The Madras High Court has upheld the rejection of an application for registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA), filed by the Kanzeon Public Charitable Trust, holding that the trust had failed to correctly disclose the religious character of its organisation, as reported in LiveLaw.
A Division Bench comprising Justice GR Swaminathan and Justice MD Sumathi observed that the trust itself claimed to subscribe to Zen Buddhist philosophy and that Zen Buddhism is a variant of the Mahayana Buddhist school. The Court held that the trust was therefore required to correctly identify itself as a religious organisation while applying for FCRA registration.
The Bench was hearing an appeal filed by the trust, which runs a Montessori School and a Zen Meditation Centre in Kodaikanal, against the rejection of its FCRA registration application by the Deputy Director (FCRA), Ministry of Home Affairs.
Trust Failed To Identify Itself As Religious Organisation
The Court noted that Form FC-3A under the FCRA Rules requires applicants to disclose the nature of their organisation, including whether it is religious, cultural, economic, educational or social.
In the case of a religious organisation, the applicant is also required to specify whether it belongs to the Hindu, Sikh, Muslim, Christian, Buddhist or “others” category.
The trust had argued that its activities were not religious in nature and that Zen practices formed part of the Dhyana tradition of India.
However, the Court noted that the trust itself had admitted that it subscribed to Zen Buddhist philosophy.
“The appellant trust claims to subscribe to Zen Buddhist philosophy… The authority rightly states that Zen Buddhism is a variant of Mahayana Buddhist School… Applying the same logic, every Buddhist school will come under the broad umbrella of Buddhism. Zen can be no exception. Since the appellant’s application did not correctly identify its nature as religious, the application was rightly negatived,” it said.
The Court further observed that the trust could have disclosed its religious character and applied for registration instead of describing itself otherwise.
“The appellant need not have been so coy. Section 12 of the FCRA bars only an unregistered religious organisation from accepting foreign contribution. An organisation having a definite religious program is entitled to apply for a certificate of registration from the central government under Sections 11 and 12 of the Act. But one has to make a clean breast of everything. One cannot keep any card up one’s sleeve. This is no game of hide and seek,” the Court said.
Court Says Hinduism Is Inclusive
While examining the religious character of the organisation, the Bench made an observation contrasting Hinduism with the Abrahamic faiths.
The Court noted that the person behind the appellant organisation was an ordained Christian priest and that the trust’s meditation centre prominently displayed a Christian cross alongside a Buddha statue.
“Unlike Hinduism which is inclusive, the Abrahamic religions are inherently exclusive. The devout Jews, Christians and Muslims believe that theirs is the one true and complete revelation because that is what their Holy books say of themselves,” the Court observed.
The observation came in the context of the Court’s discussion on the religious character of organisations seeking FCRA registration and the potential implications of foreign funding.
Not Every Indian Spiritual Organisation Is Religious
At the same time, the Court made it clear that organisations dealing with Indian philosophical and spiritual traditions cannot automatically be classified as religious institutions.
The Bench observed, “An organisation primarily engaged in the systematic teaching of Vedanta, the Bhagavad Gita, the Upanishads, Yoga and allied Indian Knowledge Systems through structured classes, residential courses, publications, research and preservation of manuscripts cannot to be classified as religious institutions.”
The Court said such activities would fall within the sphere of education or culture.
It also noted that the National Education Policy, 2020 recognises these disciplines as legitimate fields of study. Therefore, organisations primarily engaged in teaching such subjects should not automatically be treated as religious organisations under the foreign contribution framework.
Court Warns Against Foreign Funds Being Used For Conversion
The Bench also addressed the broader purpose of the FCRA and the restrictions imposed on foreign contributions to religious organisations.
It observed that India is a pluralist nation and distinguished its social model from that of the United States.
“We are a pluralist nation. Unlike USA, we are not a melting pot but a salad bowl, a beautiful metaphor credited to Justice Ruma Pal. This status quo would be upset, if one religious group gains ascendency. In Kerala, one recently witnessed friction between the Christians and the Muslims. If foreign funds are freely allowed inside to facilitate conversion activities, the sovereignty of the nation would be imperilled. We specifically highlight the issue of conversion because radical Christian Institutions are notorious for indulging in such activities,” the Court said.
The Court noted that Section 12(4)(a)(ii) of the FCRA, which deals with organisations applying for registration, requires that an applicant should not have been prosecuted or convicted for indulging in religious conversion through inducement or force.
The Bench stressed that the provision applies to religious organisations irrespective of the religion involved.
“A fundamentalist Hindu Organisation engaged in Ghar Wapsi cannot be registered under FCRA,” it remarked.
No Absolute Right To Receive Foreign Contribution
The Court also emphasised that there is no fundamental or automatic right to receive foreign contributions.
It held that even a religious organisation is entitled to apply for FCRA registration, provided it makes a proper and complete disclosure of its nature and activities.
The Bench further held that the FCRA authorities have considerable discretion while deciding applications for registration.
“We hold that considerable leeway and unfettered discretion should be given to the authority in the matter of granting or refusing registration under Sections 11 and 12 of the FCRA, 2010. Of course, if the discretion is perversely exercised or the relevant materials are not taken into account or there is non-application of mind, the rejection order would certainly be interfered with by the writ court in exercise of the power of judicial review. Such an approach was adopted in Arsha Vidya Parampara Trust v. UOI (2025 SCC Online Mad 13781). We approve the ratio laid down therein,” the Court said.
The Bench added that since there is no right to receive foreign aid, decisions of the FCRA authority would not be subjected to an excessively high threshold of judicial scrutiny.
Appeal Dismissed
In the present case, the Court found that the authority had correctly considered the nature of the trust and that the trust had failed to disclose itself as a religious organisation in its application.
The Bench therefore found no reason to interfere with the rejection of the FCRA registration application and dismissed the appeal filed by the Kanzeon Public Charitable Trust
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