Organisations working for the social and economic welfare of the society not political under FCRA

The Supreme Court delivered a significant verdict stating that if an organisation is not involved in active politics or party politics, but support public causes by resorting to legitimate means of dissent like 'bandh', 'hartals' etc., then it cannot be deprived of its legitimate right of receiving foreign contributions.

The petitioner contended the provisions in the FCRA violated fundamental rights in Articles 14, 19 (1) (a), 19 (1) (c) and 21a of the Constitution.

The verdict came on a plea by NGO India Social Action Forum (INSAF), challenging the constitutional validity of Section 5 (1) and 5 (4) of the Foreign Contribution (Regulation) Act (FCRA), 2010 and other rules, which gave Centre ambiguous and unbridled discretion to categorise any organisation as "organisation of political nature, not being a political party", and thereby blocking it from receiving foreign contributions.

Section 5 of the Foreign Regulations Act states the procedure to notify an organisation of a political nature.

1. The Central Government may, having regard to the activities of the organisation or the ideology propagated by the organisation or the programme of the organisation or the association of the organisations with the activities of any political party, by an order published in the Official Gazette, specify such organisation as an organisation of a political nature not being a political party, referred to in clause (f) of sub-section (1) of section 3: Provided that the Central Government may, by rules made by it, frame the guidelines specifying the ground or grounds on which an organisation shall be specified as an organisation of a political nature.
2. Before making an order under sub-section (1), the Central Government shall give the organisation in respect of whom the order is proposed to be made, a notice in writing informing if of the ground or grounds, on which it is proposed to be specified as an organisation of political nature under that sub-section.
3. The organisation to whom a notice has been served under sub-section (2), may, within a period of thirty days from the date of the notice, make a representation to the Central Government giving reasons for not specifying such organisation as an organisation under sub-section (1): Provided that the Central Government may entertain the representation after the expiry of the said period of thirty days, if it is satisfied that the organisation was prevented by sufficient cause from making the representation within thirty days.
4. The Central Government may, if it considers it appropriate, forward the representation referred to in sub-section (3) to any authority to report on such representation.
5. The Central Government may, after considering the representation and the report of the authority referred to in sub-section (4), specify such organisation as an organisation of a political nature not being a political party and make an order under sub-section (1) accordingly.
6. Every order under sub-section (1) shall be made within a period of one hundred and twenty days from the date of issue of notice under sub-section (2): Provided that in case no order is made within the said period of one hundred and twenty days, the Central Government shall, after recording the reasons therefor, make an order under sub-section (1) within a period of sixty days from the expiry of the said period of one hundred and twenty days.

Clarity on words "political interest"

• The expression 'political interests' in Rule 3 (v) (rules of FCRA) has to be construed to be in connection with active politics or party politics
• It is clear from the provision itself that bandh, hartal, rastaroko etc., are treated as common methods of political action. Any organisation which supports the cause of a group of citizens agitating for their rights without a political goal or objective cannot be penalised by being declared as an organization of a political nature.

Objectives of FCRA

• regulate the acceptance, utilization and accounting of foreign contribution and acceptance of foreign hospitality by a person or association.
• consolidate the law to regulate, acceptance and utilisation of foreign contribution or foreign hospitality and prohibit the same for any activities detrimental to the national interests;
• prohibit organisations of political nature, not being political parties from receiving foreign contribution;

FCR Rules 2011 (Rule 3) contain the following guidelines for determining whether an organisation is ‘political in nature’:

1. organisations having avowed political objectives in its Memorandum of Association or bylaws;
2. any trade union whose objectives include activities for promoting political goals;
3. any voluntary action group with objectives of a political nature or which participates in political activities;
4. front or mass organisations like students unions, workers unions, youth forums and women’s wings of a political party;
5. organization of farmers, workers, students, youth based on caste, community, religion, language or otherwise, which is not directly aligned to any political party but whose objective, as stated in their Memorandum of Association or activities gathered through other material evidence, include steps towards advancement of political interests of such groups;
6. any organization by whatever name called, which habitually engages itself in or employs common methods of political action like ‘bandh’ or ‘hartal’ or ‘rastaroko’, ‘rail roko’ or ‘jail bharo’ in support of public causes.