Karnataka HC Dismisses Challenges to ED Seizures in Betting Probe, Citing PMLA’s Statutory Remedies

The Enforcement Directorate (ED) registered ECIR/BGZO/19/2025 following four predicate cases alleging betting and gambling activities, and later searched the petitioners’ premises, seized property and records, and froze bank accounts.

The petitioners contended that the predicate cases had been closed and challenged the search, seizure, freezing and retention, the ED’s application under Section 17(4) of the Prevention of Money Laundering Act, 2002 (PMLA), and the Adjudicating Authority’s show-cause notices under Section 8(1).

They also argued that the Adjudicating Authority was coram non judice because it comprised a single non-legal member.

The ED opposed the petitions, relying on the PMLA’s statutory process and the availability of remedies under that Act.

Section 17(4) of the PMLA requires an application to the Adjudicating Authority for retention of seized property or continuation of freezing; Section 8 provides for notice, hearing and adjudication; and Sections 26 and 42 provide successive statutory appeals.

Under Article 226, the existence of an alternative remedy does not extinguish the High Court’s jurisdiction, but the Court ordinarily exercises restraint where an effective statutory remedy is available, absent exceptional circumstances such as patent lack of jurisdiction or a violation of natural justice.

The Court relied on JSW Steel Ltd. v. Enforcement Directorate, Union of India v. Guwahati Carbon Ltd., Special Director v. Mohd. Ghulam Ghouse, and other authorities cited in the judgment for the principles of statutory primacy and restraint in intervening at an interlocutory stage.

The question concerning the composition of the Adjudicating Authority was also before the Supreme Court in Union of India v. J. Sekar, and the High Court deferred its determination pending that decision.

The Court treated the petitions as premature challenges to proceedings within the PMLA’s adjudicatory framework.

It held that the petitioners had not established an exceptional ground warranting immediate intervention, such as patent lack of jurisdiction, breach of natural justice or violation of the Act; the statutory remedies remained available to them.

The Court therefore declined to determine the merits of the petitioners’ objections to the ECIR, predicate offences, search or retention.

It likewise did not decide the coram non judice objection, reserving that question in view of the pending Supreme Court proceedings.

It did not decide the challenge to the composition of the Adjudicating Authority, reserving that issue pending the Supreme Court’s decision in Union of India v. J. Sekar.