The Supreme Court has stayed a Delhi High Court ruling that allowed the ED to treat money from illegal online cricket betting as “proceeds of crime” under the PMLA. The apex court will now examine whether the ED can act when betting offences are not listed as scheduled crimes under the law.
The Supreme Court of India on Monday stayed a Delhi High Court judgment which had allowed the Enforcement Directorate (ED) to seize properties linked to illegal online cricket betting by treating the money involved as “proceeds of crime” under the Prevention of Money Laundering Act (PMLA).
A Bench comprising Justice M.M. Sundresh and Justice N. Kotiswar Singh issued notice to the ED while hearing a petition challenging the Delhi High Court’s decision that upheld the provisional attachment of properties by the ED in a case alleging large-scale hawala transactions and an international online betting racket.
The case relates to alleged illegal betting activities that were said to be operated through the UK-based website Betfair.com from a farmhouse located in Vadodara. According to the ED, the accused persons acted as intermediaries who procured and distributed “Super Master IDs”, which are digital access credentials that allowed the creation of multiple betting accounts without following any Know Your Customer (KYC) norms.
In November 2025, the Delhi High Court had ruled that the money earned from betting through criminal acts such as forgery, cheating and criminal conspiracy would qualify as “proceeds of crime” under Section 2(1)(u) of the PMLA. Challenging this ruling, the accused persons approached the Supreme Court.
Before the apex court, the petitioners raised a key legal issue regarding the scope and limits of the PMLA. They argued that the ED is empowered to act only when money or property is derived from offences that are specifically listed in the Schedule to the PMLA.
The petition contended that the PMLA permits the ED to initiate money-laundering proceedings only when the alleged proceeds arise from scheduled offences. Since online betting and gambling do not find a place in the Schedule to the PMLA, the ED, according to the petitioners, had no legal authority to register or pursue a money-laundering case in the present matter.
It was further argued that the ED attempted to bypass this legal limitation by linking the alleged betting proceeds to a separate case involving forged SIM cards. The petitioners claimed that this linkage was artificial and unjustified, especially when the ED itself alleged that the money was generated directly from betting activities.
As stated in the petition,
“The impugned judgment has unjustly relied upon a distinct and remote activity of forgery to substantiate the allegation of existence of proceeds of crime in the present case. It is fundamental to the scheme of PMLA that if an offence in not included in the Schedule of the PMLA by the legislature, ED cannot derive jurisdiction.”
The petitioners also pointed out that although the Delhi High Court had held that the writ petition before it was not maintainable due to the availability of alternative statutory remedies under the PMLA, it nevertheless proceeded to examine the merits of the case and upheld the ED’s actions.
According to the petition,
“This approach renders the impugned judgment ex facie without jurisdiction, as once the High Court declined to exercise writ jurisdiction, it became functus officio and could not have adjudicated issues reserved exclusively for the statutory authorities under Sections 5 and 8 of the PMLA.”
The plea further argued that by doing so, the High Court effectively decided matters that should have been left to the specialised authorities constituted under the PMLA, thereby undermining the statutory framework of the law.
The petition stated,
“The statutory remedies have been reduced to an empty formality, rendering the Petitioner remediless and violating Articles 14 and 21 of the Constitution,”
It was also contended that the High Court’s ruling amounts to an attempt to expand the reach of the money-laundering law to activities that are only loosely or indirectly connected to alleged criminal offences.
The petition further argued,
“The Hon’ble High Court has diluted and rewritten the statutory requirement of ‘as a result of criminal activity relating to a scheduled offence’ by introducing a novel and extra-statutory ‘downstream activity’,”
The petitioners were represented before the Supreme Court by Senior Advocate S. Nagamuthu, along with advocates Sushil Gupta, Mayank Jain, Madhur Jain and Arpit Goel.
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