Noel Harper & Ors. vs Union of India & Anr.
Background
Several charitable trusts and NGOs (including Care and Share Charitable Trust and National Worker Welfare Trust, which run child-welfare and migrant-worker programmes and depend on foreign donations) challenged the 2020 amendments to the Foreign Contribution (Regulation) Act, 2010. The amended law required every FCRA-registered organisation to open a designated "FCRA account" only at a specified branch of the State Bank of India in New Delhi as the sole channel for receiving foreign funds, barred registered persons from transferring foreign contributions to any other person/sub-grantee, and required Aadhaar numbers of all office-bearers/key functionaries as identification for registration or renewal. The petitioners argued these changes were manifestly arbitrary and violated their fundamental rights under Articles 14, 19 and 21 by making compliance impractical, especially for organisations far from Delhi.
Decision Breakdown
The Supreme Court upheld the constitutional validity of Sections 7, 12(1A), 12A and 17(1) of the amended Act in their entirety. It held that receiving foreign contribution is not a fundamental right but a privilege/permission granted by the State, which can be strictly regulated in the interests of the sovereignty, integrity and security of the country; Parliament had a legitimate basis for the changes, noting that over 19,000 registrations had been cancelled for violations and that foreign inflows had nearly doubled between 2010-2019. Requiring a single designated FCRA bank account was found to be only a "one-time exercise" and not unduly burdensome, since organisations remain free to operate multiple accounts elsewhere to actually utilise the funds once received, and since the designated bank confirmed accounts could be opened and operated online without physical presence. On identification, the Court "read down" Section 12A so that Indian nationals among an organisation's key functionaries may furnish their Indian passport instead of mandatorily an Aadhaar number, treating passport submission as valid compliance.
Lesson Learnt
The right to receive foreign donations is a statutory privilege, not a fundamental right, so Parliament can impose strict, centralised regulatory conditions on NGOs handling foreign funds (like a single designated bank account and identity verification of key office-bearers) in the interest of national security and accountability, so long as the regulation stops short of an outright prohibition on associating or doing charitable work.