Holding

Sections 5(1) and 5(4) of the Foreign Contribution (Regulation) Act, 2010 and Rules 3(i), 3(v) and 3(vi) of the 2011 Rules are constitutionally valid, with Rules 3(v) and 3(vi) interpreted narrowly to apply only to organisations engaged in active or party politics.

Summary

The Indian Social Action Forum (INSAF), a registered society, challenged the constitutionality of Sections 5(1) and 5(4) of the Foreign Contribution (Regulation) Act, 2010 and Rules 3(i), 3(v) and 3(vi) of the Foreign Contribution (Regulation) Rules, 2011, alleging vagueness and violation of Articles 14, 19(1)(a), 19(1)(c) and 21 of the Constitution. The High Court dismissed the writ petition and INSAF appealed to the Supreme Court. The Court held that Section 5(1) is not vague, Section 5(4) does not suffer constitutional infirmity, and the organization cannot invoke Article 19 as it is not a citizen. Rule 3(i) was upheld as a valid classification of organisations with avowed political objectives. Rule 3(v) and Rule 3(vi) were found to be susceptible to misuse but were saved by a narrow, purposive construction limiting their application to entities involved in active or party politics. Consequently, the appeal was dismissed and the provisions were upheld.

Issues considered

Whether Section 5(1) of the FCRA 2010 is vague and violative of Article 14.
Whether Section 5(4) of the FCRA 2010 is unconstitutional for not specifying the authority for representations.
Whether Rule 3(i) of the FCRA Rules 2011 is ultra vires the Act or violative of Articles 14, 19 and 21.
Whether Rule 3(v) of the FCRA Rules 2011 is vague, over‑broad and violative of Articles 14, 19 and 21.
Whether Rule 3(vi) of the FCRA Rules 2011 is vague, over‑broad and violative of Articles 14, 19 and 21.
Whether a registered society can invoke the fundamental rights guaranteed under Article 19.

Legislation cited

Foreign Contribution (Regulation) Act, 2010s. 3(1)(f), s. 48(2)(d), s. 5(1), s. 5(4)
Foreign Contribution (Regulation) Rules, 2011s. 3(i), s. 3(v), s. 3(vi)

Subjects

Foreign Contribution Regulation Actpolitical natureforeign fundingconstitutional validityArticle 14Article 19Article 21vaguenessreading downstatutory interpretationNGO regulation

Judgment

[2020] 4 S.C.R. 903 903

INDIAN SOCIAL ACTION FORUM (INSAF) A
v.
UNION OF INDIA
(Civil Appeal No. 1510 of 2020)
MARCH 06, 2020 B
[L. NAGESWARA RAO AND DEEPAK GUPTA, JJ.]
Foreign Contribution (Regulation) Act, 2010: Purpose of
enactment – Held: It is made to consolidate the law to regulate the
acceptance and utilisation of foreign contribution or foreign
C
hospitality by certain individuals or associations or companies and
to prohibit acceptance and utilisation of foreign contribution or
foreign hospitality for any activities detrimental to the national
interest and for matters connected therewith or incidental thereto.
Foreign Contribution (Regulation) Act, 2010: ss.5(1) and
D
5(4) – Constitutional validity of – The power conferred by the Act
on the Central Government to declare an organisation to be an
organisation of a political nature u/s.5(1) of the Act was challenged
by the Appellant on the ground that no guidelines are provided
for the exercise of such power – s.5(4) of the Act was assailed on
the ground that the authority to which a representation made by E
the aggrieved party is to be forwarded, has not been specified –
Held: s.5(1) does not suffer from the vice of vagueness inviting
the wrath of Art. 14 – s.5(4) cannot be declared as unconstitutional
only on the ground that the authority to whom representation
should be made is not specified – Constitution of India – Arts.14,
F
19(1)(a), 19(1)(c) and 21.
Foreign Contribution (Regulation) Rules, 2011: rr.3(i), 3(v)
and 3(vi) – Constitutional validity of – According to the Appellant,
the guidelines provided in r.3 of the Rules are impermissibly wide,
giving arbitrary discretion to the authorities which would result in
abuse of the power – It was alleged in the Writ Petition that the G
Rules suffer from unreasonableness and arbitrariness – Appellant
prayed for declaring rr.3(i), 3(v) and 3(vi) as violative of the
fundamental rights enshrined in Arts.14, 19(1)(a), 19(1)(c) and 21
of the Constitution – Held: According to r.3(i), an organisation
having avowed political objectives in its memorandum of H
903
904 SUPREME COURT REPORTS [2020] 4 S.C.R.

