The Madras High Court has recently ruled that the Bhagavad Gita cannot be classified as a religious text for the purposes of the Foreign Contribution (Regulation) Act, 2010 (FCRA), and consequently, FCRA registration cannot be denied to a trust solely on the ground that it teaches the Gita and Yoga. The ruling came in Arsha Vidya Parampara Trust v. Union of India & Anr.

Accordingly, the Court set aside the Union Home Ministry’s decision rejecting FCRA registration to Arsha Vidya Parampara Trust, holding that the rejection order suffered from lack of adequate reasoning and procedural deficiencies.

Justice G.R. Swaminathan directed the Ministry to reconsider the Trust’s application, which pertains to a charitable organisation engaged in Vedanta-based educational activities.

Established in 2017, Arsha Vidya Parampara Trust is involved in the teaching of Vedanta, Sanskrit, and Yoga, and also undertakes work related to the preservation of ancient manuscripts. The Trust applied for FCRA registration in 2021, but the application remained pending for several years. While the Ministry sought clarifications in 2024 and 2025, a fresh application filed in January 2025 was ultimately rejected in September 2025.

Challenging this rejection, the Trust approached the High Court.

One of the primary grounds cited by the Ministry was that the Trust “appears to be religious in nature.” The Court examined this assertion in detail, relying on earlier judicial pronouncements on the Bhagavad Gita and its philosophical character.

The Court observed:

“The Bhagavad Gita is not a religious book. It is a treatise on moral philosophy. It cannot be confined to any particular religion and forms an integral part of Bharatiya civilisation.”

The Ministry had argued that imparting teachings related to the Bhagavad Gita, Upanishads, Vedanta, and Sanskrit rendered the Trust a religious organisation. However, the Court held that such reasoning did not meet the requirements of Section 11 of the FCRA.

Section 11 permits organisations with cultural, educational, religious, or social objectives to receive foreign contributions, and denial of registration requires a clear, definite, and well-reasoned conclusion. The Court emphasised that the statutory requirement of a “definite” finding cannot be satisfied by tentative observations.

Explaining this, the Court stated:

“The term ‘definite’ is significant. The authority must arrive at a categorical conclusion regarding the nature of the applicant’s activities. A mere impression that the organisation ‘appears to be religious’ does not meet the statutory mandate.”

The Court further rejected the Ministry’s view that teaching Vedanta, Sanskrit, and Yoga ipso facto makes an institution religious, noting that Vedanta is a philosophical system and Yoga is a universal discipline for physical and mental well-being.

The Ministry had also relied on a ₹9 lakh contribution received by the Trust from a trustee who is an Overseas Citizen of India, contending that it violated FCRA norms due to lack of prior approval. The Trust admitted the lapse and opted to compound the offence under Section 41 of the FCRA, which allows certain violations to be settled upon payment of a compounding fee.

The Court noted that the Ministry itself completed the compounding process in August 2025 and held that once an offence is compounded, it cannot subsequently be used as a ground to deny FCRA registration.

The Court observed:

“Once the offence has been compounded, the contravention cannot be treated as an adverse factor against the applicant.”

It further held that if the Ministry intended to rely on the contravention to reject the application, it should have clearly informed the Trust that compounding would only shield it from prosecution and could still lead to disqualification.

An additional allegation—regarding the transfer of foreign contributions to another organisation—was raised for the first time in the final rejection order. The Court found that this allegation had neither been communicated earlier nor supported with specific details, and held that raising a new charge at the final stage without granting an opportunity to respond violated the principles of natural justice.

In view of these findings, the Court directed the FCRA Wing of the Union Home Ministry to reconsider the Trust’s application. If the Ministry possesses credible evidence regarding fund transfers, it must issue a fresh, reasoned notice providing the Trust an opportunity to respond. The entire exercise is to be completed within three months from receipt of the order.

The Trust was represented by Senior Advocate Sricharan Rangarajan, along with Advocate Mohamed Ashick. The Union of India was represented by Additional Solicitor General A.R.L. Sundaresan, assisted by Deputy Solicitor General K. Govindarajan.