# Preowned Phone EMI Fraud: Legal Remedies in India > Bought a preowned phone on EMI and the seller plans to default? Know your FIR, consumer and civil remedies under BNS 2023 and how to stop a device lock. Source: https://sudhirrao.com/insights/preowned-phone-emi-fraud-legal-remedies Author: Sudhir Rao — Advocate, Supreme Court of India Category: Criminal Published: 2026-09-12 --- #### 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 preowned phone EMI fraud usually has two tracks running at once. The seller who resells a financed handset and then stops paying is exposed to a cheating case under Section 318 of the Bharatiya Nyaya Sanhita, 2023, and you can file an FIR. But the faster fix is a written complaint to the lender's nodal officer asking them to hold off on any remote lock until the police complaint is decided. Do both, and do them before the first missed instalment. In February 2025, Karan Malhotra bought a preowned iPhone 15 Pro Max on Quikr for ₹72,000. The handset was about six months old. The seller, Deepak Rathore, handed over the original invoice, which showed the phone had been bought on finance through Tata Capital. Karan asked specifically about the instalments. Rathore said, in plain words, that he would keep paying on time. Karan used it for a fortnight. Then he found a buyer of his own in Indore and sold it on. That's when the tone changed. When Karan checked in once more about the EMI, Rathore first offered to buy the handset back for ₹55,000. Karan refused. Rathore then said the phone could be locked remotely once he stopped paying, that he might cover another month or two, and that after that it wasn't his problem. Karan had the WhatsApp messages. He threatened a police complaint. The reply was a laugh and a line in Hindi roughly meaning "I've seen plenty like you, do what you want." By then the phone was in a third person's hands, and Karan was the one who would be chased. Sitting on it was not an option, so Karan approached the Chamber of Advocate Sudhir Rao. Until then, his own follow-ups with the lender and a local inquiry had gone nowhere. Advocate Sudhir Rao and his office moved on two fronts within days: a written complaint to the lender's nodal officer and a complaint at the cyber police station, with the invoice and chats annexed. The seller cleared the outstanding instalments after being called in for questioning, and the handset was never locked. The domain-specific handling made the difference. # Key Facts of the Case - The handset was bought new by the first buyer on a finance agreement with an NBFC; the loan was in his name alone. - Karan bought it second-hand and paid the full price, with the original invoice handed over. - The first buyer gave a clear oral assurance that he would keep paying the instalments. - He later resiled, admitted in writing that he might default, and offered to buy the phone back at a steep discount. - Karan had already resold the phone, so a default would have landed on a third, innocent buyer. - The WhatsApp messages were the strongest documentary proof of intention. - The lender, not the police, controls the remote device lock. That is why the nodal officer complaint mattered. # The Direct Legal Answer #### Should I go to the finance company first, or the police? Both, in that order on the same day. The finance company controls the lock and the instalment schedule. The police control the criminal liability. A written complaint to the lender's nodal officer, with the invoice and chats, usually gets you a ticket number and, in a decent number of cases, a hold on enforcement while a police complaint is live. #### Can the police act on a preowned phone EMI fraud complaint? Yes. Cheating under Section 318 of the BNS is a cognizable offence. Carry the chats, the invoice, the payment proof and a short written complaint. #### What if the seller simply refuses to pay? Then it becomes his criminal liability and your civil damages claim. His credit record is his problem; your phone is yours. #### What about the third buyer? He can sue Karan, or the seller, or both. Reselling early quietly worsens your position, which is why speed matters. # 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. Put everything in writing. A phone call to the lender leaves no record; an email to the nodal officer does. Send one to the seller too, setting out the assurance he gave and asking him to confirm the loan status. Don't resell a financed handset. If you already have, tell the third buyer in writing what's happening. That single message often decides whether you're a victim or a co-accused. Matters like this turn on procedural and evidentiary details that general practitioners often miss. The right notice wording, the right forum, and the order in which you file all affect the outcome. # Applicable Sections of Law The primary provision is Section 318 of the Bharatiya Nyaya Sanhita, 2023, which covers cheating. Where the deception induces delivery of property, Section 318(4) applies. Where it is simple cheating without delivery, Section 318(2). If two or more people were in on it from the start, Section 61 BNS, criminal conspiracy, comes into play. On the civil side, the Indian Contract Act, 1872 governs. Sections 18 and 19 deal with misrepresentation and the right to avoid an agreement induced by it. Order 39 Rule 1 of the Code of Civil Procedure, 1908 allows an injunction where property is in danger of being wrongfully dealt with. For the police route, the complaint is