Gameskraft Case | Search And Seizure Under PMLA Is Not An Independent Civil Exercise, Consequence Of ECIR: Karnataka High Court

The Karnataka High Court on Wednesday held that search and seizure proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) are not an independent civil exercise but a continuation of the investigative process flowing from an Enforcement Case Information Report (ECIR).

Accordingly, it rejected the Enforcement Directorate's (ED) preliminary objection and held that Gameskraft Technologies Pvt. Ltd.'s writ petition challenging the ECIR and the consequential bank account freezing orders was maintainable.

The matter will now be heard on its merits.

The case concerns the freezing of bank accounts and investments of Gameskraft Technologies Pvt Ltd and its group companies under Section 17(1A) of the Prevention of Money Laundering Act, 2002 (PMLA) pursuant to ECIR dated February 23, 2026.

Before the High Court, Gameskfrat contended that while the alleged proceeds of crime were only ₹2.35 crore, the ED had frozen bank accounts and investments worth approximately ₹5.26 crore, rendering the action disproportionate.

The court had on July 27 reserved its order on the issue regarding the maintainability of the challenge to the freezing orders under Section 482 of CrPC passed subsequent to the registration of the ECIR

Justice M. Nagaprasanna rejected the ED's preliminary objection on maintainability, holding that a challenge under Article 226 of the Constitution read with Section 482 of the Code of Criminal Procedure against an ECIR and all consequential actions, including freezing orders, is legally maintainable.

Pronouncing the order, the court observed,

"This Court, therefore, holds, without the slightest hesitation, that a petition invoking Article 226 of the Constitution of India read with Section 482 of the CrPC is maintainable to examine the legality of an ECIR and every consequential action founded thereon. The preliminary objection raised by the Directorate of Enforcement is accordingly rejected. The writ petition will now be heard on its merits."

The court held that the freezing orders could not be viewed independently of the ECIR, as they formed part of the statutory search and seizure process under the PMLA.

It observed, "Search and seizure is not an independent civil exercise. It is in consequence of an ECIR, a continuation of the investigative process and is a statutory measure adopted to secure the proceeds of crime during the pendency of the investigation into an offence of money laundering. Once viewed in that perspective, the argument that the search retains an exclusively civil character loses all its force."

The Court added, "This Court, therefore, holds that a petition under Article 226 of the Constitution of India read with Section 482 of the CrPC challenging search and seizure proceedings that emanate from an ECIR is perfectly maintainable. The preliminary objection consequently fails. The issue is answered accordingly. Matter would be heard on its merits."

A detailed copy of the order is awaited.

Background

The present petition challenges the freezing of bank accounts and investments of Gameskraft Technologies Pvt Ltd and its group companies under Section 17(1A) of the PMLA.

The ED froze the assets pursuant to an ECIR registered on February 23, 2026, alleging that proceeds of crime generated through alleged cheating on the companies' online real-money gaming platforms, including RummyCulture and Pocket52, had been laundered.

The proceedings stem from the same investigation in which the Karnataka High Court, on June 16, 2026, declared the arrests of Gameskraft directors Vikas Taneja, Deepak Singh, and Prithviraj Singh illegal and directed their release.

In that judgment, the court had observed that the ED had merely "re-packaged" an earlier ECIR while initiating the fresh proceedings.