By Dr Swati Jindal Garg
India’s democracy rests on three constitutional pillars—the Legislature, the Executive and the Judiciary—each designed to preserve the rule of law through a system of checks and balances. The Legislature enacts laws, the Executive implements them, and the Judiciary interprets and enforces them to prevent excess and ensure accountability.
But when legislative gaps collide with emerging public emergencies, the Judiciary sometimes steps beyond traditional adjudication. In doing so, it signals that an issue has outgrown individual grievance and entered the realm of national concern.
The alarming rise of “digital arrest” scams—a sophisticated form of cyber fraud in which citizens are coerced into believing they are under arrest by impersonated law enforcement officials—has prompted precisely such intervention from the Supreme Court.
THE MENACE OF “DIGITAL ARREST”
In these scams, victims receive calls or messages from individuals posing as police officers, CBI agents or cybercrime officials. They are told their identity has been linked to criminal activity—money laundering, drug trafficking or financial fraud—and that immediate payment is required for “verification,” “bail,” or to avoid arrest. Panic does the rest.
Overwhelmed and isolated, victims transfer large sums into unknown accounts. By the time the deception is uncovered, the funds have been siphoned through mule accounts, shell entities and, in some cases, insolvency proceedings that obscure recovery.
What makes digital arrest scams particularly insidious is not merely the technology involved, but the psychology. They weaponise fear of the state.
FROM COGNIZANCE TO NATIONAL COORDINATION
Recognising the scale and urgency of the crisis, the Supreme Court initiated suo motu proceedings in October 2025. By December, it ordered a pan-India probe by the Central Bureau of Investigation, acknowledging that fragmented state-level inquiries were insufficient to combat a borderless and technologically agile crime.
In February 2026, the Court escalated its intervention. A bench led by Chief Justice of India Surya Kant, along with Justice Joymalya Bagchi, directed the swift implementation of a Memorandum of Understanding (MoU) and a Standard Operating Protocol (SOP) to streamline coordination among banks, investigative agencies and regulators. The message was unequivocal: prevention, rapid response and recovery must replace institutional inertia.
BANKS UNDER THE SCANNER
The Court’s most pointed criticism was directed at banks. In unusually sharp observations, the CJI remarked: “These banks are becoming a liability. Banks should know that they are trustees of the money and they should not get over excited with it. That trust should not be broken.” This was more than judicial admonition. It was a doctrinal reminder that banking is rooted in fiduciary responsibility.
Several systemic weaknesses have come under scrutiny:
- Lax KYC Enforcement: Fraudsters routinely exploit weak verification processes to open mule accounts.
- Failure To Flag Suspicious Transactions: Unusual high-value transfers often escape timely intervention.
- Inadequate Due Diligence: The Court flagged instances where dubious entities secure loans and subsequently collapse into insolvency proceedings before tribunals, deepening systemic risk.
- By characterising banks as potential enablers rather than passive victims, the Court has reframed accountability in the digital era.
THE LEGAL ARCHITECTURE: MOU AND SOP
The newly endorsed framework seeks to institutionalise coordination:
- Memorandum Of Understanding (MoU): Facilitates seamless information-sharing between the Reserve Bank of India, the Ministry of Home Affairs, the CBI and state police forces.
- Standard Operating Protocol (SOP): Establishes clear procedural steps for freezing suspect accounts, tracing transactions, initiating recovery and ensuring swift inter-agency communication.
The Court’s insistence on expeditious implementation underscores a simple truth: protocols on paper must translate into action on the ground.
TRUST AS THE CORE CURRENCY
At the heart of this case lies a deeper constitutional principle—trust. Banks are not merely commercial entities; they are custodians of public wealth. The fiduciary relationship between citizen and institution forms the backbone of financial stability. When that trust erodes, the consequences extend beyond individual loss to systemic anxiety.
Digital arrest scams exploit precisely
this vulnerability. The Court’s intervention is, therefore, not only punitive, but restorative—aimed at rebuilding public confidence in financial institutions.
JUDICIAL ACTIVISM IN THE DIGITAL AGE
This case exemplifies the evolving role of the judiciary in a technologically transformed society. Traditionally reactive, courts are increasingly proactive in matters where dispersed victims lack the capacity to litigate.
Through its suo motu jurisdiction, the Supreme Court has positioned itself as a sentinel of digital rights and systemic accountability. This is judicial activism not as overreach, but as constitutional guardianship.
THE ROAD AHEAD
Implementation remains the real test.
- Cybercrime units require greater capacity and training.
- Cross-border financial trails demand international cooperation.
- Banks may resist tighter compliance burdens.
- Victims often hesitate to report fraud due to stigma or fear.
Sustained judicial monitoring will be critical to ensure that institutional reform does not stall.
CONCLUSION: A MIRROR TO THE DIGITAL REPUBLIC
The matter, titled In Re: Victims of Digital Arrest Related to Forged Documents, SMW (Crl.) 3/20/–, is more than a proceeding. It is a societal reckoning.
Digital arrest scams thrive on fear and institutional delay. The Supreme Court’s intervention seeks to replace fear with accountability, fragmentation with coordination, and erosion of trust with restoration.
This case is, ultimately, a mirror—reflecting the vulnerabilities of India’s digital society and compelling its institutions to respond with vigilance, responsibility and conscience.
—The author is an Advocate-on-Record practising in the Supreme Court, Delhi High Court and all district courts and tribunals in Delhi
