A special investigation team (SIT) inquiring into a Bitcoin scam from the tenure of the BJP government in Karnataka has approached the Supreme Court against a high court decision to virtually grant anticipatory bail to a police officer under investigation.
Shridhar Pujar, an officer of the deputy superintendent rank, was granted anticipatory bail on May 2 by a single-judge bench of the Karnataka High Court despite the former not seeking the relief. He had instead asked for the quashing of two SIT cases against him and a magistrate’s proclamation order issued against him for evading investigations.
“In a case filed under section 482 of the CrPC (quashing of FIRs) by the police officer, the honourable court has issued orders that fall under section 438 of the CrPC (anticipatory bail). This order has been challenged in the Supreme Court,” an SIT official said.
The Karnataka government’s challenge to the order of Justice V Shrishananda was registered by the Supreme Court on May 15 and the matter is tentatively scheduled to be heard this week.
Earlier, a special court for CID cases in Bengaluru rejected DSP Shridhar Pujar’s bail plea on February 23 by stating that the Bitcoin scam case—involving police corruption in cases filed against international hacker Srikrishna alias Sriki, 29, in 2020-21—seemed prima facie like instances of a fence eating the crop.
“Investigating officer who had the duty to investigate the matters and bring the culprits to book, has used his investigating power to do illegal acts such as illegal detention of accused persons in the earlier case and hacking crypto wallets, websites, gaming apps etc, to make illegal gain,” the special court said while denying anticipatory bail to Poojar.
Subsequently, an FIR was registered against the officer for allegedly attacking SIT officials who attempted to arrest him, and a proclamation order was issued by a magistrate’s court against the officer for failing to cooperate with the investigation.
Karnataka HC order being challenged by SIT
The DSP-rank officer approached the high court for quashing the SIT FIR registered for alleged corruption in the Bitcoin scam investigation, the FIR for the alleged attack on SIT officials, and the proclamation order issued by a magistrate’s court.
On May 2, the high court quashed the magistrate court’s proclamation order against Pujar and asked the police officer to appear before the SIT on May 8.
“The attempts made by the petitioner to submit himself for the process of law by seeking an order of grant of anticipatory bail is turned down by the learned District & Session Judge and a Coordinate Bench of this Court… It is a settled principle of law and requires no emphasis that every accused is presumed to be innocent unless the allegations leveled against him stands proved before the court of law beyond all reasonable doubts. However, the prima-facie material would reveal that the petitioner is said to be involved in helping the accused in crime No.91/2020,” the single-judge bench observed in its order.
The bench, while asking Pujar to “join the investigation and cooperate with the investigation process,” also said the SIT could take him into judicial custody on May 8 for investigation but the police officer should be released at the end of the day.
“On conclusion of the custodial investigation, the petitioner shall be let free by taking a bond in a sum of Rs 2,00,000/- (Rupees Two Lakhs Only) with two sureties to the satisfaction of the Investigation Officer,” the high court ruled.
The police officer visited the CID SIT office on May 8 but was told to return when called again on account of the investigating officer being unwell.
SIT case against police officer
The DSP, a former Bengaluru crime branch inspector, three of his former crime branch colleagues and a cyber expert were named by a CID SIT in an FIR alleging illegal confinement, breach of trust by a public servant and destruction of evidence. It was filed on January 24 in connection with the crime branch’s handling of cases following hacker Srikrishna’s arrest in November 2020.
Srikrishna was arrested again by the SIT on May 6 in connection with the theft of 60.6 Bitcoin valued at Rs 1.14 crore in 2017 from a cryptocurrency exchange in Tumkur.
The other former crime branch officers accused of wrongdoing are inspectors Prashanth Babu, Chandradhar S R and Lakshmikanthaiah. The private cyber expert K S Santhosh Kumar, who assisted the probe in the hacker’s case, is the other accused.
The investigations in the case has found dozens of procedural lapses by the CCB in its probe against the hacker and his associates—including illegal detention, no documentation of the logins, passwords and data for the computer usage by the accused, and even the provision of a laptop worth Rs 60,000 by the police to Srikrishna to display his hacking skills in police custody.
The SIT has quizzed a senior police officer, Sandeep Patil, who headed the Bengaluru crime branch between 2020 and 2021 and was the supervisory officer in the cases against the hacker. The officer has appeared before the SIT on two occasions to provide clarifications on the investigation carried out against the hacker under his watch in 2020-21.
The SIT has found digital evidence to suggest that a large amount of Bitcoin from cloud wallets belonging to Srikrishna was transferred to hardware wallets while the hacker was in police custody.
The SIT investigations have also found digital traces to indicate that police officers used the services of private cyber and crypto experts to wipe out the digital access history of crypto wallets stored on cloud servers by hacker Srikrishna (while he was in the custody of the CCB police legally and illegally between November 2020 to January 2021).
The arrest of hacker Srikrishna and the SIT probe
Hacker Srikrishna and his accountant Robin Khandelwal were initially arrested by the crime branch officer Sridhar Pujar in November 2020 on charges of ordering drugs on the internet using Bitcoin.
The hacker’s arrest eventually led to the cracking of several cyber crimes in Karnataka including a Rs 11.5 crore heist from the Karnataka e-governance cell in July-August 2019.
The handling of the hacker’s cases by police under the BJP government after the arrests in November 2020 resulted in allegations of corruption by the Congress when it was in the Opposition, between 2020-2023. A CID SIT was constituted by the Congress government on June 30, 2023, after it came to power, to investigate the Bitcoin scam.
Srikishna has said in police statements part of chargesheets filed by the crime branch that he was forced to hand over all cryptocurrency in his possession to the police after he was held in their custody between November 2020 and January 2021.
The SIT has stated in court hearings that it is looking into the role of senior police officers in the Bitcoin-linked corruption scam that is alleged to have occurred between 2020-21.
The SIT informed the special court for CID cases in March that investigations were being conducted against senior police officers after it was argued on behalf of an arrested police officer that actions taken by him were on the instructions of a joint commissioner, a deputy commissioner and assistant commissioner who were a part of the Bengaluru crime branch in the 2020-21 period.
Three police officers of the rank of inspector and a private cyber expert have been arrested in the case so far by the SIT.
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