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Karnataka High Court Rules ED Arrests Of Gameskraft Founders Illegal

Finding the arrests rested on recycled material that breached PMLA safeguards, the court allowed the ED to continue the money‑laundering probe only by issuing summons under Section 50.

Overview

  • The court ordered the immediate release of founders Deepak Singh, Vikas Taneja and Prithviraj Singh after declaring their May arrests by the Enforcement Directorate unlawful.
  • Justice M. Nagaprasanna said the ED relied on previously available, 'repackaged' material and failed to meet Section 19's requirement for fresh grounds before depriving the men of liberty.
  • The ruling leaves in place the ED's earlier search and seizure actions from May 7–13, which included freezing about ₹526.49 crore and seizing gold and cash, and keeps those assets part of the probe.
  • The court emphasized the ED must use summons under Section 50 to secure cooperation and may continue evidence gathering and prosecutions only through lawful procedures.
  • The decision revives questions about enforcement practice in real‑money online gaming regulation and signals that future ED steps will hinge on producing new, admissible material to justify stronger coercive action.