2023 (1) TMI 597 - HC - FEMA

Prohibition to accept foreign contribution - misuse of the Foreign Contribution (Regulation) Act FCRA by the political party - Association for Democratic Reforms seeking directions to constitute an independent tribunal or committee to oversee the enforcement of the Foreign Contribution (Regulation) Act, 2010 ( FCRA Act ) - Petitioners have stated that that there have been several instances of political parties and legislators accepting contributions and hospitality from foreign sources which is, prima facie, in violation of the FCRA - HELD THAT - The Petitioner has failed to place on record any data indicating the number of political parties which have availed of foreign contribution, and have failed to be penalised under the FCRA. The apprehension of the Petitioner that the FCRA may be misused for oblique motives is a bald averment and is entirely unfounded. Courts cannot pass a direction only on hypothesis. Nothing has been placed on record to show that the FCRA is being used selectively against NGOs and other independent organisations as well. The entire case of the Petitioner is premised on the possibility of a political party, who is also at the helm of affairs at the Centre, abusing the provisions of the FCRA to suppress dissent and receive foreign contributions in its own favour. The instant Writ Petition is entirely built on surmises and conjectures. There exists a basic difference between legislative and judicial functions, elucidated by the basic structure doctrine, which states that while the legislature makes laws, the executive enforces and administers it, and the judiciary tests the validity of legislation formulated by the Legislature. It has been laid down in a catena of judgments the courts cannot direct the legislature to frame or enact a law and in a particular manner. It cannot amend a statute or add provisions to the statute, as that too would be tantamount to judicial legislation. The role of the judiciary is initiated only after a law is enacted to test the legality of a statue on the known principles of judicial review Setting up of such Tribunals/Authorities/Committee is purely a policy decision, taken by the Legislature. A direction for setting up a Committee or Tribunal would effectively be an amendment of the FCRA, which is beyond the scope of judicial review by this Court. Hence, an attempt by a judicial body to set up a tribunal is directly in the teeth of the doctrine of separation of powers. Recently, the Hon ble Supreme Court vide Judgment in John Paily v. The State of Kerala , 2021 (4) TMI 1349 - SUPREME COURT has held that Courts do not possess the power to set up an adjudicatory committee or a tribunal by way of issuing a writ of mandamus. In light of this, the direction sought by the Petitioner to set up a Committee or Tribunal to oversee the functioning of the FCRA is unsustainable. This Court cannot direct setting up of a Committee or a Tribunal, simply due to the possibility of misuse of the FCRA. The entire case of the Petitioner rests on the possibility of misuse of the FCRA by the political party at the helm of affairs. This misuse, it is apprehended, may be directed towards hindering the independence of judicial officers, targeting NGOs and stifling dissent. Further, the Petitioner apprehends that due to a conflict of interest, the FCRA may not be effective to curb political parties from accepting foreign contributions. The mere possibility that a statute will not be administered adequately is not ground for the statute to be invalidated or for this Court to supplement its wisdom with the Legislature s. To set up a committee or tribunal is a purely policy decision. The legislature alone has the power to set up a tribunal or committee, under the requisite statute, to adjudicate disputes arising from it. If the prayer sought by the Petitioner is allowed, it would essentially be an exercise in judicial legislation, and would be beyond the power of judicial review accorded to this Court. Due to the aforementioned reasons, this Court is not inclined to allow the present petition. Writ Petition is dismissed,

Summary

Issues Involved:
1. Whether the Foreign Contribution (Regulation) Act, 2010 (FCRA) is being misused by the Central Government.
2. Whether an independent tribunal or committee should be constituted to oversee the enforcement of the FCRA.

Detailed Analysis:

Issue 1: Misuse of FCRA by the Central Government

The Petitioners argued that the FCRA is susceptible to misuse by the Central Government, which could use it to suppress dissent from independent organizations and NGOs, and to protect political parties from penalties for transgressions. They highlighted the unbridled and excessive powers accorded to the Central Government under Sections 3(1)(e), 43, 46, and 47 of the FCRA, which allow the government to influence the enforcement of the Act. The Petitioners contended that this influence could hinder judicial independence and lead to selective enforcement against political opponents.

The Respondent countered that the Petition is based on unfounded apprehensions and that only a minuscule number of cases are pending under the FCRA. They argued that establishing an independent tribunal would be a waste of judicial and executive resources and would encroach upon the legislative domain.

The Court evaluated the scheme of the FCRA and noted that the Act prohibits political candidates, members of the legislature, political parties, and organizations of a political nature from accepting foreign contributions. The Court also acknowledged the Central Government's extensive powers to enforce the FCRA, including the authority to investigate offences and to make rules for carrying out the provisions of the Act.

The Court emphasized that decisions taken by the Central Government are presumed to be bona fide unless proven otherwise. The judiciary cannot assume mala fides or misuse of power without concrete evidence. The Court cited several precedents to assert that the mere possibility of a law being administered improperly does not render it invalid. The judiciary is cautious in substituting its wisdom for that of the legislature, and the presumption of constitutionality favors the statute.

Issue 2: Constitution of an Independent Tribunal or Committee

The Petitioners sought the establishment of an independent tribunal or committee, possibly presided over by a retired High Court or Supreme Court judge, to insulate the enforcement of the FCRA from government influence. They argued that this would ensure consistency, uniformity, and continuity in the functioning of the FCRA, free from political interference.

The Court rejected this prayer, stating that the judiciary cannot direct the legislature to frame or enact a law, nor can it amend a statute or add provisions to it. The role of the judiciary is to test the legality of legislation, not to create new bodies or amend existing laws. The Court cited the doctrine of separation of powers and several judgments to support this position.

The Court also noted that the Petitioners failed to provide data indicating the number of political parties that have availed of foreign contributions without being penalized under the FCRA. The Petitioners' case was built on hypothetical scenarios and lacked concrete evidence of misuse.

The Court concluded that the possibility of misuse of the FCRA by the Central Government does not warrant the establishment of an independent tribunal or committee. Such a decision is a policy matter for the legislature, and the judiciary cannot intervene in this domain.

Conclusion:

The Court dismissed the Writ Petition, stating that the Petitioners' arguments were based on surmises and conjectures. The Court reiterated that the mere possibility of misuse of a statute does not justify judicial intervention to create new bodies or amend existing laws. The Petitioners' apprehensions were deemed insufficient to warrant the establishment of an independent tribunal or committee to oversee the enforcement of the FCRA.