Vesting of provisional asset-control powers in an executive-appointed authority raises due-process concerns. Discuss with reference to recent amendments to the FCRA.

Q. Vesting of provisional asset-control powers in an executive-appointed authority raises due-process concerns. Discuss with reference to recent amendments to the FCRA. (15 marks, 250-350 words)

The Foreign Contribution (Regulation) Amendment Bill, 2026 creates a "Designated Authority" in which the foreign contribution and assets of an organisation vest provisionally the moment its FCRA certificate ceases [1]. Shifting custody of property to an executive nominee before adjudication tests the "just, fair and reasonable" standard that Article 21 demands of any procedure.

The new asset-control architecture - Cessation is triggered not only by cancellation or surrender, but also by non-renewal, denial of renewal, or failure to apply before expiry [1]. - The Authority may supervise, manage, transfer assets to ministries or agencies, or dispose of them by sale [1]. - Assets created partly from foreign contribution vest wholly; only a "distinct or ascertainable" domestic portion may be reclaimed [1]. - Provisional vesting becomes permanent if the certificate is not renewed within the prescribed period [1].

Why due process is strained - Executive as adjudicator: custody passes to a government-notified authority rather than a court or liquidator, blurring executive and judicial roles [1]. - Audi alteram partem gap: unlike cancellation, denial of renewal carries no reasonable opportunity to be heard and no appeal, yet triggers identical vesting [1]. - Article 300A: whole-asset vesting for partly-foreign assets sits uneasily with proportionality in deprivation of property. - Chilling effect on Article 19(1)(c) freedom of association, sharpened for faith-based education and health providers.

The regulatory case on the other side - FCRA's object is to prohibit use of foreign funds for activities detrimental to national interest; assets of defunct entities could otherwise be diverted unsupervised [2][4]. - It continues the tightening begun by the 2020 Act — designated SBI New Delhi account, 20% cap on administrative expenses, ban on sub-granting [3]. - Safeguards exist: appeal to the District Judge, protection of the religious character of places of worship, and reduction of maximum imprisonment from five years to one [1].

The concern lies in the procedure, not the purpose. Building in a pre-vesting hearing, an appeal against renewal denial, time-bound reasoned orders, and vesting confined to the demonstrably foreign-funded share would make the law both secure and constitutional — reconciling accountability in foreign funding with the associational freedom on which a vibrant civil society rests.

(~330 words)

Sources: 1. The Foreign Contribution (Regulation) Amendment Bill, 2026 — PRS Legislative Research — Designated Authority, grounds of cessation, provisional and permanent vesting, partly-foreign assets, absence of appeal against renewal denial, District Judge appeal, place-of-worship protection, penalty reduced to one year 2. The Foreign Contribution (Regulation) Act, 2010 (MHA, FCRA Online) — statutory object of prohibiting foreign contribution for activities detrimental to national interest 3. The Foreign Contribution (Regulation) Amendment Act, 2020 (Act No. 33 of 2020) — designated SBI New Delhi Main Branch account, 20% administrative-expense cap, prohibition on sub-granting 4. FCRA: Foreign Contribution (Regulation) Act — PIB Factsheet — MHA as administering ministry and the transparency/accountability rationale of FCRA regulation