permitted under the unamended provision. This change is also arbitrary and directly affects the implementation of the social upliftment schemes of the Trusts through E foreign contribution. It is a blanket ban on transfer of foreign contributions, thus affecting the collaborations in developing eco-system(s), especially for smaller and less visible grassroot organisations that may not meet the criteria or be able to submit detailed proposals to get access to grants from foreign countries. The grassroot organisations, in some cases, may not have the track record or meet the eligibility criteria to obtain registration F under the Act and are entirely dependent on the funding/transfer by foundations, such as the petitioner-Trusts.

The intermediary organisations, 6 The expression “person” as defined in Section 2(1)(m) of the 2010 Act as amended, reads thus: “2. Definitions. —(1) In this Act, unless the context otherwise requires,— G (a) to (l) xxxxxx xxx (m) “person” includes— (i) an individual; (ii) a Hindu undivided family; (iii) an association; (iv) a company registered under section 25 of the Companies Act, 1956 (1 of 1956);” H 902 SUPREME COURT REPORTS [2022] 19 S. C. R. A which provide the necessary identification, monitoring and capability building of the smaller non-profit organisations, which would be completely jeopardised because of the changed dispensation. Resultantly, Section 7 read with Section 17(1), as amended, is violative of the rights guaranteed under Articles 19(1)(c) and 19(1)(a) of the Constitution of India. These provisions also suffer from the vice of ambiguity and overbreadth or B over-governance, thereby violating Article 14 as well.

(d) The petitioners have also assailed the validity of Section 12A, whereby it is made mandatory to produce Aadhaar card details of the office bearers/functionaries/directors of the societies/trusts as identification document for the purpose of seeking registration, even C though they are expected to file application for grant of certificate under Section 12 or get their certificate renewed under Section 16. To buttress this assail, petitioners have relied upon the dictum of Constitution Bench of this Court in K. S. Puttaswamy (Retired) & Anr. (AADHAAR) vs. 7 Union of India & Anr. . D (e) The petitioners have also challenged the validity of Sections 17(1) and 12(1A) on the ground that the same suffer from the vice of manifest unreasonableness, ambiguity, overbreadth and impose unreasonable restrictions. Section 17(1) is also discriminatory, as it mandates opening of “FCRA account” and receiving of foreign 8 contribution only at one bank at New Delhi, i. e.

, New Delhi Main Branch E 9 of the State Bank of India , 11, Sansad Marg, New Delhi-110001 on specious ground of logistical issues for verification of accounts at different locations. Broadly on these assertions, the petitioners have prayed for the following reliefs: - “a. To hold and declare that the impugned Sections 7, 12A, 12(1A) F and 17 as inserted in the FCRA, 2010 by the Foreign Contribution (Regulation) Amendment Act, 2020 are ultra vires Articles 14, 19 & 21 of the Constitution of India and the same be struck down as unconstitutional. b. A writ in the nature of certiorari and/or any other writ, order G or direction of like nature setting aside and quashing the th impugned public notice dated 13 October, 2020 issued by the Respondent No. 2 as illegal and unconstitutional. 7 (2019) 1 SCC 1 (paras 490 and 494) 8 for short, “NDMB” 9 H for short, “SBI” NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 903 [A. M. KHANWILKAR, J. ] c.

To direct the Respondents not to interfere with the acceptance A and utilisation of foreign contribution, operation of the existing bank accounts in the scheduled banks and function of the petitioners and its bonafide members, and d. Pass such other order/orders as Your Lordships may deem fit and proper in the facts and circumstances of the case. ” B 3. Re: Writ Petition (Civil) No. 751 of 2021 (a) Petitioner Nos. 1 to 4 in this petition claim to be non-profit organisations/Trusts from all over the country having registration under the 2010 Act and petitioner No. 5 is an individual. The petitioner-Trusts C are voluntary organisations, duly registered under the unamended 2010 Act. They are engaged in carrying out social, educational and/or religious charitable activities for persons across communities.

