TaxTMI 
TaxTMI 
2026 (6) TMI 1015
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....nformation Report ('ECIR') and the issue being similar, they are taken up together and considered by this common order. 2. Shorn of unnecessary details, facts in brief are as follows: - 2.1. The petitioners are the Directors/Office Bearers of M/s Games Kraft Technologies Private Limited (hereinafter referred to as 'the Company' for short). The Company is established on 06-06-2017 and is inter alia engaged in the business of operating technology platforms, which allowed users to play skill-based online games such as rummy, ludo and poker. It is the averment that the Company is also engaged in the real estate business earning income through rental and maintenance of owned properties. The petitioner in Writ Petition No.15130 of 2026 is the founder and Chief Executive Officer of the Company. 2.2. A crime in Crime No.722 of 2024 comes to be registered before Central CEN Crime Police Station of Bengaluru for offences punishable under Sections 318(2) of the BNS and Section 66 of the Information Technology Act, 2000 ('the Act' for short) against the Company alleging that the complainant was in the habit of playing all these online games for the last 7 years when the Company was la....
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....2019. The complaint is registered only on 12-02-2026. On 23-02-2026, the subject ECIR recorded Crime Nos.97, 10 and 330 of 2026 as scheduled offences. No summons was issued to these petitioners in these cases. 2.5. On 07-05-2026, searches were carried out as obtaining under Section 17 of the PMLA, at the residence of the petitioners in Bengaluru and Gurugram. Search commenced at 7 a.m. on 07-05-2026 and concluded at 4.30 a.m. on 08-05-2026. In the interregnum, during the search, the petitioner in Writ Petition No.15277 of 2026 was taken into custody on 08-05-2026 at 3.30 a.m. and the petitioner in Writ Petition No.15278 of 2026 was taken into custody on 08-05-2026 at 2.30 a.m. The petitioner in Writ Petition No.15130 of 2026 was taken into custody on 08-05-2026 at 4.50 a.m. All of them remain in custody even to this day. The petitioners, in all these cases, call in question the arrest and seek a declaration that the arrest of the petitioners is illegal and in violation of Section 19 of the PMLA and fundamental rights guaranteed under Articles 14 and 21 of the Constitution of India and seek a consequential relief of their release from the prison. 3. Heard Dr. S. Muralidhar, Sr....
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....urt and various High Courts on the issue, which would all bear consideration qua their relevance in the course of the order. 5. The learned senior counsel Sri Vikram Chaudhary appearing for the petitioner in the companion petition - Writ Petition No.15277 of 2026, while adopting the submissions of the learned senior counsel Dr. S. Muralidhar would seek to amplify by contending that the second ECIR, in the peculiar facts of this case, is a misrepresentation and a blatant affront to the order of stay dated 22-01-2026 passed by this Court. He would submit that the material in possession as found in sub-section (1) of Section 19 of the PMLA, which forms the basis for reasons to believe regarding the guilt of the petitioner, has no life or proximate link or link with the necessity of arrest on 08-05-2026. Even if the petitioners after receipt of summons had refused to cooperate, that would not lead to direct arrest of a person. The search under Section 17 of the PMLA cannot be a valid ground to arrest any person as arriving at the satisfaction of guilt is the only pre-requisite of arrest. The ground that is communicated for the purpose of arrest is that the petitioner was evasive in ....
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.... a challenge to the arrest of a person. 8.2. The learned Additional Solicitor General would elaborate his submissions to contend that the merit-based review of grounds of arrest or reasons found in the reasons to believe should not become the subject matter of judicial review is what the Apex Court has held. He would submit that the present petition even otherwise is not entertainable, as the petition prays for release of the petitioners on the ground of illegality in the arrest and remand. The only method that the petitioners can seek release from custody is, filing an application seeking their enlargement on bail, which would be judicially adjudicated upon by applying rigours of Section 45 of the PMLA and the petitioners have availed the remedy of filing an application seeking bail and have simultaneously filed this petition on the score that the concerned Court answering the bail is not taking up the matter and the petitioners are continuing in prison. He would submit that the remand orders have to run through the course or lapsed by efflux of time. Legality or custody of a person cannot be gone into in a petition under Article 226 of the Constitution of India read with Secti....
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.... investigate the predicate offence is bereft of understanding of the offence of money laundering and after a reasoned judicial order of remand there can be no scope of challenge to the arrest, as grounds of arrest, the reason for arrest and the reason to believe for taking the petitioners into custody are all elaborately drawn while taking the petitioners into custody. On all these scores, the learned Additional Solicitor General seeks dismissal of the petitions and permitting the law to take its course. 9. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. THE PRECLUDE: 10. The afore-narrated facts, dates and link in the chain of events are all a matter of record. The petitioners are either founders, Directors or office bearers of the Company. The Company is in the business of operating technology platform which allows the users to play skill based on-line games such as rummy, ludo etc. using real money with other users. The business which began on 06-06-2017 continued till it discontinued with the promulgation of Promotion and Regulation of Online Gaming Act, 2025. On 5-12-2024 one crim....
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....led to update the ECIR as ECIR is not a statutory document like the FIR; it is only an administrative document. The offence therein was only under Section 66 of the Act, which was not a scheduled offence. Therefore, that could not have been submitted for continuance of the proceedings in the ECIR which arose from a crime in Crime No.722 of 2024. 13. The respondent/Enforcement Directorate registers a new ECIR on the basis of three predicate offences - (i) FIR No.97 of 2026 dated 24-01-2026 registered at P.S. Cyber Crimes, Hyderabad; (ii) FIR No.10 of 2026 dated 10-02-2026 registered at P.S. Kasipet, Ramagundam, Telangana and (iii) FIR No.330 of 2026 dated 12-02-2026 registered at P.S. Cyber Crimes, Hyderabad - ECIR bearing No. ECIR/BGZO/07/2026 comes to be recorded on 23-02-2026. The allegation is that the complainants therein have lost huge amounts from 2013 till the gaming platform was closed. It is upon these three FIRs that the aforementioned ECIR bearing No. ECIR/BGZO/07/2026 is registered, wherein the scheduled offences are the ones punishable under Sections 318 and 316 of the BNS, which were admittedly scheduled offences. It is the aftermath of r....
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....s multiple transactions. Later, upon contacting customer care to seek clarification and request a refund, he was informed that the games were skill-based, and operated using a Random Number Generator (RNG) system. According to the complainant, the representatives failed to address his concerns and allegedly avoided providing satisfactory responses. He claims to possess screen recordings of gameplay, which he believes demonstrate manipulation and unfair practices. The complainant has further raised concerns about the transparency of the platform, alleging that certain players appear to be consistently active at all hours, including late at night, raising suspicion about their authenticity. He also questioned the integrity of gameplay mechanics, including alleged duplication of cards, recurring score patterns favoring certain players, and consistent losses in higher-stake pooled games (Rs.500/- to Rs.10,000/-) compared to relatively balanced outcomes in low-stake point-based games. 1.3 As per FIR No. 10/2026, dated 10/802/2026, registered at Kasipet PS, Ramagundam, Telangana, for the offence under sections 318(4) of BNS, 2023 (Section 420 of IPC, 1860), it ....
