Online Financial Scams Erode Public Confidence In Online Transactions, Strike At Nation’s Financial Stability: Delhi High Court

Financial trap-laying scam conducted through online channels erodes the public's confidence in online financial transactions and strike at the heart of the nation's financial stability, the Delhi High Court has observed.

Justice Swarana Kanta Sharma thus refused anticipatory bail to an accused in an online financial scam case.

The complaint was registered under Section 420 IPC at P.S. Cyber South, alleging that the complainant had received a Whatsapp message offering part-time earning for giving ratings on Google. He was added to a Telegram group and induced to complete pre-paid tasks, on which he was to earn commissions and bonus. Initially, certain bonus/commission was paid, but later, the complainant was defrauded to the tune of Rs.7,99,850/-.

During investigation, it was revealed that the alleged cheated amount was transferred to a bank account in the name of “Sweet Valley Cottages”, of which the accused was beneficiary and sole proprietor. Reportedly, Rs.2.78 crores were received & transferred from this bank account in a single day and multiple cases found registered in its respect in different states.

APP for the State contended that the offence was of a serious nature, as the accused had sent messages to members of the public on large scale and laid traps for them to pay money.

On perusing the material on record, the Court noted that the accused had withdrawn Rs.5 lakhs in cash from the aforementioned account on the date of the alleged incident and did not join investigation.

It underlined that online financial scams erode public trust and have a cascading effect. “In an era where online transactions are the lifeblood of commerce, finance, and communication, any compromise in their integrity has severe repercussions for society as a whole”, the Court said.

Noting their propensity to faulter individuals’ faith in online financial activities, the Court also highlighted the impact of online scams on broader aspects such as financial inclusion. It was opined that such scams perpetuate a reluctance from online transactions and can impact financial growth.

"When this trust in online transactions is shaken, it leaves individuals wary and apprehensive, rendering them vulnerable to financial exploitation. As a result, the public becomes increasingly reluctant to engage in online financial activities, which can significantly impede economic growth, innovation, and financial inclusion."

Considering the nature and scale of the offence, as well as the fact that the alleged cheated amount was received in the bank account of the accused, the Court dismissed the anticipatory bail application.

Ms. Mohini Chauhan (proxy counsel) appeared for Petitioner

Mr. Manoj Pant, APP appeared for State

Case Title: Amit Sharma v. State

Citation: 2023 LiveLaw (Del) 979

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