One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: A cybercrime complaint over a service refund dispute, where timelines were clearly disclosed and work was ongoing, is often a contractual dispute — not a criminal offence. Your written quotation, email approval, progress reports, and no-refund clause form a strong defence. Challenge the lien before the bank, respond to the legal notice, and if an FIR is filed, seek anticipatory bail and quashing before the High Court.
The client operated a small marketing agency in Nagpur, providing SEO and social media services. A travel company from Jaipur approached them after seeing results for another client. The client initially declined the project, explaining that SEO for a different state was challenging and suggesting a local agency instead.
But the Jaipur client insisted repeatedly — almost begged, the client said. The client made it clear that SEO takes 6-7 months for meaningful results. The client accepted the timeline via email. For three months, the Nagpur agency delivered monthly reports and remained fully responsive.
Then the Jaipur client demanded a full refund without warning. He refused any discussion. The next morning, he filed a cybercrime complaint through the online portal. The bank — Axis Bank — placed a lien on the disputed amount. He also sent a legal notice demanding a refund plus Rs. 1 lakh for alleged mental harassment.
The client initially tried contacting the Investigating Officer but got no response. That's when they approached the Chamber of Advocate Sudhir Rao. The office reviewed the email chain, the quotation, the no-refund clause, and the progress reports. Advocate Sudhir Rao and his team crafted a comprehensive response — addressing both the bank and the cybercrime authorities — demonstrating that this was purely a contractual dispute, not a criminal matter. The specialised handling in contractual-cum-cyber disputes, where procedural and evidentiary nuances matter greatly, helped secure a favourable resolution.
Key Facts of the Case
- Written quotation clearly stated SEO results would take 6-7 months.
- Client gave explicit email approval before work began.
- No-refund clause was included in the quotation if the project was terminated midway.
- Monthly progress reports proved ongoing work for three months.
- A website was being developed free of charge for the client.
- The cybercrime complaint was filed solely after a refund was refused — not based on fraud or misrepresentation.
- The bank placed a lien only on the disputed amount, not a full account freeze.
The Direct Legal Answer
Is this a genuine cybercrime or just a contractual dispute?
Make no mistake, this is a contractual dispute — not a criminal offence. Cheating under Section 318 of the Bharatiya Nyaya Sanhita, 2023 (BNS) requires dishonest intention from the start. Here, you disclosed the timeline upfront, the client approved, and you delivered work. There's no fraud. The cybercrime portal is often misused for such recovery tactics. The authorities should ideally close the complaint once the contractual nature is clear.
Can the bank lien be removed?
Yes. A lien under a cybercrime complaint is temporary — it's only during investigation. You must approach the Investigating Officer with your documentary evidence and request a written no-objection. If the IO remains unresponsive, file a representation before the Superintendent of Police. Alternatively, approach the court for removal of the lien. The bank cannot hold the amount indefinitely without a final order.
What about the legal notice demanding refund plus Rs. 1 lakh?
Send a detailed reply through your advocate, rejecting the demand and enclosing your evidence. The no-refund clause, email approval, and progress reports will show the demand is baseless. The claim of mental harassment is weak when the client knowingly accepted the timeline.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Preserve every email, quotation, and monthly report. Don't delete any communication. Respond formally to the legal notice — silence can be construed as admission. Also, file a complaint with the Cyber Crime portal against the client for misusing the platform for a civil recovery. This type of matter requires an advocate who regularly handles contractual disputes with cybercrime overtones — general practitioners may miss procedural steps like challenging the lien or quashing the FIR.
Applicable Sections of Law
- Section 318 BNS (Cheating) — This is what the client likely invoked. But it requires dishonest inducement from the start, which is absent here.
- Section 319 BNS (Cheating by personation) — Not applicable here as there is no impersonation.
- Indian Contract Act, 1872 — Sections 4, 7, 8, and 10 govern the validity of the email acceptance and the no-refund clause.
- Section 528 BNSS — High Court's inherent powers to quash an FIR if no prima facie case exists.
Punishment and Penalties
- Section 318 BNS: Imprisonment up to 7 years and fine. Non-bailable. Cognizable. Compoundable with court permission.
- Note: Since this is a contractual dispute, punishment is highly unlikely if the evidence shows no dishonest intention. The court may impose costs on the complainant for abuse of process.
- If quashing is obtained, no punishment applies.
Jurisdiction — Where to File the Case
- Criminal side: The complaint was filed in Jaipur (complainant's location). You can file a counter-complaint in Nagpur where your business operates.
- Civil side: The contractual dispute can be raised before the Civil Judge (Junior Division) in Nagpur or Jaipur depending on the contract's jurisdiction clause. If the disputed amount exceeds Rs. 10 lakh, it goes to the Senior Division.
- High Court: For quashing the FIR, approach the Rajasthan High Court (Jaipur bench) since the FIR is filed there.
- Jurisdiction matters because procedural rules differ — filing in the wrong court wastes time and money.
What if Police Refuse to File FIR?
- Here, the client already filed a cybercrime complaint — so refusal is not the issue. But if you want to file a counter-complaint and police refuse, take these steps:
- Approach the Superintendent of Police under Section 173(4) of BNSS.
- File a private complaint before the Magistrate under Section 175(3) BNSS.
- The Magistrate can order investigation under Section 175(3) BNSS.
- As a last resort, file a writ petition before the High Court.
Rights of the Accused
- Right to silence: Article 20(3) of the Constitution — you cannot be compelled to be a witness against yourself.
- Right to legal representation: Article 22(1) — you have the right to consult and be defended by a lawyer of your choice.
- Right to be produced before Magistrate: Within 24 hours of arrest under Article 22(2) — though arrest is unlikely here.
