“Jail Is Exception Even In PMLA”: Supreme Court While Granting Bail In Mahadev Betting App Case

The Supreme Court, today, granted bail to accused persons in the Mahadev Betting App Case while observing that bail is the rule and jail is the exception, even in PMLA cases.

Mahadev Betting App case came into limelight in 2023, involving an illegal betting syndicate which uses online platforms to recruit users, generate IDs, and launder money through Benami bank accounts. The money generated by this application were involved in hawala transactions.

The Bench of Justice M.M. Sundresh and Justice N. Kotishwar Singh orally observed, “...Role attributed against the Appellants though they are varied, suffice it is to say the question of period of incarceration and the trial is likely to be delayed. We are to grant bail.”

The Bench extensively heard the submissions made by the Counsels for the Appellants in nineteen connected matters including the tests for bail in PMLA cases, roles attributed to Appellants in money laundering, and the period of incarceration.

Thereafter, ASG S. V. Raju informed the Court, “The Modus Operandi is that crores of money has been taken away to foreign countries, including Dubai. How is it done? There is a betting app called Mahadev App. If somebody wants to do betting, he has to open two accounts…WhatsApp numbers are given to him. Through that, he does betting…one is for making the bet and the other is for getting the money back.”

Upon hearing this, Justice Sundresh asked, “How does it happen somebody will bet online, so if he gains money the money will not come to him?”

ASG replied that the money doesn't come directly; it goes to another account. It was also informed by the ASG that there were cases where the money doesn't come. However, what was being done was that people like dhobies, vegetable vendors, elderly were cheated and duped to obtain their Aadhar Number and PAN details for the purpose of transferring the money.

Justice Sundresh asked, “How did they use it?” and the ASG informed the Court that those documents were used to open bank accounts in order to deposit the money laundered.

It was also emphasized by the ASG, “If one bank account is used, it will attract attention…then the money is either withdrawn in cash…through hawala sent to Dubai or it was used to fake bills for purchasing diamonds etc.”

“I see, I see, fake invoices are being created and then rooted back…some of them are rooted back, some of them are kept”, remarked Justice Sundresh.

ASG continued to submit that the money involved was used to have a lavish lifestyle and later it was used to pump it back to India through other legal means.

Further, ASG submitted, “Now, they have gone to Cryptocurrency because Cryptocurrency is difficult to detect. From mobile you can transfer your Bitcoins…that is why the price of Bitcoins are going high day by day. So all these hawala operators are now resorting to Bitcoins…These are very shrewd operators.”

ASG also informed the Court that the accused persons are involved with the main operators, who are currently in Dubai. Many people involved in the Mahadev Betting App case are relatives.

“Obviously, it will be known persons only…friends, employees…”, remarked Justice Sundresh.

ASG urged the Court that a check has to be made to ascertain whether the Mahadev app is still running and any of the accused are still involved in it. He further insisted that the accused persons should give an undertaking that they will not be involved in such cases in future.

Upon which, Justice Sundresh said to ASG, “It is not so difficult for you to understand the mind of the Court…we always believe that bail is rule and jail is the exception, even in PMLA.”

The Court also emphasized that the accused persons in question have different roles to play and the trial may last another five years.

ASG continued to insist regarding the amount of money involved and the roles of the accused persons, however, the Court remarked, “We are not inclined…any conditions and we will… ask the trial court to impose the conditions…”

The Counsel appearing for the CBI requested the Court to adjourn the matter as the investigation is still going on, however, the Court noted that the matter has already been adjourned on previous occasions on the same grounds.

“In matters like these, we cannot close our eyes. It is a huge scam…we have already adjourned it four-five times…”, said the Court.

However, the Counsel for CBI continued to insist for adjournment, stating that the investigation of CBI was at a very critical stage. Thereafter, the Court heard the cases involving the CBI.

The Court, while granting a common order in the concerned matter, recorded in its order, “Some of the accused have been granted bail. The role attributed against the Appellants is lesser compared to them. This Court has taken note of the fact the trial is going to be prolonged with respect to the voluminous documents and the number of witnesses. They have been in incarceration for more than one year…they are entitled to bail in IPC offenses…In any case, in view of the decision rendered in V. Senthil Balaji case (2024) as it comes with the bounden duty not only on part of the Court but also on part of the Constitution to make sure that the trial is concluded within a reasonable time, which is not likely to take place."

“In all these cases, money laundering is seen from the documents. After the money laundering, the money was taken out of the country to Dubai and thereafter brought back through hawala transactions with the assistance of the Appellants…Therefore, on the peculiar facts of the case, there is no need for interference ”, the Court continued to record in its order.

On the request of the Counsel for CBI, the Court deferred the case for two months on account of further investigation being made by the CBI.

The Court also took note of the fact that some of the accused persons in the Mahadev Betting App case have been granted bail by different benches of the Supreme Court.

The Court said, “Role attributed against the Appellants, though they are varied, suffice it is to say the question of period of incarceration and the trial is likely to be delayed; we are to grant bail.”

The bail granted to the Appellants was subject to conditions which would be imposed by the trial court; however, the Bench imposed the additional conditions requiring the Appellants to undertake that they will not be involved in similar offences in future; appear before the Trial Court once a week, and passports of the Appellants to be impounded.

Thereafter, the Court also granted liberty to the Prosecuting agency to seek cancellation of bail in the case if any conditions are violated by the Appellants.

Case Background

The Mahadev Online Book app was used to facilitate illegal betting on live games such as cricket, football, and kabaddi. Investigations revealed a network of panel operators and promoters managing illegal transactions. The Enforcement Directorate (ED) alleged that the accused persons played an role in laundering proceeds of crime generated through the betting operations. During the investigation, it was found that the accused persons held assets acquired from the benefits of the betting operations.

Earlier, the High Court observed that prima facie evidence of his involvement in the alleged organised crime and rejected the bail of one of the accused.

Cause Title: Nitin Tibrewal V. Directorate Of Enforcement SLP(Crl) No. 14286/2024

Click here to read/download Order