Judgment
[ 3488 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY THIRD DAY OF MARCH TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND THE HONOURABLE SRI JUSTICE G.M. MOHIUDDIN WRIT PETITION NO: 6657 OF 2026 Between:
1 Shri. Rishi Nand Kishore Gupta, S/o. Sri Nand Kishore Gupta, Aged 9Z ygars' Occ. MD and CEO FINO Pavments Bank Residing at- A 4701' 47th floor' nitretjlmperia, 1, 45 Shanklar Rao Naram Path, Lower Parel, Mumbai - 400013.
Roli Guota, W/o. Shri. Rishi Nand Kishore Gu Maker Residinq at A 4701 , 47th floor, Rahej Naram Path, Ldwer Parel, Mumbai - 400013.
AND 1. Union of lndia, Represented by its Secretary, Department of Revenue ftIinistrv. Finance North Block, New Delhi 110001 .
z. tne Oiiector General of GST lntelligence, Rep. by its Senior lntelligence - officer, i No lllz22ll, opposite to HDFC Bank' Hyderabad Zonal Unit, Begum Pet, Hyderabad- 500016.
...RES'ONDENTS 2 pta Aged 54 years, Occ. Home 'a lmperia, 1, 45 Shankar Rao ...PETITIONERS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or Direction, one more particularly in the nature or Writ of Mandamus a. Declaring the action of arrest of the Petitioner by the Respondent authorities, in file no F.NO.DGGI NT/ INTL/1 11 2O26-GR J initiated by the Respondent authorities, to be arbitrary, illegal, high-handed and violative of Article 14, 19' 21 and 22(2) of the Constitution of lndia and b. Declare the remand order dated 0110312026 passed by the Ld. Spl. Judge for Trial of Economic Offences Cases, Hyderabad as illegal and consequentially release the Petitioner on bail in the prosecution bearing file no F.No. DGGI/lNT/l NTL/1 1 /2026-GRJ.
lA NO: 1 OF 2026 Petitior under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondents authorities to release the Petitioner from the custody.
Counsel for the Petitioners: SRI Dr. ABHISHEK MANU SlNGHlVl, SENIOR COUNSEL FOR SRI S.ABHIJEETH REODY Counsel for tlre Respondent No.1: SRI B.NARSIMHA SHARMA, ADDL.
SOLICITOR GENERAL OF INDIA FOR SRI N.BHUJANGA RAO, Deputy Solicitor General of lndia Counsel for the Respondent No.2: SRI N.VENKATARAMAN, ADDL. SOLICITOR GENEFIAL OF TNDIA FOR SRI M.P.KASHYAP, SENIOR SC FOR CBIC The Court made the following: ORDER
J TN THE HIGI{ COURT FOR THE STATE OF TELANGANA AT HYDERAI]A TI{E HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND THE HON'BLE SRI JUSTTCE G.M.MOHIUDDIN WRIT PETITION No.6657 of 2026 Dated:21, .03.2026 - Between:
Shri Rishi Nand Kishore Gupta, S/o Sri Nand Kishore Gupta, Aged 57 years, Occupation: MD & CDO, FNO Payments Bank, Residing at A4701,47th Floor, Raheja Imperia, L,45, Shankar ltao Nararn Path. Lower Parel, Mumbei-400013, and another ...Petitioners and Union of tndia, rep. by its Secretary, Department of Revenue. Ministry of Finance, North Block, New Delhi I10001, and another.
...Respondents JUDGMENT (Ana h Kumar Sinsh. CJ):
Dr. Abhishek Manu Singhvi. learned Senior Counsel representing Mr. S.Abtrijeeth Reddy, Iearned counsel for the petitioners.
Mr. B.Narasimha Sharma, learned Additional Solicitor General of India. representing Mr. N.Bhujanga Rao, learned Deputy Solicitor General of [ndia appears l'or respondent No.l.
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4 NIr. N.Venkataranlan. leanred Additional Solicitor General ol' lndia (A.SGI). rcprescrlting Mr. M.P.Kash1'ap, learned Scnior Standing Counsel for Central Board of Indircct Taxcs and Custorns (CBIC) appears tbr respc,ndent No.2.
2.
Thc present u rit petition seeks a declaration thaL thc action of arrest c fl petitioncr No. I b.v the respondcnt authorities in File No.DGCI/INT/INTL llll2026-GR J is arbitrary, illegal, highhanded and violative of Articles 14. 19,21 and 22(2) of the Constitution of India: a declarati,rn that the rernand order dated 01.03.2026 passed by the learned Special Judgc flor l'rial o['Economic Offences Cases, I{yderabad is illegal and consequentially rclcase petitioner No.l on bail in connection rvith the said case.
