The High Court of Karnataka has quashed criminal proceedings initiated against Bengaluru-based payment gateway, Razorpay Software Pvt. Ltd., by the Enforcement Directorate (ED), for allegedly facilitating the transfer of “proceeds of crime” generated through extortion of borrowers by a Mumbai-based non-banking finance company (NBFC) through mobile-based loan apps, allegedly controlled by either Chinese entities or individuals from China.
Lack of evidence
“There is no evidence to suggest that the petitioner, Razorpay, a payment gateway, had knowledge that the funds transferred to the merchant IDs of accused no. 5 [Jamnadas Morarji Finance Pvt. Ltd., an NBFC] were derived from criminal activity related to a scheduled offence, nor did they [Razorpay] knowingly assist accused no. 5 in concealing or transferring illicit proceeds as clean money,” the High Court observed.
