NGO Funding Peaceful Protests Can't Be Ground To Deny Its FCRA Renewal: Kerala High Court

The Kerala High Court recently came to the aid of two NGOs, whose FCRA renewal applications were rejected by the Centre relying on a report of the Central Security Agency (Intelligence Bureau) alleging that they 'funded' the protests at Vizhinjam Port. [2026 LiveLaw (Ker) 439]It was alleged that one of the NGOs [Save A Family Plan India] transferred funds to another NGO named Trivandrum Social Service Society (TSSS), which in turn, diverted funds to SAKHI and SEWA, which allegedly funded the protests.In the case of Kerala Social Service Forum, the allegation was that it was an official state level body of Kerala Catholic Church functioning under Kerala Catholic Bishops Council (KCBC), which had funded the protests.Justice Bechu Kurian Thomas noted that there were no materials to show that NGOs had funded the protests, and added that even if they had, in fact, done so, that cannot be a ground to reject FCRA renewal: “the report has not even identified any financial trail between the petitioner and any of the protestors directly…even if it is assumed that the petitioner had funded the peaceful protests, still, can it be held to be a reason to deny renewal of the certificate? The answer has to be in the negative. The right to protest is an integral part of a democracy. Every citizen has the right to demonstrate or to protest in a peaceful manner. The said right emanates from the right to freedom of speech and expression under Article 19(1)(a) of the Constitution of India.”It was further remarked that peaceful protest does not fall within the meaning of 'undesirable purpose' mentioned under Section 12(4)(a)(ii) of the FCRA:“When the right to protest is constitutionally guaranteed, exercise of such rights cannot be labelled as 'an undesirable purpose' or against public interest… A peaceful protest against a project by persons who have a grievance or who apprehend injury to them, cannot be viewed as an 'undesirable purpose' due to a political disapproval. Executive or administrative distaste for protests or dissents, cannot convert the exercise of a constitutionally protected right into an 'undesirable purpose' or as against 'public interest'.”The Court was considering petitions filed by the two NGOs, being aggrieved by the rejection of their FCRA renewal as well as the revisional order challenging the same.The NGOs contended that they have been holding FCRA registration for decades without any violations and these have been renewed without any blemish till now. They took a stand that they never diverted any funds for supporting any protests and funds were only transferred to other FCRA-registered NGOs for welfare programmes. It was pointed out that no reasons were given for rejecting the renewal and they were not given an opportunity of hearing.The Centre challenged the maintainability of the writ petition and pointed out that the right to receive foreign contribution is not a fundamental right. Since FCRA is a national security legislation, foreign funding cannot be used any activity detrimental to national interests, which was done by the petitioners as revealed in the field inquiry, it was argued.The Centre also took a stand that there was no statutory mandate to divulge reasons for rejection of renewal. When funds are diverted for 'undesirable purposes', the petitioners are entitled for renewal of their registration, it was argued. It also submitted that the petitioners cannot be told the reason for rejection and produced the Central Agency report in a sealed cover before the Court.After hearing the parties, the Court observed that the order rejecting renewal of registration as per the Foreign Contribution (Regulation) Act, 2010 cannot be 'cryptic' and must be reasoned.“In a democratic country, governed by the rule of law, for rejecting an application, even if it is a renewal application for permission to receive foreign contribution, reasons are essential. An order without reason is an action born of whim and not of law. The right to be furnished with reasons is, undoubtedly, an indispensable part of a sound judicial system…There is not even a whisper about the clarifications given by the petitioner or as to how the petitioner can even be blamed for the alleged nature of use of the funds it transferred to another FCRA registered organization,” the Court opined.Referring to Sections 16 [Renewal of certificate] and 12 [Grant of certificate of registration] of the FCRA, the Court remarked that the authority must record reasons for rejecting the renewal application, whether or not there was delay. It also said that merely quoting statutory provisions in the rejection order is not enough.“the proviso to section 16(3) of the FCRA cannot be perceived as confined only to provide reasons for the delay. It would be quite preposterous to read the statute as laying down the principle that reasons must be given only for the delay and not when the application is rejected. The rights of the parties are affected not only...

NGO Funding Peaceful Protests Can't Be Ground To Deny Its FCRA Renewal: Kerala High Court

K. Salma Jennath

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K. Salma Jennath

NGO Funding Peaceful Protests Can't Be Ground To Deny Its FCRA Renewal: Kerala High Court

K. Salma Jennath

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K. Salma Jennath

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