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Govt must handle NGO foreign funding cases with an 'open mind': Madras HC

The court made the observation while delivering an order on a plea by a Trust which had challenged the MHA's decision to reject its application for renewal of registration under the FCRA New Delhi The Madras High Court on Friday said that the government must deal with cases related to charitable institutions receiving foreign funding with an "open mind", unless there are serious violations or misuse, Bar and Bench reported. The observation was made by Justice N Anand Venkatesh while delivering an order on a plea by the Ellen Sharma Memorial Trust, which had challenged the Ministry of Home Affairs' (MHA's) decision to reject its application for renewal of registration under the Foreign Contribution (Regulation) Act (FCRA). The court directed the Centre to renew the registration within four weeks, the report added. The court noted that just because some institutions run with the aid of foreign contributions, it is not necessary to look at them with suspicion unless there is material to show misuse of such contributions. What is the case? The Ellen Sharma Memorial Trust had moved the court after the MHA rejected its request to renew its FCRA registration. The Trust, established in 1982, runs schools and clinics in Chennai and largely depends on foreign donations for its activities. According to the Trust, it filed for renewal in February 2021 and responded to multiple queries from the MHA over several months. The application, however, was ultimately rejected in December 2021, according to Bar and Bench. The MHA's decision was based on concerns that the Trust was transferring foreign contributions to two associated NGOs — one of which also challenged a similar rejection in the same judgment. The government argued that these transfers violated amended provisions of Section 7 of the Act, which now prohibit such movements without prior approval. What did the court say? The bench noted that in the case of this Trust, there were no serious allegations of fund misuse, and that the government did not explicitly spell out which specific provision of the Act was contravened. "In the case in hand, the foreign contributions were not diverted, misused and utilised for any other purpose against national interest or for any personal gain or for undesirable purposes," the order noted. On Section 7 of the FCRA, the court also noted that it came into effect from October 2020, and "it is impossible for a layman to take note of such procedural changes brought in by the amendment." It further noted that in this case, the contributor was of Indian origin and is settled abroad. "In such cases, unless there are serious violations or misuse of foreign contribution, the Authorities must deal with it with an open mind. The case in hand is one where such contributions were made by persons of Indian origin settled in foreign countries and they wanted to contribute in terms of providing education to women and work for their welfare. Under such circumstances, to deny them that opportunity must have strong reasons to refuse renewal of the applications," the court order said. The court directed the MHA to consider the applications afresh and grant renewal under Section 16 of the Act within four weeks.