The Supreme Court on Friday issued notices to the Union government, the Reserve Bank of India, the Central Bureau of Investigation and seven private banks in a case involving an alleged ₹22.9-crore cyber fraud targeting an 82-year-old senior citizen, in what is being described as one of the largest individual digital frauds reported in the country.
A Bench led by Chief Justice of India Surya Kant, along with Justice Joymalya Bagchi, observed that the petition raised issues of grave public importance, particularly concerning banking oversight, regulatory safeguards and the growing menace of so-called “digital arrest” scams.
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The case arises from a writ petition filed by Naresh Malhotra, an octogenarian who lives alone while his children reside abroad. According to the plea, Malhotra was subjected to an elaborate and sustained cyber fraud operation in which criminals impersonated police officials and telecom authorities, threatening him with arrest and property seizure unless he complied with their demands.
The fraudsters allegedly shared forged Supreme Court and RBI orders through WhatsApp messages and video calls, creating an atmosphere of fear and urgency. Under these threats, the petitioner was coerced into transferring his life savings through multiple high-value bank transactions, ultimately losing ₹22.92 crore.
The petition contends that the fraud succeeded not only because of deception but also due to the failure of banking systems to detect or flag unusually large and repeated transfers from the account of a vulnerable senior citizen.
Appearing for the petitioner, senior advocate K. Parameshwar told the court that the incident reflected a “complete collapse of institutional safeguards” meant to protect customers, especially the elderly. He argued that when transactions involving crores occur over a short span, banks have a duty to exercise heightened scrutiny.
“There is some duty that these banks owe,” Parameshwar submitted, pointing out that the petitioner is wheelchair-bound and nearly 82 years old. He argued that the absence of alerts or intervention during such massive fund transfers amounted to gross negligence.
After hearing the submissions, the court issued notice on the main reliefs sought in the petition, while permitting the petitioner to approach the National Consumer Disputes Redressal Commission on specific prayers related to interim monetary relief. Those prayers had sought directions to banks to deposit the defrauded amount in an escrow account under court supervision.
The respondents named in the petition include Kotak Mahindra Bank, HDFC Bank, Axis Bank, ICICI Bank, IndusInd Bank, City Union Bank and Yes Bank.
Filed under Article 32 of the Constitution through advocate-on-record Abhinav Agrawal, the petition urges the Supreme Court to direct the Centre to frame and implement a uniform national policy to prevent and respond to digital arrest scams. It calls for coordinated action involving the Ministry of Home Affairs, the RBI and cybercrime agencies.
Among the key directions sought are the creation of a real-time national system to detect and freeze fraudulent inter-bank transfers, mandatory identification and blocking of mule accounts used by scam networks, and strict enforcement of RBI’s fraud risk management and customer protection norms.
The petition also seeks a CBI-led investigation into the case already registered as FIR No. 85/2025 in Delhi, along with telecom-based warning systems and real-time call blocking mechanisms to disrupt scam operations. It further calls for enhanced oversight by the finance ministry over high-risk transactions across both private and public sector banks.
Highlighting systemic gaps, the petitioner has argued that banks failed to implement safeguards mandated by RBI guidelines, allowing the fraud to continue unchecked. The plea states that accountability must extend beyond individual criminals to institutions that enable such transfers through inaction.
The case has brought renewed judicial focus on the growing sophistication of cyber frauds and the urgent need for stronger institutional responses, especially to protect senior citizens increasingly targeted through fear-based digital scams.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
