The Allahabad High Court has clarified that mere association with co-accused through rental transactions does not, by itself, establish criminal liability in cyber fraud cases. In granting anticipatory bail to a landlord accused under Sections 308(2) and 319(2) of the Bharatiya Nyaya Sanhita, the Court emphasized the necessity of direct involvement and the absence of flight risk in bail determinations.
Background & Facts
The Dispute
The applicant, Sanjay Bobby Deshwal, is a landlord whose tenant firm, RTTS, is linked to two co-accused, Rajendra Sharma and Vikash Verma. The informant, a victim of cyber fraud, alleged that between 09.08.2024 and 22.08.2024, he was defrauded of Rs. 57,89,776/- through digital means. The investigation revealed that the fraudulent proceeds were transferred to five bank accounts across IndusInd Bank, Federal Bank, and SBI Bank. The applicant’s bank account was among those that received funds, leading to his inclusion as an accused under Sections 308(2) and 319(2) BNS.
Key Facts
- The alleged fraud occurred between 09.08.2024 and 22.08.2024
- The First Information Report (FIR) was registered on 21.12.2024 at Cyber Crime Police Station, Pilibhit
- The applicant has no prior criminal record
- The applicant is a landlord; the financial transactions with Rajendra Sharma and Vikash Verma were rental payments for commercial property
- The charge sheet was filed on 15.01.2025, after which Sections 308(2) and 319(2) BNS were added against the applicant
- The applicant was already on bail since 26.09.2025, as per an order of the Sessions Judge, Pilibhit
- The applicant’s anticipatory bail application was rejected by the trial court on 10.02.2026
Procedural History
- 09.08.2024: Alleged commencement of fraudulent transactions
- 22.08.2024: Alleged conclusion of fraudulent transactions
- 21.12.2024: FIR registered at Cyber Crime Police Station, Pilibhit
- 15.01.2025: Charge sheet submitted; Sections 308(2) and 319(2) BNS added against applicant
- 26.09.2025: Applicant granted regular bail by Sessions Judge, Pilibhit
- 10.02.2026: Trial court rejected applicant’s anticipatory bail application
- 15.03.2026: Anticipatory bail application filed before Allahabad High Court under Section 482 BNSS
- 05.05.2026: High Court heard arguments and delivered order
The Parties' Positions
For the Applicant
- Counsel argued that the applicant’s connection to the fraud is purely coincidental and limited to being a landlord
- Rental payments received from RTTS were legitimate and unrelated to the fraudulent transfers
- The applicant has no criminal antecedents and has cooperated fully with the investigation
- He is already on bail and poses no flight risk
- The addition of Sections 308(2) and 319(2) BNS is an afterthought without independent evidence linking him to the fraud
For the Respondent
- Informant’s counsel contended that the flow of money to the applicant’s account establishes his involvement
- The bail applications of co-accused Rajendra Sharma and Vikash Verma were previously rejected by a coordinate bench
- The applicant’s presence in the financial trail suggests complicity, even if indirect
Relief Sought
The applicant seeks anticipatory bail to avoid arrest while the trial proceeds, with conditions ensuring his cooperation and presence in court.
The Legal Issue
The central question was whether mere receipt of funds through a legitimate rental transaction, without evidence of active participation in the fraud, constitutes sufficient grounds to deny anticipatory bail under Section 482 BNSS, particularly when the accused has no criminal history, is already on bail, and poses no flight risk.
Arguments Presented
For the Appellant/Petitioner
The applicant’s counsel relied on Sushila Aggarwal v. State (NCT of Delhi) to argue that anticipatory bail must be granted where custodial interrogation is not essential and the accused is not a flight risk. He emphasized that the applicant’s financial transactions were purely commercial, with no evidence of intent, conspiracy, or active role in the fraud. The applicant’s cooperation with the investigation and existing bail status demonstrated his willingness to face trial.
For the Respondent/State
The informant’s counsel and the Additional Government Advocate contended that the applicant’s bank account received proceeds of the crime, making him a necessary link in the financial trail. They cited the rejection of bail for co-accused as precedent and argued that the applicant’s involvement, even if indirect, warranted denial of anticipatory bail to preserve the integrity of the investigation.
The Court's Analysis
The Court undertook a structured evaluation of the factors laid down in Sushila Aggarwal v. State (NCT of Delhi), Siddharam Satlingappa Mhetre v. State of Maharashtra, and Gurubaksh Singh Sibbia v. State of Punjab. It noted that while the transfer of funds to the applicant’s account raised suspicion, there was no evidence linking him to the fraudulent scheme, no allegation of active participation, and no proof of knowledge or intent.
"The mere fact that money passed through the applicant’s account does not, by itself, establish criminal liability. The applicant’s role as a landlord receiving rent from a tenant firm is a legitimate commercial transaction, and the prosecution has not demonstrated any nexus between the rental income and the alleged cyber fraud."
The Court further observed that the applicant had been on bail since September 2025, had not evaded investigation, and had no history of non-cooperation. The addition of Sections 308(2) and 319(2) BNS after the charge sheet was filed, without new evidence, suggested an attempt to expand liability without substantiation.
The Court also distinguished the case from those where co-accused had been denied bail, noting that those decisions were based on distinct facts and evidence not applicable to the applicant’s circumstances.
The Verdict
The applicant succeeded. The Court granted anticipatory bail to Sanjay Bobby Deshwal on the condition that he appears before the trial court or Investigating Officer within 30 days of this order and furnishes a personal bond of Rs. 25,000/- with two sureties each in the like amount. He must comply with five conditions, including not tampering with evidence, not intimidating witnesses, and appearing personally on key trial dates. In case of breach, bail shall stand cancelled. The Court clarified that this order does not prejudge the merits of the case.
What This Means For Similar Cases
Receipt of Funds Alone Is Not Sufficient for Bail Denial
- Practitioners must challenge bail denials based solely on financial transactions where no direct involvement or intent is proven
- The burden remains on the prosecution to establish a causal link between the accused and the crime, not merely a coincidental financial trail
Landlords and Third Parties Are Not Automatically Suspect
- In cyber fraud cases involving third-party accounts, courts must distinguish between legitimate business dealings and criminal complicity
- Absent evidence of knowledge, conspiracy, or active facilitation, anticipatory bail should be granted where the accused is cooperative and non-fugitive
Pre-existing Bail Is a Strong Factor in Favor
- An accused already on regular bail demonstrates low flight risk and willingness to cooperate
- Courts must not deny anticipatory bail merely because co-accused were denied bail - each case must be decided on its own facts
Procedural Fairness in Charge Sheet Amendments
- Addition of serious sections post-charge sheet without new evidence invites scrutiny
- Courts should examine whether such amendments are an attempt to circumvent bail jurisprudence
