Co-founder and director of Winzo Games Pvt Ltd, Saumya Rathore, has moved a plea before the Karnataka High Court challenging the Enforcement Directorate's (ED) move to conduct its money laundering probe against the online gaming company and its representatives from Bengaluru [Saumya Singh Rathore v. Directorate of Enforcement].
Rathore's counsel has contended that the investigation and related court proceedings in this case should ideally be conducted in Delhi.
Justice M Nagaprasanna today heard preliminary submissions in the matter and posted the case for further hearing on January 14.
The judge also directed the ED not to precipitate the matter until then.
"List on 14th. Respondent shall not precipitate the matter qua the petitioner till then," the Court said.
Representing Rathore, Senior Advocate Sajan Poovayya today argued that since WinZo's operations, bank accounts and employees are based out of Delhi, the ED should conduct its probe in Delhi and not Bengaluru.
He said that everything to do with the case is centered in Delhi, except the ED's investigation.
"Fourteen accounts are frozen, all in Delhi. All of it occurred in Delhi. Don’t you (ED) have an office in Delhi? Why do you choose Bengaluru? Because it suits you. Milord, it can’t be the prosecution’s choice that it comes to a court here," he contended.
He added that even if the ED decides to conduct the probe through its zonal office in Bengaluru for reasons such as this office being better equipped to do so, the court proceedings arising out of this investigation should be in Delhi.
Rathore's plea, filed through Advocate Vandana PL of law firm Proclient LSI, states that the ED had filed its Enforcement Case Information Report (ECIR) based on four FIRs, out of which one in Bengaluru was stayed and another from Rajasthan has been closed.
Of the remaining FIRs, one was registered in Delhi and another in 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 states.
Rathore further contends that a fifth FIR lodged at Gurugram after the ECIR was registered is a false one based on surmises and conjectures.
She argues that this fifth FIR was the outcome of a subversive plan by the ED after it realised that it had wrongly relied on the earlier four FIRs to start its money laundering probe, since there was no element of 'proceeds of crime' in those FIRs.
The plea says that this fifth FIR was registered so that the ED could claim that there is a scheduled offence allegation against WinZo's representatives and 'proceeds of crime' to investigate, and so that this could be used as the basis for the central agency's money laundering probe.
The plea added that the Bengaluru courts, in any case, lacks the jurisdiction to conduct the trial in connection with the ED's ECIR.
"(The ED) is committing a conscious jurisdictional error by also misleading the Bangalore Special Court to falsely draw and assume the jurisdiction though none of the components of PMLA have either occurred or even claimed as having occurred here. It is intentionally ousting the jurisdiction of the Special Court constituted for the area of which the 5 FIR (Gurgaon case) which in fact is a planted complaint and abusing the jurisdiction of Bangalore Special Court which is no way concerned with any of the aspects," the plea says, in this regard.
Advocate Madhu N Rao represented the ED today and questioned the maintainability of Rathore's plea.
He urged the Court not to grant her the relief sought, adding that the ED's probe in the case was at a crucial stage and that ₹800 crores have already been attached in the matter.
Hundreds of players who used WinZo have alleged that the platform engaged bots and many were not even aware of where they should file a complaint, he added.
He maintained that the ED, being a pan-India agency, is acting well-within its powers while investigating this matter.
"It's not their case that we cannot investigate. I have rights to investigate because I am an all-India organisation," he said.
Poovayya, meanwhile, clarified that the present plea filed by Rathore is not on the ED's power to investigate but whether this probe can be conducted from Bengaluru.
Even assuming the ED's allegations are true, nothing to do with the case has taken place in Bengaluru except the ED's summons to WinZo's representatives and their arrest, he highlighted.
He added that while Rathore was granted bail in the matter, co-founder Paavan Nanda remains in jail on the strength of a remand order passed by a Bengaluru court, which Poovayya argued has no territorial jurisdiction as the matter should have been before a Delhi court.
"Indirectly, you are seeking bail (for Nanda)," Justice Nagaprasanna remarked at this submission.
"No, I will go (to the trial court for seeking such relief)," Poovayya replied.
"If something is rendered here, it will automatically be applicable to the person in custody," Justice Nagaprasanna pointed out.
"I understand, but for observations on jurisdiction, I can only come to the Constitutional court. I will go back to that court for (bail). But there is a cloud of doubt on the jurisdiction of the court," Poovayya replied.
"We will take it on 14th and tell (ED) not to precipitate until then. On 14th, I'll decide. On 14th, no adjournment, we will close this," Justice Nagaprasanna eventually said and adjourned the hearing.