FCRA Renewal Rejection Via 'One-Line E-mail' Violates Natural Justice; Reasons Cannot Be Supplied Later Via Affidavit: Delhi High Court - 2025-07-24

Delhi High Court Quashes 'One-Line E-mail' Rejection of NGO's FCRA Renewal, Cites Violation of Natural Justice

New Delhi: In a significant ruling on administrative accountability, the Delhi High Court has quashed the Union of India's 2016 decision to reject the renewal of the Foreign Contribution (Regulation) Act (FCRA) registration for the Indian Social Action Forum (INSAF). A Division Bench comprising Justice Nitin Wasudeo Sambre and Justice Anish Dayal held that the rejection, communicated via a "one-line e-mail," was "sans reasons" and a clear violation of the principles of natural justice.

The Court directed the government to reconsider INSAF's renewal application afresh within 90 days, taking into account new material submitted by the petitioner.

Case Background

The petitioner, Indian Social Action Forum, a registered entity under the FCRA, had its license suspended in April 2013. Subsequently, its application for renewal for the 2016-2021 period was rejected by the Union of India on October 21, 2016, through a brief email without providing any justification.

This rejection prompted INSAF to file a writ petition challenging the decision on several grounds. The petitioner argued that the order was unreasoned and that the government was improperly attempting to justify its decision post-facto through an affidavit filed in court.

Arguments and Court's Observations

Petitioner's Stance: Senior Advocate Prashanto C. Sen, representing INSAF, argued that the rejection order was unsustainable as it was devoid of any reasoning. He contended that the government's attempt to provide reasons later in an affidavit was impermissible in law. The petitioner also highlighted that the rejection was purportedly based on pending criminal cases against its office bearers, most of which had resulted in acquittal. The constitutional validity of Section 12(4)(e) of the FCRA, 2010, was also challenged, though the Court did not delve into this issue.

Court's Reasoning: The High Court strongly criticized the government's approach, stating that the reasonless rejection order reflected a "complete non-application of mind."

"The fact remains that the order impugned, whereby the renewal was rejected, was sans reasons or even the basic considerations. It was only by ‘one-line e-mail’ that the respondents/Union of India rejected the prayer of the petitioner for renewal of the certificate," the Bench observed.

The Court unequivocally rejected the government's attempt to supplement the order with reasons through a subsequent affidavit, citing established legal principles.

"Such conduct on the part of the respondent/Union of India cannot be said to be germane to the cause, in the sense that the orders impugned cannot be substantiated by reasons which are narrated through an affidavit... Such conduct... can also be termed as in violation of principles of natural justice, thereby amounting to denial of opportunity."

The Bench noted that since the rejection in 2016, there have been significant developments, including acquittals of INSAF's office bearers in several criminal cases. It remarked that this new material would have a "direct bearing" on the fresh consideration of the renewal application.

Final Decision and Directions

Finding the 2016 rejection order unsustainable, the Delhi High Court allowed the petition and quashed the impugned communication. The key directions issued by the Court are:

1. Reconsideration: The Union of India must reconsider INSAF’s renewal request afresh.
2. Submission of Material: The petitioner is permitted to submit all relevant material, including details of acquittals, to support its claim for renewal within 30 days.
3. Timeline: The government must pass an appropriate order on the application within 90 days, in line with the statutory timeline provided in the FCRA.

The Court clarified that it has not expressed any opinion on the constitutional validity of Section 12(4)(e) of the FCRA, leaving it open for the petitioner to raise the issue again if the fresh decision is adverse.