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....dence revealed that the company (being managed by you, in the capacity of Director) is indulging in fraudulent practices to cheat the gamers/users, thereby causing huge financial loss to the users. The major findings of the Search are as given below: 2.1. Luring of gullible Users: The company claims to the public that the Real Money Games (RMGs), online Rummy, offered through its web/mobile application are free from any form of BOT's, algorithms, automated devices or in any other form, and assures users a fair and transparent gaming environment while participating in such RMGs. However, evidence gathered during the search proceedings establishes that the company has, initially offers various incentives to its users, in the form of Bonuses, referral bonuses, instant cash, tournament incentives, and new joining bonuses. Further, the accused company allows the new users to win small amounts in initial low-stake games, and these early wins serve a dual purpose, it helps building trust in the gaming platform and encourage users to deposit more money, creating a false impression that earning money through the platform is very easy. Furthermore, by creating a false impression tha....
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....res in its regular books of accounts. However, these expenditures were actually incurred for making payments to third parties who engaged in illegal activities. The evidence indicates that the company recorded approximately Rs. 100 Crores as expenses during the financial years 2020-21 & 2021-22 under the heads of software maintenance, and software development & consultancy. However, the vendors subsequently returned these amounts in cash after deducting their commission, GST, and TDS amounts. The cash thus received was utilized for illegal purposes, including cash payments to various individuals across multiple states and, surprisingly, for raising questions in the Lok Sabha also. 3. Kind attention is invited to Section 3 and Section 19 of PMLA, 2002 Section 3: Whosoever directly or indirectly attempt to indulge or knowingly assists or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. Explanation-For removal of doubts, it is hereby clarified that - (i) A pe....
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....hich was offering Real Money Games to the public, was cheating the genuine game players by manipulating the outcome of the game. b. By using the discretionary powers, under the guise of 'Terms of Service', you have illegally blocked the accounts/wallets of various genuine players, causing financial loss to them. c. Part of the proceeds of crime so derived have been laundered in guise of investment and have furthered taken the funds out of the company under the garb of Dividend payment, which you have further laundered by gifting to the family members/buying movable & immovable properties in the name of family members and entities like Trust, Firms and Companies, controlled and managed by your family members. d. In order to trace the proceeds of crime and its end utilization, Search operation u/s. 17 of PMLA, 2002 was conducted at your residential premises and other accused persons premises. The evidence gathered during the course of the search operation confirms the offence of cheating the genuine players of online Rummy game and involvement in Money Laundering offence. e. You alongwith other Directors/founders mentioned were hand in glove with S....
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....e Police Station, Hyderabad, the complainant alleged that he received phone calls and SMS messages from affiliates of online rummy platforms RummyCulture and RummyCircle. They promoted their websites, www.RummyCulture.com and www.RummyCircle.com, as government-licensed, skill-based gaming platforms and promised substantial profits. Influenced by these assurances, the complainant began playing and depositing money on their platforms but claims that he consistently incurred losses. It was further alleged that the games appeared one-sided and that he ultimately lost Rs.53,080/- across multiple transactions. Later, upon contacting customer care to seek clarification and request a refund, he was informed that the games were skill-based, and operated using a Random Number Generator (RNG) system. According to the complainant, the representatives failed to address his concerns and allegedly avoided providing satisfactory responses. He claims to possess screen recordings of gameplay, which he believes demonstrate manipulation and unfair practices. The complainant has further raised concerns about the transparency of the platform, alleging that certain players appear to be ....
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.....1,43,350/-through 43 transactions, and he claims to have suffered a total wrongful loss of Rs.41,04,849/-. 1.4. Complaints filed with the National Crime Report Bureau (NCRB) by the Victims of RummyCulture app.: Apart from the FIRs, there are huge number of complaints were reported in NCRB, and many of these complaints are under investigation. On examination of these complaints, it is seen that certain victims of the accused company were expressing suicidal thoughts due to the financial losses incurred by them on the accused company's online rummy platform. Also, allegations of fraud, cheating and usage of BOTs in the online Rummy platform of the accused company. For ready reference, a few complaints are reproduced hereunder (the list of the complaints filed by the victims are submitted as Annexure-1) 2024 September Rummy culture ANDHRA PRADESH Guntur Requested Both The Apps Vision 11 And Rummy Culture Fantasy Apps To Delete My Account And Pan Personal information Bank derais But They Are Saying It Was Not Possible Even Asking From Many Years No Action Was Taken To Remove My Data, Now I Am Leaving Of My Number Due To Some Unlucky Reasons Of My Mo....
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....garding the prevailing laws of the land. 1.5. Complaints filed by the victims through e-mail to the accused company: Apart from the complaints received by the NCRB and FIR registered against the company, the accused company itself had received lakhs of grievances/complaints from its users, who were victims of the of fraudulent activities carried out by the company, and also Notices u/s. 91 of CrPC, from LEA of various states. These data was seized during the Search conducted u/s. 17 of the PMLA, 2002 at the premises of M/s. Gameskraft Technologies Pvt.Ltd., in the month of Nov'2025. Similar to the above tabulated complaints, these grievances/complaints are very serious in nature, and no less than equivalent to heinous crimes. For ready reference, a few complaints are reproduced hereunder (the list of the complaints filed by the victims are submitted as Annexure-2) Furthermore, 06 number of FIRs were registered against at various police stations, in Tamil Nadu, as people committed suicide and the allegation is that the cause of death for suicide is addiction to online gaming. The details of FIRs registered are as given below; i. FIR No.1 of 2022 d....
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....ed from withdrawing their own monies, from the online gaming platform of RummyCulture, without any prior intimation, and also not releasing their legitimate money. vi. Rampant blockage of accounts/wallets: Many users had complained about the blockage of their wallets on the online gaming platform of Rummy. 2. Recording of ECIR: As offenses under sections 420 (Cheating and dishonestly inducing delivery of property), and 419 (Cheating by personation punishment) of the IPC, 1860, invoked in the aforesaid FIRs are scheduled offenses under sections 2(1)(x) and 2(1)(y) of PMLA, 2002, an ECIR vide number ECIR/BGZO/07/2026 dt.23/02/2026, has been recorded by this Office. 3. Outcome of PMLA investigation: M/s. Gameskraft Technologies Pvt. Ltd., was incorporated in the year 2017, and its registered office is in Bangalore. Its operations are carried out from Bangalore & Gurugram offices. The company, including its associated companies, is in the business of hosting online 'Real Money Games (RMGs)', and one of the major sources of revenue is from 'Rummyculture' (Rummy game), in the form of 'Commission'. M/s. Gameskraft Technologies Pvt. Ltd. is the ....
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....ted the company, M/s. Gameskraft Technologies Pvt. Ltd., by using their source code. Thus, it is reasonably suspected that these Directors/shareholders have strategically transferred their shareholding to their family trusts, to avoid any future litigation. The total turnover and profits derived by M/s. Gameskraft Technologies are as tabulated below: Financial Year Turnover (INR in Cr.) Profit Before Tax (INR in Cr.) Profit After Tax (INR in Cr.) 2017-18 1.40 0.43 0.31 2018-19 57.76 31.85 22.19 2019-20 435.59 307.48 228.89 2020-21 1,422.19 1,015.27 740.11 2021-22 2,132.58 1,263.92 936.59 2022-23 2,703.86 1,408.81 1,053.51 2023-24 3,466.60 1,273.14 946.88 2024-25 3,854.44 1,224.23 699.34 Total 14074.42 6525.13 4627.82 The following persons are the Directors and key persons of the group companies: SI.No. Name of the Director Company's name 1 Sh. Vikas Taneja M/s. Gameskraft Technologies Pvt. Ltd. 2 Sh. Deepak Singh Ahlawat 3 Sh. Prithvi Raj Singh 4 Sh. Deepak Kumar Jha M/s. RummyCulture Technologies Pvt.Lt....
