'ED Complaint Can't Stand On Its Own When Predicate FIRs Are Stayed': WinZo Tells Karnataka High Court In Plea To Quash PMLA Case

Gaming company WinZo seeking quashing of money laundering case against it, told the Karnataka High Court on Saturday (April 25) that when a predicate FIR gets stayed by the competent court the Enforcement Case Information Report (ECIR) which is based on the predicate offence, cannot stand on its own.For context, the ED has alleged that WinZo 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 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. ED has alleged that WinZo 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 Rs. 505 crore have been frozen in form of bank balances, bonds, fixed deposits and mutual funds under Section 17(1)(A) PMLA. WinZo has thus challenged the propriety of keeping the ECIR alive by relying on an FIR which was claimed to be registered, after the registration of the ECIR, when all the predicate offences that formed the foundation of the original ECIR no longer existed. It has sought quashing of ECIR dated November 6, 2025, as well as all addendums to it. Today, senior advocate Sajan Poovayya appearing for WinZo, submitted before Justice M Nagaprasanna that when the foundation lapses (FIR), the superceeding structure (ECIR) also falls.According to WINZO, the ECIR was based on four FIRs, primarily, all of which have been closed by the police or quashed by the competent court. After the ECIR was filed on 06.11.2025, a subsequent FIR was registered by the Gurgaon Cyber Police.The subsequent FIR registered by the Gurgaon Cyber Police was added by the ED. This, WinZo has argued, was after the search and seizure at the petitioner's office and the Directors' residences. The ED has also imposed an account freeze to the tune of Rs 505 crores on WinZo's account. Poovayya submitted that the subsequent FIR at Gurugram was recently stayed by the Punjab & Haryana High Court. When the four FIRs were initially quashed, the ECIR should have also been deemed as 'obliterated' then, he added. He said that the addendum to the ECIR which was brought on account of the subsequent Gurgaon FIR has also been stayed by the Punjab & Haryana High Court. “As an obvious corollary, when the investigation in FIRs related to predicate offences gets stayed, ECIR would stand eclipsed[stayed]…they will apply to the proceedings under ECIR”, he submitted referring to decision in Mantri Developers Pvt. Ltd. v. Directorate of Enforcement (2023). In this case the high court had held that an ECIR would not stand when the predicate offence itself is rendered unsustainable.He thus submitted that the proceedings under the amended ECIR have no leg to stand on. On the other hand, ASG Arvind Kamath appearing for ED submitted that ECIR is an internal document alike a register and it can be updated as held by the division benches of five high courts. ECIR is akin to a register and not an FIR andtherefore updation is permissible, ASG said. “…We are concerned with the proceeds of crimes; these are all cybercrimes. When we get to know about it, we update the ECIR. Every time we can't register a new ECIR, it was never the object of the Act [PMLA Act]. Updation is a concept accepted by several High Courts…”, ASG argued.The ASG further added that ED has come across yet another crime concerning WinZo registered at Cyber Crime Station, Nagpur. “…it was registered on 01.04.2026. so long as there are live FIRs, we are entitled to proceed with the ECIR”, submitted the ASG.“… WinZo claims that whatever properties have been provisionally attached, he says that they are not through proceeds of crimes. Section 8 allows him to go before an adjudicating authority under PMLA to say that it's a 'clean property”, added ASG.Opposing this Poovayya informed the court that such a contention is not even a part of the pleadings in the current writ petition.After hearing the arguments the court asked ED to file their statement of objections and complete the pleadings so that the matter can be heard in detail. “….Matter would require consideration. Interim protection granted shall continue till the next date of hearing. ED shall file its objections by next date so that proceedings can be heard further and pleadings stand concluded. List the matter on 5thJune for further hearing,” the court noted in its order.At this stage the ASG said that there were proceedings before the adjudicating authority and one before special court. To which the court orally clarified that there was no stay on judicial proceedings, only continuation of non-precipitative action vis-a-vis the petitioner. The matter will be heard on June 5.Case Title:...

'ED Complaint Can't Stand On Its Own When Predicate FIRs Are Stayed': WinZo Tells Karnataka High Court In Plea To Quash PMLA Case

Sebin James

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