Disclaimer:
All the names used and events described in this preposition are fictitious. Resemblance of any kind and magnitude to any names, persons, organizations or event whatsoever is purely coincidental. The counsels are expected to operate within the four walls of the facts and issues raised herein.
The laws of the Republic of India are applicable.
Facts of the Case
1. Abhishek Mehta, a businessman residing in Nagpur, Maharajya, maintained a primary business current account with National Union Bank, Nagpur Branch.
2. In March 2026, Abhishek received an urgent electronic communication from an email ID visually identical to the official domain of Apex Technologies Pvt. Ltd., a company with which Abhishek had an ongoing supply-chain contract. The communication contained a forged digital signature, informed Abhishek that the company's designated banking node had been updated due to compliance restructuring, and requested an immediate transfer of ₹2,50,00,000 towards a pending invoice.
3. Believing the communication and the attached digitally manipulated invoice to be genuine, Abhishek initiated a Real-Time Gross Settlement (RTGS) transfer of ₹2,50,00,000 to the newly provided account, which was maintained in the name of "S.K. Enterprises."
4. Seventy-two hours later, it was discovered that the communication was an elaborate phishing attack. The Cyber Cell investigation revealed that Rohit Sharma, a disgruntled former IT administrator of Apex Technologies Pvt. Ltd., had bypassed the company's firewall, spoofed the email domain, and routed the funds to S.K. Enterprises, a shell entity he controlled.
5. Within four hours of the funds hitting the S.K. Enterprises account, the ₹2,50,00,000 was layered and dispersed in multiple tranches across various independent bank accounts to break the financial trail.
6. Among the primary recipients were Shreya Verma, who received a direct transfer of ₹70,00,000, and Khanna Enterprises, a registered MSME, which received ₹60,00,000. The remaining funds were fragmented and sent to untraceable virtual wallets.
7. During interrogation, Shreya Verma claimed the ₹70,00,000 was legitimate payment from Rohit Sharma for a second-hand luxury imported SUV. She produced an unregistered, notarized sale agreement and a delivery receipt. However, the prosecution highlighted that the official Regional Transport Office (RTO) registration had not been transferred to Rohit, and the SUV was later found parked near Shreya’s own residence.
8. Khanna Enterprises claimed the ₹60,00,000 was an advance payment for a bulk consignment of high-performance of AI processing units (GPUs) supplied to S.K. Enterprises. While Khanna Enterprises produced proforma invoices, the State’s commercial tax department noted a lack of corresponding e-way bills or freight transport logs matching the alleged date of delivery, raising suspicions of a fabricated transaction
9. Both Shreya Verma and Khanna Enterprises vehemently denied any prior knowledge of Abhishek Mehta, the phishing operation, or the illicit origins of the funds, maintaining they were bona fide parties to commercial transactions.
10. The investigating agency argued that the unprecedented speed of the transfers, coupled with the incomplete documentation for the alleged underlying transactions, indicated a coordinated money laundering network designed to conceal the proceeds of the cyber-fraud.
11. Digital forensic analysis of Rohit Sharma’s seized devices revealed that Rohit, Shreya, and the proprietor of Khanna Enterprises were members of a closed, end-to-end encrypted messaging group. While the actual content of the messages could not be decrypted, the network metadata logs demonstrated a massive surge in data exchange between the three parties precisely two hours before and immediately after the ₹2,50,00,000 was defrauded from Abhishek Mehta.
12. Relying on the metadata and the financial trail, the investigating authorities issued orders under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), immediately freezing the entire bank accounts of Shreya Verma and Khanna Enterprises.
13. The freeze has remained in effect for nine consecutive months without the filing of a formal confiscation report. Shreya Verma contends the freeze has blocked her access to unrelated personal savings needed for a medical emergency. Khanna Enterprises argues that freezing the entity's primary operative account has paralyzed its entire supply chain, ruined its credit rating, and pushed the business to the brink of insolvency.
14. The investigating agency maintains that prolonged restriction under the BNSS is a proportional and necessary measure in complex cyber-financial investigations to prevent the dissipation of proceeds of crime and to dismantle the broader economic syndicate.
15. A consolidated criminal charge sheet was filed against Rohit Sharma, Shreya Verma, and Khanna Enterprises. The prosecution charged Rohit Sharma under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023 (BNS), and Section 66D of the Information Technology Act, 2000, for cheating by personation using computer resources. Shreya Verma and Khanna Enterprise were charged under Section 317(2) and Section 317(5) read with Section 61 of the BNS, 2023, for criminal conspiracy and dishonestly receiving or retaining property knowing or having reason to believe it was derived from a fraudulent offence.
16. The Trial Court convicted all three accused. It held that while direct evidence of the encrypted chats was absent, the metadata synchronicity, the rapid layering of funds, and the dubious nature of the commercial defenses created a complete chain of circumstantial evidence establishing their culpable mens rea.
17. Aggrieved, Shreya Verma and Khanna Enterprises preferred a criminal appeal before the High Court of Maharajya.
18. The High Court upheld the conviction, ruling that the doctrine of "reason to believe" under the BNS was satisfied by the objective suspicious circumstances of the transactions. The High Court also ruled that the continuous freezing of the bank accounts, while financially burdensome, was a lawful investigative necessity under the BNSS and did not cross the threshold of constitutional arbitrariness.
19. Exhausting their standard appellate remedies, Shreya Verma and Khanna Enterprises have now approached the Supreme Court of India. The Supreme Court has clubbed the petitions.
20. The Petitioners argue that digital metadata alone cannot bridge the gap between suspicion and beyond reasonable doubt, and that penalizing commercial entities based on post-facto tracing of funds sets a dangerous precedent for the economy. They further argue that an indefinite, blanket freeze of bank accounts constitutes an economic death penalty, violating the right to livelihood and property.
21. The State counters that cyber-enabled financial crimes require a modernized judicial approach to circumstantial evidence and that shielding "intermediary" recipients who provide a safe harbor for illicit funds would render anti-fraud statutes toothless.
Issues for Consideration
- Whether the petition is maintainable before the Hon’ble Court?
- Whether the reliance on encrypted communication metadata and rapid financial routing is sufficient to establish a criminal conspiracy and satisfy the standard of "beyond reasonable doubt" in the absence of decrypted textual evidence?
- Whether the Petitioners can be held liable for the dishonest receipt and retention of property under Section 317 of the Bharatiya Nyaya Sanhita, 2023, when the underlying commercial transactions are disputed but not conclusively proven to be fictitious?
- Whether the indefinite and blanket freezing of the Petitioners' bank accounts under Section 106 of the Bharatiya Nagarik Suraksha Sanhita, 2023, constitutes a disproportionate deprivation of property and livelihood, thereby violating Articles 14, 21, and 300A of the Constitution of India?
Note: Participating teams may frame one additional issue, provided the total number of issues does not exceed five.
