The Lahore High Court has set aside an earlier judgment that had invalidated a federal government policy introduced in 2022 to regulate foreign funding for non-governmental and non-profit organizations.
The policy had previously been struck down in September 2024 by a single bench, which ruled that the federal cabinet could not exercise legislative authority without proper authorization from Parliament, declaring the policy unlawful and without legal effect.
However, a two-member bench of the Lahore High Court comprising Justice Chaudhry Muhammad Iqbal and Justice Syed Ahsan Raza Kazmi overturned that decision and reinstated the “Policy for Local NGOs/NPOs Receiving Foreign Contributions 2022.” The court held that policy formulation falls within the executive domain and should not be interfered with by the judiciary unless there is a clear legal or constitutional violation.
The decision came after appeals filed by the federal government challenging the earlier ruling.
During the proceedings, petitioners argued that the policy lacked statutory backing and violated constitutional protections, including freedom of association and the right to conduct business. The federal government, however, maintained that the policy was duly approved by the federal cabinet under the Rules of Business, 1973.
The court examined whether the government had the authority to regulate NGOs receiving foreign funding and whether such policy decisions were subject to judicial intervention. It ruled in favor of the government on both counts.
The bench observed that under Articles 90 and 99 of the Constitution, the federal government is empowered to conduct its affairs and formulate policies through the cabinet system. It further noted that the policy was properly approved and issued through the relevant ministry.
The court also emphasized that judicial interference in policy matters is limited and only justified in cases involving violation of fundamental rights, constitutional breaches, statutory violations, or bad faith. It added that the earlier judgment had incorrectly applied Article 18, stating that the matter instead falls under Article 99 governing federal executive authority.