- Right to copy of FIR: You are entitled to a free copy immediately.
- Right to know grounds of arrest: Must be informed in writing.
Bail Provisions
- Section 318 BNS is non-bailable. But in practice, for a contractual dispute where no arrest is made, bail isn't the primary concern.
- Anticipatory bail under Section 482 BNSS: If the client's complaint escalates and arrest is threatened, apply to the Sessions Court or High Court for pre-arrest bail.
- Regular bail under Section 480/483 BNSS: If arrested, apply before the Magistrate or Sessions Court.
- Typical bail conditions: furnish a bond, surrender passport, and not tamper with evidence.
Quashing of FIR / Case
- Under Section 528 BNSS, the High Court can quash an FIR if no prima facie offence is made out.
- Grounds: The complaint is purely contractual; no dishonest intention at inception; parties have documentary evidence showing transparency.
- Quashing is a strong strategy here because the cybercrime complaint misuses the process for civil recovery.
- The High Court may impose costs on the complainant for filing a frivolous FIR.
If You Are the Victim
- File a counter-complaint on the National Cyber Crime Reporting Portal about misuse of the platform.
- Send a comprehensive legal reply to the notice through your advocate.
- Approach the bank with the IO's response (once obtained) to seek lien removal.
- Preserve all evidence — do not delete any emails or messages.
- Consider filing a civil suit for damages if the false complaint caused business loss.
Documents You Must Keep Ready
- Email chain showing the quotation, acceptance, and no-refund clause.
- Monthly progress reports (PDFs, screenshots).
- Bank statement showing the lien and the disputed amount.
- Copy of the legal notice from the client's advocate.
- Your response to the legal notice.
- Identity proof (Aadhaar/PAN) of your agency.
- Any call recordings or WhatsApp messages (if saved legally).
What Evidence Is Required?
- Primary evidence: Original emails with time stamps proving the client accepted the timeline.
- Documentary evidence: Quotation, invoices, progress reports, and the website development proof.
- Secondary evidence: Screenshots of calls or messages if primary records are unavailable.
- Witness evidence: Any team member who dealt with the client can provide an affidavit.
- Bank records: Statement showing payment and lien.
- Expert evidence: If needed, an SEO expert can certify that the work done aligns with industry standards.
How the Police Behave in Such Cases
- In cybercrime complaints, police typically treat the complainant as the victim and may not verify the contractual context initially.
- They often place a lien on the bank account as a standard precaution — without evaluating the defence.
- Once you produce documentary evidence showing a contractual dispute, the IO may close the complaint or issue a no-objection.
- If the IO is uncooperative, approach the SP or file a private complaint before the Magistrate to get the lien removed.
Timeline of Legal Process
- FIR stage: Filing to investigation — 30-60 days for initial report.
- Chargesheet: If the IO files a chargesheet (unlikely here), it takes 60-90 days.
- Cognizance: Magistrate takes 30-60 days to take cognizance.
- Framing of charges: 30 days after cognizance.
- Trial: 6-12 months for a simple case.
- Quashing petition: Filing to order — 3-6 months in High Court.
- Civil suit: Notice to decree — 12-18 months for contested matters.
How Long Will the Investigation Take?
- The cybercrime investigation typically takes 30-90 days. The IO will call both parties for statements. Since the evidence is clear, the IO may close the complaint quickly — often within 30-45 days. If the IO is unresponsive, escalate to senior officers.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
- Yes, if the client is willing. Since the dispute is contractual, mediation or Lok Adalat is ideal.
- You could offer a partial refund for the work not yet completed (pro-rata) if that resolves the matter.
- Section 89 CPC allows civil courts to refer disputes to mediation.
- Criminal cases under Section 318 BNS are compoundable with court permission — so if both parties agree, the FIR can be quashed on compromise.
- Settlement saves time and legal costs, but only if the terms are fair to you.
Common Mistakes People Make
- Deleting emails or messages thinking they are not important — this destroys crucial evidence.
- Engaging an advocate who does not regularly handle contractual-cum-cyber disputes. This area requires knowledge of both criminal procedure and contract law — general practitioners may miss the nuance of challenging the lien or quashing the FIR.
- Responding emotionally to the client or the IO without a lawyer — anything said can be used against you.
- Ignoring the legal notice — silence can lead to a default civil suit.
- Posting about the case on social media — this can prejudice your defence and annoy the court.
- Not filing a counter-complaint for misuse of the cybercrime portal.
FAQs People Normally Have
Can the client transfer the disputed amount to himself without my consent?
No. The lien only freezes the amount during investigation. The bank cannot release it to the complainant without a court order or the IO's written direction after investigation. You have time to present your defence.
Will I be arrested?
Unlikely. For a contractual dispute with documentary evidence, arrest is rare. But if the FIR alleges cheating under Section 318 BNS, it's non-bailable. Apply for anticipatory bail proactively if you sense risk.
How do I get the lien removed?
Approach the IO with your evidence and request a no-objection letter. Take that letter to the bank. If the IO is unresponsive, file a representation before the SP or approach the court for an order to lift the lien.
Should I refund the amount to avoid trouble?
Not without legal advice. Refunding may imply admission of wrongdoing. If the contractual position is strong, you can refuse and fight. But if the dispute is small and settlement saves costs, consider a pro-rata refund after consulting your advocate.
Can I sue the client for filing a false complaint?
Yes. You can file a counter-complaint for misuse of the cybercrime portal (Section 182, 211 BNS for false complaint) and a civil suit for damages caused by the false allegations. The court may impose costs on the complainant.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India
Facing a similar matter? Speak to a Delhi criminal defence lawyer — Advocate Sudhir Rao appears in bail, trial and appellate matters before the Delhi District Courts, the Delhi High Court and the Supreme Court of India.