Case Note & Summary
The three writ petitions, heard together, challenged the legality of the arrest and subsequent custody remand orders of the petitioners, who were directors and office bearers of M/s Games Kraft Technologies Private Limited, by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA). The company, engaged in skill-based online gaming through platforms offering rummy, ludo, and poker, had ceased operations after the Promotion and Regulation of Online Gaming Act, 2025 came into effect on 22 August 2025. An earlier crime, Crime No. 722 of 2024 registered in Bengaluru, alleged financial loss of ₹3 crores by a complainant who played online games for seven years; the police investigation found no substance and filed a ‘B’ report (closure) on 5 July 2025. Despite this, the Enforcement Directorate registered an Enforcement Case Information Report (ECIR/BGZO/07/2026) based on that closed predicate offence, invoking Section 318(2) of the Bharatiya Nyaya Sanhita, 2023 (BNS) as a scheduled offence. Search and seizure proceedings under Section 17 of PMLA were conducted from 18 to 22 November 2025. The company and its subsidiary filed Writ Petition No. 1668 of 2026 seeking quashing of the ECIR, and on 22 January 2026, the High Court granted an interim stay of further proceedings in the ECIR. Subsequently, three fresh crimes were registered in Telangana: Crime No. 97 of 2026 for offences under Sections 66C and 66D of the Information Technology Act, 2000 and Sections 318(4) and 319(2) of the BNS, with an alleged loss of ₹53,080; Crime No. 10 of 2026 under Section 318(4) of BNS and Section 66D of the IT Act, with a claimed loss of ₹1.85 crores; and Crime No. 330 of 2026 under the same provisions, with an alleged loss of ₹40 lakhs. These three crimes, filed against unknown persons, were recorded as scheduled offences in the same ECIR on 23 February 2026. No summons were issued to the petitioners. On 7 May 2026, searches under Section 17 of PMLA were carried out at the petitioners’ residences in Bengaluru and Gurugram, starting at 7 a.m. and concluding at 4:30 a.m. the next day. During these searches, the petitioner in Writ Petition No. 15277 of 2026 was taken into custody at 3:30 a.m. on 8 May 2026, and the petitioner in Writ Petition No. 15278 of 2026 was also taken into custody. The petitioners challenged their arrest as illegal and in violation of Section 19 of PMLA and their fundamental rights under Articles 14 and 21 of the Constitution of India, and sought to quash the remand order dated 8 May 2026 passed by the Incharge Court granting ED custody until 13 May 2026 and all subsequent remand orders. The matter was heard and reserved for orders on 8 June 2026, and the order was pronounced on 16 June 2026. The judgment text does not contain the court’s analysis, findings, or the final decision; only the background facts are set out.
Issue of Consideration
Whether the arrest of the petitioners and the subsequent remand orders were illegal and in violation of Section 19 of the Prevention of Money Laundering Act, 2002 and the fundamental rights under Articles 14 and 21 of the Constitution of India.
