Karnataka High Court Issues Stern Warning to ED; Questions Legality of Gameskraft Founders' Arrest

By Legal Correspondence Bureau BENGALURU, INDIA — The Karnataka High Court has intensified its scrutiny of the Directorate of Enforcement (ED), directing the agency to provide a robust justification for the recent arrest of Gameskraft’s founders. During a high-stakes hearing on Thursday, Justice MGS Kamal emphasized that the power of arrest under the Prevention of Money Laundering Act (PMLA) is not an unchecked authority and must be backed by substantial material evidence. 

The founders of the prominent online gaming platform—Deepak Singh, Prithvi Raj Singh, and Vikas Taneja—challenged their May 8 arrest, labeling the move as illegal and mala fide. The petitioners argued that the agency’s actions were an overreach, particularly given that the underlying issues had been previously addressed in stayed proceedings. 

In a notable observation, Justice Kamal reminded the agency of the personal accountability of its officers. The Bench cited Section 62 of the PMLA, which provides for up to two years of imprisonment for officers who carry out vexatious or unnecessary arrests. "You must satisfy the court that you acted on tangible material," the Judge remarked, cautioning that if the "reasons to believe" were found lacking, the officers involved could face the same incarceration they imposed. 

The defense, led by Senior Advocate Dr. S. Muralidhar, raised sharp questions regarding the jurisdictional logic of the operation. While the underlying FIRs were registered in Telangana and the founders were apprehended in Gurgaon, the Bengaluru unit of the ED conducted the arrest. Muralidhar contended that the "reasons to believe" presented by the ED were largely indistinguishable from an earlier case that had already been stayed by the judiciary. 

Countering these claims, Special Public Prosecutor Madhu N Rao argued that the current investigation is distinct from previous litigation. While earlier cases focused on the game "Pocket52," the current ECIR pertains specifically to allegations surrounding "Rummy". The ED alleges the platform lured players into real-money games, facilitating the laundering of approximately ₹250 crores. 
The Court’s intervention comes at a critical juncture for the Indian gaming industry, which has faced significant regulatory and legal headwinds. The Bench must now determine whether the ED's actions bypassed the procedural safeguards intended to protect personal liberty. 

The matter is scheduled for further hearing on May 19, 2026, by which time the ED is expected to place its internal "reasons to believe" records before the court. 

Discription: The Karnataka High Court has issued a significant challenge to the Directorate of Enforcement (ED) regarding the arrest of Gameskraft’s founders, Deepak Singh, Prithvi Raj Singh, and Vikas Taneja. Presiding over the matter, Justice MGS Kamal demanded "substantial tangible material" to justify the agency’s "reasons to believe" the founders committed money laundering. The court issued a rare warning, noting that under Section 62 of the PMLA, officials could face two years of imprisonment if the arrests are proven to be vexatious or lacked proper grounds. While the ED alleges the platform laundered ₹250 crores through "Rummy" operations, the defense argues the arrests are mala fide and mirror previously stayed cases. This case highlights the critical tension between investigative powers and the protection of personal liberty.