A association or bye laws is an organisation of a political nature –
As the intention of the legislature is to prohibit foreign funds in
active politics, an Association with avowed political objectives (i.e.
to play a role in active politics or party politics) cannot be
permitted access to foreign funds – There is no ambiguity in the
provision and hence, cannot be termed as vague – r.3 (i) is not
B
ultra vires the Act – r.3 (v) deals with organisations of farmers,
workers, students etc. which are not directly aligned to any political
party but objectives of which include steps towards advancement
of ‘political interests’ of such groups – Prohibition from receiving
foreign aid, either directly or indirectly, by those who are involved
C in active politics is to ensure that the values of a sovereign
democratic republic are protected – On the other hand, such of
those voluntary organisations which have absolutely no connection
with either party politics or active politics cannot be denied access
to foreign contributions – Therefore, such of those organisations
which are working for the social and economic welfare of the
D
society cannot be brought within the purview of the Act or the
Rules by enlarging the scope of the term ‘political interests’ – The
expression ‘political interests’ in r.3 (v) has to be construed to be
in connection with active politics or party politics – Any
organisation which habitually engages itself in or employs common
E methods of political action like ‘bandh’ or ‘hartal’, ‘rasta roko’,
‘rail roko’ or ‘jail bharo’ in support of public causes can also be
declared as an organisation of political nature, according to the
guideline prescribed in r.3 (vi) – Support to public causes by
resorting to legitimate means of dissent like bandh, hartal etc.
cannot deprive an organisation of its legitimate right of receiving
F
foreign contribution – It is clear from the provision itself that
bandh, hartal, rasta roko 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 penalized by being declared as an
G organisation of a political nature – To save this provision from
being declared as unconstitutional, it is held that it is only those
organisations which have connection with active politics or take
part in party politics, that are covered by r.3 (vi).
Interpretation of Statutes: Two interpretations – Held: In case
H of ambiguity in the language used in the provision of a statute,
INDIAN SOCIAL ACTION FORUM (INSAF) v. 905
UNION OF INDIA

the Courts can take aid from the historical background, the A
Parliamentary debates and the aims and objects of the Act –
Foreign Contribution (Regulation) Rules, 2011.
Disposing of the appeal, the Court
HELD: 1. The Foreign Contribution (Regulation) Act, 1976
was enacted to regulate the acceptance and utilization of foreign B
contribution or foreign hospitality by certain persons or
associations with a view to ensure that parliamentary
institutions, political associations, academic and other voluntary
organisations as well as other individuals working in important
areas of national life may function in a manner consistent with C
the values of a sovereign democratic republic and the matters
connected therewith and incidental thereto. In view of several
deficiencies in the 1976 Act, a fresh law in the shape of the
Foreign Contribution (Regulation) Act, 2010 was made by
repealing the 1976 Act. The long title of the 2010 Act indicates
that it is made to consolidate the law to regulate the acceptance D
and utilisation of foreign contribution or foreign hospitality by
certain individuals or associations or companies and to prohibit
acceptance and utilisation of foreign contribution or foreign
hospitality for any activities detrimental to the national interest
and for matters connected therewith or incidental thereto. [Paras E
5-7] [912-G; 913-A-D-G; 914-A]
Association for Democratic Reforms v. Union of India
(2014) 209 DLT 609 – referred to.
2. Section 5 of 2010 Act stipulates that the Central
Government shall specify an organisation as an organisation of F
a political nature not being a political party as referred to in
Section 3 (1)(f) having regard to the activities of the organisation
or the ideology propagated by the organisation or association
of the organisation with the activities of any political party. It is
further provided in Section 5(1) that the Central Government G
may by Rules frame guidelines specifying the ground(s) on which
an organisation shall be specified as an organisation of a political
nature. Section 48(2)(d) empowers the Central Government to
frame guidelines, specif ying the ground(s) on which an
organisation may be specified as an organisation of a political
nature under Section 5(1). In exercise of power conferred under H
906 SUPREME COURT REPORTS [2020] 4 S.C.R.

A Section 48, the Central Government framed the Foreign
Contribution (Regulation) Rules, 2011. [Paras 8, 9] [914-F-H;
915-A]
3. A plain reading of Section 3 of the Act shows that foreign
contributions should not be accepted by a candidate in an
B election or by a political party or office bearer thereof and
member of any legislature apart from Judges and Government
servants and those belonging to the press, print and electronic
media. Section 3(1)(f) of the Act provides that an organisation
of a political nature is also barred from receiving foreign
contributions. Such an organisation of a political nature may be
C
specified under Section 5(1) by the Central Government.
[Para 10] [915-G-H]
4. Section 5 of the 1976 Act provided that any organisation
of a political nature not being a political party shall not accept
any foreign contribution except with the prior permission of the
D
Central Government. However, according to the 2010 Act, an
organisation of a political nature, as specified, is barred from
accepting foreign contributions. The procedure to notify an
organisation of a political nature is prescribed under Section 5
of the 2010 Act. Before declaring an organisation to be an
E organisation of a political nature not being a political party, the
Central Government shall take into account the activities of the
organisation or the ideology propagated by the organisation or
the programme of the organisation or the association of
the organisation with the activities of any political party. Section
5(1) does not suffer from the vice of vagueness inviting the wrath
F
of Article 14. Section 5(4) cannot be declared as unconstitutional
only on the ground that the authority to whom representation
should be made is not specified. No serious attempt has been
made by the Appellant-organisation to assail Section 5 (4) of the
Act. [Paras 11-13] [916-A-C-H; 917-A]
G
5. The Appellant-organisation is not entitled to invoke
Article 19. No member of the Appellant-organisation is arrayed
as a party. Article 19 guarantees certain rights to ‘all citizens’.
The Appellant, being an organisation, cannot be a citizen for the
purpose of Article 19 of the Constitution. In the absence of any
H member of the association as a petitioner in the Writ Petition,
INDIAN SOCIAL ACTION FORUM (INSAF) v. 907
UNION OF INDIA

