Delhi High Court Refuses to Entertain Challenge to ₹18 Crore PMLA Attachment; Holds Absence of Pre-Registered Scheduled Offence Does Not Invalidate ED Action
ED Can Provisionally Attach Property Without Pre-Registered FIR for Scheduled Offence, Holds Delhi High Court
Facts
The petitioners, Purushotam Rawat and Parthtech Developers LLP, approached the Delhi High Court under Article 226 challenging a Provisional Attachment Order (PAO) dated 24 February 2026 issued by the Directorate of Enforcement under Section 5(1) of the Prevention of Money Laundering Act, 2002 (PMLA). They also challenged an ED press release dated 2 March 2026 and sought release of the attached properties.
The ED investigation arose from alleged illegal betting activities conducted in India through 1xBet, an overseas online betting platform. Three FIRs concerning alleged illegal streaming, cheating and inducement of individuals to invest money were relied upon, and the ED registered an ECIR on 23 May 2025.
Petitioner No. 1 was the founder and CEO of Petitioner No. 2, which operated cricket-related digital platforms CREX and OneCricket. According to the ED, the company displayed advertisements promoting 1xBet and received substantial foreign remittances through Bwise Media AG, Switzerland.
The company received approximately ₹79.23 crore from Bwise Media AG during FY 2021-22 to 2024-25. The ED alleged that approximately ₹18.10 crore represented consideration attributable to promotion of 1xBet, including approximately ₹5.18 crore relating to advertisements targeted at Indian users.
The ED treated ₹18.10 crore as alleged proceeds of crime and provisionally attached a fixed deposit of approximately ₹1.10 crore and three properties in Sushant Lok, Gurugram, valued at approximately ₹17 crore.
Issues
- Whether a writ petition under Article 226 challenging a provisional attachment order under the PMLA should be entertained despite the availability of statutory remedies.
- Whether the ED lacked jurisdiction to issue the PAO because no scheduled/predicate offence generating the alleged proceeds of crime had been established or registered.
- Whether a scheduled-offence FIR must already exist before the ED can exercise provisional attachment powers under Section 5 PMLA.
- Whether alleged revenue from advertisements targeted at users outside India could be included while quantifying proceeds of crime.
- Whether disputes concerning the quantum of alleged proceeds of crime should be decided in writ jurisdiction or through the statutory PMLA mechanism.
Petitioners’ Arguments
The petitioners argued that their challenge raised a fundamental jurisdictional defect, bringing the case within the recognised exceptions to the alternative-remedy rule.
They contended that the existence of a scheduled offence is indispensable to the concept of “proceeds of crime” under the PMLA. According to them, the alleged receipts arose from advertising 1xBet during a period when online betting and its promotion did not constitute the relevant criminal offence under Indian law.
They submitted that the Promotion and Regulation of Online Gaming Act, 2025 (PROGA) was enacted only on 28 August 2025 and came into force on 1 June 2026. Further, offences under PROGA had not been incorporated as scheduled offences under the PMLA.
The petitioners therefore argued that advertising revenue earned before such criminalisation could not constitute proceeds generated from a scheduled offence.
They also contended that a substantial portion of the alleged ₹18.10 crore revenue related to advertisements targeted at users in Bangladesh, Pakistan and Sri Lanka, rather than India. On the ED’s own figures, only approximately ₹5.18 crore related to Indian users, making attachment of properties worth more than ₹18 crore disproportionate.
Respondents’ Arguments
The ED raised a preliminary objection regarding maintainability, arguing that the PMLA provides a comprehensive and time-bound statutory mechanism for challenging provisional attachment.
It pointed out that:
- a complaint must be filed before the Adjudicating Authority under Section 5(5);
- the Adjudicating Authority determines whether the attachment should be confirmed;
- an appeal lies to the Appellate Tribunal under Section 26; and
- a further appeal lies to the High Court under Section 42.
The ED also relied upon Vijay Madanlal Choudhary v. Union of India to contend that registration of an FIR concerning the scheduled offence is not a condition precedent for provisional attachment under Section 5 PMLA.
It further submitted that its investigation disclosed offences including cheating and fraud and that information concerning further scheduled offences had already been forwarded to the jurisdictional police under Section 66(2) PMLA.
Analysis of the Law
The High Court recognised that availability of an alternative statutory remedy is not an absolute constitutional bar to Article 226 jurisdiction.
