- 26 September, 2026
NEW DELHI, September 26, 2026: Civil society platform Nattai Kappom has urged the Joint Parliamentary Committee examining the Foreign Contribution (Regulation) Amendment Bill, 2026, to remove provisions that could lead to the permanent vesting of charitable properties and strengthen safeguards for religious institutions, minority educational bodies and vulnerable beneficiaries.
The memorandum, submitted on September 25 by Convener Advocate C.J. Rajan and Co-Convener Advocate A. Santhanam SJ, raises concerns over proposed provisions dealing with the cessation of Foreign Contribution Regulation Act (FCRA) registration, asset vesting, criminal liability, access to records and the powers of designated authorities.
The group said it supports the objectives of the FCRA, including transparency, accountability and the proper use of foreign contributions, but argued that some provisions of the proposed amendment could have consequences extending beyond the regulation of foreign funds.
Concern over asset vesting
The memorandum identifies proposed Section 16A as its principal concern. The provision would allow foreign contributions and certain assets to be provisionally vested in a designated authority following cancellation, surrender or cessation of FCRA registration, with the possibility of permanent vesting if the registration is not restored, renewed or freshly granted within the prescribed period.
The submission argues that an organisation could lose its FCRA registration while continuing legitimate charitable activities through domestic donations and other lawful resources. Schools, hospitals, hostels and social-service centres established partly through foreign contributions received years earlier could therefore come under the proposed framework.
It calls for asset vesting not to follow automatically from the expiry or non-renewal of an FCRA certificate in the absence of established fraud, diversion of funds or serious unlawful conduct.
The memorandum also raises practical questions about properties created through a combination of foreign and domestic funds. It cites the example of a hospital built with 40 per cent foreign contribution and 60 per cent domestic funds, arguing that the law should clearly establish how ownership, valuation and the foreign-funded component would be determined.
Call to protect charitable property
The submission opposes provisions allowing permanently vested assets to be transferred to government authorities or disposed of, with proceeds credited to the Consolidated Fund of India.
It argues that charitable institutions may accumulate property over decades through domestic donations, institutional funds, fees, grants and other lawful sources. Such property, it says, should not be treated in the same manner as unutilised foreign contribution.
It therefore recommends that any vesting mechanism, if retained, be limited to identifiable and unutilised foreign contribution actually held by an organisation.
Safeguards for religious and minority institutions
The memorandum seeks the exclusion of places of worship from permanent asset vesting. Alternatively, it proposes prior judicial determination, adequate notice and a hearing, participation of the concerned religious institution and protection of its religious character and lawful management.
It also calls for specific protection for minority educational institutions covered by Article 30 of the Constitution. The submission says their properties should not be permanently vested merely because FCRA registration has expired or has not been renewed, unless fraud, diversion or other serious unlawful conduct has been established and a judicial determination made.
Privacy and oversight concerns
The group has also sought safeguards for sensitive records held by civil society organisations, including medical, legal and personal information concerning children, women, survivors of violence, patients, persons with disabilities and other vulnerable groups.
It recommends that access to such records be based on written reasons and principles of necessity and proportionality, with measures to prevent unauthorised disclosure.
The memorandum further raises concerns over the concentration of investigative, administrative, valuation and property-management powers in the designated authority. It calls for clearly defined powers, written reasons for decisions, independent valuation and judicial oversight.
Appeal and criminal liability
The proposed appeal mechanism, under which an order of the designated authority may be challenged before a District Judge within 90 days, has also come under scrutiny.
The submission argues that an appeal could become ineffective if property is transferred, sold or otherwise disposed of before the case is decided. It therefore seeks a statutory bar on irreversible action against immovable property while an appeal is pending, along with access to the High Court and effective interim protection.
On criminal penalties, the memorandum calls for a distinction between wilful misuse, serious violations, negligence and technical compliance failures. It recommends that criminal prosecution primarily apply to deliberate and material violations, while minor defaults should ordinarily attract notice, an opportunity to rectify and proportionate penalties.
It also opposes criminal liability based solely on a person's position as a trustee, office-bearer or governing-body member. Liability, it says, should require evidence of personal involvement, knowledge, consent, connivance, wilful neglect or attributable failure of due diligence.
Civil society consultation
Nattai Kappom said its recommendations were based on an online consultation held on September 23, attended by about 80 participants representing nearly 60 civil society organisations from across India.
The platform, which describes itself as a network of advocates, journalists, educationists, researchers, social workers and gender-rights activists, has been working on constitutional rights and public-interest issues since 2019.
Among its principal recommendations, the memorandum calls for the removal of provisions enabling permanent vesting of immovable charitable property following the expiry or non-renewal of FCRA registration, unless serious wrongdoing is established.
It further urges the committee to limit any retained vesting mechanism to unutilised foreign contribution, protect property created through domestic resources, strengthen judicial oversight and ensure that enforcement measures remain proportionate to the violations established.
By Catholic Connect Reporter
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