the Appellant-organisation cannot enforce the rights guaranteed A
under Article 19 of the Constitution. [Para 15] [917-E-F]
State Trading Corporation of India Ltd. v. The
Commercial Tax Officer, Visakhapatnam [1964] 4 SCR
99 ; Bennett Coleman & Co. v. Union of India (1972)
2 SCC 788 : [1973] 2 SCR 757 ; Tata Engineering B
and Locomotive Ltd. v. State of Uttar Pradesh (2011)
3 SCC 193 : [2011] 3 SCR 134 – relied on.
6. It is settled principle of interpretation that the
provisions of the statute have to be interpreted to give the words
a plain and natural meaning. But, if there is scope for two C
interpretations, the Courts have preferred purposive
construction, which is now the predominant doctrine of
interpretation. In case of ambiguity in the language used in the
provision of a statute, the Courts can take aid from the historical
background, the Parliamentary debates, the aims and objects of
D
the Act including the long title, and the endeavour of the Court
should be to interpret the provisions of a statute to promote the
purpose of the Act. [Para 17] [918-E-F]
K. A. Abbas v. Union of India (1970) 2 SCC 780:
[1971] 2 SCR 446 ; Chiranjit Lal Chowduri v. Union
E
of India [1950] SCR 869 ; Union of India v.
Elphinstone Spinning and Weaving Co. Ltd. (2001) 4
SCC 139 : [2001] 1 SCR 221 – relied on.
7. The object sought to be achieved by the Act is to ensure
that Parliamentary institutions, political associations and
F
academic and other voluntary organisations as well as individuals
working in the important areas of national life should function
in a manner consistent with the values of a sovereign democratic
republic without being influenced by foreign contributions or
foreign hospitality. The long title of the Act makes it clear that
the regulation of acceptance and utilisation of foreign G
contribution is for the purpose of protecting national interest.
Candidates for election and political parties or office bearers of
political parties are barred from accepting any foreign
contribution. The legislative intent is also to prohibit
organisations of a political nature from receiving foreign H
908 SUPREME COURT REPORTS [2020] 4 S.C.R.

A contributions. It is clear that preventing foreign contribution into
the political arena is the object sought to be achieved by the
Act. Prevention of foreign contributions routed through
voluntary organisations which are not connected to party politics
is the reason behind introduction of Section 3(1)(f) and Section
B 5 of the Act. The Central Government is required to take into
account the activities, ideology or the programme of the
organisation including the association of the organisation with
activities of any political party before declaring an organisation
as an organisation of political nature not being a political party.
Guidelines that are prescribed by the Rules indicate that only
C those organisations which are actively involved in politics or
associated with political parties can be declared as organisations
of a political nature. According to Rule 3(I), an organisation
having avowed political objectives in its memorandum of
association or bye laws is an organisation of a political nature.
D As the intention of the legislature is to prohibit foreign funds in
active politics, an Association with avowed political objectives
(i.e. to play a role in active politics or party politics) cannot be
permitted access to foreign funds. There is no ambiguity in the
provision and hence, cannot be termed as vague. Therefore,
there is no substance in the contention of the Appellant that Rule
E
3(i) is ultra vires the Act. [Para 18] [918-G; 919-A-F]
8. Rule 3(v) deals with organisations of farmers, workers,
students etc. which are not directly aligned to any political party
but objectives of which include steps towards advancement of
‘political interests’ of such groups. The submission made on
F
behalf of the Appellant is that such organisations agitating for
their legitimate claims cannot be prevented access to foreign
funds by resorting to the vague term ‘political interests’. It is
correct to state that the words ‘political interests’ are vague and
are susceptible to misuse. However, possible abuse of power is
G not a ground to declare a provision unconstitutional. [Para 19]
[919-G-H; 920-A]
9. Where the provisions of a statute are vague and
ambiguous and it is possible to gather the intention of the
legislature from the object of the statute, the context in which
H the provisions occur and purpose for which it is made, the
INDIAN SOCIAL ACTION FORUM (INSAF) v. 909
UNION OF INDIA

