Writ jurisdiction limits in crypto exchange disputes: private claims, factual controversies and investigative directions fell outside Article 226.

A private dispute arising from a cryptocurrency exchange cyber incident did not disclose enforceable public law rights merely because many investors were affected. The exchange was not treated as State or an instrumentality under Article 12, and the absence of a specific regulatory statute governing such exchanges meant writ jurisdiction could not be used to seek regulatory mandamus or directions for CBI/SIT investigation. Claims for release of funds and compensation also were not maintainable in writ proceedings because they depended on disputed factual questions about account balances, restrictions, loss, culpability and quantification, which require ordinary civil or other competent remedies.

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Issues: (i) Whether the dispute arising from the cryptocurrency exchange incident disclosed enforceable public law rights and justified a writ for regulatory directions or investigation by the CBI/SIT; (ii) Whether the prayers for release of funds and compensation could be entertained in writ jurisdiction despite disputed questions of fact.

Issue (i): Whether the dispute arising from the cryptocurrency exchange incident disclosed enforceable public law rights and justified a writ for regulatory directions or investigation by the CBI/SIT.

Analysis: The controversy was treated as a private commercial dispute between individual customers and a private exchange concerning a cyber incident, withdrawal restrictions, and alleged fund mismanagement. The mere fact that a large number of investors may have been affected did not convert the matter into one involving enforceable public law rights. The exchange entities were not found to be State or instrumentalities of the State within Article 12 of the Constitution of India, and taxation of virtual digital assets did not alter that position. In the absence of a specific regulatory statute governing such exchanges, writ jurisdiction could not be invoked merely because many investors were affected.

Conclusion: No writ relief was warranted for regulatory mandamus or for directing a CBI investigation or SIT investigation.

Issue (ii): Whether the prayers for release of funds and compensation could be entertained in writ jurisdiction despite disputed questions of fact.

Analysis: The request for release of funds and lifting of withdrawal restrictions would have required factual findings on the amount standing to the credit of each investor and on the nature of the restrictions imposed after the public statement. The claim for compensation required proof of loss, culpability, and quantification of liability. These matters involved disputed questions of fact and evidence, which are not amenable to summary adjudication under Article 226 of the Constitution of India. The available remedies lay before the civil court or other competent forum, and the pending criminal complaint and alternative civil or consumer remedies preserved the appellants' ability to seek redress.

Conclusion: The prayers for release of funds and compensation were not maintainable in writ proceedings.

Final Conclusion: The appeal failed because the grievances arose from a private commercial dispute and the reliefs sought required factual adjudication outside writ jurisdiction, leaving the appellants to pursue ordinary remedies in law.

Ratio Decidendi: Writ jurisdiction cannot be invoked to adjudicate a private commercial dispute involving disputed questions of fact or to seek monetary reliefs or investigative directions in the absence of enforceable public law elements and a statutory basis for such intervention.

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