Income Generated Out Of Proceeds Gained From Flesh Trade & Criminal Conduct: Delhi High Court Upholds Order Attaching Properties Of Self-Styled Godman Shiv Murat Dwivedi

The appeal before the High Court was filed under Section 42 of the Prevention of Money Laundering Act, 2002 (PMLA) against the final order upholding the attachment of properties by the Respondent/Enforcement Directorate (ED).

The Division Bench of Justice Subramonium Prasad and Justice Harish Vaidyanathan Shankar said, “While numerous explanations were tendered by the Appellant to explain a valid source of income, the intricate investigation undertaken by the police and the Respondent/ED into the crime syndicate run by the Appellant very transparently pointed towards the conclusion that the attached immovable properties, deposits in bank accounts and investments in various life-saving policies have been made out of income generated out of the proceeds gained from flesh trade and other criminal conduct. The Appellant’s involvement in the offences under the ITP Act and MCOCA forms the basis of bringing his crime syndicate under the ambit of money laundering and is sufficient to categorize the subject properties as proceeds of crime. The Appellant, therefore, has indeed failed to discharge the burden of proving the facts in support of his claim that the attached properties are untainted and not obtained directly or indirectly from criminal activity.”

Advocate Mohit Chaudhary represented the Appellant while Standing Counsel Rahul Tyagi represented the Respondent.

Factual Background

The incident dates back to the year 2010 when information was received at Police Station, Saket that a gang involved in immoral trafficking of women was active near PVR Saket and certain pimps along with girls would be coming to the area in the night for soliciting customers. A raid was conducted at the spot, and the Appellant, along with one Praveen Kumar and six women, were apprehended. Subsequently, an FIR was registered against these persons for commission of offences punishable under Sections 4, 5 & 8 of the Immoral Trafficking (Prevention) Act, 1956 (ITP Act). Another case was filed against the Appellant and one Praveen Kumar @ Ankit for commission of offences punishable under section 3 of the Maharashtra Control of Organized Crime Act, 1999 (MCOCA).

During the investigation, it came to light that the accused Shiv Murat Dwivedi was indulging in continuing unlawful activities in an organised manner and had generated huge wealth to the tune of Rs. 1.5 crores (approx.) from these activities. The investigation revealed that the Appellant and his associates had no legal source of income, but they accumulated huge wealth by continuously indulging in the said criminal activities. As a result, the Respondent/ED initiated an investigation under PMLA. The Adjudicating Authority confirmed the Provisional Attachment Order, and the Appellate Tribunal upheld the same. Aggrieved thereby, the appellant approached the High Court.

Arguments

One of the arguments raised by the appellant was that the scheduled offences had been registered only in 2010, whereas the Appellant had acquired the attached property almost 7 years earlier in 2003.

Reasoning

The Bench noted that the Appellant was found to be involved in several criminal cases along with his associates between 1997 and 2003, and thus it was clear that the Appellant was not unknown to criminal activity. It was further noticed that during investigation under the ITP Act, several personal diaries, cheque books, CDs, pamphlets, cash to the tune of Rs. 1.55 crore, US $20, a gold arm band, mobile phones, 2 Honda cars, and various bills, cash receipts, insurance policies, deposit slips, credit cards and sundry documents showing income and expenditure by the Appellant for illegal trade were found. This also included payments made to brokers, call girls, servants.

“It is apposite to mention that with the background of Appellant’s criminal history that comes through in light of the investigation carried out by the Respondent/ED, this Court is constrained to deduce that all the investments, etc. carried out by the Appellant – at least post-1997 – are linked to the criminal syndicate the Appellant has been developing over the years. Merely because the FIR was registered in 2010 would not be sufficient to draw an adverse inference against the Respondent/ED and conclude that the attached properties have no link to the predicate offences of which the Appellant is accused of”, it added.

As per the Bench, in light of the active involvement in the commission of offences under various penal legislations and the absence of satisfactory explanation regarding legal source of income, the conclusion arrived at by the Tribunal that the properties attached by the Respondent/ED were properties acquired directly or indirectly from the proceeds of the Appellant’s criminal activity did not warrant any interference.

Thus, upholding the conclusion arrived at by the Appellate Tribunal, the Bench dismissed the appeal.

Cause Title: Shiv Murat Dwivedi v. Directorate of Enforcement (2025:DHC:5186-DB)

Appearance

Appellant: Advocates Mohit Chaudhary, Kunal Sachdeva, Katyayani Vajpayee

Respondent: Standing Counsel Rahul Tyagi, Advocates Mathew M. Philip, Karan Grover, Sangeet Sibou, Aniket Kumar Singh

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