Their activities range from providing educational and vocational training and food, clothing and medicine for the destitute, to support the disabled and the aged, conducting AIDS awareness camps and taking care of the needs of D widows and orphaned children. They claim to have played pivotal role in COVID-19 relief efforts. Reliance is placed on the dictum of this Court 10 in Public Union for Civil Liberties vs. State of T. N. & Ors. , as to the recognition by this Court regarding indispensable role played by non-profit organisations. E (b) Even these petitioners have assailed amended provisions of the 2010 Act, in particular, Section 17 of the Act being violative of Articles 14, 19(1)(c), 19(1)(g) and 21 of the Constitution of India insofar as it requires opening of primary FCRA account in SBI, NDMB only.

It is their case that non-profit organisations and voluntary organisations such as the petitioner organisations contribute enormously to India’s GDP F and provide livelihood to millions of people through direct employment and social welfare activities undertaken by them. Their role ranges from service delivery and welfare activities and welfare works for community development, promoting democracy, human rights, equitable governance and citizens’ participation. They focus their activities particularly in low G social sector spending in India by tapping into global philanthropy. It is stated that foreign contributions have increased from Rs. 10,282 crore in 2009-2010 to Rs. 16,343 crore in 2018-2019, which is a significant contribution through foreign funds. The amended provisions of the 2010 10 (2004) 12 SCC 381 (para 5) H 904 SUPREME COURT REPORTS [2022] 19 S. C. R.

A Act, however, have altered the compliance procedure including the registration of the Trusts receiving foreign contributions. That change, however, is manifestly arbitrary, irrational and unreasonable. The purpose of provisions such as Section 17 (unamended) and the relevant Rules framed under the Act served the cause of effective monitoring of foreign contribution received, in order to prevent misutilisation of such funds. B However, the amended provision is excessive, irrational, arbitrary and falls foul of test of proportionality. It suffers from the vice of disproportionate restrictions and failure to provide fair procedure. To buttress the grounds of challenge, reliance is placed on K. C. Gajapati 11 Narayan Deo & Ors. vs. State of Orissa ; Maneka Gandhi vs. Union 12 C of India & Anr. ; Ajay Hasia & Ors. vs. Khalid Mujib Sehravardi 13 14 & Ors. ; Indra Sawhney & Ors. vs. Union of India & Ors. ; T. M. A. 15 Pai Foundation & Ors. vs. State of Karnataka & Ors.

; Natural 16 Resources Allocation, In Re, Special Reference No. 1 of 2012 ; Modern Dental College and Research Centre & Ors. vs. State of 17 Madhya Pradesh & Ors. ; Shayara Bano vs. Union of India & D 18 19 Ors. ; Navtej Singh Johar & Ors. vs. Union of India ; K. S. 20 21 Puttaswamy ; Anuradha Bhasin vs. Union of India & Ors. ; and 22 Indian Social Action Forum (INSAF) vs. Union of India . (c) On such assertion, the petitioners have prayed for the following reliefs: - E “a. A writ of mandamus or any other writ/order declaring that Section 17 of the FCRA is violative of Articles 14, 19(1)(c), 19(1)(g) and 21 of the Constitution, in so far as it requires that the primary FCRA account is to be opened exclusively in a branch of the State Bank of India, New Delhi, as notified F by the Respondent No.

1; 11 AIR 1953 SC 375 12 (1978) 1 SCC 248 13 (1981) 1 SCC 722 (para 16) 14 1992 Supp (3) SCC 217 15 (2002) 8 SCC 481 (para 25) G 16 (2012) 10 SCC 1 (para 107) 17 (2016) 7 SCC 353 (paras 60) 18 (2017) 9 SCC 1 (para 101) 19 (2018) 10 SCC 1 20 supra at Footnote No. 7 (para 157) 21 (2020) 3 SCC 637 (paras 78 to 80) 22 AIR 2020 SC 1363 (for short, “INSAF”) (para 15) H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 905 [A. M. KHANWILKAR, J. ] b. A writ of certiorari or any other writ/order quashing the A MHA Notification No. S. O. 3479(E) dated 7 October 2020 issued by Respondent No. 1 as being violative of Articles 14, 19(1)(c), 19(1)(g) and 21 of the Constitution; c. A writ of certiorari or any other writ/order quashing the public notice bearing F. No. II/21022/23/(35)/2019-FCRA- B III dated 13 October 2020 as being violative of Articles 14, 19(1)(c), 19(1)(g) and 21 of the Constitution; d.

