Case Explained: Karnataka High Court Refuses To Quash FIR By Businessman Duped Of ₹200 Crore By Fake SBI Site – Legal Perspective

The Karnataka High Court refused to quash a cheating and cybercrime FIR against four persons accused of duping a businessman of over Rs. 200 Crore by allegedly creating a fake State Bank of India website, hacking the actual bank website and obtaining OTPs terming the case akin to a “crime thriller”.

The court was hearing petitions filed by four accused persons challenging FIR registered for various offences including those under Sections 419(cheating by personation), 420(cheating), 465(forgery), 120B(criminal conspiracy), 34(common intention) IPC and Section 66D of the Information Technology Act.

The prosecution alleged that the complainant, a businessman, wanted to establish a sugar factory and was looking to raise loans for it. In October, 2017 the complainant visited a tile showroom at Indiranagar, Bengaluru owned by Vinay Agarwal wherein Agarwal allegedly arranged a meeting with Niyaz at a hotel. They both had assured the complainant that they would arrange for a loan of ₹225 crores.

Niyaz and Agarwal allegedly asked complainant to come to Chennai and meet with State Bank of India officials. Niyaz and his wife introduced the complainant to one Sebaratnam Jeevan and Krishnamurthy Balaji. All of them allegedly lured the complainant that they would get ₹225 crores from State Bank of India, Corporate Finance Branch and demanded a commission of 7% of the loan amount for getting the loan, to which the complainant agreed.

₹49 Lakhs was credited to the complainant’s account that was opened in State Bank of India on 04-01-2018. Another e-mail transaction alert came from the website of sbicf.co.in informing that ₹115 crores have been credited into the account of the complainant and thereafter ₹110 crores was shown to have been credited to the account of the complainant. The total available balance showed ₹225,49,00,000.

The complainant paid ₹7.15 crores to the accused persons which is 50% of the commission amount. The complainant thereafter went to the bank to check it physically and found out that he had been duped. Thereafter the FIR was registered.

Justice M Nagaprasanna in his order observed:

“The complaint itself is a document of striking detail. It narrates, step by step, how a fictitious banking edifice was erected to lull the complainant into a false sense of security; how a counterfeit digital infrastructure masquerading, as the State Bank of India was employed; and how the complainant was induced to part with enormous sums of money. The accused have created a website www.sbicf.co.in which was never in existence and generated one time password (OTP) to the mobile of the complainant or even Whatsapp messages. At one point in time, the complainant is said to have got a message from SBI that a sum of ₹225/- crores totally is credited to the account of the complainant…The facts obtaining in the case at hand clearly indicate a large scale cyber fraud…

The case at hand is akin to a crime thriller or a crime pot boiler. The accused/perpetrators of cybercrime have created a fake website of State Bank of India and have managed to hack the website of State Bank of India to generate OTP to make the complainant believe that he has, in fact, received the amount to his account; again, hacked the website of State Bank of India to show the balance in the account of the complainant as ₹225/- crores and secured the commission from the hands of the complainant at ₹7.15 crores“

The court said that the complainant lost ₹7.15 crores in the cybercrime episode, and he neither got ₹225 crores nor could he set up a sugar factory.

The court observed that this was a clear case where all the accused have come together to hatch a conspiracy to cheat the complainant. The court said that offences punishable under Sections 120B, 406, 419 and 420 IPC are clearly met, as the complainant is lured into parting an amount of ₹7.15 crores without a rupee coming into his account and the intention of the accused from the inception is to cheat the complainant.

The court noted that the complainant had claimed that upto 2020 he was called to Chennai for discussions about the remaining ₹8 crores commission that had to be paid and it is when the accused stopped picking up calls of the complainant, he got suspicion. The complainant explained that after March 2020 Covid-19 had engulfed the nation and no complaint could be registered immediately and, therefore, the FIR was registered in 2022.

Referring to the chargesheet the court said:

“The investigation has revealed not an isolated lapse, but a concerted conspiracy allegedly replicated across States involving the victim. The role attributed to each of the accused is neither vague nor incidental. The summary of the charge sheet painstakingly delineates the part played by each accused – from introduction and inducement to technological execution, to siphoning off and laundering of funds…In the present case, the allegations transcend the realm of mere breach of promise or failure of a commercial venture. They strike at the heart of public trust in banking systems and digital infrastructure. Creation of fake websites, impersonation of bank officials, fabrication of electronic communications are and can never be matters that can be brushed aside, as civil disputes or the transactions being purely civil in nature“.

With respect to offences pertaining to forgery–Sections 465, 467, 468 and 471 IPC, the court said that the same were also “undoubtedly met in the case at hand”.

It said that if in these cases indulgence is shown by quashing the FIR, it would amount to putting a premium on the cyber hacking by the accused.

“The accused are a cartel who have succeeded in cheating the complainant to the tune of ₹7.15 crores. Therefore, it is for the accused to come out clean in a full-blown trial,” the court added.

The court said that materials disclose a prima facie case and the court is not required to weigh evidence or pronounce upon guilt.

The pleas were dismissed.

Case title: SRI K. BALAJEE @ BALAJI SHA v/s STATE OF KARNATAKA and ANR.

CRIMINAL PETITION No.5539 OF 2024 and connected petitions

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