The Karnataka High Court on Wednesday (October 7) reserved its order on an interim plea moved by WinZO US Inc. and WinZO SG Pte. Ltd. seeking permission to shift funds lying in three US bank accounts to another account in the United States, while keeping the Enforcement Directorate's (ED) attachment intact.

The ED opposed the plea, arguing that the attached funds could not be transferred to another banking partner.

The two foreign subsidiaries of WinZO have challenged the provisional attachment of their assets worth ₹505 crore under the Prevention of Money Laundering Act (PMLA), besides questioning the constitutional validity of the PMLA Adjudicating Authority.

Senior Advocate Siddharth Aggarwal, appearing for the petitioners, argued that the ED could not take control of funds lying in the US merely by virtue of an attachment order. He submitted that the attachment only prohibits transfer, conversion or disposal of the property and does not give the ED control over it.

Aggarwal said the US bank no longer wished to continue its relationship with the petitioners and therefore they only sought to move the funds to another US bank account, without using or unfreezing them.

“Keep it attached, but allow me to do other business. You cannot cause my civil death in the garb of this,” he submitted.

He further argued that four of the five predicate offences had been closed or quashed and that the remaining proceedings involved only slightly over ₹50 lakh, while the ED had attached properties worth around ₹1,000 crore, including around ₹550 crore belonging to the petitioner subsidiaries.

Appearing for the ED, Advocate Madhukar Deshpande submitted that the agency had filed its counter and sought time to file objections in the main petition.

He said the ED's investigation had found alleged proceeds of crime of around ₹3,522 crore, including substantial transfers from WinZO to its US subsidiary. The ED, he submitted, only sought that the attached funds remain in an account under the supervision of the Government of India or as directed by the Court.

After hearing the parties, Justice C.M. Poonacha said, “We will have it tomorrow. We will pass orders.”