Recording of specific reasons is mandatory for refusal of FCRA registration under Section 12(5) of the Act.

The Petitioner, a trust, filed an online application on October 30, 2024, seeking registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA)

On August 18, 2025, the Respondent (Ministry of Home Affairs) issued an order refusing the registration under Section 12(4)(a)(vi) of the FCRA

The Petitioner challenged this order before the Bombay High Court via a Writ Petition under Article 226 of the Constitution, contending that the order was passed without providing an opportunity for a hearing and failed to record any specific reasons for the refusal

1. Whether the Central Government is under a statutory obligation to record and communicate reasons when refusing a grant of registration under the FCRA, 2010?

2. Whether the impugned order dated August 18, 2025, complied with the principles of natural justice and the statutory mandate of Section 12 of the FCRA?

The Court applied Section 12 of the Foreign Contribution (Regulation) Act, 2010, specifically sub-section (5), which mandates that the Central Government "shall record in its order the reasons" for refusing a certificate and furnish a copy to the applicant

the proviso to Section 12(5), which exempts the communication of reasons only in cases where there is no obligation to disclose information under the Right to Information Act, 2005

the principle of natural justice regarding the right to a fair hearing and the requirement for "speaking orders" in administrative actions

The Court examined the scheme of Section 12 and observed that recording reasons is a mandatory requirement for the Central Government upon refusal of an FCRA application

Upon perusal of the impugned order, the Court found it to be a summary rejection citing only the statutory provision [Section 12(4)(a)(vi)] without detailing the underlying facts or findings that led to the conclusion of non-eligibility

The Respondent argued that recording reasons was not mandatory under the Act [para. 4]; however, the Court rejected this, noting that while the proviso to Section 12(5) allows withholding communication of reasons in specific sensitive cases, the Respondent failed to demonstrate that the present case fell under such an exemption

Consequently, the order lacked the requisite legal reasoning and failed the test of transparency required by the statute

The Court quashed and set aside the impugned order dated August 18, 2025, on the grounds of lack of reasoning and denial of a hearing. The matter was remanded back to the Respondent with a direction to reconsider the Petitioner's application on its merits, provide an opportunity for a hearing, and dispose of the application with a reasoned order within four months