Karnataka High Court Directs ED To Disclose Number Of Complaints, Amounts Against WinZO Amid Challenge To ₹505 Crore Account Freeze

The Karnataka High Court on Tuesday directed the Enforcement Directorate (ED) to, by Thursday, place on record the total number of complaints filed against online gaming company Winzo Pvt Ltd and also to provide the total amounts involved in those complaints.

The direction followed after the company contended that the freezing of its bank accounts was wholly disproportionate to the complaints received and investigated as predicate offences.

Senior Advocate Satvik Upadhya, appearing for the company, submitted that around ₹500 crore had been frozen on the basis of a complaint involving only ₹7–8 lakh that existed at the time the search was conducted. He argued that Section 17 of the Prevention of Money Laundering Act (PMLA) permits the ED to freeze records or property found as a result of a search, whereas the predicate offence under investigation involved merely ₹5–8 lakh. Despite this, over 25 bank accounts of the petitioner containing more than ₹500 crore had been seized. He further contended that the powers of search and seizure were being used to reach the threshold of attachment of property.

Senior Advocate Sandesh J. Chouta, also appearing for the petitioner, submitted that such action would amount to a “civil death” of the company when the complaint itself involved only around ₹10 lakh.

Counsel appearing for the ED submitted that the amounts varied and were mentioned in the complaints. He stated that the allegation was that bots were being used to play games and that there were a few hundred complaints against the petitioner as on date.

A single judge bench of Justice Suraj Govindaraj recorded that counsel for the respondent sought a day's time to take instructions on whether copies of the CCTV footage could be made available to the petitioner. The Court also directed the ED to place on record the total number of complaints filed against the petitioner and, if possible, the total amounts involved in those complaints. The matter was directed to be relisted the following day.

During the hearing, Upadhya submitted that it was an admitted fact that raids were conducted on 18.11.2025 and that the process involved continuously keeping people inside the premises and calling individuals who were not present there. He argued that it was impermissible to call persons from outside and record their statements under Section 50 of the PMLA. He further submitted that audio-video recording of the search and seizure, as mandated under the Bharatiya Nagarik Suraksha Sanhita (BNSS), was not carried out. According to him, the ED's response to these allegations was merely that such facts were not borne out from the record since the panchnama did not reflect them. He pointed out that the CCTV footage, which was made available pursuant to the Court's direction, clearly showed that people were detained until 5 a.m. and that statements were recorded during that period.

The Court queried the ED's counsel on whether copies of the CCTV footage would be provided. Initially, the counsel submitted that the footage could be submitted to the Court. Subsequently, he stated that he would seek instructions and make submissions on the following day.

The company has approached the High Court seeking a declaration that the search and seizure carried out by the ED at its office between 18.11.2025 and 22.11.2025, in furtherance of an investigation in a money laundering case, was illegal and void.

As per a press release issued by the ED, on November 26, 2025, it arrested Paavan Nanda and Ms. Saumya Singh Rathore, Directors of M/s WinZO Games Pvt. Ltd., under the provisions of the Prevention of Money Laundering Act, 2002, for their alleged involvement in the offence of money laundering.

The ED has alleged that M/s WinZO Pvt. Ltd. was engaged in criminal activities and fraudulent practices, wherein customers were made to play with algorithms or software without being informed that they were playing against software and not human players in real money games. It has also been alleged that WinZO prevented or limited withdrawals of monies held by customers in their wallets.

According to the ED, M/s WinZO Pvt. Ltd. generated proceeds of crime in the form of bet amounts placed and lost by real customers through the alleged unscrupulous use of such algorithms or software, which were received by the entity in its bank accounts. So far, proceeds of crime amounting to ₹505 crore have been frozen in the form of bank balances, bonds, fixed deposits, and mutual funds under Section 17(1A) of the PMLA, 2002.

The plea before the High Court seeks to quash and set aside the search and seizure carried out by the ED and to declare that all actions undertaken by the respondent as a consequence of and in furtherance of the impugned search and seizure, including the freezing of the petitioner's bank accounts, escrow accounts, and other financial assets or instruments, are illegal.

Case Title: WINZO PVT LTD AND DIRECTORATE OF ENFORCEMENT

Case No: WP 36998/2025