The Law that Knocks Without Warning; The FCRA Amendment Bill, 2026 — What It Changes, and What It Costs the Church
Sr. Adv. Helen Tresa CHF
“The more corrupt the state, the more numerous the laws.” — Tacitus
There is a particular kind of danger that arrives not with hostility, but with paperwork. It does not announce itself as persecution; instead, it adopts the sterile mask of “regulation.” It speaks the modern language of transparency, accountability, and national interest — reasonable terms that invite compliance while masking a more transformative intent. While the public nods along to these civic virtues, the state is quietly constructing a legal framework capable of dismantling what communities and congregations have spent generations building.
The Foreign Contribution (Regulation) Amendment Bill, 2026, is the embodiment of this danger. By tightening control over lapsed NGO funds and assets, it moves beyond mere oversight into the realm of systemic enclosure. For the Church in India, this bill represents a bureaucratic siege that places its institutional legacy directly in the path of state absorption. The following analysis examines the specific clauses of this amendment and the existential threat they pose to the autonomy of religious and civil society organisations.
The Designated Authority — A New Office, Unchecked Power
The centrepiece of the Amendment is the creation of a Designated Authority under the newly inserted Chapter IIIA. This is not a court. It is not a tribunal. It is a government-appointed official, answerable to the executive alone, vested with powers that in any functioning constitutional democracy would require judicial oversight.
The moment an FCRA certificate lapses through cancellation under Section 14, voluntary surrender under Section 14A, or simple non-renewal, triggering cessation under the newly inserted Section 14B, the Designated Authority is empowered under Section 16A(1) to take immediate provisional possession of every asset connected to foreign contributions.
Not merely the funds remaining in the FCRA bank account, but every asset, including land, Buildings. Vehicles, Medical equipment, and all other items acquired with foreign contributions throughout the institution’s operational history shall automatically provisionally vest in the Central Government, upon cancellation, surrender, or cessation.
What makes this provision constitutionally alarming is not merely the breadth of the power but its architecture. Under Section 16G, the Designated Authority and its Administrator are vested with all the powers of a Civil Court under the Code of Civil Procedure, 1908, including the power to summon persons, compel production of documents, and receive evidence on affidavit. Under Section 16D(3), any property vested in the Designated Authority cannot be transferred by any order of attachment, seizure, or sale in execution of a Civil Court decree or tribunal order — only in accordance with the provisions of this Act.
It must be noted, however, that Section 16D(3) cannot and does not oust the writ jurisdiction of High Courts under Article 226, or of the Supreme Court under Article 32, of the Constitution. These are constitutional remedies that no ordinary legislation can extinguish. An institution can seek an urgent interim stay from a High Court even before dispossession is completed. This is the primary and most immediate avenue of legal recourse available to any affected institution, and it must be exercised without delay.
If registration is not restored within the prescribed period, provisional vesting becomes permanent under Section 16A (5). Once permanently vested, the assets are at the complete disposal of the Designated Authority under Section 16A (6), transferred to any Ministry, Department, authority, or agency of the Central or State Government, or sold by public auction, with proceeds credited to the Consolidated Fund of India. A Certificate of Sale issued by the Designated Authority under Section 16D (1) is declared conclusive proof of the transferee’s ownership even without the original title deeds. Under Section 16D (2), no registering authority can refuse registration on the ground that original title deeds are absent.
For example, the bishops or major superiors who may be the key functionaries or trustees who built those institutions are permanently barred, under the proviso to Section 16A(6), from ever directly or indirectly acquiring any interest in those assets again.
A Partial Protection — And Its Limits
Section 16 A(2) contains one proviso that deserves mention, though its practical value is limited. Where an asset has been built partly from foreign contributions and partly from domestic sources, the entire asset vests in the Designated Authority. However, the institution may apply to the Designated Authority for the return of any distinct and ascertainable portion of the asset that was created from domestic sources. The Designated Authority may, on being satisfied, return that portion.
