Karnataka High Court Stays ED Summons To Advocate In PMLA Case Involving Congress MLA KC Veerendra

The Karnataka High Court on Tuesday (September 16) stayed the summons issued by the Enforcement Directorate (ED) to advocate Anil Gowda in a money laundering case over illegal online and offline betting racket, allegedly involving Congress leader KC Veerendra.

Justice Sachin Shankar Magadum also restrained the central agency from conducting any further proceedings or taking any coercive actions against the advocate.

The bench said,

“This court is of the prima facie opinion that until the Honourable Supreme Court adjudicates the matter and lays down authoritative guidelines as to whether and to what extent the Enforcement Directorate can invoke Section 50 of the PMLA Act to summon a practising advocate, no coercive steps can be permitted against a legal practitioner merely on the basis of power of summons.”

It added “Any contrary post would cause prejudice to the petitioner. Accordingly this court is of the considered view that the petitioner is entitled to interim protection. The impugned summons are stayed and respondent agency is restrained from invoking Section 50 of the PMLA Act against the petitioner or taking any coercive steps against the petitioner until the Apex court finally decides the petition pending before it.”

The petition challenged the legality of proceedings initiated by the ED under the PMLA including the summons dated 24.08.2025.

The plea states that the ED's actions which include the registration of an ECIR and selective targeting of petitioner and K.C. Veerendra, a sitting MLA, is motivated by political vendetta to suppress opposition voices, violating Articles 14 and 21 of the Constitution.

The plea states that the petitioner is an advocate and legal consultant to Veerendra. It is claimed that the ED proceedings are void ab initio, lack jurisdiction, and are driven by malafide intent rooted in political vendetta.

It states that the ED's case relies on four FIRs spanning 10-15 years, alleging cricket betting and gambling, with Section 420 IPC as the predicate offence. However, no "proceeds of crime" exist as defined under Section 2(1)(u) read with Section 3 PMLA, as mandated by Vijay Madanlal Choudhary v. Union of India (2023).

Further, the FIRs have either resulted in acquittals, quashing, or exclusion of key individuals, including the Petitioner, who is neither named nor chargesheeted. Allegations of betting do not constitute a scheduled offence under PMLA, and no credible evidence supports money-laundering activities, rendering the proceedings illegal, the plea states.

The plea alleges that the ED is impermissibly investigating the predicate offence, exceeding its jurisdiction under PMLA, as evident from the Remand Application dated 24.08.2025, which reveals a fishing inquiry in conflict with the federal structure.

Senior Advocate Vikas Pahwa, appearing for the petitioner referred to the Apex court order in the suo-motu case initiated on the issue of investigative agencies summoning advocates over their legal opinion given to clients. He argued that the legal advice given by the petitioner to Veerendra is protected.

Additional Solicitor General Aravind Kamath had opposed the plea contending that ED has not issued summons to Gowda in connection with his role as a lawyer. Rather, he is a partner in several commercial companies, including KC Veerendra's company, thus the summons were issued to an individual seeking his assistance to investigate a crime.

The plea seeks a direction to set aside the Summons dated 24.08.2025 and any proceedings initiated thereto against him by the ED. It further seeks to declare that the initiation and continuation of proceedings by the respondent qua the Petitioner under the PMLA as illegal and bad in law.

In the alternative the plea seeks a direction to the ED restraining it from compelling the petitioner to furnish any statement u/s 50 of the PML Act in a manner which amounts to testimonial compulsion and is violative of Article 20(3) of the Constitution of India.

Case Title: Anil Gowda AND The Directorate Of Enforcement

Case No: WP 26157/2025

Appearance: Sr Adv Vikas Pahwa, Adv Rajath, Shashwath Prakash, Aaron Thomas, Mayank Jain, Madhur Jain, Arpit Goel and Jasmeet Singh

Additional Solicitor General Aravind Kamath a/w CGC Madhukar Deshpande