Chaini Parwani –
Published On: November 10, 2021 at 10:56 IST
The Supreme Court on Tuesday stated that NGOs should not be permitted to receive Foreign Funds if the donor did not declare the objective for which the money is to be spent and that the Centre has diminished the purpose of the Foreign Contribution Regulation Act (FCRA) by not alleging on such a Provision.
A Bench comprising of Justices A M Khanwilkar, Dinesh Maheshwari, and C T Ravikumar stated as per Section 8 of the Foreign Contribution Regulation Act, acknowledgment has to be made at the outset regarding the motive for which a contribution has been made and directed the Government to make its stand clear on the matter.
Section 8 states that every person who is registered and granted a certificate or given prior permission under the Act and receives any foreign contribution shall utilize such contribution for the purposes for which the contribution has been received.
Solicitor General Tushar Mehta claimed that an NGO can utilize the fund for activities they are certified which could be Social, Cultural, Religious purposes.
The Bench replied that even in cases where an NGO is registered to carry out various activities, the NGO is bound to spend Foreign Funds only for the motive for which money was contributed and that in such cases an NGO has to maintain separate accounts for carrying out different activities.
The Bench stated while replying to Solicitor General “You are diluting the whole proceedings and intent of the Act. Disclosure has to be made by the donor at the outset regarding for what purpose the contribution is being made. Purpose of the contribution has to be disclosed only then inflow should be allowed. It is another matter that you are not following it. We need a clear stand of the Government on the issue.”
Solicitor General Tushar Mehta while arguing Government’s decision to amend the Act to regulate Foreign Contribution to NGOs, stated that this was to forbid NGOs from making chain-transfers of foreign funds a business.
Further Solicitor General Tushar Mehta stated that there are Intelligence Bureau directions on NGOs exploiting the funds and they cannot allege to have a Fundamental Right to receive funds from Broad.
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