1. Possession of international debit cards and alleged foreign fund flow — Challenge to registration of crime under UAPA and other offences. (Para 1 )
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2026 Supreme(Kar) 744
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
Micah Mark, S/o. Late Mr. Mark - Petitioner
Versus
State Of Karnataka, By Kothanur PS Represented By State Public Prosecutor – Respondent
Criminal Petition No.8401 of 2026 C/W Criminal Petition No.8417 of 2026
Decided On : 01-07-2026
Advocates Appeared:
For the Petitioner:Sri M.S. Shyam Sundar, Sr. Advocate A/W Sri Timothy Charles, Advocate
For the Respondents: Sri B.N. Jagadeesha, SPP-I, Sri Madhu N. Rao, SPL.PP.
For the Petitioner:Sri M.S. Shyam Sundar, Sr. Advocate A/W Sri Timothy Charles, Advocate
For the Respondents: Sri B.N. Jagadeesha, SPP-I, Sri Madhu N. Rao, SPL.PP.
Section 66(2) of the PMLA empowers enforcement authorities to share information regarding contraventions of any law. Courts should not stifle nascent investigations, especially when prima facie evidence suggests threats to national security, such as the clandestine funding of extremist activities.
Headnote:(A) Prevention of Money Laundering Act, 2002 - Section 66(2) - Unlawful Activities (Prevention) Act, 1967 - Sections 2(o), 13, 17 and 18 - Foreign Exchange Management Act, 1999 - Section 37 - Bharatiya Nyaya Sanhita, 2023 - Disclosure of information by enforcement agency to police for registration of a crime - Validity of sharing information under PMLA for contravention of other laws - It is held that Section 66(2) of PMLA expressly empowers the Director or authorized authority, upon forming an opinion that provisions of any other law are contravened, to share such information with the concerned agency for necessary action; the provision ensures that information uncovered under one enactment does not remain siloed where it reveals infractions under another. (Paras 11-12)
(B) National Security - Funding of extremism - Investigation into unlawful activities - Courts must be circumspect in stifling investigation, particularly where allegations touch upon issues of economic subversion intertwined with National security; the preservation of National security demands robust vigilance against financial channels that sustain extremism, making such investigations imperative. (Paras 17-18)
Facts of the case:
An individual was intercepted in possession of several international debit cards. Subsequent investigation by an enforcement agency revealed a network utilizing these cards to withdraw substantial funds in contravention of statutory regulations, with allegations that such funds were used to support extremist activities in various regions. The agency shared this information with the state police under the PMLA, resulting in the registration of a criminal case invoking the BNS and the stringent provisions of the UAPA. The accused challenged the legality of these proceedings and the invocation of the UAPA.
Findings of Court:
The communication under Section 66(2) of the PMLA was a detailed dossier containing prima facie material to justify investigation. The agency was authorized to share the information as the alleged activities posed a threat to the sovereignty and internal security of the nation. The interplay between PMLA and FEMA necessitates that they be read in tandem.
Issues: The central issue was whether the investigation should be interdicted at an incipient stage on the premise that the enforcement agency lacked the authority to communicate information leading to the registration of the crime.
Ratio Decidendi: Section 66(2) of the PMLA provides a clear statutory mechanism for sharing information about contraventions of other laws. In matters involving national security and the clandestine funding of extremism, courts should not exercise inherent jurisdiction to nip an investigation in the bud when prima facie material exists, as the integrity and security of the nation are paramount.
Result: Petitions dismissed.
Legal Category Hierarchy
- crime and sentencing
- practice and procedure
- constitutional law
- statutory interpretation
Table of Contents
2. Petitioners argued Enforcement Directorate lacked authority to communicate information for crime registration; State and ED opposed interdiction of nascent investigation. (Para 5 , 6 , 7 , 8 )
3. Court held Section 66(2) PMLA empowers sharing information about contravention of other laws with concerned agencies for necessary action. (Para 11 , 12 , 13 , 14 , 15 , 17 , 18 )
4. Section 66(2) PMLA authorises the Directorate to share information regarding contravention of any other law for registration of crime. (Para 11 , 12 , 13 , 14 )
5. Petitions dismissed — Investigation not interdicted at incipient stage; petitioners may avail remedies if final report is laid. (Para 19 )
6. Does Section 66(2) of the PMLA empower the Enforcement Directorate to share information about contravention of laws other than PMLA?
