The Supreme Court has expressed deep concern over the “staggering” volume of funds being siphoned out of India by cybercriminals employing “digital arrest” tactics. On Tuesday, the Apex Court directed the Centre to evaluate potential mechanisms for compensating victims, including a proposal modeled after the United Kingdom’s mandatory reimbursement scheme.
A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi voiced strong apprehensions regarding the sophisticated nature of these financial crimes, where fraudsters impersonate law enforcement or government officials to intimidate victims—often senior citizens—into transferring large sums of money.
“Staggering Amount” Leaving the Country
During the hearing, Chief Justice Kant remarked on the sheer scale of the financial loss, stating, “We are surprised by the staggering amount of money taken out of the country by these fraudsters.”
The Court was hearing a suo-motu case initiated following a complaint by an elderly couple from Haryana, which has since expanded into a broader judicial examination of the nation’s cyber defence mechanisms.
Attorney General R Venkataramani informed the bench that the government is treating the matter with high priority. He submitted that an inter-ministerial meeting is scheduled to convene shortly to strategize on curbing these scams. This meeting will consider inputs from the Central Bureau of Investigation (CBI) and suggestions tabled by the court-appointed amicus curiae, Senior Advocate N S Nappinai.
Push for Victim Compensation
A key focus of Tuesday’s proceedings was the financial recovery for victims. Amicus Curiae Nappinai proposed the introduction of a victim compensation scheme similar to the model currently used in the United Kingdom for “Authorised Push Payment” scams. Under the UK model, reimbursement to victims is often mandatory through banking channel interventions.
The bench directed the Centre to examine this suggestion seriously. “The recommendations by the amicus may also be considered by the concerned quarters,” the Court ordered.
Furthermore, Chief Justice Kant emphasized the need for technological safeguards, suggesting the implementation of automatic alarm systems within banks to flag and halt fraudulent transactions in real-time.
Unified Probe and AI Integration
The Court’s Tuesday observations build upon a series of stringent directions issued earlier this month. On December 1, the Supreme Court mandated a unified, pan-India investigation by the CBI into digital arrest cases. To facilitate this, the Court had asked various states—including opposition-ruled West Bengal, Kerala, Tamil Nadu, Karnataka, and Telangana—to grant consent under the Delhi Special Police Establishment (DSPE) Act for CBI jurisdiction.
The judiciary has also turned its gaze toward the Reserve Bank of India (RBI). The Court previously issued a notice questioning why Artificial Intelligence (AI) and Machine Learning (ML) technologies are not being adequately deployed to trace and freeze “mule accounts”—bank accounts used by criminals to layer and launder illicit funds.
Expanding the Net
Recognizing the transnational nature of these crimes, the Supreme Court has directed the CBI to seek assistance from Interpol to apprehend perpetrators operating from offshore tax havens. Additionally, the Court has ordered:
- Telecom Accountability: The Department of Telecom must ensure service providers prevent the issuance of multiple SIM cards to single entities to curb their use in cybercrimes.
- Intermediary Cooperation: IT intermediaries have been directed to provide full cooperation and data to the CBI.
- Internal Complicity: The CBI has been tasked with probing bank officials suspected of colluding with fraudsters to facilitate mule accounts, with directions to register cases under the Prevention of Corruption Act.
The Attorney General assured the Court that all stakeholders would take appropriate decisions under his guidance and apprise the bench of the outcomes.
