TaxTMI 
TaxTMI 
2026 (8) TMI 336
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....(1) of the Prevention of Money Laundering Act, 2002 [hereinafter, "PMLA"]. The PAO pertains to alleged illegal betting activities being carried out in India through 1xBet, an online betting platform based outside India. In connection with the said activities, three FIRs were registered^1 which, inter alia, invoked scheduled offences under the PMLA. On the basis thereof, the ED recorded an ECIR on 23.05.2025.^2 3. The allegations in the first of the aforesaid FIRs principally pertained to the illegal streaming of cricket matches the 1xBet platform. The remaining two FIRs, on the other hand, concerned allegations that individuals had been induced to part with money on the basis of assurances of guaranteed returns and promises of being appointed as agents on a commission basis. 4. The PAO alleges that 1xBet operates as an online sports betting platform, offering live betting and other gambling-related activities across several countries. Although the platform is registered in Curaçao and is owned by a company incorporated in Cyprus, it is alleged that it operates in India through various URLs, including domain names bearing the ".in" extension. The platform is further all....
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.....2021 to 01.01.2024, alongwith details of remittances received by petitioner No. 2 from Bwise Media AG amounting to approximately Rs. 79.23 crores during Financial Years ["FY"] 2021-22 to 2024-25. 9. Relying upon the statement of Mr. Prashant Gautam, Senior Accounts Officer of petitioner No. 2, it is alleged that, out of the total amount received from Bwise Media AG, approximately Rs. 18.08 crores was attributable to the promotion of advertisements for 1xBet on the digital platforms of petitioner No. 2. Of this amount, approximately Rs. 5.18 crores represented consideration received in relation to advertising for 1xBet targeted at users in India, while the remaining amount related to advertisements targeted at users in Bangladesh, Pakistan and Sri Lanka. 10. With regard to the identification and quantification of the alleged proceeds of crime, the PAO records as follows: "7.0 IDENTIFICATION/QUANTUM OF PROCEEDS OF CRIME (POC):- Investigation conducted under the Prevention of Money Laundering Act, 2002 has revealed that Parthtech Developers LLP (PDLLP), a digital publisher operating high-reach cricket platforms namely CREX and OneCricket. knowingly entered int....
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....wingly received, retained and utilised by PDLLP for commercial benefit, notwithstanding the clear statutory prohibition on betting and gambling advertisement in India. The knowledge and conscious involvement of PDLLP is further established from the statements of its officials recorded u/s. 50 of PMLA, wherein they have admitted awareness of illegality of such betting related advertisements. Accordingly, the aforesaid amount represents "proceeds of crime" as degined u/s. 2(1)(u) of PMLA, 2002 having been derived and obtained as a result of criminal activity relating to schedule offence. PDLLP, by receiving, possessing, using and projecting the said proceeds of crime as legitimate business income through regular commercial transactions, has indulged in activities falling squarely within the ambit of money laundering defined u/s. 3 of PMLA. The examination of bank statements of Parthtech Developers LLP, HDFC Bank Account No. 59204445555555, and Shri Purushottam Rawat, HDFC Bank Account No. 59136888888888, clearly establishes the utilisation of the proceeds of crime. The bank statements of the aforesaid accounts are detailed as under, which demonstrate receipt of fund....
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....ed that the petitioners ought to be relegated to the statutory remedies available under the PMLA. 16. In the present case, Mr. Gurnani submitted that the ED has already filed a complaint before the Adjudicating Authority, which issued a show-cause notice to petitioner No. 1 on 07.04.2026, and has further scheduled the matter for hearing on 04.08.2026. 17. In support of his submission, Mr. Gurnani relied, inter alia, upon the decisions of Division Benches of this Court in Gautam Khaitan v. Union of India 2025 SCC OnLine Del 8434 [hereinafter, "Gautam Khaitan"]., Gold Croft Properties (P) Ltd. v. Enforcement Directorate 2023 SCC OnLine Del 5900 [hereinafter, "Gold Croft Properties (P) Ltd"], and RBL Bank Ltd. v. Enforcement Directorate 2023 SCC OnLine Del 8610 [hereinafter, "RBL Bank Ltd."]., as well as several other orders, in which this Court has declined to entertain writ petitions challenging provisional attachment orders. 18. Mr. Gurnani further submitted that petitioner No. 2 has already availed of the statutory remedies available against the search and seizure operations conducted by the ED at its premises in Gurugram on 02.07.2025 and 03.07.2025. Pursuant thereto, th....