Yes, the provision expressly empowers the Director to share information with the concerned agency for necessary action if he forms an opinion that provisions of any other law are contravened. (Para 11 , 12 , 13 , 14 )
7. Should a court interdict investigation at an incipient stage where allegations involve national security and funding of extremism?
No, courts must be circumspect in stifling investigation where allegations touch upon economic subversion intertwined with national security; investigation becomes imperative in such cases. (Para 15 , 17 , 18 )
8. What constitutes an 'unlawful activity' under Section 2(o) of the UAPA?
An activity intended to bring about cession or secession of territory, disrupt sovereignty and territorial integrity, or cause disaffection against India is an 'unlawful activity' under Section 2(o) of UAPA. (Para 15 )
ORDER :
M. NAGAPRASANNA, J.
Both these petitions emanate from a singular criminal proceeding - Crime No.202 of 2026 -registered for offences punishable under Sections 318(4), 335(A)(ii), 336(3), 238, 61(2), 190 of the Bharatiya Nyaya Sanhita, 2023 and Sections 13, 17 and 18 of the Unlawful Activities (Prevention) Act, 1967 (hereinafter referred to as ‘UAPA’). Criminal Petition No.8401 of 2026 is instituted by accused No.2, while Criminal Petition No.8417 of 2026 is preferred by accused Nos.1, 3, 4, 5 and 6. Both petitions, therefore, converge upon the legality and sustainability of proceedings initiated in Crime No.202 of 2026.
2. Shorn of unnecessary details, facts in brief, germane, are as follows: -
2.1. Accused No.2 was intercepted at the Kempegowda International Airport while allegedly found in possession of 24 international debit cards. The accusation against him does not halt at mere possession. It is alleged that he had repeatedly traversed beyond the territorial shores of the nation and, upon each return, brought with him multiple ATM debit cards, whereafter, the Enforcement Directorate conducted search and seizure operations on 18-04-2026 and 19-04-2026 for suspected violations under the Foreign Exchange Management Act (‘FEMA’ for short).
2.2. During the course of search and investigation, the Enforcement Directorate claims to have unearthed a network of financial operations linked to an entity based in the United States of America, operating under the name The Timothy Initiative. Upon scrutiny of financial transactions, documentary material, and statements recorded during investigation/search, the Directorate formed a prima facie opinion that international debit cards issued by Trust Bank, USA, were systematically utilized to withdraw funds through ATMs across India. The allegation is: between November 2025 and April 2026, funds approximating Rs.92.55 crores (equivalent to USD 99,95,240) were allegedly utilized in contravention of statutory regulations; further, between January 2024 and March 2026, withdrawals nearing Rs.40 crores were allegedly effected from states such as Chhattisgarh and Assam using the same mechanism.
2.3. The cards, it is alleged, were all issued under the deceptively generic name “Santosh Kumar” and were coded region- wise as “NE-1”, “NE-2”, “Southern Region-1” and the like - an arrangement allegedly devised to shroud the identities of actual users and circumvent Know Your Customer requirements. Such camouflage, according to the prosecution, was not incidental, but deliberate. Ajit Varghese Mathai, arrayed as accused No.3, is alleged to have overseen the financial operations of The Timothy Initiative in India, while Jonathan S. Rajan is said to have supervised its overall operations. The remaining accused are alleged to have functioned as facilitators in ATM withdrawals and subsequent deployment of funds. On the foundation of these allegations, the Enforcement Directorate shares information to register a complaint before the 1st respondent, culminating in registration of the subject crime.
2.4. A brief alleged backdrop deserves notice. Upon interception at the airport, accused No.2 was directed to appear before the 2nd respondent in New Delhi on 18-04-2026 and was subsequently taken into custody. It is the contention of the petitioner that the governing statute confers no authority upon the 2nd respondent to take any individual into custody. The summons issued to him were challenged before this Court in Writ Petition No.13156 of 2026. In the said writ petition, accused No.2 specifically alleged custodial assault and coercion at the hands of the Enforcement Directorate and further apprehended that additional offences would be foisted upon him. Notices were issued by a coordinate Bench. It is in this backdrop that, on 11-06-2026, the impugned complaint came to be filed before another police station, now invoking not only the earlier offences, but also the draconian provisions of UAPA. It is this invoca
