Shruti Rampal Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)
PMLA Tribunal Releases Frozen Bank Accounts of Sister of Alleged Betting Operator – Mere Relationship, Investment, or Ongoing Investigation Not Enough
The Appellate Tribunal under PMLA set aside the Adjudicating Authority’s order confirming the freezing of three bank accounts belonging to Shruti Rampal, holding that the Enforcement Directorate failed to establish any nexus between her funds and the alleged proceeds of crime.
The case arose from an ECIR based on a scheduled offence involving alleged illegal streaming of ICC T20 World Cup matches through the Magicwin platform. The ED sought to justify freezing the appellant’s accounts primarily on the grounds that she was the sister of an alleged operator linked to the platform, had invested over ₹1.29 crore in a company where her brother was also associated, and had allegedly failed to satisfactorily explain the source of funds. However, the Tribunal noted that the appellant was not named in the FIR, there was no allegation of her involvement in the copyright violation or betting activities, and no material showed any flow of alleged proceeds of crime from her brother to her.
The Tribunal emphasized that blood relationship cannot create a presumption of money laundering, and investment in a legitimate company cannot by itself justify action under PMLA. It further observed that the appellant was an income-tax assessee with disclosed income and that the ED had failed to establish the foundational facts necessary to invoke the reverse burden under Section 24 of PMLA. Relying on principles laid down in Vijay Madanlal Choudhary, the Tribunal held that the burden shifts to a person only after the prosecution first establishes the existence of proceeds of crime and a connection of that person with such proceeds.
Importantly, the Tribunal found that the Adjudicating Authority had confirmed retention of the frozen accounts largely because the investigation was still ongoing. It held that Section 8(3) requires a finding that the property is involved in money laundering, and retention cannot be justified merely on the ground that investigation is continuing. Since no reasoned finding existed showing that the frozen bank accounts represented or were connected with proceeds of crime, the Tribunal allowed the appeal and directed release of the accounts.
PMLA action cannot be sustained merely on suspicion, family relationship, unexplained investment, or ongoing investigation. The ED must first establish a prima facie link between the property and “proceeds of crime” before the reverse burden under Section 24 can operate.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
The present appeal arises from order dated 13.05.2025 of the Ld. Adjudicating Authority (AA) established under the Prevention of Money Laundering Act, 2002 (PMLA) in Original Application (OA No.14/25) confirming the retention of three frozen bank accounts of the appellant herein, and also allowing retention/continued freezing of other properties and records seized from other persons with which we are not concerned in the present appeal. The appellant Ms. Shruti Rampal was Respondent No. 9 before the Ld. AA.
