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

The Directorate of Enforcement (ED) registered ECIR/BGZO/19/2025 following four predicate cases concerning alleged betting and gambling activities.

On 22 July 2025, the ED searched the petitioners’ premises, seized property and records, and froze certain bank accounts.

The ED then applied under Section 17(4) of the Prevention of Money Laundering Act, 2002 (PMLA) for retention of the seized or frozen material, and the Adjudicating Authority issued notices under Section 8(1).

The petitioners contended that the predicate cases had been closed and challenged the search, seizure, retention proceedings and notices.

The respondents objected that the petitioners had an effective statutory remedy and had participated in the adjudicatory proceedings.

Article 226 confers wide jurisdiction, but the High Court ordinarily exercises self-restraint where an effective statutory remedy is available; recognised exceptions include patent lack of jurisdiction, breach of natural justice and manifest illegality.

The Court relied on the PMLA’s adjudicatory and appellate framework: Section 17(4) provides for an application seeking retention of seized or frozen property; Section 8 provides for adjudication by the Adjudicating Authority; Section 26 provides an appeal to the Appellate Tribunal; and Section 42 provides a further appeal to the High Court.

The Court also relied on Special Director v. Mohd. Ghulam Ghouse for the principle that writ petitions should not ordinarily interrupt proceedings initiated by a show-cause notice where the recipient can raise objections before the statutory authority, and referred to JSW Steel Ltd. v. Enforcement Directorate and other authorities on the PMLA’s statutory remedies and restraint in writ review.

The Court treated the petitions as challenges to the search and seizure, the ED’s retention application and the resulting Section 8(1) notices; it noted that the petitioners had not challenged the ECIR itself.

Given the PMLA’s adjudicatory and appellate process, the Court held that the petitioners had not shown an exceptional circumstance warranting intervention under Article 226.

It therefore declined to determine the substantive objections—including the effect of the alleged closure of the predicate cases—at this stage, leaving them for the statutory process.

On the coram non judice contention, the Court noted that the issue was pending before the Supreme Court in Union of India v. J. Sekar and expressly reserved its consideration.

It did not decide the coram non judice issue, reserving it pending the Supreme Court’s decision in Union of India v. J. Sekar.