registered under the FIR provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023. # Punishment and Penalties Cheating under Section 318(4) BNS carries imprisonment up to seven years and a fine. This is cognizable and non-bailable. It is compoundable only with the permission of the court, so a private settlement needs judicial approval. Simple cheating under Section 318(2) BNS carries up to three years, or a fine, or both. That one is cognizable and bailable, and compoundable. Criminal conspiracy under Section 61 BNS attracts the same punishment as the offence that was the object of the conspiracy. In practice, which limb is applied depends on whether the handset and the money actually changed hands. # Jurisdiction — Where to File the Case For the criminal complaint, the police station with territorial jurisdiction is generally the one where the cheating took place, or where the loss was suffered. In Karan's case that could be Indore, where he paid and where he resold, or Bhopal, where the seller lived. Information about a cognizable offence can be given at any police station, and it is then forwarded to the station that has jurisdiction. If both places have a genuine link, the first station to register usually keeps it. For a civil suit for damages, Section 19 and Section 20 CPC allow you to sue where the defendant resides or works, or where the cause of action arose. Forum matters because it decides your travel, your cost and how fast the matter moves. # What if Police Refuse to File FIR? - Send a written complaint to the Superintendent of Police under Section 173(4) BNSS. Keep the dispatch proof. - If that produces nothing, file a private complaint before the Magistrate. The Magistrate can also direct an investigation under Section 175(3) BNSS. - Attach the chats, the invoice, the payment trail and your earlier complaint copies. A bare complaint gets closed fast. - As a last resort, move the High Court under Article 226 of the Constitution for a direction to register the FIR. Refusal at the counter is common. It is usually about workload, not about whether an offence exists. # Rights of the Accused If the seller is eventually questioned, the protections apply to him, not to you. Still, it helps to know them. - Protection against self-incrimination under Article **protection against self-incrimination** under Article 20(3) of the Constitution. No one can be compelled to be a witness against himself, and the protection covers compelled testimony — a voluntary statement is a different matter. - **Life and personal liberty** under Article 21, read with the safeguards laid down by the Supreme Court in *D.K. Basu v. State of West Bengal*. A memo of arrest attested by a witness, intimation to a relative, and a medical examination are part of that. - **Grounds of arrest** must be communicated. Article 22(1) gives the right to consult a lawyer of your choice, and Article 22(2) requires production before a Magistrate within twenty-four hours. - **Confessions** made to a police officer are not admissible in evidence. Only a Magistrate can record a confession, and it must be voluntary. A retracted confession is weighed by the court with care. - **Bail.** Cheating under Section 318(4) BNS is non-bailable, so bail is at the court's discretion. Simple cheating under Section 318(2) is bailable. - **Anticipatory bail** can be sought before arrest by anyone who has reason to fear arrest for a non-bailable offence. That application lies before the Sessions Court or the High Court. ## Can a Seller Be Arrested in a Preowned Phone EMI Fraud Case? Legally, yes. Cheating under Section 318(4) is a cognizable offence, which means the police can register a case and arrest without a warrant. Whether they actually will, in a matter that is essentially a document-heavy economic offence, is a different question. In most such cases the first step is a notice of appearance and questioning. In the matter described above, the seller was called in, and once the instalments were cleared the reason to press the lock disappeared. If you are the one being questioned — the reseller — remember that arrest is not automatic and that a lawyer can be present during interrogation. Nothing said at that stage should be said without one. ## Where This Kind of Case Often Fails I would be doing you no favour by pretending this is always a clean criminal case. Here is where it gets weak. - **Breach of a promise to pay is not, by itself, cheating.** The case turns on the seller's intention when he sold the phone. If he was paying the instalments after the sale and defaulted later because he lost income, the criminal case thins out and what remains is a civil recovery claim. - **Oral assurances are close to unprovable.** Unless the promise is in a message, it is one person's word against another's. - **Quick resale damages your own posture.** A defence lawyer will say you were a dealer who understood the loan risk and took a commercial chance. That does not sink the complaint, but it gets used. - **The lender runs its own track.** Buying and selling a financed handset does not move the loan to the new owner. The finance company's recovery action does not wait for your police complaint. - **We have one side of it.** The seller's version is not on record, and some of what looks damning in a chat can be explained away. On these facts there may be nothing to argue criminally if the seller's default was genuinely a later change of circumstances — but the lock, the dues and the resale problem still need sorting. ## What to Do, in Order - **Do not resell or hand over the handset further.