doctrine of “reading down” can be applied. To save Rule 3(v) A
from being declared as unconstitutional, the Court can apply
the doctrine of “reading down”. A balance has to be drawn
between the object that is sought to be achieved by the
legislation and the rights of the voluntary organisations to have
access to foreign funds. The purpose for which the statute B
prevents organisations of a political nature from receiving
foreign funds is to ensure that the administration is not
influenced by foreign funds. Prohibition from receiving foreign
aid, either directly or indirectly, by those who are involved in
active politics is to ensure that the values of a sovereign
democratic republic are protected. On the other hand, such of C
those voluntary organisations which have absolutely no
connection with either party politics or active politics cannot be
denied access to foreign contributions. Therefore, such of those
organisations which are working for the social and economic
welfare of the society cannot be brought within the purview of D
the Act or the Rules by enlarging the scope of the term ‘political
interests’. The expression ‘political interests’ in Rule 3(v) has
to be construed to be in connection with active politics or party
politics. [Paras 20, 21] [920-A-E]
10. Any organisation which habitually engages itself in or E
employs common methods of political action like ‘bandh’ or
‘hartal’, ‘rasta roko’, ‘rail roko’ or ‘jail bharo’ in support of public
causes can also be declared as an organisation of political nature,
according to the guideline prescribed in Rule 3(vi). Support to
public causes by resorting to legitimate means of dissent like
F
bandh, hartal etc. cannot deprive an organisation of its legitimate
right of receiving foreign contribution. It is clear from the
provision itself that bandh, hartal, rasta roko 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 penalized by being G
declared as an organisation of a political nature. To save this
provision from being declared as unconstitutional, it is held that
it is only those organisations which have connection with active
politics or take part in party politics, that are covered by Rule
3(vi). [Para 22] [920-F-G; 921-A] H
910 SUPREME COURT REPORTS [2020] 4 S.C.R.

A Case Law Reference
[1964] 6 SCR 885 referred to Para 4
[1964] 4 SCR 99 relied on Para 15
[1973] 2 SCR 757 relied on Para 15
B [2011] 3 SCR 134 relied on Para 15
[1971] 2 SCR 446 relied on Para 16
[1950] SCR 869 relied on Para 17
[2001] 1 SCR 221 relied on Para 17
C CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1510
of 2020
From the Judgment and Order dated 16.09.2011 of the High
Court of New Delhi in Writ Petition (Civil) No. 5793 of 2011.
Sanjay Parikh, Sr. Adv., Abhimanue Shrestha, Kabir Dixit,
D Ms. Sanjana Srikumar, Advs. for the Appellant.
Tushar Mehta, SG, K.M. Natraj, ASG, Sharath N. Nambiar,
Ms. Indira Bhakur, Vinayak Sharma, Ms. Priyanka Bhat, Vatsal Joshi,
Shrekanthji, Ms. Shraddha Deshmukh, Ankur Talwar, Devashish
Bharukha, Kanu Agrawal, Rahul Jajoo, Advs. for the Respondent.
E The Judgment of the Court was delivered by
L. NAGESWARA RAO, J.
1. The Appellant filed a Writ Petition in the High Court of Delhi
for a declaration that Sections 5 (1) and 5 (4) of the Foreign Contribution
(Regulation) Act, 2010 (hereinafter referred to as ‘the Act’) and Rules
F
3 (i), 3 (v) and 3 (vi) of the Foreign Contribution (Regulation) Rules,
2011 (hereinafter referred to as ‘the Rules’), are violative of Articles
14, 19 (1) (a), 19 (1) (c) and 21 of the Constitution of India. The High
Court dismissed the Writ Petition, aggrieved by which this appeal has
been filed. The Appellant is a registered society involved in resisting
G globalization, combating communalism and defending democracy. In the
Writ Petition filed before the High Court, the Appellant-organisation
stated that it firmly believes in a secular and peaceful social order and
opposes communalism and the targeted attacks on the lives and rights
of people including religious minorities. Several activities of the
Appellant-organisation in the interest of the society have been referred
H to in the Writ Petition. The power conferred by the Act on the Central
INDIAN SOCIAL ACTION FORUM (INSAF) v. 911
UNION OF INDIA [L. NAGESWARA RAO, J.]

