The Punjab & Haryana High Court has reaffirmed that providing banking infrastructure to facilitate cyber fraud constitutes active participation in the offence, even in the absence of direct interaction with victims. This ruling clarifies the threshold for bail in cases involving financial intermediaries in organized digital fraud networks.
Background & Facts
The Dispute
The petitioners, Saurabh Nivruti Sinde and Mayank Santosh Jadhav, were arrested in connection with FIR No.23/2025 registered at Cyber Crime Police Station, Patiala, under Sections 61(2), 318(4), and 319(2) of the Bharatiya Nyaya Sanhita, 2023. The complainant, Manjit Singh, and his son were defrauded of Rs.88,00,051 through a social media investment scam. Funds were routed through multiple bank accounts, including one in the name of Mayank Santosh Jadhav, which received Rs.6 lakhs of the proceeds.
Procedural History
- 05.05.2025 to 28.05.2025: Complainant transferred funds to fraudsters via WhatsApp-based scheme
- 06.06.2025: FIR registered against unnamed accused
- 19.06.2025: Accused Amita Ajay Kumar Mishra arrested; investigation revealed use of mule accounts
- 21.06.2025: Petitioners Mayank Jadhav and Saurabh Sinde arrested after investigation disclosed their roles
- Post-arrest: Chargesheet filed; bail applications filed before High Court
Relief Sought
The petitioners sought regular bail, arguing they were falsely implicated, had no direct contact with the victim, and their roles were merely passive. They emphasized clean antecedents, permanent residence, and completion of investigation.
The Legal Issue
The central question was whether providing a bank account as a conduit for proceeds of cyber fraud, without direct victim interaction, constitutes sufficient participation to justify denial of bail under Section 439 CrPC.
Arguments Presented
For the Petitioner
Learned counsel contended that the petitioners were not named in the FIR and had no role in inducing the victim. They argued that the transfer of Rs.6 lakhs to Mayank Jadhav’s account was done without his knowledge, constituting mere misuse of account details. Reliance was placed on Arnesh Kumar v. State of Bihar to argue that bail should not be denied merely on the basis of serious allegations without prima facie evidence of intent. They emphasized that investigation was complete and trial would take years.
For the Respondent
The State countered that the petitioners were key facilitators in an organized cyber fraud racket. The account of Mayank Jadhav was knowingly opened and operated for routing illicit funds, as confirmed by his own disclosure during interrogation. The mobile phone of Saurabh Sinde was used to operate the account, establishing direct involvement. The State relied on State of Maharashtra v. Bharat Shantilal Shah to argue that facilitation of financial channels in economic crimes is a grave aggravating factor.
The Court's Analysis
The Court examined the nature of the offence and the petitioners’ roles within the fraud ecosystem. It held that cyber fraud is not an isolated act but a structured criminal enterprise where banking infrastructure is indispensable. The Court found that the petitioners’ actions went beyond passive involvement.
"It has surfaced that a part of the cheated amount, i.e. Rs.6 lakhs, was transferred into the bank account of petitioner Mayank Santosh Jadhav, which account was opened and used for routing proceeds of crime. Further, material on record shows that the said account was operated using the mobile phone of petitioner Saurabh Nivruti Sinde and that the account details were knowingly shared with co-accused, clearly indicating their active and conscious participation in the offence."
The Court rejected the argument that non-inclusion in the FIR negated culpability, noting that roles often emerge during investigation. It emphasized that providing mule accounts is not a minor or collateral act but a critical enabler of the crime. The Court distinguished Arnesh Kumar by noting that case dealt with automatic arrest under Section 498A, whereas here, the issue was bail in organized economic crime. The Court held that the gravity of the offence, the scale of financial loss, and the systemic threat to digital finance warranted strict scrutiny. The petitioners’ clean antecedents and permanent residence were acknowledged but deemed insufficient to outweigh the risk of reoffending and obstruction.
The Verdict
The petitioners’ bail applications were dismissed. The Court held that knowingly providing bank accounts to route proceeds of cyber fraud constitutes active participation in the offence, justifying denial of bail at the pre-trial stage. The Court emphasized that facilitators in organized economic crimes cannot claim immunity from custody merely because they did not directly deceive victims.
What This Means For Similar Cases
Facilitation Is Not Passive Participation
- Practitioners must now argue that mere provision of bank details without knowledge or consent is a factual defense, not a legal shield
- If evidence shows awareness, use, or control over the account, bail will be denied even if the accused did not initiate the fraud
- The burden shifts to the accused to prove lack of intent or knowledge, especially when mobile devices or digital logs link them to account operations
Mule Accounts Are Key Evidence in Cyber Fraud
- Bank accounts used to route illicit funds are now treated as instrumentalities of crime, not neutral vessels
- Prosecutors can rely on transaction trails, IP logs, and device usage to establish active complicity
- Defence counsel must challenge the chain of custody and authenticity of digital evidence early, not wait for trial
Bail Denial in Economic Crimes Is Now Presumptive
- Courts will increasingly view bail as the exception in cases involving organized financial fraud
- Factors like scale of loss, use of multiple mule accounts, and role in the criminal network will outweigh personal circumstances
- Applications for bail must now include detailed affidavits rebutting the inference of conscious participation, supported by digital forensics