A writ of certiorari or any other writ/order quashing the public notice bearing II/21022/36/(58)/2021-FCRA-III dated 18 May 2021 as being violative of Articles 14, 19(1)(c), C 19(1)(g) and 21 of the Constitution. e. Any other orders as deemed fit in the interests of justice. ” 4. Re: Writ Petition (Civil) No. 634 of 2021 (a) This petition is filed as public interest litigation under Article D 32 of the Constitution, challenging the decision of the competent authority in extending the timeline for registration and compliance as per the amended provisions of the 2010 Act being unnecessary and in excess of the authority. It is a counter action filed by an individual for issuing direction and peremptory writ of mandamus against the respondent No.

1 (Union of India) to desist from granting further extension to Non- E 23 Governmental Organisations for complying with the provisions of the 2020 Act; and to maintain register of all NGOs receiving funds from the foreign countries strictly as per the provisions of amended 2010 Act. 24 This petitioner is also relying upon the dictum in INSAF ; adverting to the objective of the 2010 Act. Reliance is also placed on the elucidation F of this Court in In Re: Distribution of Essential Supplies and Services 25 During Pandemic , for issuing a peremptory writ. Also, reliance is 26 placed on the decision in Teesta Atul Setalvad vs. State of Gujarat , to urge that in the past instances have come to the fore regarding misappropriation of funds by NGOs. Lastly, reliance is placed on Rev. 27 Stainislaus vs. State of Madhya Pradesh & Ors. . G 23 for short, “NGOs” 24 supra at Footnote No. 22 (para 18) 25 2021 SCC OnLine SC 339 (Suo Moto Writ Petition (C) No.

3 of 2021) 26 (2018) 2 SCC 372 27 (1977) 1 SCC 677 H 906 SUPREME COURT REPORTS [2022] 19 S. C. R. A (b) The principal relief claimed in this petition, however, does not survive for consideration. For, the date of last extension granted by the competent authority has expired; and no further extension had been granted thereafter during the pendency of this writ petition. Nevertheless, we reproduce the reliefs claimed in this writ petition, which read thus: - B “A. Issue a Peremptory Writ of Mandamus directing Respondent No. 1 not to grant any further extension to the NGOs from complying with the mandate of the FCRA (Amendment) Act, 2020. B. Direct Respondent No. 1 and Respondent No. 2 to maintain C a register of all NGOs who are involved in the receiving of funds received under FCRA, particularly during Covid times. C. Direct the Respondent No. 3 to place on record all information about the steps taken by it with regard to the FCRA violation by NGOs, in the context of Child Rights? D D.

Pass such other Order or directions as this Hon’ble Court may deem fit in the facts and circumstances of the case for doing complete justice in the matter. ” 5. Common reply of Respondent-Union of India (a) Respondents have filed a common affidavit in response to the E averments made in the three writ petitions. The thrust of their plea is that the amendment does not bar any person to transact in foreign contribution provided it is compliant with the parameters predicated in the 2010 Act including concerning FCRA registration or prior permission. The amendments were necessitated owing to past experience of the F executive and is a matter of legislative wisdom. The amendments are intended to ensure effective regulatory measures regarding inflow and utilisation of foreign funds. These are uniformly applicable and do not discriminate any NGO receiving foreign contribution from foreign donors and its utilisation.

It is stated that the amendments, in no manner, impact the fundamental rights, much less under Articles 14, 19(1)(c), 19(1)(g) G and 21 of the Constitution, as contended. (b) The 2010 Act lays down a clear legislative policy of strict control in respect of foreign contributions and its utilisation for specified activities in the country. This is so because the inputs from concerned stakeholders and duty-holders made it evident that the foreign contribution H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 907 [A. M. KHANWILKAR, J. ] owing to its nature and vast expanse was being abused by some registered A organisations. Indisputably, no absolute right inheres in any one, much less to receive foreign contribution outside the framework delineated by the Parliament and implemented by the executive. Every person receiving foreign contribution is obliged to comply with the regulatory and procedural preconditions.

