The Delhi High Court ruled that money earned from illegal cricket betting can be attached by the ED if it originates from criminal acts linked to scheduled offences under PMLA. It held that the illegal origin of funds continues to taint all profits, even if betting itself is not a scheduled offence.
New Delhi: The Delhi High Court has ruled that even though cricket betting is not listed as a scheduled offence under the Prevention of Money Laundering Act, 2002 (PMLA), any property or money earned from illegal betting can still be attached by the Enforcement Directorate (ED) if it originates from criminal acts like cheating, forgery or conspiracy.
The decision was passed by a Division Bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar.
The Court made it clear that money generated through illegal betting becomes “proceeds of crime” if its source is connected to criminal activities that fall under scheduled offences.
The judges explained that when money is earned through criminal methods and then used to run activities that may not be scheduled offences, the illegal nature of that money does not disappear.
The Court said that even if the later activity looks legal on paper, the original crime continues to affect the property and profits.
The court said,
“This is because the taint attached to the property at its very inception, originated from a criminal activity relatable to a scheduled offence, persists throughout its subsequent use. Pithily put, “Fruit of a poisoned tree”… It is also important to note that, even if a downstream activity, such as conducting betting, is not a scheduled offence, profits generated from such activity remain traceable to the original tainted property, especially when the said downstream activity is a final manifestation of a chain of criminality, intricately interwoven with multiple preceding criminal acts, any profit derived therefrom clearly constituting “proceeds of crime” within the contours of the PMLA,”
These observations were made while dismissing several petitions which challenged provisional attachment orders issued by the ED under the PMLA. These orders were issued during an investigation into a large illegal hawala and international betting network.
The case involved a betting operation being run through the UK-based website Betfair.com from a farmhouse located in Vadodara. The ED alleged that the accused were part of a large network that facilitated illegal betting across India and other countries.
According to the investigation, the accused acted as middlemen who purchased and distributed “Super Master IDs”. These IDs allowed multiple betting accounts to be created without following any Know Your Customer (KYC) norms. This made the betting operations anonymous and untraceable.
The IDs were reportedly bought using money that was illegally sent outside India. These were then used to operate betting networks in countries like India, Dubai, Pakistan and other regions.
The ED claimed that between December 2014 and March 2015, the group generated betting transactions amounting to nearly ₹2,400 crore.
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Following this, the ED attached several movable and immovable properties, stating that they were proceeds of crime generated from illegal activities.
The accused challenged this action and argued that cricket betting is not a scheduled offence under the PMLA and therefore their properties could not be attached. They also claimed that the provisional attachment orders and show-cause notices did not contain a valid “reason to believe”.
However, after examining the matter in detail, the High Court rejected these arguments and upheld the ED’s action. The Bench held that the Super Master Login IDs used by the accused clearly fall under the definition of “property” as mentioned in Section 2(1)(v) of the PMLA.
The Court further stated that the involvement of a single-member PMLA adjudicating authority is completely valid and legal. It rejected the petitioners’ argument that such proceedings are coram non judice or without jurisdiction.
The Court clarified that the PMLA law intentionally allows single, two or three-member benches to ensure smooth functioning and prevent unnecessary delays in proceedings.
The petitioners were represented by Advocates Sushil Gupta, Sunita Gupta, Bakul Jain, Mayank Jain, Paramatma Singh, Madhur Jain and Sahil Yadav.
For the Enforcement Directorate, Special Counsel Anupam S Sharma along with Advocates Harpreet Kalsi, Ripudaman Sharma, Vashisht Rao, Riya Sachdeva, Vishal Jain and Anant Mishra appeared in court.
The Union of India was represented by Central Government Standing Counsel Ripudaman Bhardwaj along with Advocate Amit Kumar Rana.
This judgment strengthens the powers of the Enforcement Directorate and sends a strong message that even indirect profits from illegal activities connected to scheduled offences can be treated as proceeds of crime and attached under the PMLA, regardless of whether the final activity is technically a scheduled offence or not.
Case Title:
Naresh Bansal and Others v Adjudicating Authority and Another
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