PART A: DIGITAL EVIDENCE CHAIN OF CUSTODY

Definition: Under UNODC and NIST, chain of custody is "the process by which investigators preserve the crime scene and evidence throughout the life cycle of a case. It includes information about who collected the evidence, where and how it was collected, which individuals took possession, and when."

For digital evidence, it must show:
Collection → Preservation (hashing) → Extraction (forensic image E01/RAW) → Storage → Transfer → Production before Court

If any link missing, evidence is excluded even if true.

Technical Standard:

1. Secure original - write blocker
2. Forensic Acquisition - Bit-stream clone
3. Hash Verification - SHA-256 & MD5 at time of acquisition = single integrity anchor
4. Chain of Custody Form - Sealed physical & digital audit, who handled, when, purpose
5. Legal Documentation - Signed certificate

Indian Law - The 65B Regime:

Under Indian Evidence Act Section 65B (now Section 63 of Bharatiya Sakshya Adhiniyam, BSA 2023), electronic record is deemed document only if:

• Certificate under 65B(4) / 63(4) from person in charge of device
• Manner and time of storage, recording, copying must indicate authenticity - this requires clear chain of custody.

Chain of custody ensures that the recording has not been tampered with or altered. Party must demonstrate how recording was obtained, stored, handled.

PART B: RESERVE ACCOUNTS IN BANKING

Reserve Account is a ring-fenced account mandated by law/contract:

1. Payment Aggregator Escrow - RBI Mandated: Under RBI PA/PG Guidelines, payment aggregator must keep customer funds in escrow, not its own property. Cannot be attached for PA's own GST liability.
2. DSRA - Debt Service Reserve Account: 6 months loan repayment kept for desalination, infra projects
3. Fraud Provisioning Reserve: When bank classifies account as fraud under RBI Master Directions on Fraud 2016/2024, must provision 100%
4. Exchange Escrow for Buyback: Eg Cairn/Vedanta buyback - 2.5% of earmarked capital Rs 143.124 cr deposited in escrow

Key legal point: Escrow/Reserve funds of a payment aggregator are not its property.

PART C: HOW THEY INTERSECT - Reserve Account Ledger as Digital Evidence

When RBI or ED investigates:

• Bank statement of reserve account is digital evidence
• You need to prove chain: Core Banking System → Extract → Hash → 65B certificate from bank officer → Production in court
• If you cannot show who extracted ledger, when, hash value, court will reject it.

PART D: LANDMARK CASE LAWS

DIGITAL EVIDENCE CHAIN

1. Anvar P.V. v. P.K. Basheer (2014) 10 SCC 473 - Foundation
Supreme Court held Section 65B is mandatory. Electronic evidence without 65B certificate is inadmissible, even if oral evidence proves it. Overruled old practice of admitting CDs without certificate.

2. Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal (2020) 7 SCC 1 - 3-Judge Bench - Most Important for Chain

• Reaffirmed Anvar P.V. is the law. Certificate under 65B(4) is condition precedent to admissibility of secondary evidence of electronic record.
• No certificate required for primary evidence - if you produce original device (laptop/mobile with recording) through owner as witness.
• If person/authority refuses to give certificate, party can apply to Court for production under Evidence Act/CPC/CrPC - lex non cogit ad impossibilia - law does not compel impossible.
• This case is cited in every CCTV, CDR, WhatsApp, email case today.

Ratio for Chain: Court stressed source and chain of custody must be proven - alteration, fabrication must be ruled out. Hash + certificate = chain.

3. Tomaso Bruno & Anr v. State of UP (2015) - CCTV
SC acquitted because prosecution did not produce CCTV footage with 65B certificate and did not prove chain - who downloaded, how stored.

4. Shafhi Mohammad v. State of HP (2018) - Overruled
SC had said if person not in possession of device, 65B can be relaxed. Khotkar overruled this - no relaxation.

5. State of Karnataka v. T. Naseer @ Nasir (2023)
SC held electronic evidence including WhatsApp chats may be considered electronic evidence under 65B, but must be authenticated and chain of custody maintained - metadata, backup logs.

RESERVE / ESCROW ACCOUNT CHAIN

6. Bombay High Court - Section 83 Escrow Attachment Quashed - Payment Aggregator Case - Oct 22, 2026
Dept attached bank and RBI-mandated escrow accounts of payment aggregator under CGST Section 83 for alleged GST liability.
HC quashed attachment:

"Section 83 needs tangible material of person's own liability and necessity of attachment; suspicion is not enough, and escrow funds of a payment aggregator are not its property."

Principle: Reserve/escrow balance is held in fiduciary capacity. It is not attachable as debtor's asset. This is critical for digital evidence - you must prove escrow nature via trust deed + ledger chain.

7. Supreme Court - State Bank of India v. Amit Iron & Ors - Fraud Classification - 2026 + Rajesh Agarwal (2023)
Question: Does borrower get personal hearing before bank classifies account as fraud and debits fraud reserve?
SC held in Rajesh Agarwal (2023) - principles of natural justice apply, bank must give opportunity to show cause and provide Forensic Audit Report (FAR). In Amit Iron (2026) clarified no mandatory oral hearing, but reasoned order + disclosure of FAR mandatory. Borrower can challenge classification.

This impacts reserve accounts - once fraud classified, bank must create 100% provision reserve, and that accounting entry itself becomes digital evidence in CBI/ED prosecution - must maintain chain.

8. Vedanta Ltd (Cairn India) Buyback - Supreme Court on Escrow Release vs Fraud - 2024
SEBI alleged fraud in buyback despite escrow of Rs 143 cr. SAT said escrow release means no fraud. Supreme Court: Release of escrow amount is not equivalent to absence of fraud. Escrow is security, not clean chit.

9. UNODC Module 6 - Handling Digital Evidence - International Standard Cited by Indian Courts
Indian High Courts cite UNODC: Chain must show who collected, where, how, which individuals took possession, when.

PART E: How to Make Reserve Account Evidence Court-Proof

1. Daily ledger export with automated SHA-256 hash, stored in WORM storage
2. Designated officer for BSA Section 63 certificate - must state device was operating properly in ordinary course
3. Escrow Agreement clearly stating funds not property of PA
4. Maintain transfer log - CBS -> Data warehouse -> Forensic image -> Court
5. For payment aggregators, keep RBI escrow reconciliation - if you can't reconstruct every client's holding at any time, like Celsius case, court treats client money as yours.