Madras HC quashes refusal to Renew FCRA because funds were transferred from one sister NGO to another without any malafide
Sharma Centre for Heritage Education & Ellen Sharma Memorial Trust vs Union of India &Anr.[1] [CMA No. 746 of 2022 & WP No. 4887 of 2022 – Madras HC: Order dt 27-06-2025)
Madras HC (Justice N. Anand Venkatesh) decided in favour of appellant NGOs, whose FCRA registration was not renewed by FCRA Dept. The denial letter stated that renewal was denied based on S.16(1) read with S.12(4)(a)(vii) of FCRA 2010. The communication did not specify the nature of violation.
FCRA Dept in its response, filed a counter affidavit alleging violation under S.7 of the Act, stating that funds had been transferred among the sister NGOs without prior approval. Dept argued that this violation disqualified the NGOs from receiving renewal.
In its judgement, the HC recorded that the Dept’s communications have not contained any reasons except stating that the renewal was refused under S.16(1)…. Of the Act. Court held that the breach by the parties was minor, as the Dep’s own report delivered to the Court in sealed cover, did not show any material that the two Trusts had misused the FC and that there was no personal gain no diversion of fund for undesirable purposes. The court stated that transfer of funds, without any allegation of mis-proprietary is nothing more than a procedural breach. The Court quashed the FCRA refusals and stated that the petitioners should be granted renewal.
—
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008
Pingback: SC backs Madras HC decision of restoring FCRA Renewal | Socio Research & Reform Foundation