1. Court’s decision
The Delhi High Court has rejected the applicant’s plea for pre-arrest bail in a high-value cyber fraud case involving allegations of a fraudulent investment scheme executed through a trading app clone, WhatsApp groups, and multiple mule bank accounts. The Court held that the applicant’s custodial interrogation was indispensable due to his suspected role in operating the bank account used to siphon defrauded funds, his alleged non-cooperation during investigation, and his abscondence, which had compelled the authorities to initiate proceedings under Section 84 of the new criminal procedure statute. The Court concluded that the applicant failed to establish any ground for anticipatory bail, given the seriousness of the offence, the technological complexity of the fraud, and the possibility of additional victims.
2. Facts
A victim lodged a complaint alleging that after downloading the “Upstox” trading app, he was induced via phone and WhatsApp group “VIP 2 Customer Care” to invest money in the guise of stock trading. Over several transactions, the victim transferred approximately ₹67,60,000 into various accounts. One such account was registered in the name of Akshaya Kumar Nayak. On 04 August 2025, a raid at Akshaya’s residence led to recovery of the mobile phone linked to the fraudulent account. During interrogation, Akshaya implicated the applicant, stating the applicant had opened the bank account using Akshaya’s signatures, taken his mobile phone, and travelled with him to Puri, Odisha, where the applicant handed over the mobile number linked to the account to associates for facilitating transactions. Investigation further revealed that ₹17,000 was transferred from Akshaya’s account to the applicant’s account, which the applicant claimed was salary from a diagnostic centre. Authorities found, however, that the applicant had conducted multiple test transactions on the fraudulent bank account between 26 and 29 April 2025. The applicant sought pre-arrest bail, asserting innocence and alleging false implication.
3. Issues
The principal issues before the Court were:
- Whether the applicant demonstrated a prima facie case for pre-arrest bail in a serious cyber fraud matter.
- Whether custodial interrogation was necessary for effective investigation.
- Whether linkage between the applicant’s phone, email IDs, and the fraudulent bank account justified denial of anticipatory bail.
- Whether being found absconding and non-cooperative disentitled him from bail.
- Whether the precedents governing anticipatory bail permitted relief in cases involving complex digital crimes and multi-layered financial transactions.
4. Petitioner’s arguments
The applicant argued that he had no involvement in the cyber fraud and that the sole basis for implication was the ₹17,000 transfer into his account, which he claimed was wages paid by Akshaya for part-time work at a diagnostic centre. He asserted that he had never joined the WhatsApp group allegedly used for cheating and had no knowledge of the fraudulent activities. He maintained that he was a law-abiding citizen with clean antecedents and was willing to cooperate with investigators. His counsel submitted that custodial interrogation was unnecessary and that pre-arrest bail was warranted as the allegations against him rested on Akshaya’s disclosure, which was inadmissible as substantive evidence.
5. Respondent’s arguments
The State strongly opposed the application, submitting that the applicant’s involvement in the syndicate stood prima facie established through digital footprints. They highlighted that the mobile number linked to the fraudulent account was found in the applicant’s device, and both email IDs associated with the account had also been accessed from his phone. They argued that the applicant conducted trial transactions from the mule account to ensure operability before transferring ₹17,000 to himself. Further, the CDR analysis placed both the applicant and Akshaya together in Puri, Odisha, during crucial periods of the fraud. The State emphasised that the applicant had absconded and that Section 84 BNSS proceedings had already been initiated. Given the gravity of the offence, sophistication of the syndicate, and the need to trace additional victims and financial flows, custodial interrogation was essential.
