Karnataka High Court Issues Notice On Plea Challenging ED Search Of Partnership Firm Over Gambling Allegation

The Karnataka High Court on Wednesday (January 21) sought the ED's response on a partnership firm's plea challenging proceedings initiated by the agency, including search and seizure following a complaint registered in connection with allegations of betting and gambling activities.The court also issued notice on another plea challenging the agency's search and show cause notice. After hearing the matter for some time Justice M Nagaprassana in his order dictated:"The learned counsel accepts notice for ED in both matters. Objections be filed at least on the interim prayer by the next date. List the matter on January 29 in fresh matters list".During the hearing the counsel for petitioner argued that he was challenging the search conducted by the ED. He questioned whether the central agency had any reasons to conduct the search on the day that it was conducted, claiming that there was nothing against the petitioner. He submitted that the freezing order issued by the ED also does not provide any reasons. The court was also told that the matter was listed before the concerned adjudicating authority on February 5. Meanwhile ED's counsel said that there was a predicate offence pending at Cyber Cell Madhya Pradesh. The petitioner's counsel however sought stay of proceedings before the authority. The petitioner Puppy Tours and Travels LLP has sought to declare the search, seizure and freezing operations and consequent retention of property and records, conducted by ED as illegal and bad in law. It has also challenged a show cause notice issued by the ED on 29.09.2025 as well as all proceedings emanating therefrom.The plea claims that the ED had registered a complaint in 2025 allegedly on the basis of FIRs under various provisions including IPC Section 420 (cheating), registered over a period of 10-15 years relating to alleged betting and gambling activities. The plea claims that the ED had alleged that several persons are involved in online betting and gambling activities and proceeds of crime have been generated from the same, which has been laundered attracting penal consequences under Section 3 of the PMLA. The petitioner has alleged that the ED conducted search and seizure on 22.08.2025 to 09.09.2025 and seized valuables and has also frozen various bank accounts. Thereafter a show cause notice was issued to the petitioner on 29.09.2025. The petition states that KC Veerendra (petitioner in the connected matter) was granted bail by the trial court. It further states that only one predicate offence survives and even in that the concerned agency has filed a closure report (B report). Therefore, if the predicate offences have been quashed/ closed/ acquitted and in the sole surviving predicate offence, the agency has filed a closure report, the ED does not have any valid reason to believe in terms of Section 17(1) of the PMLA and moreso having nexus with the live predicate offence. The matter is listed on January 29. Case title: PUPPYS TOURS AND TRAVELS LLP v/s UNION OF INDIA AND ANOTHER WP 964/2026 KC NAGARAJA v/s UNION OF INDIA AND ANOTHER WP 966/2026 Counsel for petitioners: Advocates Mayank Jain, Madhur Jain, Arpit Goel and Rajath

Karnataka High Court Issues Notice On Plea Challenging ED Search Of Partnership Firm Over Gambling Allegation

Malavika Prasad

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