ED Search, Freezing Action Not Purely Civil, Can Be Challenged Under Article 226 Read With S.482 CrPC: Karnataka High Court In Gameskraft's Case

The Karnataka High Court on Wednesday (August 5) held that a writ petition under Article 226 of the Constitution read with Section 482 CrPC, challenging Enforcement Directorate's search and freezing action under Section 17(1A) of the Prevention of Money Laundering Act (PMLA) is maintainable. [2026 LiveLaw (Kar) 280]

The single judge bench of Justice M Nagaprasanna thus rejected ED's preliminary objection to a petition moved by gaming company Gameskraft Technologies, against freezing of its bank accounts and investments based on a February 23 ECIR.

ED had contended that the freezing action, under Section 17(1A) PMLA, is exclusively civil in nature and thus not amenable to jurisdiction under Article 226 read with Section 482 of the CrPC/ 528 of BNSS.

Rejecting the argument, the Court today observed that a search under Section 17(1A) of the PMLA is not an independent civil exercise but a continuation of the criminal investigation initiated through an Enforcement Case Information Report (ECIR).

“…During the pendency of investigation into an offence of money laundering, once viewed in that perspective, the argument that search retains an exclusive civil character loses its force…. This court therefore holds that petition under Article 226 of Constitution of India read with Section 482 of CrPC challenging search and seizure proceedings that emanate from an ECIR is perfectly maintainable. Preliminary objection consequently fails. Issue answered accordingly”, the court noted in the order.

The Court held that the search, seizure and freezing powers under Section 17 are intrinsically linked to the investigation of the offence of money laundering and, therefore, cannot be viewed as having an exclusively civil character.

With the preliminary objection decided against the ED, the Court will now proceed to hear the petitions on merits.

Section 17(1A) of the PMLA empowers the Director or any authorised officer to freeze property where seizure is not practicable, preventing the property from being transferred or otherwise dealt with without prior permission.

The petitions have been filed by Gameskraft Technologies Private Limited, Rummytime Technologies Private Limited, KN Support Services Private Limited, Kworks Technologies Private Limited, Wimo Technologies Private Limited and Rummyculture Technologies Private Limited.

The high court had on January 22 stayed ED's investigation against Gameskraft Technologies after a closure report was filed in the FIR registered for the predicate offence at Bengaluru, noting that once the FIR is closed, the foundation for ECIR from November 2025 had vanished. On February 23 the ED registered a new ECIR based on the three FIRs registered in Telangana subsequent to the stay order.

The predicate offence is the skeleton; the ECIR is the flesh and blood that envelopes it. A skeleton without flesh may remain incomplete; but flesh and blood without a skeleton is an anatomical impossibility. To hold that proceedings under the PMLA can survive independent of the predicate offence would be to breathe life into a body devoid of its skeletal frame

The ED had then initiated action under Section 17(1-A) of the PMLA, 2002, freezing bank accounts and investments of the petitioners based on on a February 23 ECIR. 

On June 18 the High Court had declared the arrest of three directors of Gameskraft—Vikas Taneja, Deepak Singh, and Prithviraj Singh—as illegal and ordered their immediate release from prison, criticizing the ED for 're-packaging' an earlier ECIR in the new one.

ALSO READ- 'Why Should I Suffer If Arrest Is Illegal?' Gameskraft Founder Tells Karnataka High Court; ED Gets Time To Respond

Case Title: M/s Gameskraft Technologies Pvt Ltd & Ors. v. Directorate of Enforcement

Case No.: WP 18285/2026

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