ORDER

18.08.2025

The batch of appeals have been filed under Section 26 of the Prevention of Money Laundering Act, 2002 (‘the Act of 2002’) challenging the order dated 26.12.2022 passed by the Adjudicating authority confirming the provisional attachment order. The impugned order was passed against multiple defendants before the Adjudicating Authority however the appeal has been filed by the appellant before us and accordingly, we would be dealing with the issues raised by him.

Brief facts of the case:

2. It is a case where 43 FIRs have been registered for the offences under the Indian Penal Code,1860 and Information Technology Act, 2000 (in short, the ‘the Act of 2000’). The Cybercrime PS, Rachakonda had registered 5 FIRs for offence under section 417, 419, 420 of the Indian Penal Code, 1860 (in short, ‘IPC’) and section 66-C, 66-D of the Act of 2000. Three accused were arrested on 26.12.2020 at the call centre office of one Jiya Lian Infotech Pvt. Ltd. which made agreements with companies namely Bienance Infrastructure Technology, Ajaya Solutions Private Limited and Taelde Technology Private Limited for providing tele-caller services for recovery of loan dues. Those companies were doing online instant loan lending business. It sanctioned personal unsecured loans to the borrowers through digital apps and provided customer data to M/s Jiya Lian Infotech Pvt. Ltd. The said company was calling the borrowers and threatening them to repay the loan on higher rate of interest. Laptops, desktops and network routers were procured from China to establish call centres and the employees were provided user-id, passwords and phone numbers to harass the borrowers.

3. A letter was received from Cyber Crime, Cyberabad wherein it was informed that Cybercrime PS, Gachibowli has registered 10 FIRs for the offences under IPC, 1860 and IT Act, 2000. In the search, it was found that Zixia Zhang, Director of Skyline Innovation technology India Pvt. Ltd and Mr. Arjun, Managing Director of Baryonyx Technologies Pvt. Ltd. were the mastermind of the offences. The further information was received that Cyber Crime, Hyderabad has registered 28 FIRs for the offence under the IPC, 1860 and IT Act, 2000 based on the similar complaints.

4. An ECIR was then recorded finding a case of money laundering. The proceeds of crime were generated out of scheduled offences.

5. Investigation was conducted and it was found that the applications through which loans were taken by the complainants were associated with NBFC (Non- Banking Finance Companies). The NBFC were approached by fintech companies (service providers) and offered to do lending business through mobile apps. As a result, NBFC entered into service agreement with the service providers to enable them into lending business in exchange of marginal profits. The personal data of the borrowers was misused by the service providers who threatened and harassed the borrowers.

6. The mobile applications were used to lend and recover the loans through merchant IDs with the payment gateways such as Paytm, Cashfree and Razorpay all pay-in and pay-out. The fintech companies/service providers misused the license issued to NBFC by the RBI and acted as de-facto NBFC. For each loan, 15-25% was deducted in the guise of processing charges. The complaints were lured into availing unsecured loans at high interest rates and processing charges. The NBFC was used for lending over and above, 5 times to limit of their Net owned Funds (NOF) in violation of the RBI regulations. The respondent has attached the bank accounts linked to the Merchant IDs to secure the proceeds of crime.

7. The appellant is a NBFC and allegations are that it had entered into service agreement without due diligence and further allowed the fintech companies to misuse the data of the borrowers. The fintech companies/ service providers took all the control of the lending business through mobile application and accessed vulnerable data of the borrowers to harass and charge exor