Digital Arrest Scams: Supreme Court Issues Directions For Prevention, Compensation & Grievance Redressal
Here's a case that mixes technology and law, real CLAT territory. So basically, scamsters have been posing as police on video calls and tricking people into handing over money, that is the digital arrest scam. The Supreme Court, with Chief Justice Surya Kant on the bench, has now stepped in with concrete directions. It has told the RBI to set up a standard procedure for banks, get grievance redressal and money restoration systems running, and asked for a framework on victim compensation. What this really means is the Court is using its writ powers to fix a gap the law had not addressed. Bottom line for the exam, remember Article 21 and consumer protection are both at play here.
The Supreme Court on Tuesday issued a series of directions to strengthen the prevention, investigation and redressal mechanisms relating to the growing menace of "digital arrest" scams, including directing the Reserve Bank of India (RBI) to adopt a standard operating procedure (SOP) for banks, operationalise grievance redressal and money restoration mechanisms, and asking an inter-departmental committee to examine a framework for shared liability and victim compensation.
A Bench comprisingChief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V Mohanapassed the directions inthe suo motu proceedingsconcerning digital arrest scams, after hearingAttorney General for India R Venkataramani, Solicitor General Tushar MehtaandAmicus Curiae Senior Advocate NS Nappinai.
Bench expresses satisfaction with reduction in cases, but stresses on continued vigilance
Taking note of the status report filed by the Indian Cyber Crime Coordination Centre (I4C), the Court recorded that restoration of defrauded money has been completed in 36,290 cases, involving an aggregate amount of ₹18.05 crore, with the participation of 57 banks and all States and Union Territories.
The Bench also noted the progress made by the Central Bureau of Investigation (CBI), observing that the agency has registered digital arrest cases and other connected matters, identified victims through transactions in 67 first-layer bank accounts, and carried out searches at 93 locations across 16 States.
The Court further recorded that an inter-departmental committee has requested the CBI to examine the feasibility of lowering the existing monetary threshold for taking over cyber fraud investigations and to consider cases involving the same organised network where the cumulative fraud exceeds the prescribed threshold.
While appreciating the progress achieved so far, the Bench observed that "the mechanism already put in place requires wide adoption, faster disposal and continued follow-up."
The Court directed the RBI to formally adopt and circulate, within four weeks, the Standard Operating Procedure prescribing the action to be taken by banks for placing temporary debit holds on accounts linked to cyber-enabled financial fraud.
The SOP, the Court said, must also incorporate:
The Court further directed the Registrars General of all High Courts to bring the grievance redressal mechanism to the notice of courts and adjudicating authorities dealing with freezing of bank accounts. Persons aggrieved by account freezing should be encouraged to first avail themselves of this mechanism.
The Supreme Court directed all States and Union Territories to notify and operationalise State Cyber Crime Coordination Centres within four weeks.
They were also directed to adopt the e-Zero FIR mechanism in consultation with the I4C, with the Ministry of Home Affairs (MHA) extending the necessary assistance.
The Bench additionally directed authorities to ensure expeditious disposal of matters relating to freezing of bank accounts arising from cyber-enabled financial frauds.
The Court instructed the inter-departmental committee to issue necessary advisories and directions to all States, Union Territories, Ministries and government departments to undertake extensive public awareness programmes on:
The committee was also directed to coordinate with banks regarding measures to prevent digital arrest scams, facilitate recovery of defrauded money, assist investigations and ensure compliance with applicable laws.
Recognising the need to strengthen victim protection, the Court directed the inter-departmental committee to examine the proposal for introducing a shared liability and victim compensation framework for victims of digital arrest scams.
The Bench also directed Legal Services Committees across the country to conduct public awareness initiatives on prevention of digital arrest scams, cyber crime awareness, cyber security and the mechanisms available for recovery of defrauded amounts.
The Supreme Court further directed the Inter-Departmental Committee to examine the proposal for reducing the existing monetary threshold for CBI investigation of cyber fraud cases. The Committee was also asked to consider whether cases involving the same organised network could be aggregated to satisfy the prescribed threshold for CBI intervention.
The Bench directed the Ministry of Electronics and Information Technology (MeitY), the Department of Telecommunications (DoT), and the Indian Cyber Crime Coordination Centre (I4C) to examine the proposal for introducing time-based restrictions on telecom services for audio and video calls. The authorities have been asked to place a brief note before the Court on the proposal's feasibility, utility and possible alternatives.
The matter will be next considered in September.
Case title – In Re: Victims of Digital Arrest Related to Forged Documents
Amisha Shrivastava is a Senior Correspondent with LiveLaw, covering the Supreme Court of India. She can be reached at amisha@livelaw.in