Can CCTV footage of raids be given to Winzo? Karnataka High Court asks ED

The Karnataka High Court on Tuesday asked the Enforcement Directorate (ED) to take instructions on whether CCTV footage seized during searches conducted at online gaming platform Winzo’s office can be supplied to the company [Winzo Pvt Ltd Vs Directorate of Enforcement].

Justice Suraj Govindaraj passed the order while hearing a writ petition filed by Winzo Games questioning the search and seizure carried out by the ED at its Malviya Nagar office in New Delhi between November 18 and 22 in connection with an ongoing money laundering investigation.

Winzo has also challenged orders passed on November 21 freezing its bank accounts, escrow accounts and other financial assets under Section 17(1A) of the Prevention of Money Laundering Act (PMLA).

Senior Advocate Siddharth Agarwal, appearing for Winzo, submitted that the search proceedings were conducted in breach of statutory safeguards under Section 17 of the PMLA.

It was argued that ED officials remained inside the company’s premises continuously for nearly five days, summoned employees and third-party professionals who were not present at the premises, and recorded statements through the night, at times extending until early morning hours.

The petitioner contended that Section 17 permits examination only of persons “found” at the premises during a search and does not authorise the ED to summon persons from outside or convert the searched premises into an interrogation centre.

According to Winzo, the ED impermissibly conflated its powers under Section 17 with those under Section 50 of the PMLA.

Winzo further alleged that CCTV recording inside the premises was stopped during the search and that the proceedings were not audio-visually recorded, despite the mandate under Section 105 of the Bharatiya Nagarik Suraksha Sanhita.

It was submitted that the panchnama dated November 22 did not accurately capture what transpired during the search, including the timing and manner in which statements were recorded.

On the issue of freezing of accounts, Winzo argued that Section 17 permits freezing only of property “found as a result of the search” and only where seizure is not practicable.

It was submitted that bank accounts already disclosed to statutory authorities could not be treated as property discovered during a search. The company also contended that freezing nearly ₹500 crore was grossly disproportionate when the predicate offences relied upon by the ED involved alleged amounts of only a few lakh rupees.

The ED maintained that there was no legal bar on seizure of pre-existing CCTV or DVR systems during a lawful search and argued that the requirement of audio-visual recording under the Bharatiya Nagarik Suraksha Sanhita did not prohibit such seizure.

The agency further contended that directions in Paramvir Singh Saini relating to CCTV safeguards were intended for state-controlled interrogation spaces and not privately owned commercial premises.

The ED argued that Section 17 of the PMLA is a self-contained code and is not governed by the procedural requirements of the Bharatiya Nagarik Suraksha Sanhita. It also submitted that allegations of overnight interrogation were not borne out by the panchnama.

During the hearing, Justice Govindaraj indicated that the CCTV footage would be relevant in examining the petitioner’s challenge to the search and asked the ED to seek instructions on whether a copy of the footage could be supplied.

The Court also observed that details relating to the number of complaints against Winzo and the amounts involved would be relevant while examining the proportionality of the freezing orders.

The case will be heard again tomorrow.