The Karnataka High Court on Friday (September 11) sought responses from the ED and PMLA adjudicating authority on a plea by two foreign subsidiaries of Indian real money gaming entity WinZO, against provisional attachment of their assets worth Rs. 505 crores. 

The entities–Winzo US Inc. and Winzo SG Pte. Ltd. (registered at US and Singapore respectively), have challenged the constitutional validity of the Adjudicating Authority under the PMLA and has sought quashing of a provisional attachment order attaching such assets.

Justice C.M Poonacha issued notice in the matter today, asking the authorities to file their response.

The petitioners have challenged the constitution of the PMLA Adjudicating Authority, alleging that a single member, particularly one from outside the field of law, cannot constitute the Adjudicating Authority or act as a Chairperson under Section 2(1)(a) read with Section 6(2) of the PMLA Act, PMLA (Appointment and Conditions of Service of Members of Adjudicating Authorities) Rules, 2007 and Adjudicating Authority (Procedure) Regulations, 2013.

The petitioners also seek a direction to the Union of India to constitute the Adjudicating Authority strictly in terms of Section 6 of the PMLA and the 2007 Rules and 2013 Regulations.

Hence, the petitioners seeking quashing of the provisional attachment order insofar as it pertains to them, including the attachment of their bank accounts maintained outside India, which they argue is without jurisdiction and non-est in law.

The plea also seeks quashing of the show cause Notice dated 04.04.2026 issued under Section 8(1) of the PMLA and the Original Complaint dated 13.03.2026 filed by the ED before the Adjudicating Authority.

The foreign subsidiaries also pointed out that four out of five predicate offences against the parent entity stand quashed. It was submitted that the petitioners' remedy before the Adjudicating Authority is not efficacious.

Meanwhile advocate Madhu N. Rao, appearing for the ED accepted notice and sought listing of the matter after a week. 

On the non-appearance of the State and Union, the court said, “There cannot be non-appearance of State and Union. Somebody has to be there.” Rao submitted that he would duly inform the Additional Solicitor General for the Union.

The Court thus directed:

“For R2 and R3, objections of R2 and R3, if any, within 2 weeks. Adv. Madhu N Rao accepts notice. Rejoinder of petitioner if any before next week".

The ED has alleged that the investigation and search at WinZO has revealed fraudulent practices and manipulation of gaming outcomes, causing financial loss to users. The total proceeds of crime allegedly generated by WinZO come around Rs 3522 crores from 2021 to 2025, ED alleges. ED had also alleged that WinZO engaged in money laundering by transferring funds to its shell subsidiary.

Earlier, the ED Bengaluru Zonal Office has conducted search operations at the office premises of WinZO and the residential premises of Rathore, based on the FIRs filed against WinZO and others on the grounds of cheating, blocking of accounts, impersonation, misuse of PAN etc.

It is alleged that WinZO also generated Proceeds of Crime (POC) in the form of bet amounts placed and lost by real customers through the unscrupulous use of such algorithms/software, which are received by the entity in its bank accounts.

As a result, proceeds of crime amounting to Rs. 505 Crores were frozen in the form of bank balances, bonds, FDRs, and mutual funds under section 17 (1)A PMLA.

The matter is listed on September 30. 

Case Title: Winzo US Inc & Anr. V. UoI & Ors.

Case Number: WP 22761/2026