Plea in SC to quash MHA's refusal to renew FCRA licenses of NGOs, and its restrictions on their accepting foreign funds

A public interest litigation has been filed in the Supreme Court urging the Court to quash the decision of the Union Ministry of Home Affairs (MHA) refusing renewal of the Foreign Contribution (Regulation) Act, 2010 (FCRA) licenses of close to 6,000 NGOs.

The plea seeks to quash a public notice issued by the MHA on December 31 last year to the extent that it bars organizations whose applications for renewal of registration have been rejected, to not accept or utilise the foreign funds received.

It also seeks to quash the MHA's refusal to renew the FCRA license of Missionaries of Charity (MoC), the Catholic religious congregation set up by the Nobel laureate, Mother Teresa. The refusal was on the ground of not meeting eligibility conditions and after "some adverse inputs" were received by the MHA. It may be noted that on January 7, the MHA restored MoC's FCRA license.

In addition, the petition urges the Court to issue a direction to the MHA to extend the validity of registration of those organisation that had failed to apply for the renewal of registration, till such time as COVID-19 continues to be notified a 'disaster' under the Disaster Management Act, 2005.

The FCRA requires organisations that do charitable work to register with the government or obtain prior permission for the receipt of foreign funds.

The petition filed by the NGO, Global Peace Initiative, a Texas-based organisation claiming to have been working with several organisations in India, including the MoC associated with the late Mother Teresa, to serve widows and orphans, has contended that the decision of the MHA violates the rights of the organisations, their workers as well as the millions of Indians they serve.

This is especially relevant at a time when the country is facing the third wave of the COVID-19 virus, the plea states. Explaining the reasons for approaching the Court, the petition states that the registration certificates under FCRA of a significant number of NGOs, have either been canceled or are on the verge of cancellation.

"These NGOs, which play a prominent role in society, have been mandated to renew their registration certificates, under sections 12 and 16 of the FCRA. In the absence of such renewed and relatively more onerous registration licenses, the NGOs have been prohibited from receiving and/or utilising foreign contributions to their organisations. The foreign contributions, in fact, are generally of vital importance for the smooth operations of such organisations. Therefore, any prohibition on the NGOs from receiving and/or utilising such foreign contributions severely and unfairly impact the financial viability of running such organisations, and is violative of fundamental rights of such organisations", the plea states.

The petition highlights the pendency of the batch of petitions in which the Supreme Court has reserved the judgment on the validity of the 2020 amendment to the FCRA, 2010. The 2020 amendment, among other things, prohibits the transfer of foreign funds and mandates the opening of FCRA primary account exclusively in a branch of the State Bank of India in New Delhi.

"Despite the pending of the petition challenging the provisions of the FCRA Amendment Act, 2020, and this Hon'ble Court having reserved judgment in the aforementioned case, the Respondent has illegally proceeded to impose the provisions of the said FCRA Amendment Act, 2020. By virtue of such imposition of the FCRA Amendment Act, 2020, the FCRA registration of several prominent NGOs, including the Missionaries of Charity, Calcutta, have been cancelled/not renewed by the Respondent…", the petition reads.

It adds that the cancellation/non-renewal of the registration of close to 6000 NGOs at a time when the validity of the amendments to the FCRA was pending determination, is arbitrary.

"It is pertinent to note that the Respondent had recognized that it was not possible to comply with the requirements of the statute in view of various exigencies including the Covid-19 pandemic. It is for this reason that various extensions were given for entities to comply. There is no explanation for the sudden change in policy decision on the part of the Respondent", the petition contends.

The petition points out the paradox that the Centre has chosen to refuse the renewal of the FCRA licenses of these NGOs, despite the Centre, Niti Aayog, and the Prime Minister's Office itself, acknowledging their role in combating the pandemic. Cancellation of the licenses of close to 6000 NGOs at this time will hamper relief efforts and lead to denial of aid to citizens in need, it says.

  The petition has been filed through Advocate-on-Record Aditya Jain.