By Ajay K. Agrawal
The apex court recently declined to grant any interim relief to NGOs whose licenses were not renewed by the Ministry of Home Affairs under the Foreign Contribution (Regulation) Act (FCRA) following their expiry in November 2021. The three judge bench, comprising Justices AM Khanwilkar, Dinesh Maheshwari and C T Ravikumar, was hearing a PIL filed by a US-based organisation, Global Peace Initiative, and its founder, which had challenged the expiry of licenses of over 6,000 NGOs under FCRA. They had challenged the decision of the Ministry of Home Affairs to cancel or renew their registration under FCRA 2010 and sought an extension of their licenses.
The Court asked them to make a representation to the concerned authorities and said that the fate of these licenses be decided on merit and in accordance with the law.
The centre, represented by Solicitor General Tushar Mehta, told the Court that FCRA registration of 11,594 NGOs, who had applied within the cut-off date, had already been extended. Senior Advocate Sanjay Hegde, appearing for the petitioners, highlighted the work done by the NGOs during the Covid-19 pandemic and said a decision regarding their licences should not have been enforced during the time of the pandemic. The petitioners urged the Court to direct the centre to exercise its powers under Section 50 of FCRA 2010 and exempt all NGOs from the FCRA till such time as Covid-19 continues to be a “notified disaster” under the Disaster Management Act. The petitioners also said that the role of NGOs in helping to combat the pandemic had been acknowledged by the centre, the NITI Aayog and the Prime Minister’s Office itself.
Mehta apprised the bench that the government was conscious of the situation and those NGOs who had not sought relief would not get it. The bench said that no interim relief would be given, and the petition would be taken up after it had pronounced its judgment in the pending Noel Harper vs Union of India case on the validity of the amendments made to FCRA in 2020.
The recent changes in law have stipulated that NGOs can receive foreign contributions only through new FCRA accounts in the State Bank of India. Although the amended Act has been challenged in the top court, adjudication would take time given pendency of cases. On November 9, last year, the Supreme Court had reserved its verdict on the question of validity of the amendments.
In March 2020, the Supreme Court in a judgment based on a petition filed by the Indian Social Action Forum challenging certain provisions of FCRA 2010 and the Foreign Contribution (Regulation) Rules 2011—which gave the centre unguided power to brand organisations as “political” and shut down their access to foreign funds—had declared that the centre could not brand an organisation as political and deprive it of its right to receive foreign funds for legitimate forms of dissent like bandh, hartal, road roko or jail bharo to aid a public cause.
Till December 31, 2021, there were 22,762 FCRA-registered organizations. On January 1, the number came down to 16,829. According to the officials, the FCRA licences of 18,778 organisations were expiring between September 29, 2020 and December 31, 2021. Of them, as many as 12,989 organisations had applied for renewal of the FCRA licence. Since 5,789 organisations did not apply for the renewal of the FCRA licence, they were deemed to have ceased to be registered organizations. In addition, renewal applications of 179 organisations were also rejected by the home ministry due to various reasons. The decision has been criticised in several quarters.
It is pertinent to note that last year, the centre had told the Supreme Court that there exists no fundamental right to unbridled foreign contribution, while replying to a plea challenging the home ministry’s notification, dated May 18, 2021, which had extended the date for compliance of specific provisions of the Foreign Contribution Regulation (Amendment) Act, 2020 (Noel Harper vs Union of India).
It has also been stated that the Foreign Contribution (Regulation) Amendment Act, 2020, does not bar any person who fulfils all the criteria to seek FCRA registration or seeks prior permission. Regarding the issue of obtaining Aadhaar numbers of key functionaries of NGOs, citing the judgment of the Supreme Court in KS Puttaswamy vs Union of India, the government said that the Aadhaar numbers of office bearers, key functionaries and members would facilitate proper identification of persons and associations with which the persons are connected for facilitating monitoring of activities of associations.
The FCRA 2010 is a consolidating Act whose aim is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to national interest and for matters connected therewith. The Ministry of Home Affairs, introduced the Foreign Contribution (Regulation) Amendment Bill, 2020, which made several changes to the existing Act, including making it mandatory for office bearers of any NGO to provide their Aadhaar numbers. It also gives the government the power to hold a summary enquiry to prevent an organization from using foreign funds. These changes were intended to increase transparency regarding the use of foreign money for non-governmental organizations.
The Indian government’s view is that many NGOs receiving foreign funding are involved in anti-development activism and hence pose a negative impact on economic growth. An Intelligence Bureau report, titled “Impact of NGOs on Development,” claims that NGOs and their international donors are also planning to target many fresh economic development projects in India.
In September 2015, the Ministry of Home Affairs cancelled the FCRA registration of Greenpeace India, making it impossible for it to receive any foreign donation. The measure was said to have been taken on the grounds of “prejudicially affecting the public interest and economic interest of the state”.
At the 2017 “peer review” by the UN Human Rights Council held in Geneva, the Indian government faced tough questioning by fellow nations. The attack on FCRA came from nearly a dozen countries, mostly from Europe. The charge was led by the US and Germany, who called the Act and the government’s actions “arbitrary”.
In September 2020, human rights watchdog Amnesty International declared that it was wrapping up its Indian operations and shutting offices due to a “complete freeze” on its finances by the Narendra Modi-led National Democratic Alliance government after the FCRA was amended earlier that month.
In the last few years, the centre has cracked down on NGOs, which were allegedly involved in anti-India activities. The home ministry had issued directions to investigate and take appropriate legal action against such organizations. On the other hand, organizations which work for the country and countrymen in the spirit of public welfare and follow the Indian law, are given proper help by the Union government. The amendment made in 2020 by the centre was intended to crack down on NGOs and other institutions carrying out suspicious activities. Due to this, action is now being taken against thousands of NGOs.
Earlier, there were many different bank accounts of NGOs, in which donations of crores of rupees came from abroad. Under the new amendment, a recognized bank branch has been earmarked for receiving foreign donations to NGOs. It is mandatory to open a bank account in the State Bank of India’s branch located in Connaught Place, Delhi. With this, banking transactions can be tracked.
Auditing of NGOs has also been made mandatory and the information must be given when demanded by the agency appointed by the government. For the purpose of restricting the misuse of funds which the organization has received from abroad, the money should be spend only on the work/project for which it has been sought. Moreover, all the information and evidence related to the receipt of money and its use will have to be kept safely by the organisation.
Till a few years ago, the process of renewal of licenses of NGOs was very loose, leading to many suspicious activities and transactions worth crores of rupees. Now, the process of renewal has been made transparent. In other words, there will be no amnesty.
—The author is Advocate, Supreme Court