Court Upholds ED's Action in Massive Cricket Betting Operation
The Delhi High Court has delivered a significant verdict in a high-profile cricket betting case, rejecting multiple petitions that challenged the Enforcement Directorate's provisional attachment orders issued nearly a decade ago in connection with an international betting racket valued at approximately Rs 2,400 crores.
In a ruling that could have far-reaching implications for financial crime investigations, the court maintained that even though cricket betting itself isn't classified as a scheduled offense under the Prevention of Money Laundering Act (PMLA), the profits generated from such illegal activities still qualify as "proceeds of crime" and fall within the ambit of anti-money laundering laws.
The Betting Network and Modus Operandi
The case originated from an FIR filed by Vadodara Police in Gujarat against four individuals from the state, all identified as partners of a firm called 'Maruti Ahmedabad' (MA). According to investigation details, the accused operated an elaborate international betting network that primarily focused on IPL matches during 2014-2015.
The betting operation utilized betfair.com, a London-based online platform that had been banned in India since 2010. The accused would purchase super master-login credentials from this platform and subsequently distribute login IDs to individual bettors, creating a multi-layered betting structure.
The Enforcement Directorate's investigation revealed that the accused earned massive profits "through illegal betting activities, by placing and accepting bets on various matches played during 2014-2015, involving bookies and punters located in India, Dubai, Pakistan and other nations across the world."
Legal Battle and Court's Rationale
The legal challenge was brought before the Delhi High Court by several accused individuals, including two international bookies identified as Girish Patel alias Tommy from Unjha in north Gujarat, and Kiran Thakkar alias Mala, a resident of Maninagar, Ahmedabad, along with Delhi-based bookie Mukesh Kumar Sharma alias 'Mukesh Delhi' among others.
These petitioners had challenged both the provisional attachment order issued by the ED in September 2015 for attaching moveable and immoveable properties valued at approximately Rs. 20 crores, and the subsequent show-cause notice issued in October 2015 for money laundering under PMLA.
The division bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar firmly rejected these challenges. The court observed that the designated officer who made the attachment "possessed sufficient and cogent material to form the requisite reason to believe" and that the action was "not mechanical or predicated on mere suspicion."
Broader Implications of the Judgment
In its detailed reasoning, the court emphasized that "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." The judgment further noted that when such downstream activity represents the final manifestation of a criminal chain, intricately connected with multiple preceding criminal acts, any profit derived clearly constitutes proceeds of crime under PMLA.
The court specifically highlighted the critical role of the Super Master Login IDs, stating that "any benefit indirectly derived by the usage of Super Master Login IDs would constitute proceeds of crime" and that without these IDs, which were the culmination of criminal activities related to scheduled offenses, the international cricket betting racket would have been non-functional.
The bench concluded that there was "no infirmity in the issuance of the PAO or the consequential SCN," effectively validating the Enforcement Directorate's entire investigative process in this massive financial fraud case that has spanned over a decade.