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....nts, which are mapped with multiple User IDs are as given below: Examples: i. Account '32661983036 - used by 1736 users ii. Account '919912726138 - used by 1324 users iii. Account '056110100317280 - used by 1300 users iv. Account '31250112855 used by 1282 users v. 80310011002259 - 110 User IDs For ready reference, one of the bank accounts linked with multiple User IDs, are tabulated below: Based on the above, it is reasonably believed that the company may be using thousands of user IDs linked to a single bank account as BOTS or in any other form, to deceive users. Further, during the financial year 2022-23, an IIT-Delhi team has analyzed the software architecture and the data of the company, revealing that there is a high possibility that a system can be implemented with that information (regarding users) that can be flagged automatically, once the user with that particular ID is logged in to the platform. Accordingly, there is a high chance of manipulating/providing the intended table to play for their advantage. Players from banned states: Though the company states that users are not allowed....
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....e further investigated and quantified. 3.2 As seen from the above findings, the company and its Directors have indulged in cheating the genuine real time human players by using unscrupulous activities. Further, the proceeds of crime so generated by the company and its Directors have been systematically laundered to make payments to various illegal activities and investment in movable/immovable properties. The total such funds transferred to the illegal payments is around Rs. 100 Crores. The relevant portion of such illegal payments is reproduced hereunder, for ready reference (the data is extracted from the Excel sheet found in the seized mobile phone of Sh.Deepak Singh Ahlawat, the Excel sheet has been submitted as Annexure-3): Laundering the proceeds under the guise of Investment: Further, an FIR in 501/2025 dt. 09/09/2025 was registered against Sh. Ramesh Prabhu, former CFO of the company, is alleging embezzlement of Rs.250 Crores. However, Sh. Ramesh Prabhu was issued a Summons u/s. 50 of the PMLA, 2002 and in response to which he has replied vide e-mail dated 18/11/2025, wherein he has responded by stating that he had diverted the above funds, under ....
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....edge. The money that was transferred from company to my bank account were all lost in F&O trading. I did not receive any direct benefit for doing this transaction and I have not made any personal benefit from such investments. The company bank account from which the funds were transferred was a RBL bank account. There were 2 authorized signatories to that bank account - Prithvi Raj Singh and Myself. Whenever the transactions were made both received email notification and sms alert. All the money withdrawn in my account was shown as Mutual funds Investments in the balance sheet of the company. I was again asked buy all the founders during a Monday morning founders meeting to create fake mutual funds statements for audit purposes. in 2023-24 I refused to create such statements and did not provide it and again for 2024-25 I refused. The company was planning to do an IPO in the next 2 years and preparing for it. They had to bring the money back into the company while all of it was lost in trading. They blamed me for losing the money and pressurized me, and assured that they will handle the situation. In February 2025 during the Monday morning founders meeting....
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....ver; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. ... ... ... 19. Power to arrest.-(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribe....
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....xplanation.-For the removal of doubts, it is clarified that the expression "Offences to be cognizable and non-bailable" shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfilment of conditions under Section 19 and subject to the conditions enshrined under this section. ... ... ... 50. Powers of authorities regarding summons, production of documents and to give evidence, etc.-(1) The Director shall, for the purposes of Section 13, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a reporting entity, and examining him on oath; (c) compelling the production of records; (d) receiving evidence on affidavits....
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....gour of the provision. 17.2. The second limb of the Explanation carries the legislative intent even further. It declares money-laundering to be a continuing offence. The offence does not stand exhausted upon a solitary act of concealment or acquisition. So long as the accused continues to enjoy the fruits of crime, directly or indirectly, through possession, use, concealment or projection as untainted property, the criminality persists. 17.3. It is upon this substantive foundation that Section 19 erects the power of arrest. If Section 3 defines the mischief sought to be curbed, Section 19 provides the weapon for its enforcement. Yet, conscious of the grave consequences that flow from an arrest, the Parliament has not left the power at large. It has circumscribed the authority with safeguards that stand as sentinels protecting personal liberty. Section 19 is not a provision conferring a mere administrative power. It is a statutory recognition of the constitutional balance between the interest of the State in investigating serious economic offences and the equally compelling right of the citizen to be protected from arbitrary deprivation of liberty. The provision, therefore, in....
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.... furnishes the investigative architecture of the PMLA. It empowers the authorities to summon persons, compel attendance, secure production of records, record statements on oath and gather evidence necessary for unravelling the complex web of financial transactions that ordinarily characterise money-laundering operations. 17.9. However, the significance of Section 50 lies not merely in the powers it confers but in its relationship with Section 19. The former is an investigative provision; the latter is a coercive provision. Section 50 enables the collection of material. Section 19 permits curtailment of liberty. The transition from one stage to the other cannot be automatic. The material gathered under Section 50 must attain a degree of credibility and cogency sufficient to generate the statutory "reason to believe" contemplated under Section 19. The power to summon cannot become a prelude to an inevitable arrest. Nor can the power to arrest be exercised merely because summons have been issued or statements have been recorded. The statute contemplates a conscious and legally sustainable nexus between the material collected and the belief formed. 17.10. Section 45 completes the....
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....pex Court in VIJAY MADANLAL CHOUDHARY v. UNION OF INDIA 2022 SCC OnLine SC 929 holds as follows: ".... .... .... Arrest 208. Section 19 of the 2002 Act postulates the manner in which arrest of person involved in money laundering can be effected. Sub-section (1) of Section 19 envisages that the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government, if has material in his possession giving rise to reason to believe that any person has been guilty of an offence punishable under the 2002 Act, he may arrest such person. Besides the power being invested in high-ranking officials, Section 19 provides for inbuilt safeguards to be adhered to by the authorised officers, such as of recording reasons for the belief regarding the involvement of person in the offence of money laundering. That has to be recorded in writing and while effecting arrest of the person, the grounds for such arrest are informed to that person. Further, the authorised officer has to forward a copy of the order, along with the material in his possession, in a sealed cover to the adjudicating authority, who in turn is obliged to pr....
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...., dated 19-4-2018].] [Special Court or] Magistrate's Court." 210. In the context of this provision, the challenge is that in the absence of any formal complaint being filed, arrest under Section 19 is being made by the authorised officers. Whereas, the purport of Section 167 of the 1973 Code would suggest that the person can be arrested by the jurisdictional police without warrant under Section 41 of the 1973 Code only upon registration of a complaint under Section 154 of the 1973 Code in connection with cognizable offence or pursuant to the order of the court. Even, in case of arrest pursuant to the order of the court, a formal complaint against such person accusing him of being involved in commission of an offence is essential. Moreover, the person produced before the court would be at a loss to know the grounds for arrest unless a formal FIR or complaint is filed accusing him about his involvement in the commission of an offence. The provision if interpreted to permit the authorised officer to arrest someone being involved in the commission of offence of money laundering without a formal complaint against him, would be ex facie manifestly arbitrary and unconstitutional.....
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.... inquiry prosecution is launched against all persons found to be involved in the commission of offence of money laundering. It is also not unusual to provide for arrest of a person during such inquiry before filing of a complaint for indulging in alleged criminal activity. 213. The respondent has rightly adverted to somewhat similar provisions in other legislations, such as Section 35 of FERA and Section 102 of the Customs Act including the decisions of this Court upholding such power of arrest at the inquiry stage bestowed in the authorities in the respective legislations. In Ramesh Chandra Mehta [Ramesh Chandra Mehta v. State of W.B., 1968 SCC OnLine SC 62 : (1969) 2 SCR 461 : AIR 1970 SC 940], the Constitution Bench of this Court enunciated that Section 104 of the Customs Act confers power to arrest upon the Customs Officer if he has reason to believe that any person in India or within the Indian Customs waters has been guilty of an offence punishable under Section 135 of that Act. Again, in Padam Narain Aggarwal [Union of India v. Padam Narain Aggarwal, (2008) 13 SCC 305 : (2009) 1 SCC (Cri) 1], while dealing with the provisions of the Customs Act, it noted that the te....
