Karnataka High Court Quashes ED Complaint Against Greenpeace NGO For Alleged FEMA Violations

The Karnataka High Court has quashed the complaint and show cause notice issued by the Enforcement Directorate to NGO Greenpeace Environment Trust, Greenpeace India Society, in an alleged case of violation of provisions of the Foreign Exchange Management Act.A single judge, Justice Suraj Govindaraj said “The show cause notice dated 25.02.2020 issued by respondent No.2 at Annexure-A in both the petitions are quashed. The complaint dated 25.02.2019 filed by respondent No.3 at Annexure-B in both the petitions are quashed.” The Show Cause notice was issued alleging contravention of Section 6(3)(b) of the FEMA Act. It was called upon petitioners to demonstrate as to why adjudication proceedings under Section 16 of the Act must not be initiated against them. ED had alleged that the petitioner created a front company by the name of Direct Dialogue Initiative India Private Limited ("Direct Dialogue") for the purpose of receiving funds from abroad by circumventing the cancellation of the Petitioner's license issued under the Foreign Contribution (Regulation) Act, 2010. The NGO was accused of violating the provisions for amounts to the extent of US$ $ 38,79,457.38 (equivalent to Rs. 29,26,78,538.49).The petitioners argued that, though they were, until 2015, in receipt of foreign and domestic funds, in view of the cancellation of their FCRA registration on 02.09.2015, they received only domestic funds from various citizens and domestic corporate entities.Further, for facilitating fundraising it had entered into a Contractual arrangement dated 30.01 2018 with a company engaged in the services of fund-raising, called M/s Direct Dialogue Initiative India Private Limited. Direct Dialogue, as per the contract is responsible for enrolling financial sponsors sustaining enrolled supporters, attending to transactional problems and bank matters, regular reporting and other services required, and was also in charge of tele fundraising marketing while was also entitled to use effective appropriate means of communication to spread the message of the petitioner and aggregate donors. Seeking quashing of the complaint and summons it was submitted that the very complaint fails to make out an offence against the Petitioner herein. Such being the case, the very issuance of the Show cause notice is arbitrary in nature and deserves to be set aside at the very threshold.The counsel for petitioners also relied on the judgment of the coordinate bench in the case of Mrs.Kshithija Urs -v- Union of India and others [WP No.1418/2021], (Former Director) decided on December 6 2024. It was pointed out that proceedings in the present matter were initiated after the omission of Section 6(3)(b) of the Foreign Exchange Management Act, 1999 from by the Finance Act, 2015. The complaint was filed on 25.10.2019, and summons were issued on 25-02-2020, when the said provision stood omitted by the Finance Act 2015, which was notified on 15.10.2019. The bench noted that since the proceedings in the present matter had also been initiated after the omission of Section 6(3)(b) of the Foreign Exchange Management Act, 1999, there is no particular dispute about the said position.Following which it held “Applying the dicta laid down by the Coordinate Bench of this court in its order dated 6.12.2025 passed in W.P. No.1418/2021, the above petition is requires to be allowed.” Appearance: Advocate Monica Patil for Petitioners.CGC UNNIKRISHAN M for RespondentsCitation No: 2025 LiveLaw (Kar) 210Case Title: GreenPeace Environment Trust AND Union of India & Others Case No: WRIT PETITION NO. 5691 OF 2021 (GM-FE) C/W WRIT PETITION NO. 4711 OF 2021Click Here To Read/Download Order

Karnataka High Court Quashes ED Complaint Against Greenpeace NGO For Alleged FEMA Violations

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