3.
Ar; per the averrncnts rnade in the rvrit petition, the petitioner No.l is the founding membcr of M/s.Fino Payments Bank Limited. He was appointe<l as Chief, Opcrating Offrcer (COO) and Chief Financial Officer (CFO) o1'M/s.Fino Pay' '[ech Lirnited, holding company. lhe petitioner No.I claims to be in the banking industry for three decades. Currently he is headinlg Fino Payments Bank as Chief Executive Oflicer (CEO). He is the recipient of a nurnber of arvards and is activel], involved in industry forurns. f'etil.ioner No.l contends lhat he rvas arrestcd on 27.02.2026 by I
5 \ the olllcers of- the Directorate Cieneral of' Goods and Services Tax Intelligencc (DGGI) for the alleged offence comrnitted under Section 132(lXi) of the Central Goods and Services 'l'ax Act, 2017 (hereinafter ret-erred to as 'CGST Act') in relation to operating illegal online gaming rvebsites r,vith assistance of associated fintech companies, including payrllent bank/aggregator. payrnent gateway and third party technology services providers. The petitioners have questioned the arrest inter alia on the basis of the following facts and sequence ol'events.
4.
At about 12:39 pm on 26.02.2026, about 12 officers entered the officc ol'M/s.Fino Payments Bank and instructed the ernployees not to leave thc office. Tr.vo officers guarded the ofTice entry. They dernanded to see thc petitioner No.l. The respondents'team asked for petitioner No.l's charnber and at ab<lut l:03 pm, they barged into his chamber.
lmmediately thereafter, their team and other employees of the company came to the adjoining board roorn. Snapshots of the Closed-Circuit Television (CCTV) footage are annexed as Exhibit P.6. The said team sought infbrmation in relation to the list of merchants and their details.
Since petitioner No. I u'as not physically au'are of the said details, he immediately deputcd his team to assist the respondents' team. He waited in his cabin. At about 6:00 prn, vl'hile he r.vas ready to leave for home, the responderrts' teanr reiterated their directions to remain with thern and
6 t lJ served lhe sulntnons ullder Scction 70 of the CGST Act. l'he said sulntllons is annexed as l:xhibit I'.7. Pctitioner No.l tried to rcason rvith the resp,rndents' tearn that the said intbmration has already been provided by his tr3em erd he had no personal knorvledge about it, thc satne could bc recol'ded through a statetnent ol'the relevant/authorised entployee of M/s.Fino Payrnents Bank. Respondents refused to acccpt his request. The recording of the statemenL continucd till about 3:48 arn on 27.02.2026.
lmrnedi;ltely thereafter. the respondents' team handed over the grounds of arrest tc,petitioner No.l. The arrcst memo showcd the arrest at 5:50 am.
Petition,:r No.l's signature was taken on the grounds of arrcst aL 6;52 am, though:t was served at 6:00 am. The respondents'tealn left the premises of M/s.llino Payments lJank u'ith petitioner No.l at around 6:45 am on 27.02.2026 and thereafter he rvas brought to thc GS't Corntnissioner Office at Ballard Pier. Mumbai. rvhereafter he was produced before the learned Additional Chiel' Judicial Magistrate, Esplanade Court. Murnbai at 8:30 pm for transit remand. '[-hcreafter, petitioner No.l rvas produced before :.he learned Special Judge for Trial of Cases under Economic Offences, Hyderabad on 01.{)3.2026 and vt/as remanded to judicial custody. The petitioner No.l had sought a declaration that his arrest and remand is illegal and violative of his fundamental rights.
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7 5.
l.earned Scnior Counsel tbr thc petitioncrs has inter alia asserted that the petitioner No.l is the CEO o{'M/s.Fino Payments Bank, r.vhich is a'Bank As a Pal,rnent Agercgator'(llAPA) having 126 branches. It has 20.5 lakh merchants including HDFC. ICICI etc. The petitioner company has undertaken all the KYC requirenrenLs. l-he petitioner No.l has been arrested on the grclund that hc has not cooperated with the investigation.
He has masterminded the transactions u'ith shell entities thereby defrauded the Goods and Services 'I'ax. Lcarned Senior Counsel has relied upon the decision of the apex court in Niranjan Singh vs.