The regulatory and procedural preconditions have been B specified by law in the form of the 2010 Act and amendments made thereto vide the 2020 Act. The same being quintessence are required to be fulfilled for acceptance of foreign contribution and its utilisation. (c) Notably, in these petitions, no challenge is set forth in respect of amended provisions, as obtained prior to coming into force of the C 2020 Act. The same were complied with by all concerned without any demur. (d) The purpose behind the amendment of 2020, is to make meaningful and effective regulatory arrangement and real-time reporting of utilisation of the foreign contribution for the activity for which it has D been earmarked and permitted to be so used in terms of the registration certificate or prior permission of the competent authority.

(e) The permission to receive foreign contribution is granted to persons for a definite cultural, economic, educational or social programme meant for the benefit of the society, as mandated in Sections 11 and 12 E of the 2010 Act. The dispensation envisaged in the Act is to seek registration or prior permission of the competent authority to receive and utilise foreign contribution. The person having obtained such certificate of registration or prior permission, cannot complain about the regulatory provisions regarding utilisation thereof for the prescribed activities. For, the legislative intent behind enactment of the 2010 Act is F that foreign contribution cannot be allowed unless it is tightly regulated and controlled. (f) The implementation of the 2010 Act increasingly revealed that certain NGOs were involved primarily in routing of foreign contributions only.

They received and utilised foreign contribution by transferring it to G other NGOs, thereby establishing a principal-client relationship. To overcome this mischief, it became necessary to amend the provisions for effective regulatory and control measures in respect of receipt and utilisation of foreign contribution. These amendments were necessitated because of large-scale transfers of foreign contribution and sudden rise in the inflow thereof in the recent past creating several operational H 908 SUPREME COURT REPORTS [2022] 19 S. C. R. A difficulties and malpractices, that threatened to defeat the very purpose of the 2010 Act. The regulatory agencies were finding it difficult to monitor the ultimate utilisation of foreign contribution by the transferee. To stop such violations and malpractices and to fix accountability, it was considered necessary to stop the transfer of foreign contribution and thus ensure that the recipient of the foreign contribution itself utilises the B same.

(g) The need to mandate the utilisation of foreign contribution by the recipient NGO itself, is also on account of the purport of Sections 11 and 12 of the Act. The same predicate that FCRA registration be offered 28 to an association having definite programme to spend the foreign C contribution on purposes useful to society. The NGOs merely indulging in transfer of foreign contribution to other NGOs albeit registered or persons having prior permission, is not the scheme of the 2010 Act. In order to ensure that the purported legitimate activities of NGOs do not result in foreign contribution being diverted from one area of activity to D other area leading to its misuse including threatening the sovereignty and integrity of the country, the Parliament opted the strict dispensation of restricted utilisation of foreign contribution by the recipient NGOs itself for the permitted activities.

The amended provisions are intended to remedy the mischief of endless chain of transfers of foreign contribution from the recipient NGOs to other registered NGOs creating layered E trail of money making it difficult to trace the flow and legitimate utilisation thereof. (h) The successive multiple chain of transfers not only create a layered trail of money, but also lead to substantive portion of foreign contribution being utilised as administrative expenditure by the concerned F entity by claiming it as its own allowance for administrative expenditure to the extent of 50 per cent of the receipt. The aggregate of such administrative expenditure, if reckoned with the aggregate quantum of inflow of funds by the original recipient, would, in a given situation, far exceed the statutory bar of 50 per cent of total contribution received by G 28 The expression “association” as defined in Section 2(1)(a) of the 2010 Act as amended, reads thus: “2. Definitions.

—(1) In this Act, unless the context otherwise requires,— (a) “association” means an association of individuals, whether incorporated or not, having an office in India and includes a society, whether registered under the Societies Registration Act, 1860 (21 of 1860), or not, and any other organisation, by whatever name called;” H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 909 [A. M. KHANWILKAR, J. ] the NGO from abroad. Further, the wisdom of the Parliament was also A in favour of reducing the permissibility of administrative expenditure by limiting it to 20 per cent, so that maximum benefit is reaped by the society at large due to its utilisation for permissible activities of the NGO. (i) The subject amendment became necessary also to obliterate the mischief of foreign powers and foreign State and non-State actors B indulging in activities resulting in interference in the internal polity of the country with ulterior designs.

