Supree Court mandates SOPs, mechanisms to curb ‘digital arrests’, facilitate time-bound refunds
The Supreme Court, hearing a suo motu case on digital arrest scams, issued a set of nationwide directions to the Union government, State governments, the Reserve Bank of India (RBI), and telecom authorities
The RBI was directed to prepare and circulate, within four weeks, a Standard Operating Procedure (SOP) for banks to deal with "mule accounts" (accounts used to receive and layer fraud proceeds) and cyber-enabled financial fraud, including a mechanism for temporary debit holds, grievance redressal, and restoration of defrauded funds to victims
States and Union Territories that have not yet adopted the e-Zero FIR mechanism (already operational in 19 States) were directed to do so in consultation with the Indian Cyber Crime Coordination Centre (I4C)
The Ministry of Electronics and Information Technology, the Department of Telecommunications, and I4C were directed to examine, in consultation with telecom/platform intermediaries, a proposal for time-based restrictions on audio/video calls as a fraud-prevention measure
The matter was listed for a further status report on September 16, 2026
"Digital Arrest" Scams and Cyber Fraud Framework
A "digital arrest" scam is a form of cyber-enabled extortion where fraudsters impersonate law-enforcement or regulatory officials (police, CBI, Enforcement Directorate, Customs) over video calls, falsely claiming the victim is under investigation or "digital arrest," and coercing them into transferring money. It is prosecuted using provisions of the Bharatiya Nyaya Sanhita (BNS), 2023 (cheating, extortion, criminal intimidation, personation) read with Section 66D of the Information Technology Act, 2000 (cheating by personation using a computer resource), since there is no distinct dedicated offence titled "digital arrest" yet.
Key Details
- I4C, under the Ministry of Home Affairs, runs the National Cybercrime Reporting Portal and the 1930 helpline for reporting financial cyber fraud, and coordinates state cybercrime response
- The Supreme Court's suo motu case originated in October 2025, after a senior-citizen couple wrote to the Court about being defrauded of ₹1.5 crore by callers impersonating CBI, Intelligence Bureau, and judiciary officials
- The Bench (Chief Justice of India and two other judges) has separately flagged the need for a distinct statutory offence for digital arrest scams, with harsher punishment, to close gaps in existing cheating/extortion provisions
This order operationalises the Court's continuing suo motu proceedings by mandating time-bound institutional SOPs (RBI, telecom, states) rather than leaving fraud response to ad hoc police action.
Zero FIR and the Lalita Kumari Doctrine
"Zero FIR" allows a First Information Report to be registered at any police station regardless of where the offence occurred, with the case later transferred to the police station having territorial jurisdiction. It operationalises the constitutional-procedural guarantee that a cognizable offence cannot go unregistered merely on jurisdictional technicality, directly traceable to the Supreme Court's 2014 ruling in Lalita Kumari v. Government of Uttar Pradesh.
Key Details
- Lalita Kumari v. State of U.P. (2014) — a Constitution Bench held that registration of an FIR is mandatory under Section 154 CrPC (now Section 173 BNSS) when the information discloses a cognizable offence, with no discretion for a preliminary inquiry in such cases; any preliminary inquiry (where genuinely needed) must be completed within a maximum of 7 days
- "e-Zero FIR" digitises this process specifically for cyber financial fraud, allowing automatic FIR registration linked to complaints filed on the National Cybercrime Reporting Portal/1930 helpline, and was reported operational in 19 States as of this order
- The Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 (replacing the CrPC) carries forward the zero FIR principle in Section 173
The Court's direction to extend e-Zero FIR to all States/UTs builds directly on the Lalita Kumari mandatory-registration principle, aimed at removing jurisdictional delay as a barrier when cyber fraud victims report crimes.
Article 32 and the Supreme Court's Suo Motu / PIL Jurisdiction
Article 32 of the Constitution guarantees the right to move the Supreme Court directly for enforcement of Fundamental Rights, and empowers the Court to issue writs (habeas corpus, mandamus, certiorari, prohibition, quo warranto). Over time, the Court has expanded this into suo motu cognizance and continuing-mandamus supervision, where it registers a case on its own motion (as here, from citizen letters) and issues periodic time-bound directions to executive agencies until systemic compliance is achieved.
Key Details
- Article 32 has itself been held to be a Fundamental Right (part of Part III), described by Dr. B.R. Ambedkar as "the heart and soul of the Constitution"
- "Continuing mandamus" is a judicial innovation (seen in cases like the Vishaka guidelines, 1997, and various environmental PILs) where the Court retains seisin over a matter and monitors compliance through periodic status reports — the pattern followed here with the September 16 review date
- Digital arrest scams implicate personal liberty and dignity concerns bearing on Article 21 (protection of life and personal liberty), since victims are coerced through simulated confinement/threat of arrest
The Court's use of suo motu jurisdiction and a continuing-mandamus format (interim directions plus a further hearing date) allows it to compel coordinated executive action across RBI, MeitY, DoT, and State governments without waiting for fresh litigation.
RBI's Regulatory Role — Mule Accounts and Banking SOPs
"Mule accounts" are bank accounts (often opened using genuine but induced or stolen KYC credentials) used to receive, layer, and quickly withdraw fraud proceeds, breaking the money trail. The RBI's regulatory power to direct banks on fraud-risk management flows from the Banking Regulation Act, 1949 and the RBI Act, 1934, exercised through Master Directions.
Key Details
- The RBI already issues Master Directions on Know Your Customer (KYC) and Fraud Risk Management for banks and NBFCs; the Court's order requires a dedicated SOP specifically for cyber-fraud mule accounts within four weeks
- The SOP is to cover temporary debit holds on suspect accounts, a grievance redressal mechanism, and a process for restoration of defrauded funds — as of the hearing, States/UTs had cumulatively restored about ₹18.05 crore across roughly 36,290 cases
- On the telecom side, the Telecommunications (Radio Equipment Provision and Authorisation) Rules, 2025 have been notified and the Telecommunications (User Identification) Rules, 2025 are at final notification stage, under the Telecommunications Act, 2023 (which replaced the Indian Telegraph Act, 1885)
By fixing a four-week deadline for the RBI's mule-account SOP and tying it to telecom identification rules, the Court is knitting together the banking and telecom regulatory frameworks to close the loopholes fraud syndicates currently exploit.
- Suo motu case originated: October 2025 (senior-citizen couple defrauded of ₹1.5 crore, September 1–16, 2025)
- Bench: Chief Justice of India and two other judges of the Supreme Court
- RBI SOP deadline: within 4 weeks of the order
- e-Zero FIR mechanism: operational in 19 States as of the order; remaining States/UTs directed to adopt it via I4C
- Fraud restoration so far: ~₹18.05 crore restored across ~36,290 cases (cumulative, States/UTs)
- Telecommunications (Radio Equipment Provision and Authorisation) Rules, 2025: notified; Telecommunications (User Identification) Rules, 2025: at final notification stage
- Next status report before the Court: September 16, 2026
- Lalita Kumari v. State of U.P. (2014): Constitution Bench ruling mandating FIR registration for cognizable offences, capping preliminary inquiry at 7 days