Madras High Court Overturns FCRA Rejection for Arsha Vidya Parampara Trust Sub Court Criticizes Violation of Natural Justice and Inadequate Reasoning in Foreign Contribution Denial
The Madras High Court, Madurai Bench, presided over by Justice G.R. Swaminathan, has set aside the rejection of Arsha Vidya Parampara Trust's application for registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA). The court criticized the decision-making process for violating principles of natural justice and relying on improper reasoning.
The petitioner, a trust engaged in spreading knowledge of Vedanta, Sanskrit language, and Yoga, had applied for FCRA registration to receive foreign contributions. The application was rejected by the Union of India on grounds of improper receipt of foreign funds and the alleged religious nature of the organization's activities.
The court observed that the first ground for rejection-receipt of foreign funds without prior permission-was untenable as the petitioner had compounded the offence by paying a penalty, which legally wipes the slate clean regarding the contravention. The court emphasized that compounded offences cannot be used adversely against the applicant, highlighting a violation of natural justice due to a lack of notice regarding the alleged transfer of funds to another organization.
On the second ground of rejection, the court criticized the authority's tentative finding that the petitioner "appears to be religious." Justice Swaminathan underscored that the Foreign Contribution (Regulation) Act allows religious organizations to receive foreign contributions, provided they obtain the necessary registration. The court pointed out that the activities of teaching Bhagavad Gita, Vedanta, and Yoga are universal practices not confined to religious boundaries.
The court also noted that the trust was registered as a charitable organization under the Income Tax Act, reinforcing the petitioner's eligibility for FCRA registration. The court highlighted the importance of considering all relevant materials and the discretionary nature of granting FCRA registration.
In addressing the maintainability of the writ petition despite the availability of an alternative remedy, the court justified its intervention due to the fundamental breach of principles of natural justice and disproportionate decision-making.
The court directed the Union of India to reconsider the application, ensuring proper notice and relevant materials are provided, and to complete the process within three months.
Bottom Line:
Rejection of application for registration under FCRA - Violation of principles of natural justice and improper reasoning - Compounded offences cannot serve as grounds for disqualification - Clear and definite conclusions required regarding religious nature of activities - Impugned order set aside and matter remitted for fresh consideration.
Statutory provision(s): Foreign Contribution (Regulation) Act, 2010 Sections 12(4), 41, 52, 11, 31(2); Income Tax Act, 1961 Section 12A
Arsha Vidya Parampara Trust v. Union of India, (Madras)(Madurai Bench) : Law Finder Doc Id # 2825307