Resultantly, sub-Section (1A) has been inserted in Section 12 of the 2010 Act, making it essential to furnish details of FCRA account. This is in consonance with the manner specified in Section 17 of the Act. In other words, insertion of sub-Section (1A) C was to infuse compatibility with other provisions of the 2010 Act. To that end, a new section – Section 12A has also been inserted requiring furnishing of Aadhaar card details in lieu of identification document. It is urged that the petitioners have misapplied the exposition of the 29 Constitution Bench in K. S. Puttaswamy . The said decision does not completely rule out the possibility of intrusion into the privacy of a person, D which is backed by a just law.

(j) The core intent behind the provisions such as Section 12A is to facilitate proper identification of person and associations with which the persons are connected and also purposeful real-time monitoring of activities for ensuring that the same are not detrimental to the national E interest. As a matter of fact, the 2010 Act (unamended) itself mandates that benami and fictitious activities are prohibited under the Act. Thus, proper identification of person at the time of registration would ensure proper identification of functionaries of FCRA/NGOs. Such a provision ought to stand the test of legitimate aim and also proportionality test. F (k) The amended Section 17(1) specifies receipt of foreign contribution in designated FCRA account in the SBI, NDMB. An NGO is required to open such account for the purpose of remittances of foreign contribution.

The proviso to Section 17(1) envisages that the FCRA account holder is free to add any FCRA account in any of the scheduled G bank of his choice for the purpose of receipt and utilisation of foreign funds received in his FCRA account with the specified branch of the SBI at New Delhi i. e. , SBI, NDMB. The operation of the FCRA account would be controlled by the account holder itself. The stipulation only requires the inflow of foreign contribution through designated channel 29 supra at Footnote No. 7 H 910 SUPREME COURT REPORTS [2022] 19 S. C. R. A which is to ensure effective implementation of proper regulatory and controlled measures. Sufficient time was given to the FCRA account holder to comply with the formalities as per the new dispensation. (l) Initially, a public notice was issued on 13. 10. 2020 providing for procedure and operation of the designated FCRA account, giving time B till 31. 3. 2021, which came to be extended from time to time until December, 2021.

It is stated that the respondent No. 1 also informed all the FCRA registered associations/organisations through SMS and e-mail on their registered mobile number and e-mail address about the public notice dated 13. 10. 2020. The competent authority also amended the 30 Foreign Contribution (Regulation) Rules, 2011 . It is urged that some C individual hardship may be caused to the registered associations on account of the change, but that cannot be the basis to declare the law made by the Parliament, vide the 2020 Act, invalid. Reliance is placed 31 on M/s. Laxmi Khandsari & Ors. vs. State of U. P. & Ors. and All India Council for Technical Education vs. Surinder Kumar Dhawan 32 D & Ors. , wherein this Court held that the Court must refrain from interfering with policy matters on the specious ground of individual hardship to some persons.

(m) It is further stated that the 2010 Act mandates Ministry of 33 Home Affairs to regulate the receipt and utilisation of foreign contributions in the country. That process involves multiple steps including E audit, inspection and filing of annual return and monitoring of fund flow. Accordingly, a systematic monitoring of FCRA bank account is imperative part of the regulatory measures provided in the Act and the rules made thereunder. It is elaborated that presently there are about 22,600 NGOs holding registration or prior permission for specific project/programme. F These NGOs used to receive foreign contribution in an exclusive bank account of their choice in any bank in India. That resulted in opening of multiple accounts in hundreds of branches spread across the country. This inevitably caused enormous difficulty in monitoring of inflow or outflow of amount from the respective accounts and also during audit process.

