Karnataka High Court Refuses Winzo US Plea To Transfer PMLA-Attached Funds To Another US Bank

The Karnataka High Court on 9 October refused to permit Winzo US Inc. to transfer funds held in its attached Silicon Valley Bank accounts to another bank in the United States, while allowing it to approach the Enforcement Directorate (ED) to seek transfer of the funds to the agency's designated account in India.

Justice C.M. Poonacha noted that funds already covered by attachment orders cannot be transferred in a manner that could dilute the effect of the attachment and its confirmation under the Prevention of Money Laundering Act, 2002 (PMLA). The Bench held:

“Prior to consideration of the same, if the relief sought for in IA No.3 is granted, the same would tantamount to diluting the effect of the PAO and Confirmation Order.”

The ED initiated proceedings following FIRs against Winzo Private Limited, the parent company of Winzo US Inc., alleging that it had transferred approximately Rs. 447.86 crore to its wholly owned subsidiaries in the United States and Singapore under the guise of foreign investment.

It alleged that the funds constituted proceeds of crime and provisionally attached the subsidiaries' bank accounts. The provisional attachment order was issued on 17 February 2026 and confirmed on 4 August 2026.

Winzo Private Limited operates the “Winzo App”, a platform that enables users to access and participate in online real-money games.

During the pendency of its writ petition challenging the attachment order and its confirmation, Winzo US Inc. received notice from Silicon Valley Bank that its banking relationship would be terminated and its accounts closed with effect from 1 September 2026.

It then sought permission to transfer the funds to JP Morgan Chase Bank while keeping them in a separate deposit subject to the attachment orders. It also argued that the funds should remain in the United States to support its business operations.

The ED opposed the request, citing the risk of dissipation of funds. It also alleged that the directors had attempted to transfer Rs. 22.48 crore from the accounts while one of them was in judicial custody. The agency proposed transferring the entire balance, along with accrued interest, to its designated account in India.

The Court referred to the Supreme Court's decision in Vijay Madanlal Choudhary v. Union of India, which considered the scope of attachment and possession of property under the PMLA. It noted that Winzo US Inc. had not placed details of its business operations on record and that the funds were already covered by attachment orders whose validity remained to be adjudicated.

Taking note of the ED's alternative proposal, the Bench directed the agency to facilitate the transfer if Winzo US Inc. approached it with a request. It clarified that the funds would remain subject to the attachment and confirmation proceedings and the outcome of the writ petition.

Accordingly, the High Court dismissed the interim application.

For Petitioner: Advocate Rohan Kothari