The Delhi High Court has said that investigations into digital-arrest scams cannot stop with identifying the people who make threatening calls to victims.
Police must also trace those who receive, move or dissipate the stolen money through bank accounts, the court observed while refusing anticipatory bail to a man whose alleged role emerged from the financial trail of a ₹2.65 crore fraud.
Justice Sanjeev Narula said such scams typically involve impersonation of public officials, sustained psychological pressure and the rapid movement of money through multiple accounts.
The court therefore stressed that people handling the proceeds may be just as important to the investigation as those directly communicating with victims.
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Senior Citizen Allegedly Lost ₹2.65 Crore
The case arose from an FIR registered by the Delhi Police Special Cell under Sections 419, 420, 384 and 120B of the Indian Penal Code.
According to the prosecution, a senior citizen was contacted through Skype and telephone by people pretending to be officials from TRAI, Mumbai Police and the Central Bureau of Investigation.
The callers allegedly told him that his Aadhaar credentials had been used in criminal activity.
He was threatened with arrest and consequences for his family before being persuaded to transfer a total of ₹2.65 crore into accounts specified by the callers.
Investigators traced ₹1.50 crore to an account belonging to Asif Enterprises and another ₹1.15 crore to Waveland Comestible Pvt. Ltd.
₹5.31 Lakh Trail Led Police to Bail Applicant
Himanshu was not accused of making the calls or threatening the complainant.
His alleged involvement emerged from the money trail.
Delhi Police told the court that about ₹5.31 lakh was transferred on May 14, 2024 from Waveland Comestible Pvt. Ltd. into Himanshu’s Kotak Mahindra Bank account.
That Waveland account had earlier received ₹1.15 crore from the victim, according to the prosecution.
Police further alleged that the ₹5.31 lakh reaching Himanshu’s account was rapidly withdrawn or used.
That made the onward movement of the money a central issue in the investigation.
Accused Said Payment Was for Mobile Phones
Himanshu denied wrongdoing and argued that the ₹5.31 lakh was payment for a genuine commercial transaction involving the sale of mobile phones.
His lawyers said he had supplied invoices and that the relevant evidence was documentary and electronic.
He also offered to deposit ₹5,31,168 while the investigation continued.
The High Court, however, found several gaps in the commercial explanation.
According to the order, the applicant had not produced records such as GST returns, income-tax returns, stock or purchase registers, sales registers, ledgers, delivery challans, transport receipts, payment receipts or e-way bills for the disputed transaction.
The invoices relied upon also lacked GST particulars.
Court Questions Supporting Records
The applicant claimed that he had bought nine mobile phones for approximately ₹5.30 lakh from a seller in Bhiwani in December 2023.
He said the phones were later sold to a buyer named Dinesh at Karol Bagh.
But the order records that there was no written agreement, security or contemporaneous communication supporting the alleged transaction.
The applicant was also unable to provide Dinesh’s telephone number or WhatsApp chats relating to the deal.
Investigators additionally said call-detail and location records did not place him in Delhi during the relevant period when he claimed to have delivered the phones.
The investigating agency was also unable to locate either the establishment described by him as “All Mobile Solution” or another person named Hitesh at Gaffar Market.
The court made clear that these observations were only for deciding the bail application and would not determine guilt at trial.
‘Mule Account’ Role Cannot Automatically Be Treated as Minor
The ruling is significant because the court directly addressed the role of people whose accounts are used to receive and transfer cybercrime proceeds.
Justice Narula referred to an earlier Delhi High Court decision in Ashok Kumar v. State of NCT of Delhi, which had observed that people involved in holding or providing mule accounts cannot automatically be treated as minor or peripheral participants while an investigation is still underway.
A mule account is a bank account used to receive or transfer money obtained through fraud.
Cybercrime networks often move stolen funds through several such accounts in quick succession, making it harder for banks and police to freeze or recover the money.
The account holder may be directly involved, may lend the account for commission or may in some cases claim that the transaction was legitimate.
Determining which situation applies requires investigation.
Supreme Court Directions Also Cited
The Delhi High Court also referred to the Supreme Court’s suo motu proceedings on digital-arrest scams.
The order noted that the Supreme Court had taken judicial notice of the scale and seriousness of such frauds and, through its December 1, 2025 directions, designated the CBI as the primary agency for coordinated investigation of these cases on a pan-India basis.
Those directions specifically included scrutiny of mule bank accounts.
That broader context influenced the High Court’s view that investigators must look beyond the front-end caller and reconstruct how the stolen money moves.
Court Rejects Offer to Return ₹5.31 Lakh
The court also rejected Himanshu’s offer to deposit the ₹5.31 lakh.
Justice Narula said the investigation was not merely a recovery exercise concerning that amount.
Police still needed to establish how money linked to the alleged fraud reached his account, whether the mobile-phone transaction offered as an explanation was genuine and where the money moved afterward.
A later deposit, the court said, could not answer those investigative questions.
Anticipatory Bail Refused
The court ultimately dismissed Himanshu’s anticipatory bail application.
It noted unresolved issues involving the banking trail, call-detail and IMEI material, electronic evidence and the identities of people linked to the claimed commercial transaction.
The court also recorded that the application was his second attempt at pre-arrest bail and that no meaningful change in circumstances had been shown after an earlier petition was withdrawn.
The order expressly stated that all observations were prima facie and should not influence the investigation or trial on merits.
What this means for you
In digital-arrest cases, police investigations are increasingly focusing on the entire financial chain, including mule accounts used to receive and move stolen money. Allowing someone else to use your bank account for unexplained transfers can expose you to serious criminal investigation even if you never spoke to the victim.
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