WinZO cofounder and director Saumya Rathore has moved the Karnataka High Court seeking transfer of an ongoing Enforcement Directorate (ED) money‑laundering probe from Bengaluru to New Delhi, arguing that the national capital is the proper forum given the company’s operational and financial anchors.
Challenge to Bengaluru’s jurisdiction
Rathore’s petition contends that the ED’s decision to investigate from its Bengaluru zonal office is legally unsound because WinZO’s registered office, principal place of business, banking relationships and key management functions are located in Delhi. The filing argues there is no substantial business activity in Karnataka to justify the Bengaluru office handling the case.
The plea maintains that territorial jurisdiction should be determined by where the alleged financial transactions occurred and where the company is operationally based, not simply by the location of an ED zonal office.
Arguments before the court
Rathore’s senior counsel told the court that several bank accounts frozen in the probe are maintained in Delhi and that financial records, accounting systems and relevant employees central to the investigation are situated in the national capital.
The petition also questions the validity of the Enforcement Case Information Report (ECIR) registered by the ED in Bengaluru under the Prevention of Money‑Laundering Act (PMLA), asserting the ECIR and subsequent steps suffer from lack of territorial jurisdiction. It further challenges remand proceedings previously conducted by a Bengaluru court in relation to WinZO’s other cofounder, saying such orders should have been sought before a competent forum in Delhi.
ED opposes transfer
The Enforcement Directorate opposed the transfer application, arguing the petition is not maintainable at this stage. The agency emphasised its statutory mandate to investigate economic offences across India and said its choice of zonal office is within its legal powers.
ED counsel cautioned the court against intervening mid‑investigation, warning that an on‑the‑fly transfer could impede sensitive enforcement action.
Interim relief from Karnataka High Court
After hearing preliminary submissions, the Karnataka High Court restrained the ED from taking any coercive action against Rathore until the next hearing, noting that questions of territorial jurisdiction merit careful judicial scrutiny and cannot be summarily dismissed.
The matter is listed for further hearing later this month, when the court will consider whether the probe should remain in Bengaluru or be shifted to Delhi.
Background of the ED probe
The ED’s inquiry into WinZO stems from alleged violations under the PMLA. As part of its investigation, the agency froze significant assets and bank balances linked to the company. WinZO, a notable participant in India’s online gaming sector, has maintained that its operations comply with applicable Indian laws and regulations.
Potential implications
Legal experts say the court’s decision could set an important precedent for startups and digital companies operating across multiple states, clarifying how territorial jurisdiction should be applied in complex financial investigations led by central agencies.
As the startup ecosystem expands nationally, disputes over enforcement jurisdiction, investigative venue and regulatory oversight are likely to become more frequent, making judicial guidance in such matters consequential for businesses and regulators alike.
