Courts Slam ED Procedures, Mandate BNSS Affidavits for Complaints - 2026-01-28

Judicial Scrutiny of Procedural Lapses: Recent Rulings from Karnataka HC and Supreme Court

In the ever-evolving landscape of Indian criminal and enforcement law, procedural adherence remains a cornerstone of justice. Two recent judicial pronouncements underscore this principle with striking clarity. The Karnataka High Court has sharply criticized the Enforcement Directorate (ED) for what appears to be a procedural misstep in freezing assets under the Prevention of Money Laundering Act (PMLA) in a case involving a subsidiary of the gaming platform WinZO. Meanwhile, the Supreme Court has firmly mandated that complaints against public servants under the Bharatiya Nagarik Suraksha Sanhita (BNSS) must be submitted in writing, backed by an affidavit, to uphold essential safeguards at the outset of criminal proceedings. These rulings, delivered in quick succession, highlight the judiciary's unwavering commitment to preventing arbitrary actions by enforcement agencies and ensuring robust thresholds for initiating investigations. For legal professionals navigating these domains, the decisions offer critical guidance on challenging procedural irregularities and fortifying complaint mechanisms, potentially reshaping how cases are framed and litigated in the coming years.

The Karnataka High Court Challenges ED's PMLA Freezing Order

The controversy at the heart of the Karnataka High Court's rebuke centers on a petition by a subsidiary of WinZO, a prominent online gaming and entertainment company, seeking the release of frozen salaries owed to its employees. The ED had invoked Section 17(1A) of the PMLA to provisionally attach bank accounts linked to the subsidiary, arguing that immediate seizure during a search was not feasible. This provision, introduced to empower investigators in money laundering probes, allows for the freezing of "property" believed to be proceeds of crime when discovered during a search operation.

However, the High Court Bench zeroed in on a critical timeline discrepancy that undermines the ED's position. According to court records, the agency received key information about the subsidiary's bank accounts via email on December 23, 2025—fully a week before the formal search operation on December 30, 2025. The Bench observed that this prior possession of details effectively precludes the application of Section 17(1A), as the provision's ambit is limited to information obtained "during" the search.

The court's frustration was palpable during hearings, where it remarked, “All this information was made available on 23rd of December. The search is on 30th of December.” Pressing further on the legal ramifications, the Bench stated, “So, you cannot, because you had the information before search, Section 17(1A) jurisdiction is out of bounds. That’s the legal question.” This observation frames the core battle: whether the ED's actions constitute a substantive overreach, rendering the freezing order void ab initio.

To contextualize, the PMLA has been a powerful tool in India's arsenal against financial crimes since its enactment in 2002, with amendments in 2019 expanding the ED's investigative latitude. Yet, courts have repeatedly cautioned against its misuse. In cases like Vijay Mallya and Nirav Modi, procedural lapses have led to prolonged litigations, often resulting in partial relief for accused parties. Here, the WinZO subsidiary's plea highlights a similar vulnerability: the informal receipt of information via email, while potentially valuable for intelligence, cannot retroactively justify a search-based freezing without adhering to statutory prerequisites.

Legal experts suggest this ruling could set a precedent for petitioners challenging ED attachments. If the court ultimately sides with the subsidiary, it may compel the agency to demonstrate that all critical intelligence was indeed unearthed during the search, not beforehand. This not only delays enforcement but also imposes a higher evidentiary burden, potentially affecting ongoing probes in the fintech and gaming sectors, where digital transactions are under increasing scrutiny for money laundering risks.

Supreme Court Insists on Affidavits for BNSS Complaints Against Public Servants

Shifting focus to the apex court, a Bench comprising Justices Dipankar Datta and Manmohan has delivered a landmark interpretation of the BNSS, the 2023 legislation that supplanted the colonial-era Code of Criminal Procedure (CrPC). The ruling addresses complaints seeking directions for investigations against public servants, a common entry point for corruption and misconduct allegations.

Under Section 175(4) of the BNSS, a judicial magistrate may order a police investigation upon a "complaint," but the court clarified that this must align with Section 175(3), which explicitly mandates that such complaints be in writing and supported by an affidavit. The Bench rejected any interpretation that would allow oral allegations, emphasizing that doing so would erode procedural safeguards at the "threshold stage of criminal process."

As the judgment articulates, "Section 175(4), a new provision introduced under the BNSS, must be read in conjunction with Section 175(3), which expressly requires an affidavit." Further, "The provision cannot be interpreted in a manner that weakens procedural safeguards at the threshold stage of criminal process." Although Section 175(4) employs the term "complaint," the court held it cannot extend to verbal submissions when directing probes, particularly against public officials who enjoy certain protections under law.

