Gameskraft founders’ ED arrest illegal: HC

THe mysore heights margaret court on tues go under aside the arrest of online gaming company Gameskraft’s founders Deepak Singh, Vikas Taneja, and Prithviraj Singh by the Directorate of Enforcement (ED), terming it illegal, and directed their release from judicial custody.Justice M Nagaprasanna held that the arrests were contrary to law and ordered that the founders be set at liberty. “Writ petitions are allowed. Arrest of these petitioners is declared contrary to law. As a consequence thereof the petitioners shall be set at liberty forthwith. The Registry is directed to intimate the prison authorities to enable release of these petitioners. (Petition) allowed bearing in mind the observations made.”The Court had reserved orders on June 8 on petitions filed by the three founders seeking the quashing of three Enforcement Case Information Reports (ECIRs) arising from predicate offences registered in Telangana between January and February this year.The ECIRs were registered after the Karnataka High Court stayed an earlier money laundering investigation against Gameskraft on January 22, 2026. At the time, the Court noted that a closure report had been filed in the Bengaluru FIR that formed the predicate offence for the earlier ECIR, effectively “removing its foundation.”Two days later, a fresh FIR was registered in Telangana alleging losses were suffered by a player on the company’s online rummy platform. Two more FIRs followed. The ED subsequently registered a fresh ECIR based on the Telangana cases and arrested the founders on May 7.The petitioners contended that the agency had relied on substantially the same material that formed the basis of the earlier, stayed ECIR. The ED, however, maintained that the fresh case was based on new material uncovered during its investigation.Appearing for the ED, Additional Solicitor General SV Raju had argued that the agency had uncovered substantial new material during its investigation. He submitted that proceeds of crime worth “ ₹187 crore had been diverted through Gameskraft” and that allied entities had made “overseas direct investments worth around ₹100 crore.” Raju had argued that further investigation required the continued custody of the accused.Senior advocate S Muralidhar, who appeared for Deepak Singh, had argued that the ED had failed to comply with the requirements of Section 19 of the Prevention of Money Laundering Act (PMLA), which governs arrest powers. He had contended that the search conducted on May 7 and 8 did not yield the material that formed the basis of the arrests. Muralidhar had also argued that the grounds of arrest were based on material already available to the agency and not on evidence gathered during the search operation.A detailed order of the High Court is awaited.