Even though the mandate of law obliges the NGOs to file G periodical annual return, however, the inflow and outflow details at a 30 for short, “the 2011 Rules” 31 (1981) 2 SCC 600 32 (2009) 11 SCC 726 33 H for short, “the MHA” NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 911 [A. M. KHANWILKAR, J. ] particular point of time or on real-time basis, association-wise, as well A as, cumulatively, for all such organisations was not forthcoming and monitoring thereof due to scattered distribution of the FCRA accounts across the country seriously affected the monitoring process. Notably, keeping in mind the convenience of the registered associations, they have been given choice to open another FCRA account in any scheduled B bank/branch of their choice after opening of FCRA account in SBI, NDMB, for receiving foreign contribution from any foreign source.

It is urged that the legislative intent behind the 2010 Act and the object sought to be achieved is to curb misuse of foreign contribution threatening the sovereignty and integrity of the nation including impacting the polity. As aforesaid, the amendments were necessitated on account of past C experience and to curb the mischief which was prevalent despite the tight regulatory measures under the 2010 Act. (n) The legislative history has also been highlighted in the common reply filed by respondents. To address the scourge of foreign contribution impacting the national interest was taken note of by way of the 1976 D Act. Certain changes were brought about to that Act in the year 1985, making it more effective. The 2010 Act had been the outcome of a bill drafted in 2006.

The Statement of Objects and Reasons, as mentioned in the said Bill titled as “Foreign Contribution (Regulation) Bill, 2006” recognised that significant developments had taken place since 1984, E such as change in internal security scenario, an increased influence of voluntary organisations, spread of use of communication and information technology, quantum jump in the amount of foreign contribution being received and large-scale growth in the number of registered organisations, necessitating comprehensive legislative approach. The Bill was referred to the Department–related Parliamentary Standing Committee on Home F Affairs. Eventually, the 2010 Act was perceived. This legislative history 34 has been taken note of in the case of INSAF . The amendments effected in the year 2020 had become necessary to ensure that the object of the Act is achieved efficiently. (o) It is urged that the 2010 Act cannot be equated with any other G general legislation.

The object behind this Act is to insulate the democratic polity and public institutions and individuals working in the national democratic space from being unduly influenced with the aid of foreign contribution or foreign hospitality received from foreign source. The object 34 supra at Footnote No. 22 H 912 SUPREME COURT REPORTS [2022] 19 S. C. R. A behind the Act is to secure the sovereignty and integrity of India including public order and public interests. This wisdom of the Parliament cannot be lightly brushed aside being a legislative policy. Reliance is placed on 35 Rajeev Suri vs. Delhi Development Authority & Ors. to buttress this argument. Reliance is also placed on Joseph Lochner vs. People 36 of the State of New York ; New State Ice Company vs. Ernest A. B 37 38 Liebmann ;West Coast Hotel Company vs. Ernest Parrish ; United 39 States of America vs. Carolene Products Company ; American Federation of Labor, Arizona State Federation of Labor et al. vs.

40 41 American Sash & Door Company et al. ; and Ferguson vs. Skrupa . 42 It is urged that the doctrine that prevailed in Joseph Lochner that due C process authorises Courts to hold laws unconstitutional whenever they believe the legislature has acted unwisely - has long since been discarded. (p) After having said so, reliance is also placed on the decision of this Court in State of Himachal Pradesh & Ors. vs. Himachal Pradesh 43 Nizi Vyavsayik Prishikshan Kendra Sangh ; Ravindra D Ramachandra Waghmare vs. Indore Municipal Corporation & 44 45 Ors. ; State of Himachal Pradesh & Ors. vs. Satpal Saini ; and Union of India vs. Indian Radiological & Imaging Association & 46 Ors. , in support of the argument that Court should be loath in interfering with the wisdom of the legislature adopting a particular policy. Further, the Court cannot substitute such wisdom in the guise of exercise of the E power of judicial review. Reliance is also placed on the enunciation in 47 Dr. Ashwani Kumar vs.

