‘How can tech developers know payment fund source?': Court grants bail to techies in Fairplay betting app case
Chirag Shah and Chintan Shah were arrested for providing software and technical infrastructure for the app.
The court also observed that all business transactions would come to a standstill as there was no mechanism to clarify the source of the income from which the person giving orders and obtaining services is paying the amount.
The Enforcement Directorate (ED) had last month filed a prosecution complaint (chargesheet) against Fairplay Sport and two of its companies, its founder, Krish Shah, and others including brothers Chirag and Chintan, who formed Wohlig Transformation Pvt Ltd for software services to the app. The court said that the role of the two brothers was limited to the extent of developing software and providing IT support and they had received legitimate dues for their services.
'IT professional who is providing services regarding software development… whether is required to know the source of funds of the persons (who) have directed them to develop the app. In case, this question is answered in affirmative, then in the commercial world, clearly all the business transactions will come to standstill as there is no mechanism to clarify from which source the person who is giving orders and obtaining services is paying the amount,' special judge A C Daga said.
The ED had alleged that Fairplay lured individuals into betting schemes including on the Indian Premier League and the Lok Sabha elections 2024, promising them returns and wins. However, the platform deliberately manipulated odds and routed the money through a complex web of shell companies to conceal the origins of the funds for their personal gain. The Shah brothers sought bail stating that their company provided services to Fairplay and received Rs 2.4 crore for it, on which they duly paid tax and had therefore no connection with the allegations of money laundering.
The court said that the transaction between Fairplay and the Shah brothers' company are not fake as they are seen to be legitimate from bank to bank. It said that the brothers played a significant role in development and technological operations of Fairplay's platform, including monitoring its website traffic and user engagement. When the ED had claimed that they were aware of the cheating, the court said prima facie evidence showed they were aware Fairplay was allegedly indulging in online betting and that this was not a scheduled offence under the Prevention of Money Laundering Act. The court also said that while the main FIRs probed initially were quashed by the Bombay High Court in February, others filed later did not name the Shah brothers as accused.
Other accused persons, including Krish Shah, are named as absconding accused.
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