‘Gravest threat’: Karnataka High Court denies relief in foreign funds UAPA case

The Karnataka High Court on Wednesday dismissed two petitions filed by six people seeking to cancel an FIR registered in Bengaluru against them under the Unlawful Activities (Prevention) Act for allegedly channelling over Rs 92.55 crore in illegal foreign funds to India, with a portion claimed to have reached Maoist-affected areas in Chhattisgarh and Assam.

Justice M Nagaprasanna said in his order, “One of the gravest threats to National security in the present times is the clandestine funding of extremism. Funding, therefore, becomes the oxygen that enables extremist movements to survive and proliferate.”

Dismissing the petitions, the single-judge bench emphasised that the danger of extremist financing lies not merely in the money transferred, but in the consequences it unleashes and if left unchecked, such funding can transform ideological extremism into organised violence, threatening national unity and public safety.

‘Rs 92.55 crore routed to India using US debit cards’

The FIR against the petitioners—Micah Mark, Jonathan S Rajan, Ajit Varghese Mathai, Varghese Chacko, Bablu Kurmi, and Supreme Joy—was registered on charges of cheating, criminal conspiracy, forgery, causing disappearance of evidence, and UAPA violations.

The FIR was registered on June 11 based on a complaint the Enforcement Directorate’s (ED) filed at the Kothanur police station, alleging that The Timothy Initiative (TTI), headquartered in Raleigh, North Carolina, routed foreign funds to India using US bank debit cards, withdrawing cash through ATMs across Karnataka, Chhattisgarh, and Assam—in violation of the Foreign Exchange Management Act (FEMA) and the Foreign Contribution (Regulation) Act (FCRA).

Between November 2025 and April 2026, Rs 92.55 crore ($9.9 million) was allegedly transacted in violation of laws. Over the past few years, more than 1,000 such foreign debit cards are alleged to have been distributed across India.

The ED complaint alleged that funds were received and utilised without a valid FCRA registration or government permission. Cards were allegedly issued in a fictitious name, Santosh Kumar. Additionally, TTI’s global portal became inaccessible to Indian users following ED’s raids, and digital banking records were allegedly deleted under Mark’s direction.

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ED also said that its investigation revealed that in Dhamtari, a Maoist-affected area, foreign debit cards were used at the Vijaya Paleja branch ATM of a cooperative bank, with Chacko allegedly overseeing withdrawals. It claimed to have found evidence of Rs 6.34 crore being funnelled into these regions to sustain cash-based networks linked to Maoist units and cadres.

‘Court needs to examine only if prima facie material exists’

Observing that investigations were at a preliminary stage and under UAPA dealing with unlawful activities, raising funds for terrorist acts, and conspiracy, the bench said the court was required to examine only whether prima facie material exists to justify investigation.

The bench said, “The material presently available, particularly the communication under Section 66(2), cannot be said to be so barren as to warrant judicial interdiction. Any deeper scrutiny at this stage would risk trenching upon the domain of investigation and potentially prejudicing either side.”

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The bench held that the courts must therefore be “circumspect in stifling investigation, particularly where allegations touch upon issues of economic subversion intertwined with National security”.

‘Statutory interpretation cannot be myopic’

Senior advocate Shyam Sunder, appearing for Mark, argued that the offence was registered based on a suspicion for which the ED officer who filed the complaint had no credible evidence. He contended that ED was investigating an offence under the FEMA and could not have shared information with the police under section 66 (2) of the Prevention of Money Laundering Act (PMLA).

Sunder had said, “Everything is on the basis of suspicion, and there is no proof. The ED officer is hallucinating about the suspicion, and the Bengaluru police have registered a case, thinking PMLA is passing the information.”

Senior advocate S Basvaraj, appearing for the other accused, argued that they had not received any international debit cards from Mark and were not involved in any of the alleged activities.

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Public Prosecutor B N Jagadeesha argued that the funds withdrawn by the accused using the debit cards were allegedly used to fund left-wing extremist organisations banned under the UAPA.

Advocate Madhu N Rao, appearing for ED, submitted that Mark was arrested based on a lookout circular issued against him and that the agency seized 24 international debit cards. Further, he argued that prima facie evidence collected during the FEMA offence led to the information being shared with the Bengaluru police, who registered the case. He argued that ED can share information.

Section 66(2) of the PMLA Act allows ED or such other authority to share information with other agencies if it believes that other laws have been violated.

Rejecting the contention of the petitioners, the bench said, “The provision is intended to ensure that information uncovered in the course of investigation under one enactment does not remain siloed where it reveals infractions under another. To accept the contention that such communication is permissible only in relation to offences strictly under PMLA would amount to reading clause (i) of sub section (1) into irrelevance and rendering the legislative intent nugatory.”

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The order added, “Statutory interpretation cannot be so myopic as to defeat the plain purpose of the enactment.”

The bench stated that ED cannot be faulted for communicating information to the jurisdictional police as initially it had appeared as a financial irregularity but allegedly revealed a far wider network upon search and seizure.

Justice Nagaprasanna said, “Statutes operating in cognate fields must be construed harmoniously, not in watertight compartments.”