6. Analysis of the law
The Court reaffirmed that anticipatory bail is an extraordinary remedy, to be granted only sparingly and in exceptional circumstances. It relied on established principles from the Supreme Court, including Bimal Krishna Kundu, Pokar Ram, and Anil Sharma, underscoring that pre-arrest bail cannot be used as a shield to obstruct investigation. The Court emphasised that digital fraud cases necessitate deeper custodial interrogation because they often involve distributed devices, virtual accounts, and decentralised communication networks. The offences in question—under Sections 318(4), 319(2), and 3(5) of the penal statute—carried serious implications for public trust and cyber security. Courts must consider not only the rights of the accused but also the societal harm caused by large-scale online deception. The Court noted that where an accused is absconding, non-cooperative, and connected to the operational infrastructure of fraud, anticipatory bail becomes legally unsustainable.
7. Precedent analysis
The Court reproduced and applied the Supreme Court’s guidance in State of A.P. v. Bimal Krishna Kundu, which distinguished between considerations for anticipatory bail and regular bail. It also applied Pokar Ram and Anil Sharma, which caution that anticipatory bail should not be granted where it may impede investigation or allow accused persons to manipulate evidence. These precedents stress that custodial interrogation is often indispensable in cases of conspiracy, economic offences, and organised fraud. Applying these principles, the Court held that granting bail would “greatly harm the investigation” and that public interest would suffer if individuals engaged in sophisticated cyber crime schemes were insulated from custodial questioning.
8. Court’s reasoning
The Court held that the material on record—digital linkage between devices and accounts, CDR corroboration of presence in Puri, and involvement in document signing and mobile handover—created substantial grounds to suspect the applicant’s active role in the fraud. The applicant’s explanation regarding the ₹17,000 transfer did not address why he had conducted multiple operational test transactions on the mule account. His abscondence and initiation of Section 84 BNSS proceedings further indicated unwillingness to cooperate. The Court observed that cybercrime syndicates often function through layered intermediaries, making custodial interrogation a vital tool for unearthing broader networks. Thus, anticipatory bail would seriously impede investigation and potentially allow crucial evidence to be destroyed. The applicant had not established any exceptional circumstances warranting pre-arrest bail.
9. Conclusion
Rejecting all grounds advanced by the applicant, the Court held that the allegations were grave, the applicant’s digital footprint was incriminating, and custodial interrogation was necessary. The applicant had failed to demonstrate cooperation or bona fide conduct. Accordingly, the application for pre-arrest bail was dismissed. The Court clarified that its observations were confined to the present bail adjudication and would not affect the merits of the trial.
10. Implications
This judgment strengthens judicial scrutiny of cybercrime investigations, especially those involving digital impersonation, banking fraud, and mule accounts. It reinforces that anticipatory bail cannot be used to shield suspects who allegedly operate technological infrastructure of organised fraud. The ruling signals that courts will prioritise investigative needs in sophisticated cyber offences, particularly when accused persons are absconding or evidence suggests deep operational involvement. It also underscores the growing role of digital forensics—CDR analysis, device linkage, and transaction histories—in determining bail outcomes.
CASE LAW REFERENCES
1. State of A.P. v. Bimal Krishna Kundu (1997) 8 SCC 104
Held that anticipatory bail must be sparingly granted and cannot undermine investigation.
Applied: Used to justify denial of bail.
2. Pokar Ram v. State of Rajasthan (1985) 2 SCC 597
Held that considerations for anticipatory bail differ from post-arrest bail.
Applied: Highlighted limited scope for pre-arrest protection.
3. State v. Anil Sharma (1997) 7 SCC 187
Held that custodial interrogation is more effective than questioning under protection.
Applied: Basis for refusing anticipatory bail.
FAQs
1. Why did the Delhi High Court refuse pre-arrest bail in this cyber fraud case?
Because the applicant’s custodial interrogation was essential, he was allegedly absconding, and digital evidence linked him to the mule account used to siphon funds.
2. Does receiving a small transfer (₹17,000) justify arrest in a cyber fraud case?
Yes, when accompanied by evidence showing the recipient operated or tested the fraudulent bank account, handled devices, or was present with co-accused during key events.
3. How do courts treat anticipatory bail in digital and economic offences?
Courts apply heightened scrutiny, recognising the complexity of cybercrime and the necessity of custodial interrogation to uncover networks and prevent destruction of evidence.
