An orphanage in India run by a Germany-based Christian ministry is set to be taken over by local authorities after a court ruled its inmates were suffering from "Stockholm Syndrome".

The reference is to the condition which sees hostages build relationships with their captors and take their side.

The Moses Ministries orphanage in Tiruchy, Madras, is run by the Christian Initiative for India, founded in Hamburg by Indian-born Rev Gideon Jacob in 1989. It houses 89 children and is run by Jacob and his wife.

The court said it had failed to obtain recognition under the relevant legislation and that it had admitted the children without taking details of their date or place of birth or their parents' names. The ruling also said passports had been obtained by "dubious methods" for the children, who had been taken on trips to Germany.

Speaking to Christian Today, Jacob – pastor of the Good Shepherd World Prayer Centre in Tiruchy – strongly denied the allegations, which he said were motivated by Hindu nationalists.

He said only 2,000 of the 5,000 orphanages in the state were officially registered and that Moses Ministries had operated successfully for 20 years.

A judge-led inspection of the orphanage had recommended changes but had said the charity should be given time to make them, he said.

Asked about the lack of records for the children, he said they had been brought to the orphanage as an alternative to infanticide, a fate suffered by girl children in the region. "When you bring a baby to give her away you are committing a crime for which you can be imprisoned," he said. "If you give away your child you aren't going to give your telephone number."

He flatly denied there was anything untoward about the children's passports, saying they had been organised by the official social welfare services.

Jacob and his wife have cared for the children, the youngest of whom is 17, since they were infants, and he said they regard them as their daughters. The first is to be married in February.

However, according to the New Indian Express, Justice V Ramasubramanian of the Madurai Bench of Madras High Court said: "The children are virtually suffering from a syndrome, something similar to Stockholm Syndrome, that makes them believe very strongly that Pastor Gideon Jacob is their only saviour."

Change India's petition said the children were victims of trafficking and were illegally held.

The court said that any attempt to shift the orphans to other institutions would be counter-productive because they had been "brainwashed" to believe that only their pastor could save them. Its interim ruling said: "We are of the considered view that the removal of Pastor Gideon Jacob and his coterie from the management and administration of the institution, rather than the removal of the inmates, would be the better option for the present, so that the inmates are subjected to a kind of de-briefing, enabling them to slowly come out of the web of illusory world weaved around them."

It established a committee to take over the running of the home.

Jacob is preparing to appeal against the ruling. He told Christian Today: "I don't know what lies in the future, but God can do the impossible."