In a fresh legal move, WinZO cofounder and director Saumya Rathore has approached the Karnataka High Court, seeking the transfer of an ongoing Enforcement Directorate (ED) money laundering investigation from Bengaluru to New Delhi. The plea raises important questions around territorial jurisdiction and the manner in which central agencies conduct investigations involving startups operating across multiple states.
Petition Challenges Bengaluru’s Jurisdiction
According to the petition filed before the High Court, Rathore has questioned the ED’s decision to initiate and continue proceedings from its Bengaluru zonal office. The core argument put forward is that WinZO’s principal place of business, registered office, banking operations, and key management functions are all based in Delhi, making it the appropriate jurisdiction for the probe.
The petition states that there is no substantial or direct business activity conducted by the company in Karnataka that would justify the investigation being handled from Bengaluru. Rathore’s legal team has argued that jurisdiction should be determined by the location where the alleged financial transactions took place and where the company is operationally anchored.
Key Arguments Presented Before the Court
Senior advocate appearing for Rathore submitted that several bank accounts linked to WinZO, which have been frozen as part of the probe, are located in Delhi. The plea further claims that all financial records, accounting systems, and relevant employees connected to the investigation are based in the national capital.
The cofounder has also challenged the validity of the Enforcement Case Information Report (ECIR) registered by the ED in Bengaluru under the Prevention of Money Laundering Act (PMLA). According to the petition, the ECIR and subsequent actions suffer from a lack of territorial jurisdiction, making the proceedings legally questionable.
Additionally, concerns were raised regarding earlier remand proceedings involving WinZO’s other cofounder, which were conducted by a Bengaluru court. The petition argues that such remand orders should have been sought before a competent court in Delhi, given the location of the alleged offences.
ED Opposes the Plea
The Enforcement Directorate has opposed the transfer request, stating that the petition is not maintainable at this stage. The agency has maintained that it functions as a pan-India authority and is empowered under the law to investigate economic offences across states, irrespective of where a company is headquartered.
ED’s counsel urged the court not to interfere with the investigation, highlighting that transferring the probe mid-way could hamper enforcement action in a sensitive financial case.
High Court Grants Interim Relief
After hearing preliminary arguments, the Karnataka High Court directed the ED not to take any coercive action against Rathore until the next date of hearing. The court observed that the issue of territorial jurisdiction deserves careful judicial scrutiny and cannot be dismissed at the threshold.
The matter has been posted for further hearing later this month, during which the court is expected to examine whether the probe should continue in Bengaluru or be shifted to Delhi.
Background of the ED Investigation
The ED’s investigation into WinZO is linked to alleged violations under the money laundering law. As part of the probe, the agency had earlier frozen significant assets and bank balances associated with the company. WinZO, a prominent player in India’s online gaming ecosystem, has maintained that its business operations are lawful and compliant with Indian regulations.
What This Case Could Mean
Legal experts believe that the outcome of this case could have wider implications for startups and digital companies operating across multiple states. The High Court’s decision may offer clarity on how territorial jurisdiction should be applied in complex financial investigations involving central agencies.
As the Indian startup ecosystem continues to grow nationally, cases like this highlight the evolving legal challenges around enforcement, jurisdiction, and regulatory oversight.