Government to declare an organisation to be an organisation of a political A
nature under Section 5 (1) of the Act was challenged by the Appellant
on the ground that no guidelines are provided for the exercise of such
power. Section 5 (4) of the Act was assailed on the ground that the
authority to which a representation made by the aggrieved party is to
be forwarded, has not been specified. According to the Appellant, the
guidelines provided in Rule 3 of the Rules are impermissibly wide, giving B
arbitrary discretion to the authorities which would result in abuse of
the power. It was alleged in the Writ Petition that the Rules suffer from
unreasonableness and arbitrariness. Hence, the Appellant prayed for
declaring Rules 3(i), 3(v) and 3(vi) as violative of the fundamental rights
enshrined in Articles 14, 19(1)(a), 19(1)(c) and 21 of the Constitution. C
2. After considering the relevant provisions of the Act and the
submissions made on behalf of the Appellant, the High Court of Delhi
dismissed the Writ Petition as being bereft of merit.
3. Mr. Sanjay Parikh, learned Senior Counsel appearing for the
D
Appellant submitted that Section 5 (1) of the Act confers unguided and
uncanalised power on the Central Government to specify an
organisation as an organisation of a political nature not being a political
party. He submitted that Rule 3(i), 3(v) and 3 (vi) which contain the
guidelines and grounds, suffer from the vice of vagueness. According
to Mr. Parikh, Rules 3 (i), 3 (v) and 3 (vi) require to be declared as E
unconstitutional as they are vague, overbroad and unreasonable. He
urged that the vagueness in the said provisions leads to arbitrary
exercise of power in violation of Article 14 of the Constitution. He
further submitted that an organisation, the activity of which is to educate
and promote civil, political, social, economic and cultural rights cannot F
be prevented from having access to funding, whether domestic or
foreign. Curtailing the right of the Appellant-organisation in having
access to foreign funds would result in the violation of the fundamental
rights guaranteed under Articles 19(1)(a) and 19(1)(c) of the
Constitution. He relied upon the International Covenant on Civil and
Political Rights and International Covenant on Economic, Social and G
Cultural Rights which have been accepted as sources of human rights
by the Protection of Human Rights Act, 1993. Mr.Parikh submitted
that political rights are an integral part of human rights and any
restriction in exercise of political rights would be unconstitutional.
H
912 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 4. Mr. K. M. Nataraj, learned Additional Solicitor General
appearing for the Respondent defended the judgment of the High Court
by arguing that all the relevant points have been rightly adjudicated by
the High Court. He argued that the constitutional validity of a statute
can be challenged only on two grounds which are legislative
competence and violation of any of the fundamental rights guaranteed
B
under Part III of the Constitution. Additionally, he submitted that a
subordinate legislation can be challenged successfully only on the ground
of the subordinate legislation being ultra vires the Act. The learned
Additional Solicitor General contended that the Appellant organisation
is not entitled to invoke Article 19 of the Constitution of India. According
C to him, Article 19 provides for fundamental rights which are guaranteed
only to citizens. The Appellant organisation cannot be considered as a
citizen. Moreover, no individual member of the organisation has been
made a party to the Writ Petition or in this Appeal. In support of this
submission, he relied upon judgments of this Court reported in Tata
Engineering and Locomotive Co. Ltd. v. State of Bihar1 and Shree
D
Sidhbali Steels Ltd. vs. State of Uttar Pradesh2. According to the
learned Additional Solicitor General, right to receive foreign contribution
is not a fundamental right guaranteed under Article 19 of the
Constitution. We were taken through the provisions of the Act and the
Rules by the learned Additional Solicitor General who submitted that
E sufficient safeguards against possible abuse of power are incorporated
in the Act and the Rules. That apart, it was contended that possibility
of abuse of power cannot be a ground to challenge legislation. It was
submitted that the object and purpose of the Act has to be taken into
consideration by this Court while interpreting the provisions of the Act.
The further submission on behalf of the Respondent was that the
F
principle of ‘reading down’ has to be adopted in case this Court is of
the opinion that there is ambiguity in Rule 3 of the Rules.
5. It is imperative to refer to the statutory regime. The Foreign
Contribution (Regulation) Act, 1976 (hereinafter referred to as ‘the 1976
Act’) was enacted to regulate the acceptance and utilization of foreign
G contribution or foreign hospitality by certain persons or associations with
a view to ensure that parliamentary institutions, political associations,
academic and other voluntary organisations as well as other individuals
working in important areas of national life may function in a manner
1
(1964) 6 SCR 885
H 2
(2011) 3 SCC 193
INDIAN SOCIAL ACTION FORUM (INSAF) v. 913
UNION OF INDIA [L. NAGESWARA RAO, J.]

consistent with the values of a sovereign democratic republic and the A
matters connected therewith and incidental thereto. The background
in which the 1976 Act was made has been succinctly stated by the
High Court of Delhi in Association for Democratic Reforms v. Union
of India3 as follows:
“It can be safely gathered that amidst a spate of subversive B
activities sponsored by the Foreign Powers to destabilize our
nation, the Foreign Contribution (Regulation) Act, 1976 was
enacted by the Parliament to serve as a shield in our legislative
armoury, in conjunction with other laws like the Foreign Exchange
Regulation Act, 1973, and insulate the sensitive areas of national
life like - journalism, judiciary and politics from extraneous C
influences stemming from beyond our borders.”
6. In view of several deficiencies in the 1976 Act, a fresh law in
the shape of the Foreign Contribution (Regulation) Act, 2010 was made
by repealing the 1976 Act. The introduction of the Act is as under:
D
“It had been noticed that some of the foreign countries were
funding individuals, associations, political parties, candidates for
elections, correspondents, columnists, editors, owners, printers or
publishers of newspapers. They were also extending hospitality.
The effects of such funding and hospitality were quite noticeable
and to have some control over such funding and hospitality and E
to regulate the acceptance and utilisation of foreign contribution
or foreign hospitality by certain persons or associations, with a
view to ensuring that Parliamentary institutions, political
associations and academic and other voluntary organisations as
well as individuals working in the important areas of national life F
may function in a manner consistent with the values of a
sovereign democratic republic the Foreign Contribution
(Regulation) Act, 1976 (49 of 1976) was enacted.”
7. The long title of the 2010 Act indicates that it is made to
consolidate the law to regulate the acceptance and utilisation of foreign G
contribution or foreign hospitality by certain individuals or associations
or companies and to prohibit acceptance and utilisation of foreign
contribution or foreign hospitality for any activities detrimental to the
national interest and for matters connected therewith or incidental
3
(2014) 209 DLT 609 H
914 SUPREME COURT REPORTS [2020] 4 S.C.R.

