BENGALURU: The necessity to arrest must arise from new circumstances, new material, or new conduct; it cannot spring from the ashes of allegations that have remained unchanged, the Karnataka High Court said while declaring the arrest of the directors/office-bearers of Games Kraft Technologies Private Limited by the Directorate of Enforcement (ED) as contrary to law.
Justice M Nagaprasanna delivered the verdict on Tuesday, while allowing petitions filed by Deepak Singh, Vikash Taneja and Prithvi Raj Singh, questioning the legality of their arrest on May 8 by the ED, a day after searches were conducted under Section 17 of the PMLA, at their residence in Bengaluru and Gurugram.
Counsels for the petitioners contended that a crime comes to be registered to overcome the interim stay order by court on an offence registered in 2024. Karnataka
Countering it, Additional Solicitor General of India submitted that stay of further proceedings in the crime cannot impact investigation in the predicate offence in relation to three new distinct FIRs registered in Telangana Cyber police stations in February 2026.
After hearing them, the court observed that the apex court drew a clear and constitutionally significant distinction between the power to investigate and the power to arrest. The latter cannot be invoked merely because the former is ongoing.
The material that animated the earlier case, the searches and seizures conducted, and material relied upon to justify arrest under the new case, are reflections of the same underlying allegations. Therefore, the attempt to justify arrest on the strength of material already in possession of the ED from earlier proceedings runs contrary to the very architecture of Section 19(1) of the PMLA, the court added.
The court also noted that it is an admitted position that no summons under Section 50 was ever issued to the petitioners before their arrest. Their liberty was curtailed even before the search proceedings conducted had reached fruition. Both the grounds of arrest and reasons to believe reveal that the ED was relying predominantly upon material already in its possession from earlier proceedings, said the court, adding that the ED is at liberty to initiate proceedings by following due procedure, exercising powers under Section 50 of PMLA and proceeding in accordance with law.