** Every fresh transfer multiplies the people who can point at you. - **Write to the lender's nodal officer the same day.** Attach the original invoice, the loan account number if it appears on it, your purchase proof and the chats. Ask, in writing, for the current loan status and for enforcement to be held while a police complaint is live. - **File the police complaint.** A written complaint with the annexures, at the station with jurisdiction or the cyber police station if the sale and payment were online. Take an acknowledged copy. - **Message the seller in writing.** Set out the assurance he gave, the date, and ask him to confirm in reply whether the loan is current. Silence or a vague reply helps your record. - **Tell the third buyer in writing** what is happening and when. That single message is often the line between victim and co-accused. - **Keep every receipt** — courier slips, complaint acknowledgements, bank entries. Digital records get deleted. ![Original invoice of a financed handset along with WhatsApp chats attached to a preowned phone EMI fraud complaint](/images/preowned-phone-emi-fraud-invoice-and-chat-evidence.jpg) ## Costs and Timeline A police complaint costs you nothing except time and travel. Registration of an FIR for a cognizable offence is free. Where money goes is in legal fees, and those vary with the city, the forum and how contested the matter gets — ask for the fee in writing before you engage anyone. A civil suit for damages will run for years and the amount recoverable may be smaller than what you spend recovering it, which is why most people press the criminal track and the lender track instead. A cheating case at the trial stage typically runs well over a year, sometimes several. The realistic goal in the first fortnight is narrower: get the dues cleared or the lock held, and get your own position documented as that of a buyer who was deceived. ## Frequently Asked Questions ### The phone has already been locked remotely. Can I get it unlocked? Only the lender can unlock it. A police complaint by itself does not release a device. What usually works is the loan account being brought current — either by the original buyer or by whoever the police and the lender can reach — followed by a written request to the nodal officer. If the lender refuses despite the dues being clear, that refusal, in writing, becomes part of your record in any proceeding for damages. ### I bought the handset from a second buyer. What is my position? You are not a party to the finance agreement, so the lender cannot demand instalments from you. But the device can still be locked, and the loss falls on you. Your remedy runs against the person who sold it to you, and his remedy runs against the person who sold it to him. Keep the invoice and your payment proof even if the seller told you not to worry about it. ### Can I be arrested for reselling a financed handset? You can be pulled in if you sold it knowing the loan was unpaid and said nothing. If the buyer knew about the loan because you told him, in writing, that helps you a great deal. The lesson is dull but real: put the disclosure in a message before the money changes hands. ### Should I report this as a cyber crime? You can, and it is often quicker, because the chats and the payment are digital. Be clear in the complaint that the locking is done by the finance company, not by a hacker. If you describe a bank fraud instead of cheating by a seller, the complaint gets routed somewhere it does not belong. ### Can we settle it privately? Yes, and it is often the sensible end. Cheating under Section 318(4) BNS is compoundable, but only with the permission of the court once a case is registered. A settlement that clears the loan and records that the phone is no longer under any charge is worth more than a trial. ### How long does the seller's default stay on my record? It does not, because the loan was never in your name. What follows you is the police case, if one is registered against you, and any civil claim the third buyer files. That is the part worth spending on a lawyer for. ## Send This to Us If you are in this position, do not wait for the first missed instalment to sort itself out. Send the original invoice, the loan details if visible on it, the chat screenshots, your payment proof, and a two-line note saying where you bought the phone and where it is now. If a complaint or notice has already been issued, send that too, with its date and the police station or forum it came from. Write to [me@sudhirrao.com](mailto:me@sudhirrao.com), call [+91 97295 06771](tel:+919729506771), or use the [contact form](/contact-us). The chamber is at Lawyers' Chamber, Chamber No. 86, Supreme Court of India, New Delhi 110001. For family and matrimonial matters, Adv. Jyoti Rao (Bar Council of Delhi D/891/2023) handles those files. Criminal defence, cyber crime and economic offences are what this chamber works on. *This article is general information about Indian law and is not legal advice on your own situation. Outcomes depend on facts that only a review of your documents can establish.* *Advocate Sudhir Rao, Supreme Court of India* --- _This is the AI-readable Markdown version of an article published by the Chambers of Sudhir Rao. It is general legal information, not legal advice. Canonical page: https://sudhirrao.com/insights/preowned-phone-emi-fraud-legal-remedies_