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....orised officer before effecting arrest, as contained in Section 19 of the 2002 Act, are equally stringent and of higher standard. Those safeguards ensure that the authorised officers do not act arbitrarily, but make them accountable for their judgment about the necessity to arrest any person as being involved in the commission of offence of money laundering even before filing of the complaint before the Special Court under Section 44(1)(b) of the 2002 Act in that regard. If the action of the authorised officer is found to be vexatious, he can be proceeded with and inflicted with punishment specified under Section 62 of the 2002 Act. The safeguards to be adhered to by the jurisdictional police officer before effecting arrest as stipulated in the 1973 Code, are certainly not comparable. Suffice it to observe that this power has been given to the high-ranking officials with further conditions to ensure that there is objectivity and their own accountability in resorting to arrest of a person even before a formal complaint is filed under Section 44(1)(b) of the 2002 Act. 216. Investing of power in the high-ranking officials in this regard has stood the test of reasonableness in....
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....scal legislations. The provision embodies a legislative design intended to secure fairness, objectivity, accountability and, above all, a demonstrable necessity to arrest. 18.2. The Apex Court later in V. SENTHIL BALAJI v. STATE (2024) 3 SCC 51 holds as follows: ".... .... .... 40. To effect an arrest, an officer authorised has to assess and evaluate the materials in his possession. Through such materials, he is expected to form a reason to believe that a person has been guilty of an offence punishable under the PMLA, 2002. Thereafter, he is at liberty to arrest, while performing his mandatory duty of recording the reasons. The said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any non-compliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Under sub-section (2), the authorised officer shall immediately, after the arrest, forward a copy of the order as mandated under sub-section (1) together with the materials in his custody, forming the basis of his belief, to the adjudicating authority, in a sealed envelope. Needless to state, compliance of sub-section (2)....
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....bused. Additionally, the Central Government has framed Rules under Section 73 in 2005, regarding the forms and the manner of forwarding a copy of order of arrest of a person along with the material to the adjudicating authority and the period of its retention. In yet another decision in Ahmed Noormohmed Bhatti [Ahmed NoormohmedBhatti v. State of Gujarat, (2005) 3 SCC 647: 2005 SCC (Cri) 794], this Court opined that the provision cannot be held to be unreasonable or arbitrary and, therefore, unconstitutional merely because the authority vested with the power may abuse his authority. (Also see Manzoor Ali Khan [Manzoor Ali Khan v. Union of India, (2015) 2 SCC 33: (2015) 1 SCC (Cri) 802])." (emphasis supplied) 42. The conclusion thus arrived is that the legislature in its wisdom has consciously created the necessary safeguards for an arrestee, keeping in mind his liberty, and the need for an external approval and supervision. This provision is in compliance with Articles 21 and 22(2) of the Constitution of India." The contours of these safeguards were further illuminated in V. SENTHIL BALAJI supra. The Apex Court held that before an authorised officer can curtail ....
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.... arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within 24 hours and such production is to comply with the requirement of Section 167CrPC. It was pointed out that there is nothing in Section 19 PMLA which is contrary to the requirement of production under Section 167CrPC and being an express statutory requirement under Section 19(3) PMLA, it has to be complied by the authorised officer. It was concluded that the safeguards provided in the 2002 Act and the preconditions to be fulfilled by the authorised officer before effecting arrest, as contained in Section 19 PMLA, are equally stringent and of higher standard when compared to the Customs Act, 1962, and such safeguards ensure that the authorised officers do not act arbitrarily, by making them accountable for their judgment about the necessity to arrest any person involved in the commission of the offence of money laundering, even before filing of the complaint before the Special Court. It was on this basis that the Bench upheld the validity of Section 19 PMLA. 18. The Bench in Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : ....
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.... Court reiterated that Section 19 PMLA, supplemented by Section 167CrPC, provided adequate safeguards to an arrested person as the Magistrate has a distinct role to play when a remand is made of an accused person to an authority under the 2002 Act. It was held that the Magistrate is under a bounden duty to see to it that Section 19 PMLA is duly complied with and any failure would entitle the arrestee to get released. It was pointed out that Section 167CrPC is meant to give effect to Section 19 PMLA and, therefore, it is for the Magistrate to satisfy himself of its due compliance by perusing the order passed by the authority under Section 19(1) PMLA and only upon such satisfaction, the Magistrate can consider the request for custody in favour of an authority. To put it otherwise, per this Court, the Magistrate is the appropriate authority who has to be satisfied about the compliance with safeguards as mandated under Section 19 PMLA. In conclusion, this Court summed up that any non-compliance with the mandate of Section 19 PMLA, would enure to the benefit of the person arrested and the court would have power to initiate action under Section 62 PMLA, for such non-compliance. Significa....
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....it is the case of ED that investigation in relation to the first ECIR is still ongoing. In any event, after the arrest of Roop Bansal, both the appellants secured interim protection by way of anticipatory bail on 9-6-2023 [Basant Bansal v. State (NCT of Delhi), (2023) 2 HCC (Del) 700], albeit till the next day of hearing viz. 5-7-2023, from the Delhi High Court. However, both the appellants were summoned on 14-6-2023 for interrogation in connection with the first ECIR, in which they had interim protection. Summons in that regard were served upon them on 13-6-2023 at 6.15 p.m. Significantly, the second ECIR was recorded only on that day i.e. on 13-6-2023, in connection with FIR No. 0006 which was registered on 17-4-2023. Therein also, neither of the appellants was shown as an accused and it was only Roop Bansal who stood named as an accused. In compliance with the summons received by them vis-à-vis the first ECIR, both the appellants presented themselves at ED's office at Rajokri, New Delhi, at 11.00 a.m. on 14-6-2023. While they were there, Pankaj Bansal was served with summons at 4.52 p.m., requiring him to appear before another investigating officer at 5.00 p.m. in relatio....
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....f probity on the part of ED. Its prompt retaliatory move, upon grant of interim protection to the appellants, by recording the second ECIR and acting upon it, all within the span of a day, so as to arrest the appellants, speaks for itself and we need to elaborate no more on that aspect. 32. Further, when the second ECIR was recorded on 13-6-2023 "after preliminary investigations", as stated in ED's replies, it is not clear as to when ED's investigating officer had the time to properly inquire into the matter so as to form a clear opinion about the appellants' involvement in an offence under the 2002 Act, warranting their arrest within 24 hours. This is a sine qua non in terms of Section 19(1) PMLA. Needless to state, authorities must act within the four corners of the statute, as pointed out by this Court in Devinder Singhv. State of Punjab [Devinder Singh v. State of Punjab, (2008) 1 SCC 728 : (2008) 1 SCC (Civ) 401], and a statutory authority is bound by the procedure laid down in the statute and must act within the four corners thereof. 33. We may also note that the failure of the appellants to respond to the questions put to them by ED would not be sufficient ....
