India, June 23 -- The Karnataka high court last week ordered the immediate release of three Gameskraft founders from judicial custody, ruling that the Enforcement Directorate had arrested them on material it possessed from a previous case and had failed to show that any fresh evidence had emerged since.

Quashing the arrests of Deepak Singh, Vikas Taneja and Prithviraj Singh under the Prevention of Money Laundering Act (PMLA), the court said the agency cannot use "stale material" from an old case file to justify arrests in a fresh case.

The 134-page judgment, pronounced on 16 June by Justice M Nagaprasanna, steps into a long-running judicial debate over how far Section 19 of PMLA - the ED's powers to arrest - stretches.

The judgment doe...