The Lahore High Court on Monday set aside an earlier ruling that had struck down a federal government policy introduced in 2022 to regulate foreign funding of non-governmental and non-profit organizations.
The policy had been declared unlawful in September 2024 by a single bench, which held that the constitutional framework did not allow the federal cabinet to exercise legislative powers without authorization from the legislature. The court had ruled the policy invalid and without legal effect.
However, a two-member bench comprising Justice Chaudhry Muhammad Iqbal and Justice Syed Ahsan Raza Kazmi overturned that decision, stating that policy-making falls within the executive domain and should be protected from undue judicial interference. The court restored the Policy for Local NGOs/NPOs Receiving Foreign Contributions 2022.
The decision followed appeals filed by the federal government after the earlier judgment.
During the proceedings, the petitioners argued that the policy lacked statutory backing, similar to a previous framework struck down by courts, and violated constitutional protections, including the right to freedom of association and business.
The federal government defended the policy, stating that it had been properly approved by the federal cabinet in accordance with the Rules of Business, 1973.
The court examined whether the government had the authority to regulate NGOs receiving foreign funding and whether courts could interfere in such policy decisions. It ruled in favor of the government on both questions.
The bench held that under Articles 90 and 99 of the Constitution, the federal government is empowered to conduct its business and formulate policies. It also found that the policy was approved by the federal cabinet and issued by the relevant ministry.
The court emphasized that judicial interference in policy matters is limited unless there is a violation of fundamental rights, the Constitution, statutory law, or evidence of bad faith.
It also ruled that the earlier judgment had incorrectly applied Article 18, stating that the matter instead falls under Article 99, which governs the conduct of federal government business.
