Grave Economic Offence Alone Not Organised Crime Under Section 111 BNS | J&K HC Denies Bail In ₹53 Crore Cyber Fraud Case
Safiya Malik
The High Court of Jammu & Kashmir and Ladakh Single Bench of Justice Sanjay Dhar has dismissed bail petitions filed in connection with an extensive financial fraud case involving suspicious banking transactions aggregating more than Rs. 53 crores. The order, reserved on July 8, 2025, and pronounced on July 18, 2025, upheld the continued custody of the petitioners, citing the presence of significant prima facie material indicating their alleged involvement in financial offences under the Bharatiya Nyaya Sanhita (BNS), the Information Technology Act, and other statutory provisions.
The petitioners had challenged the rejection of their bail plea by the Principal Sessions Judge, Ganderbal, and sought relief under grounds including statutory default bail, insufficiency of allegations under Sections 111 and 316(5) of the BNS, procedural infirmities, medical conditions, and the absence of specific charges under the Prevention of Money Laundering Act (PMLA). However, the Court found that "there is prima facie material on record to show that the petitioners are involved in commission of offence under Section 316(5) of BNS read with Section 61 BNS". Given the seriousness of the charges, the ongoing investigation, and the stage of proceedings, the Court held that the petitioners are not entitled to bail at this juncture.
The case arose from an application lodged on April 13, 2025, with Police Station, Kangan, by one Firdous Ahmad Dar, alleging fraudulent inducement by petitioner Shahnawaz Ahmad Shah, an officer at J&K Bank, Branch Kangan. It was claimed that Shah persuaded Dar to invest in an online trading scheme under the name "@RSN" by promising high returns, and in the process obtained access to Dar's Aadhaar, PAN, and bank account credentials. Subsequently, Shah allegedly used Dar’s bank account for suspicious transactions.
Dar also transferred Rs. 5 lakhs to the bank account of Shah’s father, Ghulam Nabi Shah, upon assurance of immediate returns, which never materialized. The complainant alleged that his bank account was flagged and a lien was placed due to the nature of the transactions, further discovering that Shah’s sister Rumaisa Jan and her fiancé Dr. Aamir Bashir Magray were allegedly participants in the same scheme, targeting multiple locals with fraudulent investment offers.
FIR No. 28/2025 was registered under Section 318(4) of the BNS. Investigation began, with statements recorded under Sections 180 and 183 of the BNSS. Examination of bank accounts followed, including those held with J&K Bank, SBI, HDFC, PNB, and IndusInd Bank. Authorities uncovered cumulative credit and debit transactions exceeding Rs. 53 crores across accounts linked to the petitioners: Rs. 4.15 crores to Shahnawaz Ahmad Shah, Rs. 22.31 crores to Rumaisa Jan, Rs. 26.43 crores to Aamir Bashir Magray, and Rs. 24.10 crores to Ghulam Nabi Shah.
The Investigating Agency concluded that the petitioners had lured vulnerable individuals into a cyber fraud scheme by guaranteeing substantial returns via an unregistered online trading platform. Investigation also revealed that the accused operated in coordination: Shah as a banker, Magray and Rumaisa as partners, and Ghulam Nabi Shah as a conduit. The fake platform "@RSN" was found to be unregistered and unauthorized by any government authority.
The custody of the accused was transferred to the Cyber Police Station, Srinagar, on May 1, 2025, in relation to FIR No. 5/2025 under various provisions including Section 66-D of the IT Act and Sections 3(5), 61(1), 111(2), and 319(2) of the BNS. Petitioners secured bail in that FIR on May 17, 2025, and were subsequently remanded back in the present case.
The Agency also identified a land purchase worth Rs. 2.5 crores by Aamir Bashir Magray during 2023–24 and found evidence of numerous inter se financial transactions among the accused. It further submitted that Income Tax authorities were informed and that Section 4 of the PMLA would be invoked as investigations progress.
The Court recorded that the petitioners argued for default bail under Section 187(3) of BNSS, stating that the original offence under Section 318(4) carries a maximum of seven years' imprisonment. It was submitted that the subsequent inclusion of Sections 316(5) and 111 of the BNS was without adequate basis.
The Court noted that "if it is shown from the material on record of the Case Diary that the petitioners are not involved in offence under Section 111 of BNS or offence under Section 316(5) of BNS, they can claim default bail".
Examining Section 111, which relates to organized crime, the Court found that "there is nothing on record and not even an allegation emanating from the investigating agency that any chargesheet has ever been filed against the petitioners... nor there is any assertion that any court has taken cognizance of such offence". Thus, it held that "invocation of Section 111 of BNS against the petitioners by the Investigating Agency does not have any basis at all".
On Section 316(5), which covers criminal breach of trust by a banker, the Court found that Shah’s role as a Probationary Officer and his access to Dar’s account details constituted prima facie evidence. It recorded: "There is material on record to suggest that there have been huge financial transactions... and credits to the extent of more than Rs.53 crores have been made". The Court stated that "there is material on record to show that all the petitioners were working in concert and were part of the conspiracy", thus justifying invocation of Section 316(5) read with Section 61.
Given that Section 316(5) is punishable with life imprisonment, the Court held that the 60-day limit for default bail did not apply, as "the provisions of default bail... would get attracted only if the petitioners remain in custody beyond ninety days without filing of the charge sheet", which had not yet occurred.
The Court also examined the merits of the bail plea. It referred to the statements of 13 witnesses corroborating fraud allegations and noted that the "investigation... is still in progress and is nowhere near completion". The Court remarked: "the material on record collected by the Investigating Agency so far points towards a huge financial/cyber fraud that was being perpetrated by the petitioners in concert with others".
Addressing the contention that the accused were not provided grounds of arrest, the Court observed: "neither in the bail application nor in the petition... have they pleaded that they were not furnished with the grounds of arrest", thus rejecting the argument under Prabir Purkayastha’s precedent.
As for the medical grounds claimed by Shah and Jan, the Court found no current evidence of deterioration in health and concluded: "they are not entitled to bail on medical grounds as well".
The Court concluded that "petitioners are not entitled to bail at this stage". It held that "I do not find any merit in these petitions, as such, the same are dismissed along with connected CrlM(s)". No other relief was granted.
Advocates Representing the Parties:
For the Petitioners: Mr. Salih Pirzada, Advocate, with Mr. Aabid Hamid, Advocate; Mr. Areeb Kawoosa, Advocate, and Mr. Gagan Oswal, Advocate
For the Respondents: Mr. Waseem Gul, Government Advocate
Case Title: Aamir Bashir Magray & Ors. v. UT of J&K
Case Number: CRM(M) No.279/2025 c/w Bail App No.88/2025
Bench: Justice Sanjay Dhar
