'Foundation Has Vanished': Karnataka High Court Stays ED Probe Against Gameskraft Citing Closure Report In Predicate FIR

The Karnataka High Court in an interim order on Thursday (January 22) stayed ED's investigation against Gameskraft Technologies after a closure report was filed in the FIR registered for the predicate offence, noting that once FIR is closed the foundation for ECIR had vanished. 

The plea seeks quashing of ED's November 2025 Enforcement Case Information Report (ECIR) and all consequential proceedings emanating therefrom. In the interim it seeks a stay of the investigation in the ECIR.

After hearing the submissions, Justice M Nagaprasanna in his order dictated:

"...In light of the closure report in Crime No. 722 of 2024 the foundation for the subject ECIR, (for) which the predicate offence is now closed, has vanished. In that light the ECIR in so far as it pertains to Crime No. 722 of 2024 cannot be permitted to be investigated into". 

The court noted the ASG's (appearing for the ED) submission that there are several other FIRs pending prior to registration of ECIR. The court permitted the ED to file statement of objections and also make submissions on the concept "of updating of ECIR as and when FIR comes to be registered". 

During the hearing Senior advocate Sandesh Chouta appearing for petitioner Gameskraft, submitted that in the FIR on the basis of which ED's ECIR was registered, a B report/closure report had been filed by the police and the same was accepted. 

He said, "The Crime No (FIR) is 722 of 2024. Date of acceptance of B report is 5-7-2025 but ECIR gets registered on 11-11-2025".

Meanwhile Additional Solicitor General Arvind Kamath appearing for the ED submitted that in the course of investigation if the agency finds other offences, then it can update the ECIR, which the ED had done in the present case. "My instructions are that there atleast six other FIRs," he said. 

"This ECIR is based on particular on B report, that we cannot permit you to go on. But if other FIRs are there that you can carry on...If there is any other you can continue. Let learned ASG file his objections. Predicate offence 722 of 2024 upon that you have registered ECIR that cannot continue," the court orally said. 

The court further said that if the ED finds other FIRs then it must show the provision of law or judgment to update the existing ECIR. To this the ASG said, "I will furnish this".

The court however orally said, "If there is any other FIR you place it before the court along with judgment that you can update the ECIR that has become defunct, from time to time when subsequent event take place. This ECIR based on particular FIR, if the foundation of it goes the superstructure cannot remain. You cannot go on building superstructure..."

ASG Kamath however said that before the ED registered the ECIR there were already existing predicate offences. "If there are you bring place it...as far as this petition is concerned your ECIR is only based on 722/2024 (FIR) which I will stay," the court said. 

Case title: M/S GAMESKRAFT TECHNOLOGIES PVT LTD AND ANR v/s DIRECTORATE OF ENFORCEMENT

 WP 1668/2026