The burden of proving what is domestic and what is foreign falls entirely on the institution. The Designated Authority is not obliged to return anything. For institutions that did not maintain meticulous, year-by-year records of the source of every rupee that went into any building, this proviso offers very little real protection.
The Cessation Trap — When the System Punishes the Innocent
There is a provision in this Bill so quietly devastating that it deserves its own name. Legal analysts have already given it one: the cessation trap.
Under the amended Section 12, FCRA certificates are valid for five years. Under the newly inserted Section 14B, a certificate is deemed to have ceased, automatically, in three circumstances: if no application for renewal was made; if the application was made but refused by the Central Government; or if the certificate is simply not renewed before its expiry, regardless of the reason. That cessation, the moment it occurs, triggers the provisional vesting of all assets under Section 16A(1). There is no grace period written into the law. There is no provision for condonation of delay. No mechanism pauses the consequences while renewal is being processed.
It must be noted, however, that provisional vesting under Section 14B is not irrevocable. Section 16A(5) itself provides that permanent vesting occurs only if registration is not restored within the prescribed period. The existence of a restoration mechanism makes cessation conditional rather than final, though the absence of any grace period or automatic pause means the burden of acting to restore registration falls entirely and immediately on the institution.
The government bears no statutory obligation to complete renewal before the expiry date. Every risk sits with the institution. An organisation that applied for renewal in good faith, that submitted every document, paid every fee, followed every procedure, can still find its certificate ceased and its assets provisionally vested if the government’s portal crashed, if a processing officer was on leave, or if a technical objection was raised at the last moment over a minor document.
This raises serious constitutional questions under Articles 14, 21, and 300A of the Constitution. On Article 300A in particular, it must be noted that the provision only protects against deprivation of property without authority of law. Since this Bill is the law, a successful Article 300A challenge would need to argue on the grounds of proportionality and procedural fairness, specifically, that deprivation caused by the government’s own administrative failure, without any prior hearing, is disproportionate and inconsistent with the principles of natural justice that the Supreme Court has long held to be constitutionally mandated.
There is a further dimension that most analyses have not addressed. Section 16B provides that the new vesting framework applies retrospectively to all assets already vested under the old Section 15, which is now omitted by this very Amendment. This means institutions whose registrations were cancelled in previous years, and whose assets were dealt with under the old Section 15, are now brought within the ambit of the new, far more sweeping Chapter IIIA regime. Institutions that lost their registration in 2018, 2020, or 2022 and have continued to operate may now find their existing physical assets, subject to the Designated Authority’s powers under a law that was not in force when their registration was cancelled. Whether this constitutes impermissible retroactive legislation is a live constitutional question, one that engages Article 20 of the Constitution, and every affected institution must seek legal advice on this risk without delay.
The Net Tightens Before Cancellation — The Suspension Stage
The danger does not begin at cancellation. It begins earlier. The amended Section 13(2)(c) provides that during the suspension of a certificate which precedes any final cancellation order, the institution is already prohibited from alienating, encumbering, or otherwise dealing with any asset created out of foreign contributions, without the prior approval of the Central Government.
This means that from the moment a certificate is suspended, even if the organisation ultimately prevails and the suspension is lifted, it cannot sell, mortgage, donate, or transfer any asset built with foreign funds without government permission. Combined with the cessation provisions of Section 14B, this creates a two-stage legal immobilisation: the institution is frozen at suspension and dispossessed at cessation.
A Criminal Charge with Your Name on It
Until this amendment, when an FCRA-registered organisation committed an offence, the organisation was the primary target of prosecution. The 2026 Amendment Bill ends that arrangement entirely.
The substituted Section 39(1) makes every key functionary of an FCRA-registered institution subject to a rebuttable presumption of knowledge of every offence committed by the institution. This presumption is automatic and arises by operation of law the moment an offence is established against the organisation. To escape criminal liability, the individual must affirmatively demonstrate with the burden of proof lying entirely upon them that the offence was committed without their knowledge and that they exercised all due diligence to prevent its commission. This is not a finding of guilt without trial, which would be constitutionally impermissible; it is a reverse burden of proof, a mechanism that shifts the evidentiary obligation to the accused. The distinction, however, does not diminish its severity in practice.
