Bombay High Court Declares Arrest Illegal in Deepfake Stock Market Fraud Case, Releases Petitioner on Bail

In a significant ruling emphasizing procedural safeguards in arrests, the Bombay High Court has declared the arrest of Chandrashekhar Bhimsen Naik unlawful due to non-compliance with Section 35 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. The court granted a writ of habeas corpus, ordering the petitioner's immediate release on bail. The decision, delivered by Justices Bharati Dangre and Shyam C. Chandak on December 3, 2025, underscores the mandatory nature of recording individualized reasons for arrests in cases punishable by up to seven years' imprisonment.

Case Background

The case stems from FIR No. 293/2025 registered on September 29, 2025, at the Cyber Police Station West Region, Mumbai. Complainant Prakash Gopichand Gaba, a SEBI-registered research analyst and stock market expert, discovered deepfake videos impersonating him promoting fraudulent stock market investments since June 2025. These videos, circulated on social media platforms like Facebook, Instagram, X, Telegram, and YouTube, allegedly defrauded investors.

The FIR invoked Sections 318(4), 319(2), 336(2), and 356(2) of the Bharatiya Nyaya Sanhita (BNS), 2023, along with Sections 66C and 66D of the Information Technology Act, 2000. Naik, Senior Vice President (Business Development) at Valueleaf Services (India) Pvt. Ltd.—a Bengaluru-based digital technology firm—was not named in the FIR. However, following the arrest of three company employees on October 9, 2025, police visited Naik's residence without prior notice under Section 35(3) BNSS. He cooperated with interrogation but was arrested at midnight on October 16, 2025, and remanded to police custody for four days, followed by judicial custody.

Naik's bail application was rejected by the Magistrate on October 31, 2025, leading to his continued detention at Taloja Central Jail. He then filed Writ Petition No. 5764 of 2025 seeking habeas corpus relief.

Arguments Presented

Petitioner's Contentions

Represented by Advocate Kushal Mor, Naik argued that his arrest violated fundamental rights under Articles 21 and 22 of the Constitution and Sections 35, 47, and 48 of BNSS. Key points included: - No prior notice under Section 35(3) BNSS, akin to Section 41A CrPC, despite offenses punishable by up to seven years. - Vague, generic reasons for arrest, mechanically copied from Section 35(1)(b)(ii) without case-specific facts. - Grounds of arrest under Section 47 BNSS were not individualized, failing to provide details enabling defense or bail. - The Magistrate mechanically remanded him without verifying legality, ignoring Apex Court directives.

Mor relied on precedents like Arnesh Kumar v. State of Bihar (2014) 8 SCC 273, stressing that arrests require recorded satisfaction of necessity (e.g., preventing further offenses or evidence tampering) and that Magistrates must scrutinize compliance.

Prosecution's Response

Additional Public Prosecutor Supriya Kak defended the arrest, citing case diaries and evidence like email communications and deleted WhatsApp messages. She alleged Naik's involvement surfaced from co-accused Deepayan Tapan Banerjee's interrogation: Naik instructed uploading fraudulent Facebook ads linked to Chinese clients, promoted deepfake videos, and contacted Firstbridge Hong Kong. Kak argued the arrest was necessary to prevent evidence destruction and ensure investigation, with the Magistrate confirming statutory safeguards.

Legal Precedents and Principles Applied

The court extensively referenced Supreme Court rulings to reinforce procedural protections against arbitrary arrests: - In Arnesh Kumar v. State of Bihar , the Apex Court mandated checklists for arrests under Section 41 CrPC (now Section 35 BNSS), prohibiting mechanical reproduction of statutory clauses. It directed Magistrates to verify compliance before remand, applicable to offenses up to seven years' imprisonment. - Satender Kumar Antil v. CBI (2022) 10 SCC 51 reiterated that non-compliance entitles the accused to bail, emphasizing presumption of innocence under Article 21. - Prabir Purkayastha v. State (NCT of Delhi) (2024) 8 SCC 254 and Gautam Navlakha v. NIA (2022) 13 SCC 542 highlighted that grounds of arrest must be specific and written, enabling effective defense. - Earlier cases like Jogindar Kumar v. State of U.P. (1994) 4 SCC 260 and Prem Shankar Shukla v. Delhi Administration (1980) 3 SCC 526 stressed individualized justification, distinguishing power from necessity.

The court distinguished quashing from habeas corpus, noting illegal arrests warrant immediate release, regardless of charge sheet filing. It criticized "template" reasons in multi-accused cases, holding arrests must be "accused-specific" to prevent group-based mechanical detentions.

Pivotal Excerpts from the Judgment

Justice Bharati Dangre, delivering the opinion, observed:
> "Arrest is an individualized act... Furnishing common or identical reasons for all accused... cannot be countenanced as the reasons for arrest cannot be copied, repeated mechanically or stated in collective terms."

On Magistrate's duty:
> "The Magistrate... is duty bound to review those reasons... and shall not mechanically approve the police request for detention but apply his mind."

Quoting Arnesh Kumar :
> "Arrest brings humiliation, curtails freedom and casts scars forever... The need for caution in exercising the drastic power of arrest has been emphasised time and again."

The checklist reasons were deemed "abject failure to make [them] specific qua the Petitioner," rendering the arrest illegal.

Court's Decision and Implications

The Bombay High Court ruled Naik's October 16, 2025, arrest illegal for lacking individualized reasons under Section 35(1)(b)(ii) BNSS and non-compliance with notice requirements. It made the habeas corpus petition absolute, directing Naik's release on a personal recognizance bond of Rs. 50,000 with sureties, subject to the Magistrate's satisfaction.

This ruling reinforces safeguards in cyber crimes involving deepfakes, where arrests (punishable up to seven years) cannot bypass procedural mandates. It serves as a caution to investigating agencies against "template arrests" in multi-accused probes, potentially reducing custodial abuses and promoting fair investigations. For legal professionals, it highlights the judiciary's role in upholding Article 22, ensuring arrests are necessity-driven, not routine.

The decision aligns with ongoing reforms under BNSS, urging stricter adherence to protect personal liberty amid rising digital frauds.