The Kerala High Court has delivered an important judgment concerning FCRA registration, NGO funding, the right to peaceful protest and the requirement of reasoned administrative orders. The Court set aside orders rejecting the renewal applications of two NGOs after the Centre relied on a report of a Central Security Agency alleging that funds connected with the organisations were ultimately used to support protests against the Vizhinjam Port project.
Justice Bechu Kurian Thomas held that the authorities could not deny FCRA renewal merely on the basis of allegations unsupported by adequate material. The Court also emphasised that peaceful protest is a constitutionally protected democratic right and cannot, by itself, be treated as an “undesirable purpose” under the Foreign Contribution (Regulation) Act, 2010 (FCRA).
The judgment is significant for NGOs receiving foreign contributions because it reinforces the principles of natural justice, transparency, reasoned decision-making and constitutional protection of dissent.
Background of the FCRA Dispute
The petitions were filed by Save A Family Plan India and Kerala Social Service Forum, challenging the rejection of their FCRA renewal applications and the subsequent revisional orders.
Save A Family Plan India was allegedly linked to the protests through a chain of financial transactions. According to the authorities, it had transferred funds to Trivandrum Social Service Society (TSSS), which allegedly transferred money to SAKHI and SEWA. The Central authorities alleged that these organisations subsequently used funds in connection with protests relating to the Vizhinjam Port project.
In the case of Kerala Social Service Forum, the allegation was that it functioned as a state-level body associated with the Kerala Catholic Church under the Kerala Catholic Bishops Council and had funded the protests.
The NGOs denied diverting funds for protests. They maintained that the transfers were made to other FCRA-registered organisations for legitimate welfare activities and that they had maintained FCRA registration for several decades without any established violation.
Court Questions Alleged Financial Link
The High Court closely examined the material relied upon by the authorities and found that there was no adequate evidence demonstrating a direct financial trail between the petitioners and the persons involved in the protests.
The Court noted that the petitioners themselves were not identified as participants in the protests. Merely establishing that money transferred by an NGO eventually reached another organisation was not sufficient, in the circumstances, to justify rejection of FCRA renewal.
More importantly, the Court observed that even assuming that an NGO had provided financial support to peaceful protests, such conduct could not automatically be classified as an “undesirable purpose.”
Right to Peaceful Protest Cannot Be Treated as Undesirable
One of the most significant observations of the judgment relates to the constitutional right to protest.
The Court emphasised that peaceful demonstrations are an integral part of democracy and are protected by the fundamental right to freedom of speech and expression under Article 19(1)(a) of the Constitution of India.
According to the Court, administrative or executive disagreement with a protest cannot transform constitutionally protected dissent into an activity contrary to public interest.
The judgment therefore draws an important distinction between unlawful or prohibited activities and the legitimate exercise of democratic rights. A peaceful protest against a developmental project, particularly where individuals claim to have legitimate grievances or apprehensions, cannot simply be branded an undesirable purpose because the authorities disagree with the protest.
FCRA Renewal Orders Must Contain Reasons
The High Court also strongly criticised the manner in which the FCRA renewal applications were rejected.
Referring to Sections 12 and 16 of the FCRA, the Court held that an order rejecting renewal must contain proper and intelligible reasons. Simply reproducing statutory provisions or making general allegations is insufficient.
The Court observed that an administrative order affecting the rights and interests of an applicant cannot be “cryptic”. Reasons are essential to demonstrate that the authority has applied its mind to the facts and submissions of the applicant.
The Court also rejected the interpretation that reasons were required only when there was a delay in deciding an FCRA renewal application. According to the judgment, the statutory requirement of providing reasons cannot be restricted to delay-related circumstances when the ultimate decision is to reject renewal.
Sealed Security Report Cannot Automatically Justify Non-Disclosure
The Centre argued that FCRA is a national-security legislation and that the authorities were not required to disclose sensitive information derived from a Central Security Agency report.
The High Court, however, held that the mere existence of such a report does not automatically justify withholding reasons from the affected organisation.
The Court cautioned that accepting such an interpretation could create an arbitrary situation in which an authority could reject an FCRA application merely by referring to a confidential security report without providing meaningful reasons to the applicant.
The Court further observed that the material placed before it did not establish sufficient grounds for claiming privilege on the basis of national security.
High Court Orders Fresh Consideration
After examining the allegations, statutory provisions and materials placed before it, the Kerala High Court concluded that there were no valid grounds to sustain the rejection of the NGOs’ FCRA renewal applications.
Accordingly, the Court set aside the rejection and revisional orders and directed the competent authorities to reconsider the applications and pass fresh orders within three months.
In one of the matters, the Court also clarified that until a fresh decision was taken, the petitioner’s existing FCRA certificate would remain valid to enable utilisation of foreign contribution already received.
Significance of the Judgment
The ruling has wider implications for NGOs and other organisations regulated under the FCRA. While the government undoubtedly has regulatory powers over foreign contributions and can take action against organisations involved in activities prohibited by law, those powers must be exercised in accordance with the principles of fairness, reasoned decision-making and constitutional safeguards.
The judgment also reiterates that national-security considerations cannot become a blanket justification for passing unreasoned administrative orders.
At its core, the decision reinforces two important legal principles: an FCRA renewal rejection must be supported by reasons, and peaceful democratic dissent cannot automatically be characterised as an undesirable activity.
Case Details
Cases: WP(C) No. 42996 of 2025 and WP(C) No. 43936 of 2025
Case Titles: Save A Family Plan India v. Union of India & Ors. and Kerala Social Service Forum v. Union of India & Ors.
Judge: Justice Bechu Kurian Thomas, Kerala High Court
Key Legal Issues: FCRA renewal, Section 12 and Section 16 of FCRA, foreign contribution regulation, right to peaceful protest, Article 19(1)(a), reasoned administrative orders and national-security claims.