Foreign Funds Should be Not Allowed to NGOs: Supeme Court

New Delhi: The Supreme Court on Tuesday observed that foreign funds should not be allowed to be donated to an NGO, without the declaration of its objective and purpose, for which funds were meant.

A bench headed by Justice A.M. Khanwilkar said in this aspect, the law is not being followed in true spirit and told the Centre to ensure that there is no misutilisation of funds by NGOs, which receive foreign funds.

The bench, also comprising Justices Dinesh Maheshwari and C.T. Ravikumar, told the Centre that if it has not been able to ensure so in the past, then it should now ensure that funds are utilised for purpose they have been received.

The bench emphasised that if funds are given to NGOs without declaring the objective, then there is a possibility that it could be used for any activities, for which the NGO is not registered.

While reserving its verdict on a plea challenging constitutional validity of amendments to the Foreign Contribution Regulation Act, the bench said that the loophole needed to be plugged and asked the Centre to look into the matter.

Senior advocate Gopal Sankaranarayanan, representing the petitioner NGOs, contended before the bench that this hearing has been less about what they are challenging and more about what they have not challenged. He added that the fact that 19,000 NGOs were de-recognised is proof that the system is working.

The Centre had told the Supreme Court that there is no fundamental right to receive unbridled foreign contributions without any regulation, in its defence to the 2020 amendments to the Foreign Contribution (Regulation) Act (FCRA).

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