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....is form of communication is not found to be adequate to fulfil compliance with the mandate of Article 22(1) of the Constitution and Section 19(1) PMLA, we have no hesitation in holding that their arrest was not in keeping with the provisions of Section 19(1) PMLA. Further, as already noted supra, the clandestine conduct of ED in proceeding against the appellants, by recording the second ECIR immediately after they secured interim protection in relation to the first ECIR, does not commend acceptance as it reeks of arbitrary exercise of power. In effect, the arrest of the appellants and, in consequence, their remand to the custody of ED and, thereafter, to judicial custody, cannot be sustained." The jurisprudence on necessity of arrest under Section 19 of the PMLA received further refinement in PANKAJ BANSAL supra. The Apex Court, while setting aside the arrest and consequential remand orders, delivered a stern reminder that the Enforcement Directorate, notwithstanding its pivotal role in combating economic offences, remains subject to the discipline of constitutional governance. The Apex Court holds that mere allegations of non-cooperation or purported evasiveness during interrog....
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....igation, or at best should be limited to subversive abuse of law. Discretion and right to arrest vests with the competent officer, whose subjective opinion should prevail. 23. We do not agree and must reject this argument. We hold that the power of judicial review shall prevail, and the court/Magistrate is required to examine that the exercise of the power to arrest meets the statutory conditions. The legislature, while imposing strict conditions as preconditions to arrest, was aware that the arrest may be before or prior to initiation of the criminal proceedings/prosecution complaint. The legislature, neither explicitly nor impliedly, excludes the court surveillance and examination of the preconditions of Section 19(1) of the PML Act being satisfied in a particular case. This flows from the mandate of Section 19(3) which requires that the arrestee must be produced within 24 hours and taken to the Special Court, or Court of Judicial/Metropolitan Magistrate having jurisdiction. The exercise of the power to arrest is not exempt from the scrutiny of courts. The power of judicial review remains both before and after the filing of criminal proceedings/prosecution complaint. It ....
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....ficer must be founded and based upon fair and objective consideration of the material, as available with them on the date of arrest. On the reading of the "reasons to believe" the court must form the "secondary opinion" on the validity of the exercise undertaken for compliance of Section 19(1) of the PML Act when the arrest was made. The "reasons to believe" that the person is guilty of an offence under the PML Act should be founded on the material in the form of documents and oral statements. .... .... .... 41. Once we hold that the accused is entitled to challenge his arrest under Section 19(1) of the PML Act, the court to examine the validity of arrest must catechise both the existence and soundness of the "reasons to believe", based upon the material available with the authorised officer. It is difficult to accept that the "reasons to believe", as recorded in writing, are not to be furnished. As observed above, the requirements in Section 19(1) are the jurisdictional conditions to be satisfied for arrest, the validity of which can be challenged by the accused and examined by the court. Consequently, it would be incongruous, if not wrong, to hold that the accus....
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....ot be based on inadmissible evidence. While there is an element of hypothesis, as oral evidence has not been led and the documents are to be proven, the decision to arrest should be rational, fair and as per law. Power to arrest under Section 19(1) is not for the purpose of investigation. Arrest can and should wait, and the power in terms of Section 19(1) of the PML Act can be exercised only when the material with the designated officer enables them to form an opinion, by recording reasons in writing that the arrestee is guilty. .... .... .... 74. It has been strenuously urged on behalf of Arvind Kejriwal that the arrest would falter on the ground that the "reasons to believe" do not mention and record reasons for "necessity to arrest". The term "necessity to arrest" is not mentioned in Section 19(1) of the PML Act. However, this expression has been given judicial recognition in Arnesh Kumar v. State of Bihar [Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273 : (2014) 3 SCC (Cri) 449], which lays down that "necessity to arrest" must be considered by an officer before arresting a person. This Court observed that the officer must ask himself the questions - Why arres....
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.... and justified. Except in heinous offences, an arrest must be avoided if a police officer issues notice to person to attend the Station House and not to leave the station without permission would do." 77. Recently, Siddharth v. State of U.P. [Siddharth v. State of U.P., (2022) 1 SCC 676 : (2022) 1 SCC (Cri) 423], relied on Joginder Kumar [Joginder Kumar v. State of U.P., (1994) 4 SCC 260 : 1994 SCC (Cri) 1172], to observe : (Siddharth case [Siddharth v. State of U.P., (2022) 1 SCC 676 : (2022) 1 SCC (Cri) 423], SCC p. 682, para 10) "10. We may note that personal liberty is an important aspect of our constitutional mandate. The occasion to arrest an accused during investigation arises when custodial investigation becomes necessary or it is a heinous crime or where there is a possibility of influencing the witnesses or accused may abscond. Merely because an arrest can be made because it is lawful does not mandate that arrest must be made. A distinction must be made between the existence of the power to arrest and the justification for exercise of it [Joginder Kumar v. State of U.P., (1994) 4 SCC 260 : 1994 SCC (Cri) 1172]. If arrest is made routine, it can cause inc....
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....st itself. Under sub-section (2), the authorised officer shall immediately, after the arrest, forward a copy of the order as mandated under sub-section (1) together with the materials in his custody, forming the basis of his belief, to the adjudicating authority, in a sealed envelope. Needless to state, compliance of sub-section (2) is also a solemn function of the arresting authority which brooks no exception." 81. In Prabir Purkayastha [Prabir Purkayastha v. State (NCT of Delhi), (2024) 8 SCC 254 : (2024) 3 SCC (Cri) 573], this Court went beyond the rigours of the PML Act/UAPA. Drawing a distinction between "reasons to arrest" and "grounds for arrest", it held that while the former refers to the formal parameters, the latter would require all such details in the hands of the investigating officer necessitating the arrest. Thus, the grounds of arrest would be personal to the accused. 82. Therefore, the issue which arises for consideration is whether the court while examining the validity of arrest in terms of Section 19(1) of the PML Act will also go into and examine the necessity and need to arrest. In other words, is the mere satisfaction of the formal paramete....
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....n behalf of Arvind Kejriwal, it is submitted that there was no necessity to arrest on 21-3-2024. The RC/ECIR were registered in the month of August 2022. Further, most of the material relied upon in the "reasons to believe" are prior to July 2023. The statements under Section 50 of the PML Act and under Section 164 of the Code, or otherwise, of Magunta Srinivasulu Reddy, Raghav Magunta, Siddharth Reddy, etc. relate to the period prior to July 2023. Thus, it was not necessary to arrest Arvind Kejriwal on 21-3-2024 based on the said material. Lastly, in Pankaj Bansal [Pankaj Bansal v. Union of India, (2024) 7 SCC 576 : (2024) 3 SCC (Cri) 450], this Court observed : (SCC p. 594, para 33) "33. ... Mere non-cooperation of a witness in response to the summons issued under Section 50 PMLA would not be enough to render him/her liable to be arrested under Section 19." 86. As per the data available on the website of DoE, as on 31-1-2023 [ The data post 31-1-2023 has not been updated.], 5906 ECIRs were recorded. However, search was conducted in 531 ECIRs by issue of 4954 search warrants. The total number of ECIRs recorded against ex-MPs, MLAs and MLCs was 176. The number of ....
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.... traditional grounds of review. The court is required to assess the balance struck by the decision-maker, not merely whether it is within the range of rational or reasonable decisions. In this manner, proportionality goes further than the traditional grounds of review as it requires attention to the relative weight according to interest and considerations. State of U.P. v. Sheo Shanker Lal Srivastava [State of U.P. v. Sheo Shanker Lal Srivastava, (2006) 3 SCC 276 : 2006 SCC (L&S) 521], which refers to several other cases, states that the proportionality test safeguards fundamental rights of citizens to ensure a fair balance between individual rights and public interest. It requires the court to judge whether the action taken was really needed and whether it was within the range of courses of action which could be reasonably followed. Proportionality is more concerned with the aims and intentions of the decision-maker and whether the decision-maker has achieved more or less the correct balance or equilibrium. 90. The principle of proportionality has been followed by this Court in several decisions such as Modern Dental College & Research Centre v. State of M.P. [Modern Dent....
