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 ED’s Bengaluru zonal office lacks territorial jurisdiction over the matter. The petition raises broader questions about how central agencies investigate startups that operate across multiple states.
Challenge to Bengaluru’s jurisdiction
Rathore’s petition contends that WinZO’s principal place of business, registered office, banking operations and senior management are located in Delhi, and therefore any investigation ought to be conducted from the national capital. The filing asserts there is no substantial or direct business activity by the company in Karnataka that would justify the ED pursuing the matter from its Bengaluru office.
Legal counsel for Rathore has argued that territorial jurisdiction must be determined by where the alleged financial transactions occurred and where the company is operationally anchored, rather than by the location of the investigating ED zonal unit.
Arguments advanced in court
Senior counsel for Rathore told the court that several bank accounts frozen in the probe are in Delhi and that the company’s financial records, accounting systems and key employees relevant to the investigation are based in the capital. The plea also questions the legal validity of the Enforcement Case Information Report (ECIR) registered by the ED in Bengaluru under the Prevention of Money‑Laundering Act (PMLA), saying the ECIR and subsequent actions suffer from a lack of territorial competence.
The petition further challenges earlier remand proceedings for WinZO’s other cofounder that were conducted by a Bengaluru court, arguing such remand orders should have been sought before a competent court in Delhi given the alleged location of the offences.
ED opposes transfer request
The Enforcement Directorate has opposed the transfer plea, urging the court to dismiss it as not maintainable at this stage. The agency has emphasized its mandate as a pan‑India authority empowered to investigate economic offences across state boundaries and cautioned that transferring an ongoing probe could hamper enforcement action in a sensitive financial investigation.
Interim relief from Karnataka High Court
After hearing preliminary arguments, the Karnataka High Court restrained the ED from taking any coercive action against Rathore until the next hearing, observing that the question of territorial jurisdiction warrants careful judicial scrutiny and cannot be disposed of at the threshold.
The matter is listed for further hearing later this month, when the court will consider whether the probe should remain in Bengaluru or be transferred to Delhi.
Background of the ED investigation
The ED’s probe relates to alleged offences under the PMLA and has included freezing of assets and bank balances linked to the company. WinZO, a recognised player in India’s online gaming sector, has maintained that its operations comply with applicable Indian laws and regulations.
Wider implications
Legal experts say the outcome could set important precedents for how territorial jurisdiction is applied in complex financial investigations involving central agencies and multi‑state digital businesses. The decision may clarify procedural norms for enforcement agencies handling cases against startups with dispersed operations across India.
