Plea in Supreme Court challenges Section 17 of FCRA which mandates opening of primary FCRA account at SBI New Delhi

A petition has been filed before the Supreme Court challenging Constitutional validity of Section 17 of the Foreign Contribution (Regulation) Act, 2010 on the ground that it mandates that the primary FCRA account is to be opened exclusively in a branch of State Bank of India in New Delhi as notified by the Central government (Jeevan Jyothi Charitable Trusts v. Union of India)..The petitioner Jeevan Jyothi Charitable Trusts also challenged MHA Notification No. S.O. 3479 (E) dated 7 October 2020 which assigned “State Bank of India, New Delhi Main Branch, 11, Sansad Marg, New Delhi-110001” as the concerned branch under Section 17. .The plea stated these changes were introduced by the 2020 amendment to the FCRA and issuance of the MHA notification dated October 7, 2020. After the same, all persons seeking foreign contribution, whether registered or seeking registration/permission, are forced to prefer applications to open their new designated FCRA account at the SBI Main Branch, New Delhi. Such a restriction, the petitioner said, is restrictive and unconstitutional and it violates the right of the petitioner and its members from forming associations under Article 19(1)(c) and their right to carry on occupation under Article 19(1)(g)..The plea highlighted that the Central government released a Standard Operating Procedure (SOP) setting out the procedure for opening the account, as well as the process flow for persons already in possession of a certificate of registration/prior permission..As per the same, the SBI Main Branch, New Delhi is required to wait for Centre to confirm the applicant’s prior permission/certificate of registration before allowing inflow of foreign contribution into the account..Thus, as a result of the 2020 Amendment Act, the petitioner organizations, which are not based in Delhi, are required to open their primary FCRA account in New Delhi, at the SBI, Main Branch. Once this account is opened, the only mode available to operate their account is the net banking facilities of SBI."The Petitioners are, thus, prevented from having physical access to a local bank account of their choice to speedily resolve any issues that might arise during banking transactions. This creates unnecessary operational delays in receiving fund transfers/withdrawing money or sorting out technical issues and also limits the Petitioners’ choice as consumers," the petition said. The plea further stated that the amendment incorrectly pre-supposes that all charitable organizations, in each part of the country, have access to the kind of infrastructure, electricity and internet supply, which will make access to net banking simple for them, ."The impugned Section 17 and the MHA Notification, as well as the public notices, violate Article 14 for bring arbitrary and unreasonable. A blanket requirement of opening a bank account at one specific branch of the SBI, New Delhi for all organizations receiving FCRA is absurd, irrational and serves no rational purpose under the FCRA or any other law," reads the plea. The changes to law have led to operational delays in receiving fund transfers/withdrawing money or sorting out technical issues and also limits the petitioners’ choice as consumers, it was contended. .The plea is likely to be heard next week.