The Supreme Court on Friday issued notices to the Union government, the Central Bureau of Investigation (CBI), the Reserve Bank of India (RBI) and seven private banks in connection with a case involving an alleged ₹22.93-crore fraud carried out through a so-called “digital arrest” scam targeting an 82-year-old senior citizen. The court observed that the matter raises serious concerns not only about cybercrime but also about banking oversight, regulatory vigilance and institutional accountability.
A Bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi took up the petition and sought detailed responses from the concerned authorities. While declining to entertain some of the petitioner’s prayers at this stage, the Bench agreed that the remaining issues warranted examination. The case is being viewed as one of the largest instances of digital fraud involving a single individual in the country.
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Senior Citizen Appears in Wheelchair, Questions Raised on Bank Vigilance
Appearing for the petitioner Naresh Malhotra, senior advocate K. Parameshwar informed the court that his client is 82 years old and had appeared before the Bench in a wheelchair. He submitted that the alleged fraud took place at a time when the petitioner’s children were abroad, leaving the elderly man isolated and vulnerable.
The senior counsel argued that the scale of the financial transfers should have triggered automatic alerts and safeguards within the banking system. “When crores of rupees are being moved from the accounts of a senior citizen, banks cannot remain silent spectators,” he submitted, stressing that monitoring and preventive intervention are integral to banking responsibility.
Fear of Arrest Used to Drain Life Savings
According to the petition, the fraudsters posed as law enforcement officials and contacted the petitioner through WhatsApp messages and video calls. He was allegedly told that serious criminal cases had been registered against him and that arrest and attachment of property had been ordered.
The petitioner was shown what were claimed to be Supreme Court orders, later found to be fabricated. Under the fear of immediate arrest and legal consequences, he was allegedly coerced into transferring his entire life savings across multiple bank accounts. Through this process, a total of ₹22.93 crore was siphoned off into accounts allegedly controlled by the fraudsters.
Mule Accounts and the Banking Trail
The petitioner’s counsel contended that such a large-scale fraud would not have been possible without the use of mule accounts—bank accounts used to receive and launder fraud proceeds. He urged the court to direct the RBI to issue instructions requiring collecting banks to identify account holders and operators involved in routing the money.
The plea also seeks directions to ensure recovery and restitution of the defrauded amount, arguing that the absence of timely checks enabled the crime to progress unchecked.
Liberty Granted to Approach Consumer Forum
During the hearing, the Bench clarified that the petitioner would be at liberty to approach the National Consumer Disputes Redressal Commission (NCDRC) against the banks concerned. The court noted that apart from criminal investigation, the case may also involve elements of deficiency in service on the part of financial institutions.
Court Flags Growing Threat of Digital Fraud
Legal observers say the Supreme Court’s intervention reflects increasing judicial concern over the rapid rise of cyber-enabled financial crimes, particularly those exploiting fear, impersonation and institutional trust. The issuance of notices to the Centre, investigative agencies and the banking regulator indicates that the court is examining the issue as a systemic challenge, rather than an isolated incident.
What Lies Ahead
The Centre, CBI, RBI and the concerned banks have now been asked to explain:
- how such a large fraud was executed,
- why mule accounts were not detected in time, and
- whether existing banking alert mechanisms failed during the transactions.
At the next hearing, the Supreme Court is expected to consider whether specific responsibilities should be fixed on banks and regulators, and whether broader safeguards are required to prevent similar digital frauds, particularly against senior citizens.
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.
