Archive · 29 Aug 2026
High Court Rules Digital Arrest Victim Must Repay Bank Loan
Shreya Tayal said scammers pretended to be a cybercrime officer and falsely accused her of money laundering.
They allegedly kept her under a fake “digital arrest” for three days.
During that time, she used money borrowed through her credit card to pay them.
After discovering the fraud, she filed a police complaint.
She then asked the court to stop the bank from recovering the loan.
The bank said it had checked the large transaction and that she had not reported any pressure or fraud.
The High Court said it sympathized with her but ruled that the borrowed money still had to be repaid.
It also said the bank could use revenue authorities to recover the amount.
The Madhya Pradesh High Court dismissed Shreya Tayal’s plea to stop bank loan recovery proceedings.
Tayal said fraudsters impersonating a cybercrime officer kept her under “digital arrest” for three days.
She used a credit-card loan facility to transfer money to the alleged scammers and later filed an FIR.
The bank said it verified the transaction and that Tayal did not disclose any coercion during a branch visit.
The court ruled that the alleged scam did not remove her loan liability and upheld recovery through revenue authorities.
- Who
- The Indore bench of the Madhya Pradesh High Court, petitioner Shreya Tayal, and the unnamed bank involved in the loan recovery case.
- What
- The court dismissed a petition seeking to stop recovery of a credit-card loan allegedly used in a digital arrest scam.
- When
- The article does not specify when the ruling was issued.
- Where
- The case was heard by the Indore bench of the Madhya Pradesh High Court in Madhya Pradesh.
- Why
- The court held that being allegedly defrauded did not, by itself, eliminate Tayal’s obligation to repay money advanced to her as a loan.
Borrower’s Position
Bank’s Position
Whether recovery should be paused
Borrower’s Position
Tayal sought to stop recovery proceedings until the FIR concerning the alleged fraudsters was resolved.
Bank’s Position
The bank opposed the request and maintained that it had the right to recover money advanced as a loan.
Transaction authorization and coercion
Borrower’s Position
Tayal said the payments were made while fraudsters had allegedly placed her under digital arrest and coerced her.
Bank’s Position
The bank said it verified the substantial transaction, contacted Tayal, and found that she consented to it; it also said she did not disclose coercion during a branch visit.
Validity of recovery proceedings
Borrower’s Position
Tayal challenged further recovery action after reporting the alleged cyber fraud.
Bank’s Position
The bank pursued recovery, and the court found no illegality or impropriety in proceedings through the revenue authorities.
- Petitioner
- Shreya Tayal
- Court
- Indore bench of the Madhya Pradesh High Court
- Alleged scam
- Fraudsters impersonated a cybercrime officer and accused Tayal of involvement in money laundering.
- Alleged confinement
- Tayal said she was kept under “digital arrest” for three days.
- Payment method
- She allegedly used a loan facility linked to her credit card to pay the fraudsters.
- Court’s ruling
- The alleged digital arrest scam did not by itself cancel her obligation to repay the loan.
- Recovery action
- The court upheld the bank’s use of recovery proceedings through revenue authorities.