A thereto. Section 3 of the Act prohibits acceptance of foreign contribution
by the following:
(a) candidate for election;
(b) correspondent, columnist, cartoonist, editor, owner,
printer or publisher of a registered newspaper;
B
(c) Judge, Government servant or employee of any
corporation or any other body controlled or owned by
the Government;
(d) member of any Legislature;
C (e) political party or office-bearer thereof;
(f) organisation of a political nature as may be specified
under sub-section (1) of section 5 by the Central
Government;
(g) association or company engaged in the production or
D
broadcast of audio news or audio visual news or current
affairs programmes through any electronic mode, or any
other electronic form as defined in clause (r) of sub-
section (1) of section 2 of the Information Technology
Act, 2000 (21 of 2000) or any other mode of mass
E communication;
(h) correspondent or columnist, cartoonist, editor, owner of
the association or company referred to in clause (g).
8. Section 5 thereof stipulates that the Central Government shall
specify an organisation as an organisation of a political nature not being
F a political party as referred to in Section 3 (1) (f) having regard to the
activities of the organisation or the ideology propagated by the
organisation or association of the organisation with the activities of any
political party.
9. It is further provided in Section 5 (1) that the Central
G Government may by Rules frame guidelines specifying the ground(s)
on which an organisation shall be specified as an organisation of a
political nature. Section 48 (2) (d) empowers the Central Government
to frame guidelines, specifying the ground(s) on which an organisation
may be specified as an organisation of a political nature under Section
H 5 (1). In exercise of power conferred under Section 48, the Central
INDIAN SOCIAL ACTION FORUM (INSAF) v. 915
UNION OF INDIA [L. NAGESWARA RAO, J.]

Government framed the Foreign Contribution (Regulation) Rules, 2011. A
Rule 3 of the Rules, which is relevant for this case, is as follows:
“3. Guidelines for declaration of an organisation to be of a political
nature, not being a political party. - The Central Government may
specify any organisation as organisation of political nature on one
or more of the following grounds: B
(i) organisation having avowed political objectives in its
Memorandum of Association or bylaws;
(ii) any Trade Union whose objectives include activities for
promoting political goals;
C
(iii) any voluntary action group with objectives of a political
nature or which participates in political activities;
(iv) front or mass organisations like Students Unions,
Workers’ Unions, Youth Forums and Women’s wing of
a political party;
D
(v) organisation of farmers, workers, students, youth based
on caste, community, religion, language or otherwise,
which is not directly aligned to any political party, but
whose objectives, as stated in the Memorandum of
Association, or activities gathered through other material
evidence, include steps towards advancement of Political E
interests of such groups;
(vi) any organisation, by whatever name called, which
habitually engages itself in or employs common methods
of political action like ‘bandh’ or ‘hartal’, ‘rasta roko’,
‘rail roko’ or ‘jail bharo’ in support of public causes.” F
10. A plain reading of Section 3 of the Act shows that foreign
contributions should not be accepted by a candidate in an election or
by a political party or office bearer thereof and member of any
legislature apart from Judges and Government servants and those
belonging to the press, print and electronic media. As the dispute in this G
case revolves around the organisations which are not actively involved
in politics, it is necessary to focus on the provisions of the Act and the
Rules governing such organisations. Section 3 (1) (f) of the Act provides
that an organisation of a political nature is also barred from receiving
foreign contributions. Such an organisation of a political nature may be
specified under Section 5(1) by the Central Government. H
916 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 11. Section 5 of the 1976 Act provides that any organisation of
a political nature not being a political party shall not accept any foreign
contribution except with the prior permission of the Central Government.
However, according to the 2010 Act, an organisation of a political nature,
as specified, is barred from accepting foreign contributions. The
procedure to notify an organisation of a political nature is prescribed
B
under Section 5 of the 2010 Act. Before declaring an organisation to
be an organisation of a political nature not being a political party, the
Central Government shall take into account the activities of the
organisation or the ideology propagated by the organisation or the
programme of the organisation or the association of the organisation
C with the activities of any political party. The Central Government is
obligated in terms of Section 5 (2) of the Act, to issue notice in writing
informing the organisation in respect of which the order is proposed to
be made of the ground(s) on which an order under Section 5 (1) is
proposed. As per Section 5 (3), the organisation is to be given an
opportunity to submit its representation which shall be considered within
D the time prescribed in Section 5 and an order is required to be passed
recording the reasons therefor.
12. Guidelines for declaration of an organisation to be an
organisation of a political nature not being a political party are found in
Rule 3 of the Rules. We are concerned with Rules 3 (i), 3 (v) and 3
E (vi) of the Rules, which are the subject matter of challenge in this appeal.
13. The principal challenge of the Appellant-organisation to Section
5 (1) of the Act is on the ground that the terms ‘activity, ideology and
programme’ are vague and have not been defined in the Act which
result in conferring unbridled and unfettered power on the executive.
F Therefore, the Appellant-organisation contended that Section 5 (1) is
violative of Article 14 of the Constitution. Section 5 (4) is also
challenged on the ground that the authority to whom a representation
should be made has not been specified and it is not clear whether the
authority would be an independent authority or the Central Government
G itself. The High Court held that the words ‘activities of the organisation,
the ideology propagated by the organisation and the programme of the
organisation’ having nexus with the activities of a political nature are
expansive but cannot be termed as vague or uncertain. Sufficient
guidance is provided by the Parliament in Section 5 and it is for the
rule making authority to lay down the specific grounds. We are in
H agreement with the High Court that Section 5 (1) does not suffer from
INDIAN SOCIAL ACTION FORUM (INSAF) v. 917
UNION OF INDIA [L. NAGESWARA RAO, J.]

