New Delhi: The Karnataka high court has quashed a 2018 communication by the Enforcement Directorate to banks, directing them to freeze Amnesty International India’s accounts, alleging that provisions of Foreign Exchange Management Act, 1999, had been violated.
LiveLaw has reported that a single judge bench of Justice K.S. Hemalekha said that under Section 132 of the Income Tax Act, the ED’s notice can be valid only for 60 days.
It was issued on October 25, 2018.
In 2018, the ED carried out a search at the office of the human rights organisation in connection with an investigation into the group’s foreign funding.
The ED had claimed that the Amnesty International India Foundation Trust was trying to circumvent the Foreign Contribution (Regulation) Act (FCRA) after they were denied “permission/registration under FCRA 2010 by MHA”. To do this, the ED said, the group had created a commercial arm called Amnesty International India Pvt Ltd (AIIPL) to receive foreign funding. This arm has “received foreign funds through (the) commercial route to the extent of Rs 36 crore till date,” the ED claimed.
The agency had then issued a direction to its banks, HDFC and Kotak Mahindra, to stop the operation of its accounts, without any notice.
By July 2022, the probe agency had issued a show-cause notice under the Foreign Exchange Management Act, imposing a penalty of Rs 51.72 crore on the AIIPL and Rs 10 crore on its former head Aakar Patel.
In court, senior advocate Professor Raviverma Kumar highlighted the 60-day cap on the implementation of the notice. Kumar also cited the Greenpeace India Society vs Union of India and Others judgment.
Senior central government standing counsel, H. Jayakara Shetty, said that the Greenpeace judgment would be applicable only to the present petition and it cannot be a precedent to be applied in all the matters, according to LiveLaw.
In 2020, the ED had issued provisional attachment orders under the Prevention of Money Laundering Act for Amnesty’s bank accounts. Later that year, the high court had given partial relief to the NGO and allowed them to withdraw Rs 60 lakhs to meet expenses.
Subsequent appeals by Amnesty requesting the court to consider the substantive points of its challenge against the ED’s movn the e were quashed by a high court division bench and later, the Supreme Court.
Amnesty International India now no longer operates in India, following the seizure of its bank accounts.
