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 and since 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 when there is delay in considering the application for renewal, but also when the application is rejected. The very terminology used in the statute itself indicates that reasons have to justify rejection,” the Court added.

Moreover, even if there is no fundamental right to receive foreign funds and the permission to receive it is a regulatory mechanism, such a mechanism cannot ignore need to give reasons while rendering decisions, the Court opined.

The Court took note of the fact that the petitioners were not included in the list of NGOs involved in the protests and merely because the funds transferred by it were transmitted to another for funding the protests, that does not warrant denial of renewal against the petitioners.

It was also of the view that the report of the Central Security Agency does not reveal any material to claim a privilege under concerns of national security.

“there is no mandate that can be read into section 12(5) of the FCRA that merely because there is a report of a Central Security Agency, the reasons cannot be divulged or furnished. A contrary interpretation would lead to an anomalous and arbitrary situation wherein the statutory authority can pick and choose applicants for grant or renewal of certificate of registration and deny furnishing any reason, by merely referring to a report of a Central Security Agency,” the Court added.

The Court was of the view that there were no valid reasons for rejecting renewals and that the petitioners were entitled to have their registration renewed. Thus, it set aside the rejection and revision orders, and directed the authorities to pass fresh orders within 3 months.

In one of the judgments, it was clarified that till a decision in this regard was made, the petitioner's FCRA certificate would remain valid for enabling it to utilize the funds already received.

Case Nos: WP(C) No. 42996 of 2025 and WP(C) No. 43936 of 2025

Case Title: Save A Family Plan India v. Union of India and Ors. & Kerala Social Service Forum v. Union of India and Ors.

Citation: 2026 LiveLaw (Ker) 439

Counsel for the petitioners: Karthika Maria, Santhosh Mathew (Sr.), Shinto Mathew Abraham, Arun Thomas, Veena Raveendran, Anil Sebastian Pulickel, Mathew Nevin Thomas, Kurian Antony Mathew, Karthik Rajagopal, Leah Rachel Ninan, Arun Joseph Mathew, Noel Ninan Ninan, Adeen Nazar, Aparnna S., Rohan Mathew

Counsel for the respondents: Harikumar G. Nair - Sr. CGC, K. Jayesh Mohankumar

Click to Read/Download Judgment in WP(C) No. 42996 of 2025