Safiya Malik

The High Court of Karnataka Single Bench of Justice Suraj Govindaraj held that show cause notices and complaints issued under the Foreign Exchange Management Act, 1999 (FEMA), subsequent to the omission of Section 6(3)(b), were legally untenable. The Court quashed both the show cause notice and the corresponding complaint filed by the Directorate of Enforcement against the petitioners. Relying on binding precedent from a Coordinate Bench in a similar matter, the Court concluded that the actions taken by the Enforcement Directorate could not be sustained in law.

The petitioners in the connected writ petitions were Greenpeace Environment Trust and Greenpeace India Society, both entities registered and operating from Chennai. The petitions were filed under Article 226 of the Constitution of India, challenging two specific actions initiated by the Directorate of Enforcement.

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The primary relief sought in both petitions was the quashing of a show cause notice dated 25.02.2020, issued by the Special Director, Directorate of Enforcement, Southern Regional Office, Chennai. The notice, bearing reference number T-4/SRO/SDE/BGZO/01/2020, was served upon the petitioners under the provisions of the Foreign Exchange Management Act, 1999. In addition, the petitioners sought to quash the complaint dated 25.10.2019, bearing reference number T-3/BGZO/96/2018, filed by the Assistant Director of the Directorate of Enforcement, Bengaluru Zonal Office.

The petitioners argued that the initiation of proceedings against them was based on a provision that no longer existed in law. They submitted that Section 6(3)(b) of FEMA, which previously required prior approval of the Reserve Bank of India for certain transactions, had been omitted before the initiation of these proceedings. As such, any complaint or show cause notice relying on that provision was without legal foundation.

The petitioners further pointed out that their case was covered by the judgment dated 06.12.2024 in Mrs. Kshithija Urs v. Union of India & Others [WP No. 1418/2021], rendered by a Coordinate Bench of the High Court of Karnataka. In that case, the Court had quashed similar proceedings initiated under FEMA on the ground that the legal provision invoked had been omitted prior to the initiation of action.

Both petitioners were represented by the same counsel and challenged the identical show cause notice and complaint, which had been served and filed respectively in relation to the same set of transactions or factual circumstances.

The respondents in both matters included the Union of India, represented through the Ministry of Finance; the Special Director, Directorate of Enforcement, Southern Regional Office, Chennai; the Assistant Director of the Directorate of Enforcement, Bengaluru; and the Directorate of Enforcement, Bengaluru Zonal Office, represented by its Joint Director. The respondents were represented by Central Government Counsel in the proceedings.

The respondents did not dispute the omission of Section 6(3)(b) from FEMA and acknowledged that the proceedings had been initiated after the said omission had taken legal effect.

In the absence of any factual dispute on the legal position, and in view of the binding precedent from the Coordinate Bench, the Court proceeded to adjudicate the matter summarily during the preliminary hearing stage.

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The learned counsel for the petitioners submitted that the lis in the present matters was covered by the decision dated 06.12.2024 of a Coordinate Bench of the Court in the case of Mrs. Kshithija Urs v. Union of India and others [WP No.1418/2021]. Since the proceedings in the present matters had also been initiated after the omission of Section 6(3)(b) of the Foreign Exchange Management Act, 1999, there was no particular dispute regarding that position.

In view of the above, and applying the dicta laid down by the Coordinate Bench in its order dated 06.12.2025 passed in W.P. No.1418/2021, the petitions were required to be allowed.

The Court allowed both writ petitions by issuing a writ of certiorari.

It quashed the show cause notice dated 25.02.2020, issued by respondent No. 2 in both matters, which had been marked as Annexure-A. Additionally, the complaint dated 25.10.2019, filed by respondent No. 3 and referenced as Annexure-B in both petitions, was also quashed.

Advocates Representing the Parties

For the Petitioners: Smt. Monica Patil, Advocate

For the Respondents: Sri. Unnikrishnan M., Central Government Counsel

Case Title: Greenpeace Environment Trust v. Union of India & Others; Greenpeace India Society v. Union of India & Others

Neutral Citation: 2025:KHC:20287

Case Number: WP No. 5691 of 2021 c/w WP No. 4711 of 2021

Bench: Justice Suraj Govindaraj

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