06 March 2020
Supreme Court
Download

INDIAN SOCIAL ACTION FORUM(INSAF) Vs UNION OF INDIA

Bench: HON'BLE MR. JUSTICE L. NAGESWARA RAO, HON'BLE MR. JUSTICE HEMANT GUPTA
Judgment by: HON'BLE MR. JUSTICE L. NAGESWARA RAO
Case number: C.A. No.-001510-001510 / 2020
Diary number: 36648 / 2011
Advocates: KABIR DIXIT Vs


1

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No.1510 of 2020 (Arising out of SLP (C) No.33928 of 2011)

Indian Social Action Forum (INSAF) .... Appellant(s)

Versus

Union of India

…. Respondent (s)

J U D G M E N T

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 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

1 | P a g e

2

Appellant  is  a  registered  society  involved  in  resisting

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 to in the Writ Petition.  The

power conferred by the Act on the Central Government to

declare an organisation to be an organisation of a political

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 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

2 | P a g e

3

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.   

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 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  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

3 | P a g e

4

which  is  to  educate  and  promote  civil,  political,  social,

economic  and  cultural  rights  cannot  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 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.  

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

4 | P a g e

5

guaranteed 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  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  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

1 (1964) 6 SCR 885 2 (2011) 3 SCC 193

5 | P a g e

6

General who submitted that 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

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 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 the

values of a sovereign democratic republic and the matters

6 | P a g e

7

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 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  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:    

“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

3 (2014) 209 DLT609

7 | P a g e

8

to have some control over such funding and hospitality

and 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  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 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.   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;  

(c)  Judge,  Government  servant  or  employee  of  any

corporation or any other body controlled or owned by

the Government;  

(d) member of any Legislature;  

8 | P a g e

9

(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  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 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 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

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)

9 | P a g e

10

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  5  (1).    In  exercise  of  power  conferred  under

Section  48,  the  Central  Government  framed the Foreign

Contribution (Regulation) Rules, 2011.  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:  

(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;

(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;

(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

10 | P a g e

11

through other material evidence, include steps towards

advancement of Political 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.”

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 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.    

11. Section  5  of  the  1976  Act  provides  that  any

organisation of a political nature not being a political party

11 | P a g e

12

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 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 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 the time

prescribed  in  Section  5  and  an  order  is  required  to  be

passed recording the reasons therefor.   

12 | P a g e

13

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 (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.  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  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

13 | P a g e

14

provided by the Parliament in Section 5 and it is for the

rule  making authority  to  lay  down the specific  grounds.

We are in agreement with the High Court that Section 5 (1)

does not  suffer  from the vice  of  vagueness  inviting  the

wrath 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.  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 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.   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

14 | P a g e

15

connected with party politics can be brought into the fold

of  Rule  3.    Therefore,  according  to  the  Appellant-

organisation, Rules 3 (i), 3 (v) 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.   

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 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

15 | P a g e

16

Pradesh, (2011) 3 SCC 193).    In the absence of any

member  of  the  association  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 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  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  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

4 (1970) 2 SCC 780

16 | P a g e

17

may itself draw the line of demarcation 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  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 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  Parliamentary  institutions,  political

associations  and  academic  and  other  voluntary

5 Shailesh Dhairyawan v. Mohan Balkrishna Lulla, (2016) 3 SCC 619

17 | P a g e

18

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  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 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 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

18 | P a g e

19

declaring  an  organisation  as  an  organisation  of  political

nature  not  being  a  political  party.    Guidelines  that  are

prescribed  by  the  Rules  indicate  that  only  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.   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 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 | P a g e

20

19. 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 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  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  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”.

6 Collector of Customs v. Nathella Sampathu Shetty, (1962) 3 SCR 786. 7 DTC v. Mazdoor Congress, 1991 Supp (1) SCC 600

20 | P a g e

21

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  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 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 opinion  that  the expression  ‘political  interests’  in

Rule 3 (v) has to be construed to be in connection with

active politics or party politics.   

21 | P a g e

22

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 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 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

declared as unconstitutional, we hold 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).

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

22 | P a g e

23

organisations used for channeling foreign funds by political

parties cannot 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.        

               ...................................J.                                       [L. NAGESWARA RAO]

                                     ..................................J.                                           DEEPAK GUPTA]

New Delhi, March 06, 2020.   

23 | P a g e