the vice of vagueness inviting the wrath of Article 14. Section 5 (4) A
cannot be declared as unconstitutional only on the ground that the
authority to whom representation should be made is not specified. It
is relevant to note that no serious attempt has been made by the
Appellant-organisation to assail Section 5 (4) of the Act.
14. The contention of the Appellant is that the guidelines in Rule B
3 of the Rules are vague giving scope for misuse and abuse of power
by roping in voluntary organisations within the sphere of the Act.
Thereby, an organisation which has no interest in active politics can be
deprived of the right to receive foreign contribution at the whims and
fancies of the executive by resorting to the vague guidelines in Rule 3. C
It was further submitted on behalf of the Appellant that the words
‘political objectives’, ‘political activities’, ‘political interests’ and ‘political
action’ used in Rule 3 have no clarity and any activity though not
connected with party politics can be brought into the fold of Rule 3.
Therefore, according to the Appellant-organisation, Rules 3 (i), 3 (v)
D
and 3 (vi) suffer from the vice of over-breadth and are liable to be
declared as unconstitutional being violative of Article 14. According to
the Appellant-organisation, there is an infraction of Article 19 of the
Constitution as the Rules are also unreasonable and violate the freedom
of speech and expression and the right to form associations protected
under Article 19 (1) (a) and 19 (1) (c) of the Constitution. E
15. We find force in the objection taken on behalf of the Union
of India that the Appellant-organisation is not entitled to invoke Article
19. No member of the Appellant-organisation is arrayed as a party.
Article 19 guarantees certain rights to ‘all citizens’. The Appellant,
being an organisation, cannot be a citizen for the purpose of Article 19 F
of the Constitution. (See: State Trading Corporation of India Ltd. V.
The Commercial Tax Officer, Visakhapatnam, (1964) 4 SCR 99;
Bennett Coleman & Co. v. Union of India, (1972) 2 SCC 788 and
Tata Engineering and Locomotive Ltd. v. State of Uttar Pradesh,
(2011) 3 SCC 193). In the absence of any member of the association G
as a petitioner in the Writ Petition, the Appellant-organisation cannot
enforce the rights guaranteed under Article 19 of the Constitution.
16. The principal contention of the Appellant-organisation is that
the guidelines provided in Rule 3 are vague and confer naked and
untrammeled power on the executive thereby giving the scope for H
918 SUPREME COURT REPORTS [2020] 4 S.C.R.

A arbitrary exercise of power. In K. A. Abbas v. Union of India4 this
Court was of the opinion that:
“46. The real rule is that if a law is vague or appears to be so,
the court must try to construe it, as far as may be, and language
permitting, the construction sought to be placed on it, must be in
B accordance with the intention of the legislature. Thus, if the law
is open to diverse construction, that construction which accords
best with the intention of the legislature and advances the purpose
of legislation, is to be preferred. Where however the law admits
of no such construction and the persons applying it are in a
C boundless sea of uncertainty and the law prima facie takes away
a guaranteed freedom, the law must be held to offend the
Constitution, this is not application of the doctrine of due process.
The invalidity arises from the probability of the misuse of the law
to the detriment of the individual. If possible, the Court instead
of striking down the law may itself draw the line of demarcation
D where possible but this effort should be sparingly made and only
in the clearest of cases”.
17. It is settled principle of interpretation that the provisions of
the statute have to be interpreted to give the words a plain and natural
meaning. But, if there is scope for two interpretations, the Courts have
E preferred purposive construction, which is now the predominant doctrine
of interpretation5. In case of ambiguity in the language used in the
provision of a statute, the Courts can take aid from the historical
background, the Parliamentary debates, the aims and objects of the Act
including the long title, and the endeavour of the Court should be to
F interpret the provisions of a statute to promote the purpose of the Act.
(See: Chiranjit Lal Chowduri v. Union of India, (1950) SCR 869;
Union of India v. Elphinstone Spinning and Weaving Co. Ltd.,
(2001) 4 SCC 139).
18. The object sought to be achieved by the Act is to ensure that
G Parliamentary institutions, political associations and academic and other
voluntary organisations as well as individuals working in the important
areas of national life should function in a manner consistent with the

4
(1970) 2 SCC 780
5
H Shailesh Dhairyawan v. Mohan Balkrishna Lulla, (2016) 3 SCC 619
INDIAN SOCIAL ACTION FORUM (INSAF) v. 919
UNION OF INDIA [L. NAGESWARA RAO, J.]