Section 39(2) goes further still. Where an offence is proved to have been committed with the consent or connivance of, or is attributable to any neglect on the part of any key functionary, that functionary is also deemed guilty and liable to be prosecuted accordingly. Neglect alone — not fraud, not deliberate wrongdoing, but mere inattention — is sufficient.
The definition of key functionary, newly inserted by this Bill as Section 2(1)(ja), is sweeping. It includes the Director of a company; a partner in a firm; a trustee of a trust; the Karta of a Hindu undivided family; any office bearer, member of a governing body, managing committee, or controlling authority of a society or association; and any other person, by whatever name called, who has control over or responsibility for the management or affairs of the institution. Every one of them faces, under the substituted Section 35, imprisonment for a term which may extend to one year, or a fine, or both, upon conviction.
The government has presented this as a reduction in penalty, noting that the old Section 35 provided for imprisonment of up to five years. That framing is deliberately misleading. The old Section 39 targeted companies and their directors. The new Section 39 targets every key functionary of every person, a term that includes trusts, societies, and associations. The net is wider, the presumption is stronger, and the individual is now the primary target.
A bishop who has never reviewed an institution’s FCRA returns, who may not even have visited it, faces criminal prosecution because his name is on the registration form and a subordinate made a filing error. This is not accountability. It is the legal architecture of intimidation.
The ‘Defunct Entity’ — Seized Before You Know It
Section 16C introduces a concept that should unsettle every religious institution in India: the defunct entity. Where any institution that was permitted to receive foreign contributions ceases to exist, or is rendered inoperative or defunct, two consequences follow automatically. First, the last key functionaries of that institution are obligated to inform the Central Government of that status within the prescribed period. Second, and more critically, all foreign contributions and all assets created from foreign contributions stand permanently vested in the Designated Authority under Section 16A(5) without any cancellation proceeding, without any prior notice, and without any hearing of any kind.
The words “inoperative” and “defunct” are not defined in the Bill. This is not a legislative oversight. In a law that attaches the consequence of immediate, total, and permanent dispossession to a single administrative determination, the absence of a definition is a grant of unguided and unchecked power to the Designated Authority.
Power of this nature, exercised without defined criteria, without judicial oversight, and without prior notice to the institution, is constitutionally impermissible, yet absent judicial intervention, it will be exercised.
The institutions most exposed to this provision are the ones that have served the Church the longest and most faithfully. Communities that received FCRA registration in the 1970s or 1980s have since shifted from formal development programmes to pastoral and spiritual ministry. Institutions navigating transition following the death, retirement, or transfer of founding leaders. Organisations that have missed one or more annual returns, not out of negligence but because they operate in areas where a trained accountant, reliable internet connectivity, or access to legal counsel is structurally unavailable.
These are not delinquent institutions. They are faithful ones. Under Section 16C, they can be stripped of everything without warning, without the opportunity to be heard, and with no Civil Court able to override the vesting once the Designated Authority has acted. Constitutional remedies through the High Courts remain available and must be pursued immediately upon any such determination.
The Transfer Provision — Where Seized Assets Go
It is Section 16A(6), read with Section 16D, that reveals most plainly what this Amendment is truly about. Once assets are permanently vested, Section 16A(6)(a) empowers the Designated Authority to transfer them to any Ministry, Department, authority, or agency of the Central or State Government, or to any local authority, in such manner as may be prescribed. Alternatively, under Section 16A(6)(b), it may dispose of them through public auction or any other process, crediting the proceeds together with any unutilised foreign contribution to the Consolidated Fund of India. The institution that built those assets, and every one of its key functionaries, is permanently barred from acquiring any direct or indirect interest in them thereafter.
