'Funding Is the Oxygen of Extremism': Karnataka High Court Declines to Quash UAPA FIR in ₹92.55 Crore Foreign Funding Case

The Karnataka High Court on Wednesday refused to quash an FIR registered against six persons in a case alleging illegal foreign funding through international debit cards and its suspected diversion to Left Wing Extremism (LWE)-affected regions.

Court held that investigations involving allegations touching national security should not ordinarily be interdicted at the threshold.

"National security is the invisible architecture upon which the sovereignty, stability and constitutional order of a nation rest. One of the gravest threats to National security in the present times is, the clandestine funding of extremism," court observed.

The bench of Justice M. Nagaprasanna dismissed two criminal petitions challenging registration of a case by Kothanur Police, Bengaluru, under Sections 318(4), 335(A)(ii), 336(3), 238, 61(2), 190 of the Bharatiya Nyaya Sanhita (BNS) [earlier Sections 415, 464, 463, 201,120, 149 of the IPC, respectively ] and Sections 13, 17 and 18 of the Unlawful Activities (Prevention) Act (UAPA).

The petitions had questioned both the legality of the Enforcement Directorate's communication leading to registration of the FIR and the invocation of UAPA.

According to the Enforcement Directorate, Micah Mark was intercepted at Bengaluru's Kempegowda International Airport on April 18, 2026, while carrying 24 foreign debit cards issued by Truist Bank, USA.

Subsequent searches allegedly uncovered a financial network linked to a US-based organisation, The Timothy Initiative (TTI), through which foreign funds were withdrawn in India using international debit cards.

The agency alleged that approximately ₹92.55 crore was withdrawn between November 2025 and April 2026 in violation of FEMA and FCRA provisions. It also claimed that over 1,000 debit cards had been circulated in India, many bearing the generic name "Santosh Kumar" to conceal the identities of users and circumvent KYC norms.

Did the ED have power to trigger registration of the FIR under PMLA?

Answering the principal challenge raised by the petitioners, the court held that Section 66(2) of the Prevention of Money Laundering Act expressly authorises the Enforcement Directorate to share information with the appropriate agency if, during its investigation, it forms an opinion that another law has been violated.

Rejecting the contention that the ED lacked authority to initiate such communication, court said the statutory scheme was intended to ensure that information revealing offences under other enactments did not remain confined to PMLA proceedings alone. Accepting the petitioners' interpretation, it observed, would defeat the legislative purpose behind Section 66(2).

Court further noted that the communication sent by the ED was "neither cryptic nor perfunctory" but a detailed dossier narrating the alleged modus operandi, movement of foreign funds, ATM withdrawals and suspected channelisation of funds into LWE-affected regions.

Was there enough material to justify invoking UAPA?

The petitioners argued that the stringent provisions of UAPA had been invoked mechanically and without any material connecting them to terrorist activities.

The high court, however, held that at the stage of investigation, it was not required to determine guilt but only to examine whether prima facie material existed to justify continuation of the probe.

Referring to Sections 13, 17 and 18 of the UAPA, court observed that "the material presently available, particularly the communication under Section 66(2), cannot be said to be so barren as to warrant judicial interdiction".

It cautioned that undertaking a deeper examination at this stage would encroach upon the domain of investigation and risk prejudicing either side.

Court also rejected the argument of the co-accused that there was no link between them and Micah Mark, observing that the communication under Section 66(2) established the chain of allegations connecting the accused persons.

Emphasising the seriousness of the allegations, Justice Nagaprasanna observed that national security rests upon preventing clandestine financing of extremism.

"Funding becomes the oxygen that enables extremist movements to survive and proliferate," court said, adding that courts must exercise restraint before stalling investigations involving allegations of economic subversion intertwined with national security.

In such cases, it observed, investigation is "not merely permissible - it becomes imperative".

Dismissing both petitions, court clarified that the accused would remain free to avail all remedies available in law if a final report is ultimately filed, and that the observations in the order would not influence the ongoing investigation.

Case Title: Micah Mark v. State of Karnataka and Another, connected with R. Jonathan Sushil & Ors. v. State of Karnataka and Another

Bench: Justice M. Nagaprasanna

Order Date: July 1, 2026