values of a sovereign democratic republic without being influenced by A
foreign contributions or foreign hospitality. The long title of the Act
makes it clear that the regulation of acceptance and utilisation of foreign
contribution is for the purpose of protecting national interest. Candidates
for election and political parties or office bearers of political parties are
barred from accepting any foreign contribution. The legislative intent B
is also to prohibit organisations of a political nature from receiving foreign
contributions. It is clear that preventing foreign contribution into the
political arena is the object sought to be achieved by the Act.
Prevention of foreign contributions routed through voluntary
organisations which are not connected to party politics is the reason
behind introduction of Section 3 (1) (f) and Section 5 of the Act. The C
Central Government is required to take into account the activities,
ideology or the programme of the organisation including the association
of the organisation with activities of any political party before declaring
an organisation as an organisation of political nature not being a political
party. Guidelines that are prescribed by the Rules indicate that only D
those organisations which are actively involved in politics or associated
with political parties can be declared as organisations of a political
nature. The question that falls for our consideration is whether the
guidelines in Rule 3 suffer from vagueness and ambiguity and whether
they can be stated to be conferring uncanalised power on the executive.
E
According to Rule 3 (i) an organisation having avowed political
objectives in its memorandum of association or bye laws is an
organisation of a political nature. As the intention of the legislature is
to prohibit foreign funds in active politics, an Association with avowed
political objectives (i.e. to play a role in active politics or party politics)
cannot be permitted access to foreign funds. There is no ambiguity in F
the provision and hence, cannot be termed as vague. Therefore, we
find no substance in the contention of the Appellant that Rule 3 (i) is
ultra vires the Act.
19. Rule 3 (v) deals with organisations of farmers, workers,
students etc. which are not directly aligned to any political party but G
objectives of which include steps towards advancement of ‘political
interests’ of such groups. The submission made on behalf of the
Appellant is that such organisations agitating for their legitimate claims
cannot be prevented access to foreign funds by resorting to the vague
term ‘political interests’. We are in agreement that the words ‘political H
920 SUPREME COURT REPORTS [2020] 4 S.C.R.

A interests’ are vague and are susceptible to misuse. However, possible
abuse of power is not a ground to declare a provision unconstitutional6.
20. Where the provisions of a statute are vague and ambiguous
and it is possible to gather the intention of the legislature from the object
of the statute, the context in which the provisions occur and purpose
B for which it is made, the doctrine of “reading down” can be applied7.
To save Rule 3(v) from being declared as unconstitutional, the Court
can apply the doctrine of “reading down”.
21. A balance has to be drawn between the object that is sought
to be achieved by the legislation and the rights of the voluntary
C organisations to have access to foreign funds. The purpose for which
the statute prevents organisations of a political nature from receiving
foreign funds is to ensure that the administration is not influenced by
foreign funds. Prohibition from receiving foreign aid, either directly or
indirectly, by those who are involved in active politics is to ensure that
the values of a sovereign democratic republic are protected. On the
D other hand, such of those voluntary organisations which have absolutely
no connection with either party politics or active politics cannot be denied
access to foreign contributions. Therefore, such of those organisations
which are working for the social and economic welfare of the society
cannot be brought within the purview of the Act or the Rules by
enlarging the scope of the term ‘political interests’. We are of the
E
opinion that the expression ‘political interests’ in Rule 3 (v) has to be
construed to be in connection with active politics or party politics.
22. Any organisation which habitually engages itself in or employs
common methods of political action like ‘bandh’ or ‘hartal’, ‘rasta roko’,
‘rail roko’ or ‘jail bharo’ in support of public causes can also be declared
F
as an organisation of political nature, according to the guideline
prescribed in Rule 3 (vi). Support to public causes by resorting to
legitimate means of dissent like bandh, hartal etc. cannot deprive an
organisation of its legitimate right of receiving foreign contribution. It
is clear from the provision itself that bandh, hartal, rasta roko etc., are
G 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 penalized by being declared as
an organisation of a political nature. To save this provision from being
6
Collector of Customs v. Nathella Sampathu Shetty, (1962) 3 SCR 786.
7
H DTC v. Mazdoor Congress, 1991 Supp (1) SCC 600
INDIAN SOCIAL ACTION FORUM (INSAF) v. 921
UNION OF INDIA [L. NAGESWARA RAO, J.]

declared as unconstitutional, we hold that it is only those organisations A
which have connection with active politics or take part in party politics,
that are covered by Rule 3 (vi). To make it clear, such of those
organisations which are not involved in active politics or party politics
do not fall within the purview of Rule 3 (vi). We make it clear that
organisations used for channeling foreign funds by political parties cannot
B
escape the rigour of the Act provided there is concrete material. In
that event, the Central Government shall follow the procedure prescribed
in the Act and Rules strictly before depriving such organisation the right
to receive foreign contributions.
23. The appeal is disposed of accordingly.
C

Devika Gujral Appeal disposed of.

D

E

F

G

H