Received Funds Through Cryptocurrency To Carry Out Terrorist Activities: Karnataka High Court Upholds UAPA Accused’s Bail Rejection

The appeal before the High Court was filed against the order of rejection of bail petition passed in a case registered under Sections 120B, 121A, 427 and 435 of IPC, 1860 and Sections 16, 17, 18, 20, 38, 39 and 40 of the Unlawful Activities (Prevention) Act, 1967 and Section 2 of the Karnataka State Prevention of Destruction and Loss of Property Act, 1981.

The Division Bench of Justice H.P. Sandesh and Justice Venkatesh Naik T held, “Furthermore, it has been established that accused No.4 received funds through Crypto-currency from online handler affiliated with the terrorist outfit and these funds were subsequently utilized to carry out the terrorist activities. The Trial Court further held that the facts which have been taken together provide reasonable grounds to believe that the accusations levelled against accused No.4 are prima facie true.”

Advocate Usman P represented the Appellant, while Special Public Prosecutor P Prasanna Kumar represented the Respondent.

Factual Background

The main allegation against the accused appellant was that he is a member of the proscribed terrorist organisation, Islamic State and was radicalised as well as recruited by the second accused, who is his college mate at PA College of Engineering, Mangaluru. As part of a larger conspiracy, the appellant allegedly participated in reconnaissance and arson activities in Mangaluru with the intention to wage war against the Government of India. The Investigating Officer had gathered both oral and documentary evidence to support these claims. The accused was arrested, and at the time of arrest, a personal search was conducted. The appellant stated that the second accused radicalised and recruited him to further the activities of the proscribed terrorist organisation, Islamic State.

He also stated that he received cryptocurrency into his Zebpay account from online handlers as well as into the crypto account of his college friend. It was thus alleged that the appellant had been involved in terrorist activities along with the second accused, who is his college mate. The Trial Court noted the involvement of the appellant in the said activities, considered the fact that he had been engaged in cryptocurrency activities and thus rejected his bail petition.

Reasoning

The Bench noted that the Trial Court considered the cumulative material and held that there was prima facie material evidence against the accused appellant to show that he was acting to further the objectives of the proscribed terrorist organisation, Islamic State. It was further noticed that both the second accused and the appellant are actively involved in conducting reconnaissance and arson activities in and around Mangaluru.

The Bench noticed that it was established that the appellant accused received funds through cryptocurrency to carry out the terrorist activities. The Trial Court further held that the facts taken together provided reasonable grounds to believe that the accusations levelled against the accused appellant were prima facie true.

“Having considered the order passed by the Trial Court considering the involvement of the appellant in the acts which has been narrated from paragraph 21 onwards of the order including the involvement of crypto-currency in paragraph 38 and also taking note of FSL report in paragraph 35 of the order of the Trial Court, this Court is of the opinion that it is not a case for setting aside the order of the Trial Court since the Trial Court in detail discussed the material collected against the appellant which substantiated the prima facie case against him. Hence, appellant/accused No.4 has not made out any ground to enlarge him on bail”, it held.

Having considered the material collected by IO during the investigation, the Bench held that the matter required trial, which had been commenced. Thus, the Bench dismissed the appeal.

Cause Title: Reeshaan Thajuddin Sheikh v. The National Investigation Agency (Neutral Citation: 2026:KHC:3550-DB)

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