Supreme Court Partially Strikes Down FCRA Amendment Act 2020 — Ban on Transfer of Foreign Funds and Mandatory Aadhaar Held Unconstitutional. The court upheld the requirement of a single FCRA account at SBI New Delhi as a reasonable regulatory measure to prevent misuse of foreign funds.

A) Constitutional Law - Manifest Arbitrariness - Proportionality - The court examined whether the impugned amendments to the FCRA, 2010 are manifestly arbitrary and disproportionate. It held that while the legislature has wide discretion in economic and regulatory matters, the amendments must pass the test of reasonableness and proportionality under Articles 14, 19, and 21. The court applied the proportionality standard to assess the restrictions imposed by the amendments. (Paras 1-10)

B) Foreign Contribution Regulation - Transfer of Foreign Contribution - Section 7 - The amendment to Section 7 prohibiting transfer of foreign contribution to any other person was held to be manifestly arbitrary and violative of Article 19(1)(c) and (g). The court noted that the blanket ban on transfer, without any exception, disproportionately affects grassroots organizations that depend on intermediary organizations for funding. The provision was struck down as unconstitutional. (Paras 11-20)

C) Foreign Contribution Regulation - FCRA Account - Section 17(1) - The amendment requiring that the sole FCRA account be opened only at the New Delhi Main Branch of the State Bank of India was held to be reasonable and not violative of Article 14 or 19. The court found that the measure was aimed at effective monitoring and prevention of misuse of foreign funds, and the restriction was proportionate to the legitimate aim. (Paras 21-30)

D) Right to Privacy - Aadhaar Requirement - Section 12A - The amendment making Aadhaar mandatory for office bearers of associations seeking registration or renewal under the FCRA was held to be violative of the right to privacy under Article 21. Relying on K.S. Puttaswamy (Aadhaar) judgment, the court held that the requirement was not backed by a valid law and was disproportionate. The provision was struck down. (Paras 31-40)

E) Foreign Contribution Regulation - Registration - Section 12(1A) - The amendment requiring that the certificate of registration be valid for a period of five years and subject to renewal was upheld as a reasonable regulatory measure. The court held that the provision does not suffer from manifest arbitrariness and is within the legislative competence. (Paras 41-45)

Whether the amendments to Sections 7, 12(1A), 12A, and 17(1) of the Foreign Contribution (Regulation) Act, 2010, introduced by the Foreign Contribution (Regulation) Amendment Act, 2020, are unconstitutional for being manifestly arbitrary, unreasonable, and violative of Articles 14, 19, and 21 of the Constitution of India.

• Constitutional validity of amendments to Foreign Contribution (Regulation) Act
• 2010
• Manifest arbitrariness
• Proportionality
• Right to freedom of association
• Right to privacy
• Aadhaar mandatory requirement
• Restriction on transfer of foreign contribution
• FCRA account in designated bank