Bengaluru Court grants bail to WinZo co-founder Saumya Rathore in PMLA case, denies bail to Paavan Nanda

A Bengaluru sessions court on December 26 granted bail to Saumya Singh Rathore, co-founder and director of Winzo Games Pvt Ltd, in a money-laundering case registered by the Enforcement Directorate (ED) [Enforcement Directorate Vs Saumya Singh Rathore & Paavan Nanda].

However, the Court rejected the bail plea of co-founder Paavan Nanda and and permitted the agency to take him into custody for four days

The common order was passed by Principal City Civil and Sessions Judge M Chandrashekar Reddy in a complaint arising out of offences under the Prevention of Money Laundering Act, 2002 (PMLA).

The ED registered the case on November 6 based on predicate offences reflected in three first information reports (FIRs) registered in Bengaluru, Rajasthan and Delhi. During the course of investigation, the agency conducted search and seizure operations at Rathore’s residence and at the company’s premises between November 18 and 22 and subsequently arrested both Rathore and Nanda on November 26.

The ED has alleged that the company’s gaming operations involved manipulation through algorithms and BOTs, resulting in alleged wrongful gains of ₹177 crore, diversion of funds to overseas subsidiaries, and laundering of proceeds of crime through cloud-based infrastructure hosted on Amazon Web Services (AWS).

The agency has also alleged identity misuse of a large number of users and transnational fund flows involving approximately USD 55 million.

Both accused denied the allegations, claimed full cooperation during searches and questioning and challenged the legality of the search and seizure operations.

The sessions court allowed Rathore’s bail plea and held that she was entitled to the benefit of the proviso to Section 45 of the PMLA which excludes women-accused from the ambit of stringent bail conditions under the money laundering law.

“Accused No.1 being a ‘woman’, her case falls under the proviso to Section 45(1)(ii) of PML Act and the twin conditions are not applicable in her case,” the Court said.

The judge noted that Rathore had already undergone substantial custodial interrogation and continued detention was not warranted.

“Merely because she has to be confronted with statements of her employees or that some more evidence is to be collected, that will be no ground for seeking Accused No.1 for further custody by ED,” the Court said.

On apprehensions of evidence tampering, the Court said such concerns could be addressed by imposing adequate bail conditions.

Hence, the Court proceeded to grant bail to Rathore.

Rathore was directed to be released on a personal bond of ₹5 lakh with two sureties, surrender her passport, not leave the country without permission, and cooperate with the investigation.

However, as regards Nanda, the Court held that the stringent conditions under Section 45 of the PMLA continued to apply. The judge said he was not satisfied that Nanda had made out a case for bail.

“I am unable to subscribe to his view that he has reasonably made out a case that he is not guilty of the alleged offences and that he is unlikely to tamper with evidence or influence witnesses,” the judge said.

The judge accepted the ED’s contention that the investigation had expanded in scope and scale.

“The materials on record would show that the investigation is becoming more transnational and that huge amount of data is collected to prima-facie show the complicity of Accused No.2,” the order said.

Hence, the Court granted ED further custody of Nanda from December 27 to December 30.

Nanda should not be subjected to any kind of ill-treatment and should be given daily access to counsel, the Court added.

The ED was represented by advocate Madhu N Rao.

Rathore was represented by Senior Advocate Sajan Poovayya.

Nanda was represented by Senior Advocate MS Shyam Sundar.