SC issues notice to Centre, CBI, RBI, banks on Rs 23 crore ‘digital arrest’ scam

The Supreme Court on Friday sought responses from the Centre, the Central Bureau of Investigation (CBI), the Reserve Bank of India (RBI) and several banks on a plea by a 78-year-old retired banker who was allegedly cheated of Rs 23 crore after being kept under “digital arrest” for nearly a month.

A bench of Chief Justice Surya Kant and Justice Joymalya Bagchi issued notices to the Union of India, the CBI, the RBI and others on the petition filed by Naresh Malhotra. The plea seeks directions to the banks concerned to deposit the defrauded amount of Rs 22.92 crore back into the petitioner’s accounts.

Malhotra has made Kotak Mahindra Bank, HDFC Bank, Axis Bank, ICICI Bank, IndusInd Bank, City Union Bank and Yes Bank parties to the case.

According to police, cyber fraudsters posing as officials of the Enforcement Directorate (ED) and the CBI duped the retired banker, a resident of south Delhi’s Gulmohar Park area, by falsely placing him under “digital arrest”, a scam tactic with no legal basis that involves coercing victims into believing they are under official investigation.

The accused allegedly told Malhotra that his Aadhaar card was linked to narcotics trafficking, terror funding and the Pulwama terror attack, instructed him not to leave his flat and coerced him into transferring money from his bank accounts to multiple accounts specified by the fraudsters over nearly a month. The ordeal began on August 4 last year with a call from a man claiming to be a Mumbai Police officer and continued with contacts from impersonators of ED and CBI officials, police said.

Senior citizens are considered particularly vulnerable to such scams due to their trust in authority, limited digital literacy, fear of legal consequences and accumulated savings, which fraudsters exploit through sustained psychological pressure and isolation.

After realising that he had been cheated, Malhotra lodged a complaint on the National Cybercrime Reporting Portal (NCRP) on September 19 last year, following which the case was transferred to the Intelligence Fusion and Strategic Operations (IFSO) unit. Police said an FIR was registered and Rs 12.11 crore of the cheated amount was frozen in various bank accounts.

By issuing notices to the Centre, CBI, RBI and banks, the Supreme Court is expected to examine broader issues relating to cyber fraud, including the misuse of impersonation of law-enforcement agencies, the adequacy of regulatory safeguards, banks’ monitoring responsibilities and the need for institutional measures to prevent emerging scams such as “digital arrest”.