ED can attach assets in ₹2,400cr betting scam: Delhi HC
What's the story
The Delhi High Court has ruled that the Enforcement Directorate (ED) can attach assets linked to forgery, cheating, and conspiracy under the Prevention of Money Laundering Act (PMLA). The ruling comes in light of a ₹2,400 crore cricket-betting scam. The court said money generated from cricket betting through these means could be treated as "proceeds of crime" under Section 2(1)(u) of the PMLA.
Asset attachment
ED can attach assets from illegal betting
The court also clarified that the ED can attach assets generated from illegal betting, even though cricket betting isn't a scheduled offense under PMLA. The bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar made this observation while hearing a petition challenging provisional attachment orders (POA) issued by the ED in connection with the case.
Downstream activities
Court's clarification on downstream activities
The court clarified that if a person acquires immovable property through forgery, cheating, or criminal conspiracy and uses it for any "downstream activity," profits from such use can be attached as "proceeds of crime." This is true if the activity can be traced back to the original tainted property. The court said, "This is because the taint attached to the property at its very inception... persists throughout its subsequent use."
Betting profits
Stance on betting as a downstream activity
The court further said, "It is also important to note that, even if a downstream activity, such as conducting betting, is not a scheduled offense, profits generated from such activity remain traceable to the original tainted property." This was particularly relevant when the downstream act represented the culmination of a broader criminal sequence. The court also clarified that PMLA Section 2(1)(u) covers not only direct criminal proceeds but any advantage gained from using or transferring property tied to scheduled offences.
Investigation details
Investigation into international betting syndicate
The case stems from an ED probe into a major hawala network linked to an international betting syndicate allegedly run through UK-based platform Betfair.com. In May, the agency raided the residence of one of the accused, who was acting as a conduit and procuring/distributing Super Master IDs for creating multiple betting accounts without KYC checks. The accused allegedly procured them at ₹2.4 crore each.
Court's decision
ED's allegations and court's ruling
The ED has alleged that the group generated ₹2,400 crore in betting turnover between December 2014 and March 2015. The agency attached movable/immovable properties believed to be proceeds of crime. However, petitions were filed challenging the attachment of these properties. The court rejected these petitions and upheld the ED's action, noting there was a clear nexus between collected material and drawn inference regarding accused involvement in money laundering.