FIR filed by Vadodara Police against four from Gujarat: Delhi HC rejects pleas against ED attachment order in Rs 2400-crore cricket betting scam

The ED, which has pegged the proceeds of crime at Rs 2,400 crores, had started probing the case after the Vadodara police in Gujarat had lodged an FIR against four individuals from the state, who were all partners of a firm ‘Maruti Ahmedabad’ (MA).

The modus operandi included betting on IPL matches through an online London-based platform betfair.com, banned in India in 2010, where the accused would buy super master-login credentials, and in turn would distribute the login IDs for use by individual bettors.

According to the ED’s allegations, the accused earned the proceeds of crime “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.”

With cricket betting not part of scheduled offences for which Prevention of Money Laundering Act (PMLA) prosecution can be initiated, the Delhi HC, however, held, “It is also important to note 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, especially when the said downstream activity is a final manifestation of a chain of criminality, intricately interwoven with multiple preceding criminal acts, any profit derived therefrom clearly constituting “proceeds of crime” within the contours of the PMLA…Therefore, any benefit indirectly derived by the usage of Super Master Login IDs, would constitute proceeds of crime…even if cricket betting is not a separate predicate offence, non-availability of the Super Master IDs, which was a culmination of a series of criminal activities related to a scheduled offence, would have made the international cricket betting racket non-functional.”

Those who filed petitions before the Delhi HC include two international bookies identified as Girish Patel alias Tommy, from Unjha in north Gujarat, and Kiran Thakkar alias Mala, a resident of Maninagar, Ahmedabad, and Delhi-based bookies Mukesh Kumar Sharma alias ‘Mukesh Delhi’, among others.

In September 2015, the ED had issued a provisional order for attaching moveable and immoveable properties valued at approximately Rs.20 crores of the accused, and had also issued a showcause notice in October 2015 for money laundering under the PMLA. Both were challenged by the accused in their petitions filed before the Delhi HC.

The division bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar, while refusing to set aside the provisional attachment order and subsequent proceedings, held that the designated/authorised officer, making the attachment, “possessed sufficient and cogent material to form the requisite reason to believe” and “was not mechanical or predicated on mere suspicion.”

The court also held that the “PAO also indicates the existence of a clear nexus between the material collected and the inference drawn” regarding the involvement of the accused in the process of money-laundering, concluding that there is “no infirmity in the issuance of the PAO or the consequential SCN.”

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