The Chhattisgarh High Court has rejected a bail application in a high-value cyber fraud case, affirming that active facilitation of mule bank accounts for laundering proceeds of online fraud constitutes a serious offence warranting continued custody. The judgment underscores the judiciary’s stance against intermediaries who enable large-scale digital financial crimes, even in the absence of direct receipt of illicit funds.
Background & Facts
The Dispute
The applicant, Ajay Kumar, was arrested in connection with Crime No. 452/2025 registered at Police Station Civil Lines, Raipur, for allegedly acting as an "account broker" in a structured cyber fraud syndicate. The case originated from inputs received via the National Cyber Crime Reporting Portal "Sammanvay", which flagged 17 DCB Bank accounts in Raipur as being used to receive proceeds of online fraud.
Key Facts
- The applicant is accused of facilitating the opening of Bank Account No. 21214700000435 in the name of Gul Hamza.
- This account received fraudulent transactions totaling Rs. 1,29,88,840/- within a short period after its opening.
- The account was directly linked to a cyber fraud complaint by victim Shankar Kharade, who lost Rs. 10,000/- on 09.07.2024 (Complaint Acknowledgement No. 31907240098050).
- Gul Hamza, the nominal account holder, deposed that he handed over the entire banking kit (ATM card, passbook, chequebook) to the applicant.
- The applicant admitted in his statement that he opened the account on behalf of Gul Hamza and subsequently transferred the banking kit to co-accused Prakash Singh in exchange for a loan of Rs. 2,00,000/-.
- Prakash Singh admitted to using the account for all transactions and having received Rs. 60,000/- and Rs. 90,000/- from the applicant in exchange for gold and cash.
- No incriminating material or proceeds of crime were recovered from the applicant’s person or residence.
- The applicant has been in judicial custody since 21.12.2025.
Procedural History
- 09.07.2024: Victim Shankar Kharade reports cyber fraud of Rs. 10,000/- via National Cyber Crime Reporting Portal.
- Late 2024: Cyber Crime Reporting Portal identifies 17 DCB Bank accounts linked to fraud transactions.
- December 2025: Investigation initiated by Police Station Range Cyber, Raipur.
- 21.12.2025: Applicant arrested and remanded to judicial custody.
- 12.02.2026: High Court directs Investigating Officer to file affidavit detailing evidence against applicant.
- 09.04.2026: Investigating Officer files affidavit confirming applicant’s role in facilitating the mule account.
- 09.04.2026: First bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023.
The Parties' Positions
For the Applicant: Counsel argued that the applicant is innocent, falsely implicated, and that no incriminating material was recovered. The case is based on surmises and circumstantial links. The applicant has been in custody since December 2025, and trial will take years.
For the State: The Investigating Officer’s affidavit established a clear chain of involvement: the applicant opened the account, transferred control to a co-accused, and received monetary consideration. The scale of fraud (Rs. 3.64 crore across 17 accounts), the organized nature of the operation, and the risk of evidence tampering justify denial of bail.
Relief Sought
The applicant sought regular bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023, pending trial.
The Legal Issue
Whether the applicant’s role in facilitating a mule bank account for cyber fraud, supported by corroborated statements and financial records, constitutes a prima facie case sufficient to deny bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023, despite the absence of direct recovery of proceeds?
Arguments Presented
For the Appellant/Petitioner
The applicant’s counsel contended that mere facilitation of a bank account without direct receipt or control of illicit funds does not establish criminal intent under Sections 317(2), 317(4), 317(5), 111, and 3(5) of the BNS. Reliance was placed on the absence of recovered proceeds and the fact that the applicant was not the beneficiary of the fraud. The counsel emphasized the prolonged custody since 21.12.2025 and the likelihood of a lengthy trial, invoking the principle that bail is the rule and jail the exception.
For the Respondent/State
The State, through the Investigating Officer’s affidavit, demonstrated that the applicant was not a passive intermediary but an active broker who knowingly enabled the laundering of cyber fraud proceeds. The affidavit detailed the applicant’s admission of transferring the banking kit to Prakash Singh in exchange for Rs. 2,00,000/-, and Gul Hamza’s corroborative deposition. The State argued that the applicant’s role was indispensable to the conspiracy, and granting bail would risk witness intimidation, destruction of digital evidence, and re-engagement in similar criminal activity.
The Court's Analysis
The Court conducted a detailed review of the Investigating Officer’s affidavit, which was filed in compliance with its earlier order dated 12.02.2026. The affidavit provided a clear, documented chain of events linking the applicant to the fraudulent account.
"The account holder Gul Hamza has categorically stated that he handed over the bank account kit to the present applicant, and the applicant has admitted that he got the account opened and subsequently transferred the entire banking kit to co-accused Prakash Singh in exchange for monetary consideration."
The Court emphasized that Section 317 of the BNS criminalizes the act of knowingly providing or facilitating the use of bank accounts for the purpose of concealing or transferring proceeds of crime. The applicant’s conduct - opening an account in a fictitious name, transferring control to another, and receiving payment for the service - constituted a conscious and profit-driven participation in a criminal enterprise.
The Court rejected the argument that absence of recovered proceeds negates criminality. It held that the magnitude of the fraud (Rs. 1.3 crore through a single account), the structured modus operandi involving multiple mule accounts, and the corroborative testimonies of both the nominal account holder and the co-accused established a prima facie case.
The Court further noted that the applicant’s role was not peripheral but central to the scheme: without intermediaries like him, the syndicate could not have operated at scale. The risk of influencing witnesses or absconding was deemed real, given the seriousness of the charges and the financial incentive involved.
The Court declined to apply the general presumption in favor of bail, holding that the nature of the offence under BNS 317 - which targets organized financial crime - demands a stricter threshold, particularly where the accused has played a facilitative role in a large-scale, multi-victim fraud.
The Verdict
The bail application was rejected. The applicant remains in judicial custody pending trial. The Court held that a prima facie case exists under Sections 111, 3(5), 317(2), 317(4), and 317(5) of the Bhartiya Nagrik Suraksha Sanhita, 2023, and that the applicant’s release would endanger the investigation. The trial court is directed to conclude proceedings expeditiously.
What This Means For Similar Cases
Facilitation Is Sufficient for Bail Denial
- Practitioners must now treat the act of opening or transferring mule bank accounts for cyber fraud as a standalone aggravating factor under BNS 317, irrespective of whether proceeds were physically recovered.
- Merely claiming ignorance or lack of direct benefit will not suffice to secure bail if the accused received consideration for facilitating the account.
Corroborative Statements Carry Weight
- Memorandum statements under Section 161 CrPC (now BNS) from nominal account holders and co-accused, when consistent and detailed, can form the basis for prima facie findings even without forensic digital evidence.
- Courts will rely on admissions made during interrogation if recorded properly and corroborated by financial trails.
Scale and Structure Trump Individual Gain
- In cyber fraud cases involving syndicates, courts will consider the overall scale of the operation (number of accounts, total amount laundered) when assessing risk of reoffending or witness tampering.
- A single accused’s personal gain (e.g., Rs. 2 lakh) is irrelevant if their role enabled a larger criminal enterprise affecting hundreds of victims.
No Automatic Bail for Long Custody
- Prolonged custody alone does not entitle an accused to bail if the offence is serious and the evidence establishes active participation in organized crime.
- Courts will prioritize the integrity of the investigation over the duration of detention in cases involving financial cyber offences.
