The Madras High Court, while examining a dispute over registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA), has highlighted the risk of foreign funds being used to facilitate religious conversion and observed that such an inflow could imperil the sovereignty of the country, as reported in LiveLaw.
A Division Bench comprising Justice GR Swaminathan and Justice MD Sumathi made the observations while dismissing an appeal filed by Kanzeon Public Charitable Trust, which runs a Montessori School and a Zen Meditation Centre at Kodaikanal.
The trust had challenged the rejection of its application for FCRA registration by the Deputy Director (FCRA), Ministry of Home Affairs. The High Court upheld the rejection, holding that the trust had failed to correctly disclose its religious character.
FCRA And Foreign Funds For Conversion
The Court specifically addressed the issue of foreign funding in the context of religious conversion while examining the safeguards under the FCRA.
“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 also referred to Section 12(4)(a)(ii) of the FCRA Act, which prescribes that an organisation applying for FCRA registration should not have been prosecuted or convicted for indulging in religious conversion through inducement or force.
The Bench made clear that the provision applies to religious organisations generally.
“A fundamentalist Hindu Organisation engaged in Ghar Wapsi cannot be registered under FCRA,” it remarked.
Foreign Contributions And Religious Organisations
The Court noted that Form FC-3A under the FCRA Rules requires an applicant to disclose the nature of its organisation, including whether it is religious, cultural, economic, educational or social.
Where an organisation is religious, the applicant must also specify whether it belongs to the Hindu, Sikh, Muslim, Christian, Buddhist or “others” category.
The Court was considering the trust’s claim that its activities were not religious in nature.
The trust argued that its Zen Meditation Centre at Kodaikanal could not be treated as a religious activity and that Zen practices belonged to the Dhyana tradition of India.
However, the Court noted that the trust itself claimed to subscribe to Zen Buddhist philosophy and that Zen Buddhism is a variant of the Mahayana Buddhist school.
“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,” the Court said.
The Bench stressed that a religious organisation is not prohibited from applying for FCRA registration, but it must disclose its nature correctly.
“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,” it added.
Court On Religious Conversion
While discussing the nature of religious organisations and foreign contributions, the Court also observed, “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 Court made the observation after noting 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.
The Court also noted the government’s argument that its policy was to check the inflow of foreign funds that may be deployed for carrying out conversion and other activities which would harm the secular fabric of the country.
No Automatic Classification Of Indian Spiritual Institutions
The Court simultaneously distinguished religious organisations from institutions engaged in teaching Indian philosophical and spiritual traditions.
It 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 organisations would fall under education or culture and noted that the National Educational Policy, 2020 recognises these disciplines as legitimate fields of study.
FCRA Authority Has Wide Discretion
The Court further held that considerable discretion must be given to the FCRA authority 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 Court further remarked that there is no right to receive foreign aid and that the decision of the authority would therefore not be judged on a high threshold.
In the case before it, the Court found that the trust had failed to correctly disclose its religious nature and upheld the authority’s decision to reject its FCRA registration application. The appeal was accordingly dismissed.
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