Union of India & Anr. to contend that the Constitution predicates that legislature is supreme and has a final say in matters of legislation when it reflects on alternatives and choices with inputs from different quarters, with a check in the form of democratic F accountability and a further check by the Courts which exercise the 35 2021 SCC Online 7 (paras 570 and 571) 36 198 U. S. 45 (1905) 37 285 U. S. 262 (1932) 38 300 U. S. 379 (1937) 39 304 U. S. 144 (1938) 40 335 U. S. 538 (1949) G 41 372 U. S. 726 (1963) 42 supra at Footnote No. 36 43 (2011) 6 SCC 597 (para 21) 44 (2017) 1 SCC 667 (para 46) 45 (2017) 11 SCC 42 (para 6) 46 (2018) 5 SCC 773 (para 16) 47 (2020) 13 SCC 585 (paras 25-27) H NOEL HARPER & ORS. v. UNION OF INDIA & ANR. 913 [A. M. KHANWILKAR, J. ] power of judicial review.

It is further held in this decision that it is not for A the Judges to seek to develop new all-embracing principles of law in a way that reflects the stance and opinion of the individual judges when the society/legislature as a whole are unclear and substantially divided on the relevant issues. (q) Reliance is also placed on Rustom Cavasjee Cooper vs. Union B 48 of India , restating the above principle and observing that the Court will not sit in appeal over the policy of Parliament in enacting a law. 49 Reliance is also placed on R. K. Garg vs. Union of India & Ors. , wherein it has been observed that the Courts have only the power of destroying and not to reconstruct. Further, in respect of economic C regulation being replete with complexity, self-limitation needs to be exercised by the Courts, thereby following the path of judicial wisdom. Reliance is also placed on Peerless General Finance and Investment 50 Co. Limited & Anr. vs. Reserve Bank of India ; Premium Granites 51 & Anr.

vs. State of T. N. & Ors. ;Delhi Science Forum & Ors. vs. 52 Union of India & Anr. ; BALCO Employees’ Union (Regd. ) vs. D 53 Union of India & Ors. ; and State of Madhya Pradesh vs. Narmada 54 Bachao Andolan & Anr. . Relying on said decisions, it is urged that the gravamen of grievance of the writ petitioners is essentially about the operational inconvenience being caused to them. That cannot be the basis to declare the amended provisions being violative of fundamental E rights and more so, because the same are necessitated to overcome the misuse of foreign contribution from foreign sources threatening the sovereignty of the nation. (r) Dealing with the plea regarding amended provisions being violative of Article 14 of the Constitution, it is urged that the Constitution F does not predicate that all laws must be general in character and universal in application.

On the other hand, it is open to the legislature to distinguish and classify persons or things for the purposes of legislation. Indeed, such discrimination and classification should not be arbitrary and ought to be in conformity with the intelligible differentia having a reasonable 48 G (1970) 1 SCC 248 (para 63, 70) 49 (1981) 4 SCC 675 (para 8) 50 (1992) 2 SCC 343 (para 31) 51 (1994) 2 SCC 691 (para 54) 52 (1996) 2 SCC 405 (para 7) 53 (2002) 2 SCC 333 (para 38) 54 (2011) 7 SCC 639 (para 36) H 914 SUPREME COURT REPORTS [2022] 19 S. C. R. A relation to the object sought to be achieved by the law in question. The impugned amendments of 2020 are fully compliant. The amendments fulfil the “twin test of classification” founded on the factum of classification between Indian citizens and foreigners, so much so, Indian contribution and foreign contribution.

The amendments fulfil the permissible classification principle and are founded on intelligible B differentia and distinguish contributions to be received by the NGO. In other words, if an NGO intends to receive foreign contribution, it must fulfil the necessary conditions and comply with the formalities specified 55 therefor. Thus understood, the exposition in Shayara Bano , pressed into service by the writ petitioners, will be of no avail. Whereas, C classification by law is not forbidden. It is not open to belittle the legislative intent behind the amendments by giving it the colour of manifest arbitrariness. The argument that the law suffers from the vice of manifest arbitrariness, must be examined on the touchstone of the enunciation by this Court in series of judgments. Reliance is placed on Charanjit Lal 56 Chowdhury vs. The Union of India & Ors. ; The State of Bombay D 57 & Anr. vs. F. N. Balsara ; Kathi Raning Rawat vs. State of 58 59 Saurashtra ; Gurbachan Singh vs.

State of Bombay & Anr. ; The 60 State

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