The BNSS, effective from July 1, 2024, aims to modernize criminal justice by incorporating technology and expediency, drawing from CrPC provisions like Sections 156 and 190. However, this ruling ensures continuity with established safeguards, preventing a flood of unsubstantiated claims that could paralyze administrative functions. In practice, this means complainants—often whistleblowers or aggrieved citizens—must now formalize their grievances with sworn statements, verifiable facts, and legal backing, reducing the risk of malicious prosecutions.

This decision echoes prior Supreme Court precedents, such as those under the CrPC where affidavits were deemed essential for private complaints (e.g., in Priyanka Srivastava v. State of U.P. , 2015). For public servant cases, it adds a layer of deterrence against frivolous litigation, aligning with Article 14's equality principle by ensuring only meritorious cases advance.

Analyzing the Legal Underpinnings: Procedural Safeguards in Focus

Both rulings, though distinct, converge on a fundamental tenet: the sanctity of procedure in curbing executive overreach. In the ED matter, the timeline discrepancy exemplifies how preemptive knowledge can vitiate statutory powers, invoking principles of strict construction under administrative law. Section 17(1A) of the PMLA is not a blanket authorization but a targeted mechanism tied to the exigencies of a search; prior information, even if emailed, arguably shifts the paradigm to other provisions like anticipatory attachments under Section 5, which carry different safeguards.

Similarly, the Supreme Court's harmonious reading of BNSS Sections 175(3) and (4) prevents interpretive loopholes that could undermine due process. By insisting on affidavits, the court safeguards against oral "complaints" that lack accountability, a concern amplified in an era of social media-driven accusations. This approach mirrors the "ejusdem generis" rule, where new provisions are construed consistently with existing ones to avoid absurdity.

From a doctrinal perspective, these judgments reinforce the judiciary's role as a check on legislative and executive innovations. The PMLA's evolution from a narrow anti-laundering law to a broad economic offense statute has invited criticism for diluting rights under Article 20(3); the Karnataka HC's stance mitigates this by enforcing temporal boundaries. Likewise, the BNSS's transition from CrPC raised fears of weakened protections—the SC's ruling alleviates those by embedding evidentiary rigor early on.

Hypothetically, consider a lawyer defending a corporate executive in an ED probe: Armed with this precedent, they could petition for quashing a freeze by proving pre-search intel, buying time for substantive defenses. In BNSS scenarios, prosecutors might move to dismiss non-affidavit complaints, streamlining dockets but requiring complainants to engage counsel upfront.

Implications for Enforcement and Criminal Practice

For practitioners, these developments demand recalibration. In PMLA litigation, vigilance on information trails—emails, tip-offs, or database accesses—becomes paramount. Firms advising clients in high-stakes sectors like gaming (as in WinZO) must audit ED interactions meticulously, potentially incorporating timeline clauses in compliance protocols. This could increase defensive filings, straining High Court resources but enhancing transparency.

In criminal practice, the affidavit mandate under BNSS elevates the bar for initiating probes against officials, from bureaucrats to police. Lawyers drafting complaints will prioritize sworn veracity, perhaps integrating digital affidavits under the IT Act for efficiency. Magistrates, too, face clearer guidelines, reducing discretion and appeals on procedural grounds.

Broader implications touch policy: The ED may need internal reforms, like formalizing intel acquisition logs, to withstand judicial scrutiny. For BNSS implementation, training modules for lower judiciary could emphasize affidavit protocols, averting inconsistent applications. Economically, in cases like WinZO's, delayed salary releases impact employee morale and business continuity, underscoring PMLA's collateral effects on innocents.

Broader Ramifications for India's Justice System

These rulings signal a maturing justice system attuned to balancing efficiency with rights. By invalidating lax procedures, courts deter "fishing expeditions" by agencies, fostering public trust amid rising ED cases (over 5,000 in 2024 alone). For public servants, the BNSS clarity shields against vendettas, enabling focus on governance, while ensuring accountability for genuine malfeasance.

Yet, challenges persist: Overly rigid timelines might hamper legitimate enforcement in dynamic cybercrimes, and affidavit requirements could exclude illiterate complainants, necessitating pro bono interventions. Policymakers might respond with amendments—perhaps clarifying PMLA's pre-search powers or easing BNSS for urgent matters—but any dilution risks further judicial pushback.

Ultimately, these decisions affirm that procedure is not mere formality but the bedrock of fairness, influencing how India's 1.4 billion citizens access justice.

Conclusion

The Karnataka High Court's critique of the ED's PMLA application and the Supreme Court's affirmation of BNSS safeguards collectively champion procedural integrity. As legal professionals digest these insights, they are poised to invoke them in advocacy, ensuring that enforcement and investigations serve justice rather than expediency. In an era of legal reforms, such judicial interventions remind us that the rule of law thrives on precision and precaution.