Delhi High Court Allows ED to Attach Property from Illegal Cricket Betting Funds
The Delhi High Court has made a significant ruling, stating that even though cricket betting is not a scheduled offence under the Prevention of Money Laundering Act, 2002 (PMLA), property generated from illegal betting can be attached as the proceeds of crime by the Enforcement Directorate (ED). This decision was delivered in the case of Naresh Bansal and Ors v Adjudicating Authority and Anr.
A Division Bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar ruled that money made from betting using criminal acts of forgery, cheating, and conspiracy is 'proceeds of crime' under Section 2(1)(u) of the PMLA. The Court explained that if a person acquires any immovable property through acts of forgery, cheating, and criminal conspiracy and subsequently uses such property for a downstream activity, such as conducting an unlicensed real-estate business, the proceeds from the latter activity still constitute proceeds of crime.
The Court emphasized that the taint attached to the property at its inception, originating from a criminal activity related to a scheduled offence, persists throughout its subsequent use. As the Court put it, “Fruit of a poisoned tree.” 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 downstream activity is a final manifestation of a chain of criminality, intricately interwoven with multiple preceding criminal acts.
The High Court rendered these findings while dismissing a batch of petitions challenging provisional attachment orders (PAOs) issued under the PMLA. The case stemmed from an ED investigation into large-scale hawala operations and an international betting operation run through the UK-based website Betfair.com from a farmhouse in Vadodara. It was alleged that the petitioners acted as conduits who procured and distributed Super Master IDs—digital access credentials that enabled the creation of multiple betting accounts without any KYC compliance.
The IDs were allegedly purchased using funds illegally remitted abroad and were central to enabling anonymous betting networks across India, Dubai, Pakistan, and other countries. The agency argued that the group generated nearly ₹2,400 crore in betting turnover between December 2014 and March 2015. The ED attached movable and immovable properties believed to be proceeds of crime.
However, the accused challenged the attachment, stating that the PAOs and show-cause notices lacked a valid “reason to believe” and that cricket betting is not a scheduled offence under the PMLA. After considering the case, the High Court rejected the petitioners’ argument and upheld the attachment of properties. It held that the Super Master Login IDs obtained and distributed by the accused fall well within the ambit of “property” under Section 2(1)(v) of the PMLA.
The Bench also rejected the petitioners’ contention that proceedings conducted by a single-member PMLA adjudicating authority are coram non judice (without jurisdiction). The Court stated that the PMLA intentionally provides for single, two, or three-member benches to maintain efficacy and avoid redundancy.
Advocates Sushil Gupta, Sunita Gupta, Bakul Jain, Mayank Jain, Paramatma Singh, Madhur Jain, and Sahil Yadav appeared for the petitioners. Special Counsel Anupam S Sharrma, along with advocates Harpreet Kalsi, Ripudaman Sharma, Vashisht Rao, Riya Sachdeva, Vishal Jain, and Anant Mishra, appeared for the ED. Central Government Standing Counsel Ripudaman Bhardwaj, along with advocate Amit Kumar Rana, represented the Union of India.
