SHC sets aside ECC’s policy on NGOs receiving foreign contributions

The Sindh High Court (SHC) has set aside the Economic Coordination Committee’s (ECC) policy for regulation of organisations receiving foreign contributions, declaring that the same was issued without lawful authority.

The order came on a petition of a non-governmental organisation challenging the policy for regulation of organisations receiving foreign contributions through a notification issued on November 28, 2013.

The petitioner, Marie Stopes Society, had submitted in the plea that it was engaged in welfare activities in the health and population welfare sectors and had been aggrieved due to the impugned notification.

A counsel for the petitioner, Salahuddin Ahmed, submitted that the petitioner had applied for registration in terms of the policy but its case was allegedly put on the backburner and later rejected in January 2019.

He submitted that the policy purported to determine the legal character and obligations of the organisations receiving foreign funds through a notification that was prima facie an attempt by the executive branch of the state to legislate, which was a violation of the Constitution.

He submitted that the policy itself recognised the need for legislation and was nothing but a stop-gap arrangement bereft of any force of law but was nonetheless being implemented so as to curtail the petitioner’s operations.

The deputy attorney general opposed the petition submitting that the Article 90(2) of the Constitution allowed the prime minister to perform his functions either directly or through federal ministers or the ECC of the cabinet that was constituted pursuant to the Rule 17(2) of the 1973 Rules of Business, and hence, the notification and policy issued in pursuance of the decision of the ECC was lawful.

He submitted that as the judgment of the superior courts operated prospectively, the policy issued in 2013 aimed at ensuring accountability, transparency and securing the interests of the country was not covered by the judgment of the Supreme Court in the Mustafa Impex case.

He, however, could not show any document that the impugned notification had any backing of the law or if the economic affairs division was vested with such powers to promulgate such a policy. The federal law officer submitted that the Supreme Court had examined the policy in a suo motu case and was satisfied with its purpose.

He submitted that the petitioner’s appeal had been rejected due to non-clearance of the security with direction to apply afresh for any new foreign funding project. A division bench of the high court comprising SHC Chief Justice Ahmed Ali Sheikh and Justice Yousuf Ali Sayeed after hearing the case observed that it was an admitted position that the impugned policy was framed by the ECC sans the cabinet as a whole.

The bench observed that it was manifest that the respondent Ministry of Finance, Revenue, Economic Affairs, Statistics and Privatisation (economic affairs division) had not been vested with such powers to regulate or curb the petitioner’s operations through such a policy that had no constitutional strength or legislative mandate behind it.

The SHC declared that the impugned notification and policy dated November 28, 2013, for which the federal government had not taken any step to provide a legislative cover, was of no legal effect. The high court observed that any action taken against the petitioner pursuant to the impugned notification was declared to be without lawful authority having no legal consequence.