When immovable property is sold, Section 16D(1) requires the Designated Authority to issue a Certificate of Sale, which constitutes conclusive proof of the buyer’s ownership even in the absence of original title deeds. Under Section 16D(2), this certificate is a valid instrument for registration, and no registering authority can refuse it on the ground of missing title documents. Under Section 16D(3), no Civil Court decree, no tribunal order, and no attachment can override a transfer made by the Designated Authority under this Act.
There is one limited protection. Section 16A(7) provides that where a permanently vested asset is a place of worship, the Designated Authority must entrust its management to a person who will maintain its religious character. A church building or chapel that is permanently vested may therefore not be converted to a secular purpose, but its management passes entirely to a person chosen by the government, not the congregation that built it.
If the stated purpose of this Bill were financial transparency, none of these provisions would be necessary. Transparency requires audit, disclosure, and accountability. It does not require the power to transfer a seized hospital to a government agency chosen by the executive, or to auction a school built by a religious congregation, issue a Sale Certificate that overrides the congregation’s own title deeds, and credit the proceeds to the government’s consolidated fund. The architecture of these provisions does not serve transparency. It serves a permanent, irreversible transfer. That distinction must be named clearly.
Investigations Require Government Permission — A Monopoly on Prosecution
One provision has received almost no public attention, but its implications are profound. The amended Section 43(2) provides that no investigation for any offence under the FCRA shall be initiated except with the prior approval of the Central Government.
In a single sub-section, the Bill concentrates the power to initiate prosecution entirely within the executive. No independent agency, State police force, or magistrate acting on a complaint can commence an investigation without the Central Government’s permission. What distinguishes this provision is the scope of executive interest at stake: when the Central Government itself stands to benefit from the seizure and transfer of assets, the gate it controls over who may be investigated becomes a gate over institutional survival itself. When it chooses to open that gate, it will open; when it does not, it will remain shut regardless of the merits of any complaint. Power over prosecution is, in practice, power over survival.
The Poor Pay the Price Last — and Heaviest
There is a consequence of this Bill that no legal analysis should pass over in silence, and that is what happens to the people the Church serves when an institution is shut down by paperwork.
A government portal that crashes during the renewal window. A scanned document is rejected because its resolution fails a technical specification. An annual return flagged for a formatting error. Under the existing law, these were administrative irritants. Under the 2026 Amendment, any one of them, left unresolved past the certificate’s expiry date, triggers cessation under Section 14B, activates the Designated Authority under Chapter IIIA, and sets in motion a chain of legal consequences that ends with the permanent seizure of the institution.
The hospital does not close because it has stopped healing people. It closes because a digital portal timed out. The school does not shut down because it has stopped teaching children. It shuts because a renewal file sat unprocessed on a government officer’s desk for three weeks past the expiry date. It ceases because a technical objection was raised at the last moment over a minor document, and the law provides no grace, no pause, and no remedy before the consequences take hold.
The Amendment speaks in the dry language of designated authorities, provisional vesting, and consolidated funds. But behind every lapsed certificate is a community that depended on what that certificate made possible. The poor do not appear in the text of this Bill. They never do. But they are the ones who will bear its consequences most completely and with the least ability to seek redress.
A law that allows technical failures in a government system to cascade into the closure of institutions serving the most vulnerable citizens of this country is not a law designed for accountability. It is a law designed for power. And the Church, which has stood beside the poor when no one else would, must say so, clearly and without apology.
The Gospel Has Always Been Countercultural
The Church in India has never waited for political comfort before answering the demands of the Gospel. It built institutions when no one else would. It served communities that the state had abandoned. It educated children in places the government had not yet reached. It did this not because any law permitted it, but because the call was clear and the need was real. That call has not changed. But the legal landscape in which the Church answers it has shifted sharply, deliberately, and not in the Church’s favour.
The response of the Church must be clear-eyed, organised, and immediate, with compliance so impeccable that no legal pretext exists for action, and constitutional challenges mounted at the earliest opportunity.
