Property From Illegal Cricket Betting Activities Constitutes 'Proceeds Of Crime', Can Be Attached By ED: Delhi High Court
The Delhi High Court has held that though cricket betting is not a separate predicate offence under Prevention of Money Laundering Act, 2002, the property generated from such illegal activities can be attached by the Enforcement Directorate.A division bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar observed that the scope of Section 2(1)(u) PMLA, which defines proceeds of...
The Delhi High Court has held that though cricket betting is not a separate predicate offence under Prevention of Money Laundering Act, 2002, the property generated from such illegal activities can be attached by the Enforcement Directorate.
A division bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar observed that the scope of Section 2(1)(u) PMLA, which defines proceeds of crime, is very wide.
“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,” it observed.
In the case at hand, it is alleged that Petitioner played an active role of the Petitioner in procuring and distributing Super Master IDs, which were an indispensable requirement for continuation of the Int‟l Cricket Betting Racket.
Out of the ₹2,400 crore generated from such activities, ₹20 crores were statedly transferred to him.
As such, ED provisionally attached his moveable and immoveable properties worth ₹20 crores, as being proceeds of crime arising out of illegal acts connected to the betting activities.
Petitioner contended that cricket betting is not a scheduled offence, as such failing to fall under the ambit of predicate offence, consequently, no proceeds of crime can be stated to have been derived.
Disagreeing, the High Court held,
“the act of the Petitioner to procure and distribute these IDs, without any KYC verification or lawful documentation amounts to forgery, cheating, identity fraud and criminal conspiracy, all of which constitute as a scheduled offence. Moreover, the conduct of the Petitioner was not merely incidental; rather, it was a deliberate act undertaken in furtherance of a larger criminal conspiracy aimed at facilitating the running of an illegal betting racket. Therefore, any benefit indirectly derived by the usage of Super Master Login IDs, would constitute proceeds of crime.”
The Court illustrated that if a person acquires any immovable property through acts of forgery, cheating and criminal conspiracy and thereafter utilises such property for a downstream activity, such as conducting an unlicensed real-estate business which is not a scheduled offence, the proceeds generated from the latter activity nonetheless constitute “proceeds of crime” under Section 2(1)(u) of the PMLA.
“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”.”
As such, the petition was dismissed.
Appearance: Mr Sushil Gupta, Ms Sunita Gupta, Advs. for Petitioners; Mr. Anupam S. Sharrma, Special Counsel with Ms. Harpreet Kalsi, Mr. Ripudaman Sharma, Mr. Vashisht Rao, Ms. Riya Sachdeva, Mr. Vishal Jain, Mr. Anant Mishra, Advs. for ED Mr. Ripudaman Bhardwaj, CGSC with Mr Amit Kumar Rana, Adv. for UOI
Case title: Naresh Bansal & Ors. v. Adjudicating Authority And Anr (and batch)
Citation: 2025 LiveLaw (Del) 1590
Case no.: W.P.(C) 11361/2015 (and batch)