However, in challenges to PMLA provisional attachment orders, writ jurisdiction must be exercised with considerable restraint. The Court observed that intervention may be justified where the petitioner establishes circumstances such as:
- manifest lack of jurisdiction;
- patent arbitrariness; or
- mala fide exercise of statutory power.
The critical question was therefore not simply whether the petitioners raised a jurisdictional argument, but whether they demonstrated a manifest or ex facie lack of jurisdiction sufficient to bypass the statutory PMLA remedies.
The Court found that they had not.
Precedent Analysis
The Court considered Whirlpool Corporation v. Registrar of Trade Marks, Popcorn Entertainment v. City Industrial Development Corporation and Godrej Sara Lee Ltd., relied upon by the petitioners to establish that alternative remedies do not completely exclude writ jurisdiction.
However, the Court placed particular emphasis on Delhi High Court decisions specifically dealing with PMLA attachment proceedings, including:
- Gautam Khaitan v. Union of India
- Gold Croft Properties (P) Ltd. v. Enforcement Directorate
- RBL Bank Ltd. v. Enforcement Directorate
- M/s Krrish Realtech Pvt. Ltd. v. Union of India
These decisions emphasised that writ challenges to PAOs should ordinarily not circumvent the statutory PMLA mechanism.
Most importantly, the Court applied Vijay Madanlal Choudhary v. Union of India, where the Supreme Court distinguished between prosecution for money laundering and provisional attachment. While prosecution under Section 3 requires a scheduled offence, a pre-registered criminal case concerning that scheduled offence is not indispensable before provisional attachment under Section 5.
The ED may proceed under Section 5 while contemporaneously supplying information to the jurisdictional police under Section 66(2) for appropriate action.
Court’s Reasoning
The Court found no manifest lack of jurisdiction in the ED’s action.
First, the PAO itself referred to three FIRs, including offences of cheating under Section 420 IPC, corresponding to Section 318(4) BNS, which constitutes a scheduled offence under the PMLA.
The fact that one portion of the PAO characterised the proceeds as arising from “illegal betting” without specifically using the expression “cheating” could not, at the threshold, establish that the ED lacked jurisdiction. The PAO had to be considered holistically.
Second, the ED had sent a communication dated 27 November 2025 to the Commissioner of Police, Ahmedabad, under Section 66(2) PMLA, identifying prima facie commission of various offences under the BNS and Information Technology Act, including scheduled offences.
The fact that the jurisdictional police had not yet registered an FIR pursuant to that communication did not invalidate the ED’s action. The procedure adopted was consistent with the course expressly contemplated by the Supreme Court in Vijay Madanlal Choudhary.
Third, the argument concerning inclusion of foreign-targeted advertising revenue did not establish a jurisdictional defect. It concerned the quantification of proceeds of crime and involved disputed factual questions regarding where the advertisements were placed, hosted and targeted.
Such factual controversies were better suited for determination by the Adjudicating Authority and the statutory appellate forums rather than under Article 226.
The Court also considered it significant that Petitioner No. 2 had already invoked the PMLA’s appellate mechanism in connected proceedings arising from search and seizure operations.
Conclusion
The Delhi High Court dismissed the writ petition without examining the merits of the attachment itself.
It held that the petitioners had failed to establish any manifest lack of jurisdiction warranting exceptional intervention under Article 226. A pre-existing FIR for every scheduled offence relied upon by the ED is not necessarily a condition precedent to provisional attachment under Section 5 PMLA where the ED contemporaneously follows the procedure contemplated under Section 66(2).
The Court further held that questions concerning the quantification of proceeds of crime, including whether foreign-targeted advertising revenue could be included, should be adjudicated through the statutory PMLA mechanism.
Importantly, the Court expressly left all rights and contentions of both sides open to be raised before the Adjudicating Authority and in subsequent statutory proceedings.
Case Details
Case: Purushotam Rawat & Anr. v. Director, Directorate of Enforcement & Anr.
Court: Delhi High Court
Case Number: W.P.(CRL) 1051/2026
Judge: Justice Prateek Jalan
Date: 4 August 2026
Result: Writ petition dismissed on the ground that the petitioners should pursue the statutory remedies available under the PMLA. The Court found no manifest lack of ED jurisdiction justifying Article 226 intervention and left all merits and contentions open for adjudication before the competent PMLA authorities.
