The Supreme Court took suo motu cognisance of rising “digital arrest” cyber frauds involving forged documents, noting losses up to Rs 10 crore and a severe impact on senior citizens. Directing uniform SOP implementation, the Court ordered CBI investigations, RBI-led banking safeguards, inter-agency coordination, and steps towards a national victim compensation framework.
The Supreme Court of India on Monday took up a serious matter concerning victims of so-called “digital arrest” cyber frauds carried out through forged documents, while examining a detailed status report submitted by the Union Government on the growing cyber fraud epidemic across the country.
The case was heard by a Bench comprising the Chief Justice of India, along with Justice Joymalya Bagchi and Justice N.V. Anjaria.
During the hearing, Attorney General R. Venkataramani informed the Court about the present status of investigations and remedial measures taken by the government.
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Addressing the Bench, he stated,
“I have placed a brief note for Your Lordship’s kind consideration, merely to indicate the present status and to give a short update. With Your Lordship’s permission, may I also hand over the complete status report on record.”
Explaining the financial impact of the frauds, the Attorney General told the Court,
“As of now, My Lord, the aggregate exposure may be in the vicinity of ₹10 crores at the higher end. Individually, some losses may also approach that figure. However, what requires special emphasis is the nature of the victims.”
At this point, the Chief Justice intervened and observed,
“there are senior citizen also.”
Responding to the concern, the Attorney General said,
“There are senior citizens involved, My Lord. For them, even an amount of ₹3 lakhs is substantial. In one instance—which prompted this Hon’ble Court to take suo motu cognizance—a retired couple has suffered a loss of over ₹1 crore. For them, this represents their entire life’s savings.”
Later, while addressing the preparedness of authorities, the Attorney General submitted,
“The SOPs, in our respectful submission, are fairly comprehensive, and at this stage it would be appropriate to allow them to take concrete shape by being put into action mode.”
He further informed the Court,
“My Lords, there are two status reports on record—one dated 13.01.2026 and the second dated 29.01.2026. I have tabulated both, clearly indicating what issues have been addressed, at least at a preliminary stage, and what aspects remain pending.”
Taking note of the submissions, the Chief Justice stated,
“we will issue directions to implement the SOP.”
During further arguments, counsel appearing in the matter pointed out,
“The RBI, My Lords, has indicated the need for deliberation, and those discussions have since been finalised.”
The counsel added,
“If a reasonable timeline is fixed for taking such action, it would greatly assist the departments in reverting with clarity and would help in expediting the entire deliberative process.”
Recalling earlier proceedings, the Chief Justice observed,
“In conclusion of the previous orders up to 25th December 2025, the learned Attorney General of India will convey the position of the Ministry of Home Affairs before this Hon’ble Court.”
The Court recorded that the status report was filed on behalf of the Union of India along with supporting documents marked as Annexures R1 to R5, including minutes of inter-departmental meetings, Reserve Bank of India inputs, ministry reports, and grievance redressal data relating to restoration of defrauded funds.
Passing important directions, the Chief Justice ordered,
“The Central Bureau of Investigation (CBI) has identified a threshold of losses of ₹10 crore or more for investigation of digital asset-related cases.”
The order further stated,
“At present, three such cases have been identified in the States of Gujarat and Delhi. State Governments have been accordingly directed to grant the necessary permissions within one week.”
The Court also noted progress on institutional coordination, with the Chief Justice observing,
“The MOU is expected to be finalized within three to four weeks.”
On the role of banks, the Chief Justice recorded,
“Further, the Reserve Bank of India has drafted a Standard Operating Procedure (SOP) prescribing actions to be taken by banks, including the placement of temporary debit holds on accounts identified as involved in mule activities or cyber-enabled fraud.”
Issuing binding directions, the Court ordered,
“We respectfully call upon the Ministry of Home Affairs to formally adopt and implement this SOP with effect from 2nd January 2026, and to issue it across the country.”
Clarifying the objective, the order stated,
“The objective is to ensure a uniform process to strengthen inter-agency coordination, facilitate timely restoration of defrauded funds wherever possible, and commence action by all participating agencies.”
The Chief Justice further observed,
“While litigants may approach any High Court, it is submitted that the High Courts need not undertake the exercise afresh; a uniform process should be followed by all participating entities to strengthen inter-agency coordination.”
The Court also took note of future regulatory measures and recorded,
“Further, with regard to future action as noted on page 2 of the status report, the Department of Telecommunications has drafted two sets of rules:”
These were identified as
“1. Telecommunications (User Identification) Rules, 2025” and “2. Telecommunications (Radio Equipment Possession Authorisation) Rules, 2025”.
Issuing further directions, the Chief Justice ordered,
“Ministry of Technology is directed to finalise guidelines for the portal within 4 weeks.”
On investigation mechanisms, the Court noted,
“The future course of action is concerned, the Committee is pointed out that from now directly the CBI will expedite registration of the identified digital arrest cases for investigation.”
With respect to banking delays, the order recorded,
“RBI is directed to the recommendations of the delayed transactions at the end of the issue of bank and take an appropriate decision in this regard.”
Addressing intermediary accountability, the Court directed,
“The Ministry of Electronics and Information Technology is directed to follow up with intermediaries for time-bound complaints.”
In a significant step to curb money laundering, the Chief Justice ordered,
“The RBI, MHA, and Department of Revenue are directed to consider suspending suspicious transactions under Section 12KA of the PMLA, strictly following the prescribed legal procedures.”
Finally, the Court issued a crucial directive on victim relief, stating,
“It is further directed that the RBI, the Department of Telecommunications, the Ministry of Electronics and Information Technology, the Department of Legal Affairs, and the Ministry of Consumer Affairs jointly hold a meeting to evolve a framework for victim compensation in digital asset-related cases.”
Case Title:
In Re: Victims of Digital Arrest Related to Forged Documents, registered as SMW
(Crl) No. 3/2025, was
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