An organisation which has no connection whatsoever - with politics - is not precluded from foreign contributions; SC.

Supreme Court of India

Justice L. Nageswara Rao & Justice Deepak Gupta

The SC {Indian Social Action Forum (INSAF) v. Union of India} holds that a balance has to be drawn between the object that is sought to be achieved by the legislation and the rights of the voluntary organisations to have access to foreign funds. It was held that the purpose for which the statute prevents organisations of a political nature from receiving foreign funds is to ensure that the administration is not influenced by foreign funds. It was further held that Prohibition from receiving foreign aid, either directly or indirectly, by those who are involved in active politics is to ensure that the values of a sovereign democratic republic are protected. It was held that, on the other hand, such of those voluntary organisations which have absolutely no connection with either party politics or active politics cannot be denied access to foreign contributions. Therefore, it was held that such of those organisations which are working for the social and economic welfare of the society cannot be brought within the purview of the Act or the Rules by enlarging the scope of the term ‘political interests’. The SC directed that the expression ‘political interests’ in Rule 3 (v) has to be construed to be in connection with active politics or party politics. 

It was held by the SC that to save the provision from being declared as unconstitutional, it was directed that it is only those organisations which have connection with active politics or take part in party politics, that are covered by Rule 3 (vi). Further held, to make it clear, such of those organisations which are not involved in active politics or party politics do not fall within the purview of Rule 3 (vi). 

In the present case, the Appellant filed a Writ Petition in the High Court of Delhi for a declaration that Sections 5 (1) and 5 (4) of the Foreign Contribution (Regulation) Act, 2010 and Rules 3 (i), 3 (v) and 3 (vi) of the Foreign Contribution (Regulation) Rules, 2011, are violative of Articles 14, 19 (1) (a), 19 (1) (c) and 21 of the Constitution of India. The High Court dismissed the Writ Petition, aggrieved by which this appeal had been filed before the SC. The SC disposed of the appeal by directing as aforesaid.