Legal Developments in Cyber Fraud Case
The Karnataka High Court has intervened to shield officials from LegalPay Technology Private Limited from arrest in an ongoing cyber fraud investigation. The case revolves around a deceptive ‘marriage invitation’ APK file, reportedly sent via WhatsApp, which led to the hacking of a recipient’s phone and the unauthorized transfer of nearly ₹4 lakh using LegalPay’s payment gateway [Kundan Kumar vs State of Karnataka].
High Court’s Directions
Justice R. Nataraj, presiding over a vacation bench, instructed law enforcement to continue their investigation into the matter while refraining from arresting any individuals associated with LegalPay. The court underscored that the ongoing inquiry should proceed lawfully, with a final report to be filed subsequently.
Petition by LegalPay’s Founder
The court’s order came in response to a petition by Kundan Kumar, the founder and director of LegalPay, who sought anticipatory bail after an earlier rejection by a trial court on May 13, 2026. Kumar argued his non-involvement in the creation or distribution of the fraudulent APK file and emphasized that the evidence against him was mainly electronic and documentary.
Legal Arguments Presented
Senior Advocate M.S. Shyam Sundar, representing Kumar, highlighted that LegalPay operates as a payment gateway similar to Paytm and BharatPe, lacking control over transactions conducted through its platform. Sundar informed the court that upon receiving the fraud complaint, LegalPay promptly cooperated with investigators by providing requested details about merchants and transactions.
State’s Position and Court’s Response
The State’s Government Pleader opposed Kumar’s plea, citing multiple complaints against LegalPay and advocating for a thorough investigation. The High Court Government Pleader (HCGP) even disclosed a personal loss of ₹10 lakh to a LegalPay-linked account, which remains under investigation.
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Despite these contentions, the court decided in favor of Kumar, preventing his arrest and that of any LegalPay affiliates until the investigation concludes. Justice Nataraj noted Kumar’s willingness to cooperate fully with the investigation, aiming for the reversal of the fraudulent transaction.
Broader Implications and Court’s Remarks
The court’s decision reiterated the need for careful handling of digital transactions. During the hearing, Justice Nataraj commented on the rising incidences of cyber fraud linked to smartphones, humorously advising against owning such devices for those unable to manage them safely.
In a lighter moment, Senior Counsel Shyam Sundar remarked on the ubiquitous presence of digital payment methods, noting that even street beggars now prefer digital transactions over cash.
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The case has been adjourned to resume after the court’s current vacation period.