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....ust possess material, which objectively demonstrates guilt and must undertake a rigorous scrutiny of such material before arriving at the requisite satisfaction. The Apex Court emphasised that the expression "material in possession" does not dilute the requirement that such material must reasonably support a conclusion of guilt. The Apex Court drew a clear and constitutionally significant distinction between the power to investigate and the power to arrest. The latter cannot be invoked merely because the former is ongoing. 18.4.3. The Apex Court then elucidated the doctrine of "necessity to arrest". Drawing sustenance from the principles laid down in JOGINDER KUMAR v. STATE OF U.P. reported in (1994) 4 SCC 260; ARNESH KUMAR v. STATE OF BIHAR reported in (2014) 8 SCC 273; MOHD. ZUBAIR v. STATE (NCT OF DELHI) reported in (2023) 16 SCC 764 and SIDDHARTH v. STATE OF UTTAR PRADESH reported in (2022) 1 SCC 676, the Apex Court reiterated that the existence of power and the justification for its exercise are distinct concepts. The authorized officer must ask himself not merely whether arrest is lawful, but whether it is necessary. 18.4.4. Though the precise contours of the doctrine o....
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....ed that a higher threshold is required for making an arrest, necessitating a review of the material available to demonstrate the person's guilt. Production of the "reasons to believe" before the Special Court/magistrate, cannot be construed and is not the same as furnishing or providing the "reasons to believe" to the arrestee who has a right to challenge his arrest in violation of Section 19(1) of the PML Act. 20. In Vijay Madanlal Choudhary (supra), the Supreme Court on the aspect of the checks on the power to arrest stated that there must be material in possession with the Authority before the powers of arrest can be exercised as opposed to the Cr. P.C. which gives the power of arrest to any police officer and the officer can arrest any person merely on the basis of a complaint, credible information or reasonable suspicion against such person. Thirdly, there should be reason to believe that the person being arrested is guilty of the offence punishable under the PMLA in contrast to the provision in Cr. P.C., which mainly requires reasonable apprehension/suspicion of commission of offence. 21. In case of Arvind Kejriwal (supra), the Supreme Court has further elab....
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....s for consideration is whether the court while examining the validity of arrest in terms of Section 19(1) of the PML Act will also go into and examine the necessity and need to arrest. In other words, is the mere satisfaction of the formal parameters to arrest sufficient? Or is the satisfaction of necessity and need to arrest, beyond mere formal parameters, required? We would concede that such review might be conflated with stipulations in Section 41 of the Code which lays down certain conditions for the police to arrest without warrant: * Section 41(1)(ii)(a) - preventing a person from committing further offence. * Section 41(1)(ii)(b) - proper investigation of the offence. * Section 41(1)(ii)(c) - preventing a person from disappearing or tampering with evidence in any manner. * Section 41(1)(ii)(d) - preventing the person from making any inducement or threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the court or police. * Section 41(1)(ii)(e) - to ensure presence of the person in the Court, whenever required, which without arresting cannot be ensured. How....
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.... The authorized officer must possess material which rationally connects the accused to the offence of money-laundering and demonstrates guilt rather than mere suspicion. The High Court of Bombay accordingly held that the power of arrest cannot be exercised routinely or mechanically and granted interim protection to the accused. 19.2. Again, the High Court of Bombay in ANILKUMAR KHANDERAO PAWAR v. DIRECTORATE OF ENFORCEMENT Criminal Writ Petition No.4779 of 2025 decided on 15-10-2025 has held as follows: ".... .... .... 7. Before proceeding further, we may usefully have a glance through the "grounds of arrest" and the "reasons to believe". In the grounds of arrest, the ED gave the following reasons for the petitioner's arrest:- "You, Anil Kumar KhanderaoPawar, are hereby informed that during the ongoing inquiry and investigation under PMLA by the Directorate of Enforcement, various incriminating records (including the digital devices), Whatsapp Chats and statements of various persons were taken on record, wherein it has been revealed that: 1. You have deliberately and intentionally committed omission to perform your lawful public duty and there....
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....e amount of cash from Sh. Y S Reddy for clearing files giving various development permissions and same was delivered to your distant relative and the said cash so collected by your distant relative was invested in properties situated at various locations in Maharashtra which clearly manifest that you have not only acquired or possessed the Proceeds of crime but also concealed and project the same as untainted and integrated the crime proceeds in the financial main-stream of the economy. 10. You have incorporated various firms in order to channelize and utilize the proceeds of crime and also to integrate the proceeds of crime in the financial main-stream of the economy. 11. You in order to conceal the source of acquisition of the Proceeds of crime have incorporated the firms wherein your wife has been ostensibly shown as the partner however she denies having knowledge of basic facts pertaining to all the projects/entities incorporated in her name. 12. You have infused huge amount of cash in all your projects/entities/investments in the multiple entities floated in the name of your Wife, daughters and distant relatives. These entities were engaged in constr....
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...."reasons to believe" with certain descriptions about the commission paid to the petitioner and other officials using a Codeword. The relevant extracts of the "reasons to believe" are reproduced herein below: - "I. ACTUAL INVOLVEMENT OF SH. ANIL KUMAR KHANDERAO PAWAR IN THE ACQUISITION, POSSESSION AND CONCEALMENT OF PROCEEDS OF CRIME: 1. That Sh. Anil Kumar KhanderaoPawar is an IAS officer of 2014 batch. He joind Vasai Virar City Municipal Corporation as Commissioner on 13.01.2022 and remained there till 25.07.2025. He organized a cartel of VVCMC officers. Junior Engineers. Architects, CAs and Liasoners after joining as Commissioner. That Sh. Anil Kumar KhanderaoPawar was involved in an organized action plan to acquire the Proceeds of crime by committing the illegal omission to perform his public duty and thereafter granting development permissions at fixed rate. 2. That Sh. Anil Kumar KhanderaoPawar, as Commissioner of VVCMC, was directly responsible for taking preventive actions so that no illegal construction occured over government/private land in the jurisdiction of VVCMC. 3. That Sh. Anil Kumar KhanderaoPawar, as a head of Demolition departm....
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....as recorded u/s 50 of the PMLA, 2002 dated 07.08.2025 stated that: "......On being asked I would like to state that Shri Anil Pawar the Municipal Commissioner, VVCMC use to take Rs 20-25 per sq ft. DDTP was given Rs10 per sqft and Rs 4 per sqft is given to ADTP/Town planner and Rs 1 per sq ft is given to JE. If plot area is more the 2000sqmtrs then the file is handled by ADTP and for proposals with less than 2000sqmtrs, it is handled by Town Planner..." That statement of certain builder and Architects were also recorded wherein they have stated the details of commission paid. The excerpt of the statement of a builder/Architect recorded u/s 50 of the PMLA, 2002 dated 09.07.2025 is reproduced under: Sr. No. Department Name Commission Paid 1 Legal Department Rs 50,000 to Rs 1 Lakh per file 2 Engineering Department Rs 25,000 per file 3 Junior Engineer Rs 1 - Rs 2 per Square Feet 4 Municipal Engineer Rs 2 per Square Feet 5 Assistant Director of Town Planning Rs 5 per Square Feet 6 Deputy Director of Town Planning Rs 10 to Rs 12 per Square Feet 7 Commissioner Rs 25 per Square Feet ....
