Karnataka High Court.
When a government agency investigates a company, what rights does that company have to defend itself? Recently, the Karnataka High Court answered a crucial question regarding this in the case of Gameskraft vs. the Directorate of Enforcement (ED).
The Background
Gameskraft, an online gaming platform that previously hosted games of skill before the enforcement of the Promotion and Regulation of Online Gaming Act, 2025, found itself under the lens of the ED. In 2024, a complaint led to an investigation that actually resulted in a police closure report. However, six months after that closure, the ED initiated search and seizure operations based on the same alleged offense.
The ED alleged that Gameskraft manipulated gameplay, cheated users, and laundered nearly ₹250 crore through bogus business expenditures, investments, and cash transactions. In response, Gameskraft approached the Karnataka High Court to quash the Enforcement Case Information Report (ECIR)—the internal document the ED uses to begin a money laundering investigation—as well as the search and seizure actions.
The Legal Battle
The ED strongly objected, arguing that an ECIR is merely an internal, administrative document rather than a formal First Information Report (FIR) under the Code of Criminal Procedure (CrPC). Therefore, the ED claimed that a writ petition or a challenge under Section 482 of the CrPC could not be used to question an ECIR.
What the Court Decided
Justice M Nagaprasanna firmly rejected the ED’s objections. The Court ruled that judicial review is part of the basic structure of the Constitution and cannot be avoided simply by calling a document an “ECIR” instead of an “FIR.”
Furthermore, the Court clarified that the Prevention of Money Laundering Act (PMLA) is deeply tied to criminality, meaning attachment of property cannot be artificially divorced from the underlying criminal proceedings. With these objections dismissed, the High Court will proceed to hear the petitions on their merits.
Legal Representation
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For Gameskraft: Senior Advocates Dr S Muralidhar, Vikram Chaudhary, Sajan Poovayya, Sandesh Chouta, along with Advocates Advocate Suhaan Mukherji, Advocate Arshiya Ghose, Advocate Nithin N Patil, Advocate Harshvardhan Mudhole, Advocate Aishwarya M, Advocate Sankalp A Sharma, Advocate Diya Bhagwan, Advocate Varuni Aggarwal, and Advocate Palash Maheshwari.
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For the ED: Senior Advocate Zoheb Hossain, Special Public Prosecutor Madhu N Rao, and Central Government Counsel Anuparna Bordoloi.
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