In a significant ruling, the Delhi High Court has held that earnings from illegal betting activities qualify as “proceeds of crime” under the Prevention of Money Laundering Act (PMLA).
According to reporting by Anushka Kumari, the court made it clear that any income generated from an unlawful source retains its illegality, regardless of how many layers it is moved through.
The judge drew a powerful analogy, comparing such income to the “fruit of a poisoned tree,” a principle widely referenced in criminal jurisprudence to denote that anything derived from an illegal act carries the same taint.
Court’s Key Observation
The High Court stated:
If the initial source of funds is illegal (such as betting),
Then every subsequent layer of profit, investment, or conversion remains illegal.
Any attempt to portray the earnings as legitimate does not change their criminal nature.
This interpretation strengthens enforcement agencies’ ability to investigate and prosecute illegal betting networks under PMLA.
Impact on Money Laundering Investigations
The ruling is expected to influence ongoing and future cases involving:
Online betting rackets
Hawala channels tied to gambling income
Foreign remittances linked to betting sites
IPL and sports-betting syndicates
Cryptocurrency-based betting transactions
The High Court’s clarification ensures that individuals cannot escape liability by layering, placement, or disguising illegally earned money.
What Is the ‘Fruit of a Poisoned Tree’ Analogy?
The metaphor means:
If the tree (the source) is illegal,
The fruit (the earnings) remains illegal.
This principle is widely used globally to highlight that no clean profit can originate from an unlawful activity.
🔍 Why This Judgment Matters
The ruling:
Helps law enforcement tighten their net around betting syndicates
Clarifies grey areas around digital transactions involving betting apps
Strengthens PMLA cases by establishing a clear legal foundation
Prevents accused individuals from legitimizing money through multiple transactions
Legal experts say this verdict could set a precedent for other illegal trade cases as well.
FAQs
1. What did the Delhi High Court rule?
That earnings from illegal betting are proceeds of crime under PMLA.
2. What analogy did the court use?
The “fruit of a poisoned tree,” meaning unlawful gains remain unlawful.
3. Does layering or reinvesting illegal betting money make it legal?
No. Every layer remains tainted.
4. How will this impact betting-related cases?
Agencies can prosecute more strongly under money laundering laws.
5. Does the ruling affect online betting apps?
Yes, especially those operating without licenses within India.
Published on : 26th November
Published by : SMITA
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Source Credit: Content inspired by reporting from Anushka Kumari,