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.... involved in keeping a blind eye and taking no action over rampant illegal construction on government/private land in lieu of fixed commission/bribe amount and subsequently involved in money laundering by way of acquiring, possessing. concealing and utilizing the proceeds of crime and thereby transferring and channelizing the said proceeds of crime through distant relatives and local liasoners. 10. That during inquiry and investigation, it is further gathered that the Proceeds of crime was acquired and possessed by Sh. Anil Kumar KhanderaoPawar in cash and the said cash has been collected and delivered through VVCMC officers, distant relatives and local liasoners. The in-depth analysis of Whatsapp chats of Sh. Anil Kumar KhanderaoPawar with Sh. Y S Reddy, of Local Liasoners with Sh. Y S Reddy and others established that: * Sh. Anil Kumar KhanderaoPawar received more than Rs. 17.75 crore from Sh. Y S Reddy for clearing files giving various development permissions and same was delivered to distant relative. * Distant relative collected huge amount of cash for Sh. Anil Kumar KhanderãoPawar from Sh. Reddy on other occasions. The cash so collected by di....
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....as. 4. Thus, Sh. Anil Kumar KhanderaoPawar has committed and is guilty of offence of Money Laundering defined u/s 3 of PMLA, 2002, punishable u/s 4 of PMLA, 2002 since he has actually involved in acquisition, possession and concealment of crime proceeds and also in utilising the proceeds of crime and projecting the tainted property as untainted." 9. After hearing the learned senior counsel for the petitioner and the learned Additional Solicitor General and on perusing the materials on record, we have formed an opinion that as on 13th August 2025 the Arresting Officer had no such material in his possession which would establish that the petitioner committed offence under the PMLA so as to form reasons to believe under section 19 of the PMLA. When we say that the Arresting Officer had no such material, we mean that "notangible material" was available with the Arresting Officer to establish that the petitioner was guilty of the offence under the PMLA and, that, we are not weighing such materials so as to examine the sufficiency of the materials in possession of the Arresting Officer. In" Radhika Agarwal", the Hon'ble Supreme Court referred to "Vijay Madanlal Choudhar....
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....not the case pleaded by the ED that any cash, ornament or unaccounted property has been recovered from the possession of the petitioner or his premises which can be said to be the proceeds of crime. The definition of the expression "proceeds of crime" under section 2(1)(u) of the PMLA refers to any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. Furthermore, if this is the case of the ED that the proceeds of crime were seized from the possession of Mr. Y. S. Reddy, there is no indication how the petitioner is involved in money-laundering. In "Arvind Kejriwal", the Hon'ble Supreme Court explained the expression "reasons to believe" in section 19 and held that belief is beyond speculation or doubt. The Hon'ble Supreme Court further held that the requirement in law is not satisfied by just providing "written grounds of arrest" and such action of the Arresting Officer does not initself satisfy the compliance requirement. The Hon'ble Supr....
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....erpretation which leans towards protecting the rights of the accused, given the ubiquitous power disparity between the individual accused and the State machinery. This is applicable not only in the case of substantive penal statutes but also in the case of procedures providing for the curtailment of the liberty of the accused."] Secondly, any undue indulgence and latitude to DoE will be deleterious to the constitutional values of rule of law and life and liberty of persons. An officer cannot be allowed to selectively pick and choose material implicating the person to be arrested. They have to equally apply their mind to other material which absolves and exculpates the arrestee. The power to arrest under Section 19(1) of the PML Act cannot be exercised as per the whims and fancies of the officer." 11. When we examined the materials on record with reference to the aforementioned dictum, we see no prima-facie case made out against the petitioner for his arrest on 13th August 2025. We observed that the same and similar facts are reiterated in the "grounds of arrest" and "reasons to believe". The stand taken by the ED is speculative and based on hazy facts. The case built up by....
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....rge-sheet, submitted that the ED cannot investigate the occurrence. In "Vijay Madanlal Choudhary", the Hon'ble Supreme Court held that the expression "proceeds of crime" needs to be construed strictly because this is the core of the ingredients constituting the offence of money-laundering and all properties recovered or attached by the investigating agency in connection with the criminal activity relating to a scheduled offence under the general law cannot be regarded as the proceeds of crime and there may be cases where the property involved in a crime of scheduled offence attached by the investigating agency dealing with that offence may not be wholly or partly regarded as the "proceeds of crime" within the meaning of section 2(1)(u) of the PMLA. Inparagraph no. 109 of the said judgment, the Hon'ble Supreme Court held as under:- "109. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence that can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money laundering on an assumption that the property recovere....
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....ner shall be released on production of a copy of this order and filing an affidavit of undertaking that he will not tamper with the evidence or influence or attempt to influence the witnesses. Findings recorded by this Court in the present proceedings are prima-facie opinion of the Court recorded only for the purpose of deciding legality of the arrest of the petitioner on 13th August 2025 and such findings shall not affect the case of the ED when the Prosecution Complaint is examined by the Court in any further proceedings against the petitioner." 19.2.1. The same constitutional ethos reverberates through the decision of the High Court of Bombay in ANILKUMAR KHANDERAO PAWAR supra. The High Court of Bombay undertook a meticulous examination of the "grounds of arrest" and the "reasons to believe" and ultimately concluded that there existed no tangible material capable of sustaining the statutory satisfaction required under Section 19. The High Court of Bombay observed that while the Enforcement Directorate may possess statements, chats and other materials, the crucial inquiry is whether such material objectively establishes guilt so as to justify arrest. Mere allegations cannot su....
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....is a non starter. If the arguments of the Additional Solicitor General are accepted, then the ED on registration of an ECIR can conduct a roving enquiry with respect to other aspects also. That is not the position of law. To put it pithily, no predicate offence, no action by ED. 61. A careful perusal of Section 66(2)PMLA points out that if during the course of investigation, the ED comes across violations of other provisions of law, then it cannot assume the role of investigating those offences also. It is to inform the appropriate agency, which is empowered by law to investigate into that offence. If that Agency, on the intimation from the ED, commences investigation and registers a complaint, then certainly the ED can investigate into those aspects also, provided there are "proceeds of crime". In case, the investigating agency does not find any case with respect to the aspects pointed out by the ED, then the ED cannot suomotu proceed with the investigation and assume powers. The essential ingredient for the ED to seize jurisdiction is the presence of a predicate offence. It is like a limpet mine attached to a ship. If there is no ship, the limpet cannot work. The ship is....
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.... of arrest and reasons for arrest are indicative of the fact that those are the issues or reasons for the grounds or for search and seizure proceedings that took place when the crime in Crime No.722 of 2024 has been registered. When Crime No.722 of 2024 stood stayed at the hands of this Court, statement of objections was filed by the Enforcement Directorate contending that there is another crime anterior to registration of crime in Crime No.722 of 2024. Therefore, they may update their ECIR and incorporate the other predicate offence in the ECIR. The specific grounds taken could be gathered from paragraphs 6, 9 and 12 of the statement of objections. They read as follows:- ".... .... .... 6. At the time of recording of the reasons to believe on 11-11-2025 and authorization of searches under Section 17 of the PMLA during 18-11-2025 to 22-11-2025, the respondent Directorate had no knowledge of the closure of FIR No.0722 of 2024. It is submitted that reasons to believe were not solely made on the basis of the said FIR No.0722 of 2024, but various other complaints, available on the open web source, against the petitioners. The complaints have been discussed in detail i....