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.... the enactment of PROGA, the offences created thereunder have not been included within the ambit of "scheduled offences" under the PMLA. Consequently, according to Mr. Krishnan, the alleged activities could not constitute a predicate or scheduled offence, capable of generating "proceeds of crime" within the meaning of the PMLA during the period to which the impugned PAO relates. 22. The second limb of Mr. Krishnan's jurisdictional challenge is founded on the contention that the impugned PAO seeks to target revenues generated through an advertising business directed not only at users in India, but also at users in Bangladesh, Pakistan and Sri Lanka. Mr. Krishnan further contended that the purported attachment of properties valued at over Rs. 18 crores is, even on the ED's own case, grossly disproportionate to the revenue allegedly generated by petitioner No. 2 from hosting advertisements targeted at users in India. 23. In response to the aforesaid challenge raised by Mr. Krishnan, Mr. Gurnani submitted that the Supreme Court, in Vijay Madanlal Choudhary v. Union of India (2023) 12 SCC 1 [hereinafter, "Vijay Madanlal Choudhary"]., has categorically held that the registration of....
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....available under the PMLA. In the most recent of these decisions, namely Gautam Khaitan, the Division Bench of this Court articulated the governing principles in the following terms: "17. This Court has duly considered the submissions advanced by the learned counsel for the parties. At the outset, this Court deems it appropriate to state that the scope of exercise of jurisdiction under Article 226 of the COI, particularly when an alternative efficacious remedy exists, must be undertaken with due care and caution. The indiscriminate filing of writ petitions challenging the issuance of a PAO not only risks circumventing the legislative scheme envisaged under PMLA but also results in multiplicity of proceedings and unwarranted consumption of judicial time and resources. It is, therefore, imperative that the writ jurisdiction must be invoked sparingly and only in cases where there is a clear demonstration of mala fide exercise of power, patent arbitrariness, or a manifest lack of jurisdiction." [Emphasis supplied.] 28. While cautioning against the unbridled exercise of writ jurisdiction in matters of this nature, the Court thus recognized that recourse to such jurisdiction m....
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.... consistent with the course envisaged by the Supreme Court in Vijay Madanlal Choudhary. He cited the following observations of the Supreme Court: "162. As a matter of fact, prior to the amendment of 2015, the first proviso acted as an impediment for taking such urgent measure even by the authorised officer, who is no less than the rank of Deputy Director. We must hasten to add that the nuanced distinction must be kept in mind that to initiate "prosecution" for offence under Section 3 PMLA registration of scheduled offence is a prerequisite, but for initiating action of "provisional attachment" under Section 5 there need not be a pre-registered criminal case in connection with scheduled offence. This is because the machinery provisions cannot be construed in a manner which would eventually frustrate the proceedings under the 2002 Act. Such dispensation alone can secure the proceeds of crime including to prevent and regulate the commission of offence of money laundering. The authorised officer would, thus, be expected to and, also in a given case, justified in acting with utmost speed to ensure that the proceeds of crime/property is available for being proceeded with appropr....
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.... with the issuance of the PAO under Section 5, ED forwarded the relevant information to the jurisdictional police in exercise of its powers under Section 66(2) of the PMLA. Although the jurisdictional police has not, till date, acted upon the said communication by registering an FIR, that, in my view, does not detract from the legality of the course adopted by ED. Rather, the present case appears to fall squarely within the situation contemplated by the Supreme Court in the above extract of Vijay Madanlal Choudhary. This argument, therefore, does not persuade me to hold that the exercise of jurisdiction under Section 5 was ex facie without authority. 37. The second ground urged by Mr. Krishnan was that the PAO encompasses amounts allegedly generated from advertising activities directed at users located outside the territory of India. I do not find any such specific challenge in the writ petition. In any event, such an argument does not, in my view, amount to a challenge to jurisdiction of the authority, but to the quantification of alleged proceeds of crime, which can be adjudicated by availing the statutory remedies. In addition, Mr. Gurnani submitted that the advertisements in....