A sessions court in Bengaluru last week refused anticipatory bail to a government school teacher accused in a ₹3.62-crore cyber fraud case, following suspicious transactions in his bank account that exceeded his legitimate income and raised concerns about his potential role in a larger fraud network.
Teacher’s Bank Account: ₹5 Lakh to ₹30 Lakh Spike
The accused, Indudhar Mallikarjun Kataraki, 25, a resident of Shigli in Gadag district and a mathematics teacher in Gokak, filed a plea under Section 482 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) 2023, claiming that professional obligations prevented him from attending earlier police summons. Kataraki’s counsel stated that he was assisting students in filing applications for government residential schools and preparing examination papers and conducting extra classes for SSLC students during the period in question.
The case originates from a complaint filed by K K Belliyappa, a senior citizen from Kodagu, who alleged he was lured into an online trading scheme and subsequently defrauded of over ₹3.62 crore. Investigators discovered that the funds were routed through multiple mule accounts, indicating the involvement of an organized interstate cybercrime network.
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Initially registered by the Kodagu CEN Police, the case was later transferred to the Criminal Investigation Department (CID) in Bengaluru for further investigation. Records show that Kataraki’s State Bank of India (SBI) account reflected significant unexplained activity. Transactions in 2021 were around ₹5 lakh, while by 2025, this reportedly escalated to ₹30.52 lakh, excluding his official salary, triggering alarms over irregular deposits and withdrawals.
Court Rejects Bail: Custodial Probe Essential
In January 2026, police issued a notice directing Kataraki to appear for questioning by February 2. He did not comply, citing professional responsibilities. Prosecutors opposed his anticipatory bail application, emphasizing that custodial interrogation was essential to uncover the masterminds behind the fraud and to trace the remaining ₹3.58 crore, which had not yet been recovered.
During proceedings on March 17, the court noted that Kataraki failed to submit his bank statements, despite claiming false implication. Considering the scale of the fraud and the involvement of multiple mule accounts, the court emphasized the necessity of police custody to effectively investigate and dismantle the network.
Interstate Cyber Fraud Network Under CID Scanner
Legal experts highlighted that such cases reflect the growing sophistication of cyber frauds, where individuals may unknowingly become intermediaries for transferring illicit funds. They warned that professionals handling financial accounts must exercise caution, and educators, in particular, should avoid unintentional involvement in schemes that could entangle them in criminal investigations.
The CID continues to trace the interstate network, working to identify the key perpetrators and map the flow of funds. Officials stressed that cyber frauds of this magnitude require meticulous coordination across multiple states, and mule accounts play a central role in laundering money across jurisdictions.
Judicial Warning on Mule Accounts and Online Trading Risks
Authorities have indicated that monitoring of mule accounts will remain a priority to prevent similar large-scale frauds, especially in cases where victims are vulnerable or unaware of the risks associated with online trading platforms.
The case has drawn attention to the vulnerabilities in online financial systems and the need for stricter oversight to prevent misuse. Prosecutors have urged educational institutions and individuals to maintain transparent financial records and ensure adherence to regulatory guidelines while dealing with unfamiliar investment schemes.
Kataraki’s anticipatory bail rejection signals the judiciary’s stance on taking cyber fraud allegations seriously, particularly when bank transactions suggest discrepancies that merit detailed investigation. Police custody in such cases is increasingly being used as a tool to unravel complex, multi-state financial crimes, with a focus on recovering defrauded amounts and identifying the principal conspirators.
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.