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.... an addendum dated 18-02-2026 breathed fresh life into the ECIR and rendered the challenge to its continuance infructuous. Yet, the very objections display the fragility of that contention. Paragraph 12 candidly avers that the "reasons to believe" dated 11-11-2025 were founded upon the same allegations of online gaming fraud, use of bots, collusive gameplay, inducement through free credits, withdrawal restrictions and complaints spread across platforms such as Pocket-52 and Rummy Culture. These are, in substance and in form, the very allegations that resurface in the new ECIR - the present and ultimately culminate in the arrest of the petitioners. 26. The narrative, therefore, unfolds with unmistakable clarity. The material that animated the earlier ECIR, the searches and seizures conducted thereunder, and the material now relied upon to justify arrest under the new ECIR, are but reflections of the same underlying allegations. The foundation may have been repackaged; it has not been reconstructed. 27. If the earlier ECIR, fortified by search and seizure operations spread over several days, did not persuade the Enforcement Directorate that the arrest of the petitioners was eit....
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....nantly upon material already in its possession from earlier proceedings. 31. The contention of the learned Additional Solicitor General that the pendency of a bail application before the competent Court ought to dissuade this Court from entertaining the present petitions is equally unpersuasive. The Constitution does not permit this Court to be held hostage to parallel proceedings. The Apex Court in the case of ARNAB MANORANJAN GOSWAMI v. STATE OF MAHARASHTRA (2021) 2 SCC 427 has held as follows: ".... .... .... 68. Mr Kapil Sibal, Mr Amit Desai and Mr Chander Uday Singh are undoubtedly right in submitting that the procedural hierarchy of courts in matters concerning the grant of bail needs to be respected. However, there was a failure of the High Court to discharge its adjudicatory function at two levels-first in declining to evaluate prima facie at the interim stage in a petition for quashing the FIR as to whether an arguable case has been made out, and secondly, in declining interim bail, as a consequence of its failure to render a prima facie opinion on the first. The High Court did have the power to protect the citizen by an interim order in a petition inv....
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....nsciously placed upon a high constitutional pedestal. The decision of the Apex Court in ARVIND KEJRIWAL reiterates that the safeguards governing arrest under the PMLA are of a higher order and that the necessity of arrest must precede and inform the formation of satisfaction under Section 19. The Apex Court has further cautioned that even evasive answers, non-cooperation, or refusal to confess do not, by themselves, furnish a justification for arrest. 34. Examined in that constitutional light, the submissions of the learned senior counsel for the petitioners deserve acceptance. The Enforcement Directorate possessed ample statutory authority under Section 50 to summon the petitioners and secure their participation in the investigation. Had the petitioners thereafter obstructed the process or refused cooperation, the question of arrest may have arisen in a different factual setting. But no such situation had arisen. No summons were issued. No opportunity for cooperation was afforded. No fresh incriminating material emerged from the subsequent searches. Yet, the petitioners were arrested. 35. What renders the action particularly vulnerable is, the undeniable fact that six months....
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....======== Document 1Ticket m Subject Statu Priority Source 13362 Please disable my account permanently immediatel please please please please sir Otherwise i wil commit suicide Closed Low Email Suicide Email Emergency call back from the team othe wise we have to go for mass suicide Closed Email 9878 | Give me permission for suicide Email 3795 Committing Stickle Email 4314 Watch "Goldsmith Murders Wife & Daughters ady. es vade After Falling in Debt Trap | Tami YouTube Email 43232 Watch "Online Rummy losses drive man to suicide TV9' on YouTube Closed Low Email 49077 Suicide Email 50901 U people sucks money I will do suicide and write you Closed Low Email 68812 My suicide letter Low 8836 |Re: My suicide letter Closed Email 7162 am going to suicide for RummyCulture taday I ar mad for total money loss no one game I win totally or game play Closed Low Email 79882 side My money of 21,152 not given- i m in troble going suicide Closed Low Email 83643 am going to commit suicide regarding cheating ir RummyCulture didn't refund my money Closed Low Email 88020 |Suicide case Closed Low Email am going to suicide for RummyCulture They have taken my all ban....
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....009356 Bank AgGre Kotak Mahindra dated 24.08.2020man No: 1848-MHA Closed Email Re: Notice 91 CrPC (Kotak Mahindra Bank, Rummy) Complaint No. 1848-MH Email 1009913 Re: Notice 91 CrPC (Kotak Mahindra Bank, Rummy) Complaint No. 1848-MH Closed Low Email 011593 Notice 91 CrPC (Kotak Mahindra Portal kumar 1011600 Notice 91 CrPC (Kotak Mahindra dated 24.08.2021, PS Cyber ASI Anil Closed Low Portal 1039794 Fwd. URGENT NOTICE 91 4051-5PII DATE- 09.08.2021 PS CYHE GGM ASI AMIT KUMAR Closed Low Portal 1055523 Notice 91 CrPC (RUMMY) Comp. No. ofrer95 09 2021 PS Cybe GGM-ASI VINGDARUMM Closed Low Email 1055578 4651-5P II, Dated 12.09.2021 PS Cyber GGM- ASI VINced Closed Low Email 1056382 Fwd: Fwd: URGENT NOTICE 91 STROMY /MOBIWIK) COMP NO HAM ASI AMATE- 09.08.2021 DS NO. GGM AMIT KUMAR Closed Low Email 1058499 COM- ASI Dated 12.09.2021 PS Cyber Closed Low Portal 1108407 Fwd: Fwd: URGENT NOTICE 91 HET RUMMY/MOBIWIK) COMP N 4051-5PII DATE:08 08 5/COMP NO. GGM ASI AMIT 09:08-2021 PS CYBER ANH: ADAMIT KUT Closed Low Portal 1124996 Fwd: Fwd: URGENT NOCOM NOTICE 91 1051-SPHAMIT 3:08.2021 PS CYBER GM ASI AMIT KUMAR Closed Low Portal 1192120 Mahindra Bank, Ru CC (Kotak 1848-MHA kumm....
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....RIVATE LIMITED AS THE TRUSTEE Nit. Nit. NIL NIL. 19.38% AKHILESH CHAUDHARY 1.62% 1.62% 1.62% 1.62% 1.62% PUNYA GOEL 1.62% 1.62% 1.62% 1.62% 1.62% PARASHAR SHARMA 0.00% 0.00% 0.00% 0.00% 0.00% ALANKAR KUMAR 0.51% 0.51% 0.51% 0.51% 0.51% GAMESKRAFT ESOP TRUST 0.78% 0.78% 0.78% 0.78% 0.79% ABHISHEK UPADHYAY 1.29% 1.29% 1.29% 1.29% 1.29% SUMIT GUPTA 2.42% 2.42% 2.42% 2.42% 2.42% VINAY JHA 1.35% 1.35% 1.35% 1.35% 1.35% RAM NIWAS SHARMA 1.35% 1.35% 1.35% 1.35% 1.35% POONAM 1.35% 1.35% 1.35% 1.35% 1.35% RAJBIR SINGH BAMEL 1.35% 1.35% 1.35% 1.35% 1.35% DIVYA ALOK AGARWAL 0.17% 0.17% 0.17% 0.17% 0.17% ABHISHEK GOYAL 0.06% 0.06% 0.06% 0.06% 0.06% TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% Document 3PLATFORM USER ID ACCOUNT NUMBER IFSC WITHDRAWA L TIME GROSS WITHDRAW AL AMOUNT RummyCult ure 757725 '32661983 036 SBIN00034 36 2018-10- 24T20:28:20.0 0OZ 22743 RummyCult ure 736590 '32661983 036 SBIN00034 36 2018-10- 20T14:05:03.0 ooZ 19284 RummyCult ure 643658 '32661983 036 SBIN00034 36 2018-10- 22T23:22:01.0 00Z 18107 RummyCult ure 643737 '32661983 036 SBIN00034 36 2018-10- 22T23:19:00.0 ooZ 13936 RummyCult ure 644676 32661983 036 SBIN00034 36 2018-10- ....