'If It Wants To Do Social Service, What's Your Problem?' Supreme Court Rejects Union's Challenge To NGO's FCRA Registration

The Supreme Court today dismissed the Union of India's challenge to a Madras High Court order which directed it to process and grant renewal of registration to a Non-Government Organization (NGO) which was receiving foreign contributions.  

A bench of Justices Vikram Nath and Sandeep Mehta heard the matter and asked the Union to not harass the NGO any further.

"Have they misappropriated? is there any abuse of these funds received by them? There is no such finding at all. If they are doing some social service for the society, what is your problem? You monitor, keep a check, let them file their accounts annually - that's all. Don't complicate things, don't further harass them", said Justice Nath to Additional Solicitor General Archana Pathak Dave.

The matter pertained to a sister NGO of the Ellen Sharma Memorial Trust, founded in the year 1982 with the object of improving education and overall welfare of children. Statedly, the Trust received foreign donations, which formed part of 70-75% of its revenue. It was dependent on these funds for performing charitable and social work. The Trust was duly registered under the Foreign Contribution (Regulation) Act, 2010 and its registration was lastly renewed in 2016 for a period of 5 years.

In 2021, the Government refused to renew the registration of the NGO (respondent), which had a registration separate from that of the Trust, under Section 16(1) read with Section 12(4)(a)(vii) of the Act. Aggrieved, the NGO moved the High Court.

Before the High Court, the Government explained that there was a violation of Section 7 of the Act since there had been movement of funds among three NGOs. Several transfers were made without obtaining prior permission, it alleged. It also argued that the respondent-NGO did not have any fundamental right to carry on with the activity of running education institutions only by receiving foreign contributions.

The NGO countered that the provisions of Section 7 were not violated since the requirement for getting prior permission was brought in only in 2020. Till then, there was no prohibition on transfer of foreign contribution to any other person where the other person has been registered and has also been granted the certificate.

After hearing the parties, the High Court held in favor of the Trust and the NGO. The petitioner was directed to grant renewal to the two within 4 weeks. Aggrieved, the petitioner filed the present case.

Case Title: UNION OF INDIA Versus M/S SHARMA CENTRE FOR HERITAGE EDUCATION, SLP(C) No. 26284-26285/2025