BENGALURU — The Karnataka High Court directed state investigators Monday to place their evidence linking payment platform LegalPay to an alleged cyberfraud that used a fake wedding invitation sent through WhatsApp.
LegalPay is seeking to quash three criminal cases registered by Hulimavu police. The company argues that it acted only as an intermediary payment gateway and should not face criminal proceedings without material showing its participation in the alleged scheme.
Follow the money
According to the complaints, victims clicked a file presented as a marriage invitation and later lost a combined sum of about ₹12.5 lakh. Authorities allege that the transfers moved through the LegalPay gateway and named the company as an accused under the Information Technology Act and the Bharatiya Nyaya Sanhita.
Justice V. Srishananda ordered the state to identify the account in which the disputed funds are held and to put prima facie evidence of LegalPay’s involvement in writing. Counsel for the company said it would withdraw the petitions if the state showed that the full amount was credited to a LegalPay account.
The court also required a formal notification if the investigation is moved to a cybercrime unit, rejecting reliance on an oral transfer. It stressed that a charge sheet must identify the investigating officer and that officer’s authority.
The intermediary question
The next hearing is scheduled for Oct. 5. At this stage the court has not decided whether LegalPay participated in wrongdoing or whether the cases should be quashed.
The dispute illustrates the evidentiary line between a payment service used in a crime and a service provider that can legally be treated as part of the crime.
Use of a payment rail is not automatically participation
Digital fraud often moves money through a chain of banks, gateways, wallets and merchant accounts. Identifying that chain is essential, but the appearance of a company’s system in the flow does not by itself establish knowledge, intent or control over the fraud.
Investigators must determine who opened the relevant account, what verification was performed, where funds settled, whether alerts were triggered and what the intermediary did after complaints arrived. Those records can separate a neutral service from an entity that knowingly enabled or retained criminal proceeds.
The allegations under the technology statutes
Sections 66C and 66D of the Information Technology Act concern identity theft and cheating by personation using computer resources. Applying them to a corporate intermediary requires evidence connecting responsible people or company conduct to the prohibited acts, not merely proof that an accused fraudster used the platform.
The Bharatiya Nyaya Sanhita counts add conventional cheating and personation theories. Corporate attribution will depend on the statutory language, the role of individual officers and the material gathered during investigation.
Why the High Court asked for a written record
At the quashing stage, a court does not usually conduct a full trial. It can nevertheless ask whether the allegations and available material disclose an offense against the petitioner. Requiring the state to identify the account holding the money and produce prima facie material prevents the proceeding from resting on assertion alone.
LegalPay’s offer to withdraw if the funds are shown in its own account sharpens one factual issue, but even possession may not answer every element. A gateway may temporarily hold settlement funds; investigators would still need to establish the legal and operational context.
Authority to investigate
The demand for a formal transfer notification is an accountability measure. The officer who gathers evidence and files a final report must have lawful authority, and the charge sheet should allow a court to verify that authority.
By the Oct. 5 hearing, the state will be expected to present a clearer money trail and a procedurally valid investigative structure. The decision will influence how criminal law distinguishes infrastructure providers from participants as payment systems become embedded in nearly every online offense.
