WinZO Cofounder Urges K’taka HC To Move ED Probe To Delhi

WinZO’s cofounder Saumya Rathore has reportedly moved the Karnataka High Court (HC), challenging Enforcement Directorate’s (ED) move to undertake the money laundering probe against the gaming platform from Bengaluru. 

As per Bar and Bench, Rathore’s counsel has urged the HC to direct ED to conduct proceedings in the case from Delhi. 

After hearing preliminary submissions from the two sides, a bench comprising Justice M Nagaprasanna slated the case for next hearing on January 14. In the same breath, the Court directed the agency to “precipitate the matter” till then.

In simple parlance, the HC directed the ED to not take any action that may lead to a sudden or premature event, without sufficient deliberation. 

During the hearing, Rathore’s counsel Sajan Poovayya contended that ED should conduct its probe out of Delhi since WinZO’s operations, bank accounts and employees are based out of the national capital. He reportedly said that everything to do with the case was centered in Delhi, except ED’s probe.

“Fourteen accounts are frozen, all in Delhi. All of it occurred in Delhi. Don’t you (ED) have an office in Delhi? Why do (did) you choose Bengaluru? Because it suits you. Milord, it can’t be the prosecution’s choice that it comes to a court here,” Poovayya reportedly argued.

Rathore’s counsel further added that even if ED decides to conduct the probe through its zonal office in Bengaluru, court proceedings arising out of this investigation should be undertaken in Delhi.

Meanwhile, ED’s counsel Madhu N Rao reportedly questioned the maintainability of Rathore’s plea during the hearing. Urging the Court not to grant her relief, ED’s advocate said that the ED’s investigation in the case was at a crucial stage, adding that INR 800 Cr have already been attached in the matter.

Rao maintained that the ED, being a pan-India agency, is acting well-within its powers while probing the matter. “It’s not their case that we cannot investigate. I have rights to investigate because I am an all-India organisation,” he reportedly added.

In retort, Poovayya clarified that Rathore’s current plea was not related to ED’s power to investigate, but whether the probe can be conducted from Bengaluru. He added that nothing related to the case took place in Bengaluru, barring ED’s summons to WinZO’s cofounders and their arrest.

Rathore’s counsel argued that while she was granted bail in the matter, fellow cofounder Paavan Nanda remains in jail due to remand order passed by a Bengaluru court, which Poovayya argued had no territorial jurisdiction as the matter should have been heard before a Delhi court.

When Justice Nagaprasanna remarked that if WinZO’s counsel was indirectly seeking Nanda’s bail, Poovayya reportedly underlined that he would move to the trial court for relief in the matter.

At the heart of the matter is Rathore’s petition, which claims that the agency filed its enforcement case information report (ECIR) on the basis of four FIRs. Of these, the plea claims that the one in Bengaluru was stayed and another from Rajasthan has been closed. The remaining two FIRs have been registered in Delhi and Rajasthan.

“None of these four cases had any strand of ‘proceeds of crime’ or element of ‘money laundering’ that could attract the cognitive jurisdiction of the Respondent ED,” the plea reportedly read.

The petition argues that the fifth FIR was lodged in Gurugram after the ECIR was registered, adding that the latest report was based on surmises and conjectures. 

Rathore reportedly contends that the fifth FIR was the outcome of a subversive plan by the ED after the agency realised that it had wrongly relied on the earlier four FIRs to start its money laundering probe despite no element of ‘proceeds of crime’ in those FIRs.

The petition also claims that Bengaluru courts lack the jurisdiction to conduct the trial in connection with the ED’s ECIR.