Funding Peaceful Protests Cannot Be Ground To Deny NGO's FCRA Renewal: Kerala High Court

The Kerala High Court on August 13 held that funding peaceful protests cannot, by itself, be a ground to deny an NGO renewal of its registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA), observing that executive or administrative disapproval of dissent cannot convert constitutionally protected protest into an "undesirable purpose".

Justice Bechu Kurian Thomas made the observations while allowing two separate petitions filed by 'Kerala Social Service Forum' and 'Save A Family Plan India', both of which challenged the refusal of their FCRA renewal applications amid allegations concerning financial support to organisations associated with protests against the Vizhinjam Seaport project.

The Court set aside the rejection orders in both cases and directed the competent authority to pass fresh orders within three months.

FCRA renewal rejection must contain reasons

In the 'Kerala Social Service Forum' case, the organisation, which had held FCRA registration since 1985 and had received uninterrupted renewals, was informed that its renewal application was rejected by merely citing provisions of the FCRA.

The subsequent revisional order referred to adverse inputs from a Central Security Agency alleging financial support to agitators protesting against the Vizhinjam Port project.

The Union Government argued that the reasons could not be disclosed because they were based on classified security material. The report was consequently placed before the Court in a sealed cover.

Rejecting the contention that a bare reference to statutory provisions was sufficient, the Court held: "reasons being the soul of every order, however short it be, it is essential for the authority to specify the reason for denial of even a renewal application".

The Court further held that mere reference to statutory provisions cannot substitute the requirement of recording reasons and that an order without specified reasons cannot properly be treated as an order.

It stressed that even if an applicant has no fundamental right to receive foreign contribution, the regulatory mechanism under the FCRA cannot dispense with the requirement of giving reasons. The applicant must at least be told the "core irreducible minimum" of the grounds for rejection.

The Court also held that the proviso to Section 16(3) of the FCRA cannot be interpreted to mean that reasons are required only when there is a delay in deciding a renewal application. Reasons are equally necessary when renewal itself is rejected.

Peaceful protest is not an ‘undesirable purpose’

The Court then examined the substantive allegations concerning the Vizhinjam protests.

In the 'Save A Family Plan India' case, the authorities alleged that funds transferred by the NGO to another FCRA-registered organisation were ultimately connected with financial support to agitators opposing the Vizhinjam Seaport project. The NGO disputed the allegation and maintained that its funds had been used for welfare programmes.

The Court examined the security material and noted that the petitioner did not figure among the organisations participating in the agitation and that no financial trail had been traced from the petitioner directly to any of the protestors.

Justice Thomas observed that the right to peacefully protest and object to Government policies flows from Article 19(1)(a) of the Constitution.

The Court held: "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".

It clarified that the expression “undesirable purpose” under Section 12(4)(a)(vi) of the FCRA cannot mean something merely undesirable to the Government or its political will. The characterisation must be rooted in a legal prohibition or public injury.

Thus, the bench held that a peaceful protest against a development project cannot be treated as an undesirable purpose merely because of political disapproval.

Even assuming that some financial support was provided to protestors, the Court held that such support could not, without more, be treated as diversion of foreign contribution for an undesirable purpose or against public interest.

‘No serious violation or misuse’ established

The Court also relied upon the absence of evidence demonstrating serious misuse of foreign contribution.

In the 'Save A Family Plan India' case, it concluded: "No serious violation or misuse of foreign contribution received by the petitioner is evident or borne out by the records."

It consequently held that the authorities ought to have considered the renewal application with an open mind and found the refusal arbitrary and illegal.

In the other case, the Court similarly found that the applicant had not been furnished even a summary of the reasons relied upon for rejection. It held that without the “core irreducible minimum” being disclosed, renewal could not have been denied.

FCRA certificates to be reconsidered

The Court accordingly set aside the renewal rejection orders and the consequential revisional orders in both matters, directing the authorities to take fresh decisions within three months.

In 'Save A Family Plan India', the Court additionally directed that its FCRA certificate would remain valid pending the fresh decision for utilisation of foreign contribution already received during the period of its earlier validity.

However, the NGO would not be entitled to receive fresh foreign contributions until a fresh order was passed.

Case Title: Kerala Social Service Forum v. Union of India And Anr & connected matter

Date of Judgment: August 11, 2026

Bench: Justice Bechu Kurian Thomas