Prabhakar Rajaram Kharoter (para 7) in support of his contention that while he was in custody, he was undcr the ph1'sical control of an officer exercising coercive pow'ers rvithin thc meaning under Section 439 of the Code of Criminal Procedure. 1973. IIe has also referred to the decision rendered by the Bornbay l{igh Court in Hem Prabhakar Shah vs. State of Maharashtra2 (paras 15 and 27) on the same proposition that petitioner No.l's arrest comrllenced lrom l:03 prn on26.02.2026 when his right to move r.r,as restricted. Thc production of the petitioner No.l before the learncd Additional Chiel' Judicial Magistrate, Esplanade, Mumbai for obtaining transit remand at 8:30 pnl on 27.02.2026 is beyond 24 hours timeline. As such. thc arrest is illegal. Ilc relies upon the case of I lrstoy 2 scc 559 'zo2q SCC online SC 240 I I !
8 Hanumant Jagganath Nazirkar vs. State of Maharashtrar (paras 36.
37 and 38) to subrnit that the period durine r.r'hich he r.vas nredicalll' examined cannol be excluded fiom 24 hours pcriod nrandated fbr production ol' the arrested person. Learned Senior Counsel for the petitione,rs, therefore, submits that the irnpugned arrest he declared as illegal and the petitioner No.l rna1, be releascd on bail on tirrnishing bail bonds with surcties as this Court rnay deem flt and proper.
6.
A counter affidavit has been filed by the respondents. Learned Additional Solicitor General of India (ASGI) has taken this Court to thc chronological dates and events. A letter dated 19.01.2026 rvas issued to the authorised signature of M/s.Fino Payments Bank by the DGGI on thc subject c,f investigation with regard to GST cvasion by certain entities with a re,luest to provide dataldetails/docurnents pcrtaining to the entities.
namely I\4/s.Oceanique Web Solutions Prival.c Limited and M/s.Webrvin IT Hub iJolutions Private Limited. Since the said inforrnation w,as not provided till 25.01.2026, summons was issued to the authorised signatory on 09.02.2026. Still the required data was not supplied. Again data r.vas called for: vide letter dated 11.02.2026 in {urtherance to the voluntarv statement recorded on 09.02.2026 (Annexurc R.3) during the course ol' inspection. l-lorvever, the data was not submitted. 'I'hereforc. surnnlolts I II 'zOzs SCC,Jnl-inc Bom 2508
9 \\'as issued to thc petitioner No.l on his offlcial ernail address otl 14.02.2026 to provide inlbrmation and to appear belirre the Senior Intelligence Officer, Hyderabad Zonal Unit on 17.02.2026, at 12.30 pm.
I{owever, said data was not subrnitted. The sumrnons rvas again issued on petitioner No. I on 18.02.2026 on his of,ficial ernail address. Further ernail was sent on 23.02.2026 to the authorised signatory anlongst others to provide information and to appear in person on 25.02.2026. Since the petitioner No.l was not coopcrating. authorisation for scarch was issued on 26.02.2026 in Form CST INS-01 under Scction 67(2) of the CGST Act by the Additional Comrnissioner/Additional Director on the business/residential premises o[' petitioner No.l. On the same day, i-e., 26.02.2026, summons was issued upon the pctitioner No.l to appear before the Senior Intelligence Officer at 6.30 pm on the same day.
However, the answer given by, the petitioner No.l was evasive. Learned ASGI submits that the team ol- DGGI, there{bre. conducted a search on the premises of the companl, rvhich ended at 3:45 hours in the early nrorning on 27 .02.2026. The statements given by the petitioner No.l were evasive. Since he was not cooperatin*q with the invcstigation, and the evidence gathered during investigation shorved the involvement of the petitioner No.1 in an oraganized svndicate in operating illegal online t\ 1l I garning websites rvith the assistancc of associated fintech companies, a
r0 decision r.vas takcn to arrest thc pctitioner No.l. Ilc uas arrestcd at 5:50 arn on ')-7.02.2026. 'I'hc arrest mcrno \vas preparcd and signcd by the petitione:r on 27.02.2026. 'I'he petitioner was also cornrnunicated the grounds of arrest at 6:00 arn on 27.02.2026.'fhe intinration ol'arrest u,as comrnur.icated to the petitioner No.2, u'ile o[ pctitioncr No.l, on 27.02.2C,26. Thercafter petitioner No.l rvas producctl bctbre the Chiel Mcdical Oflicer. St. George Hospital, Mumbai on 27.02.2026. llc u'as under rnedical examination upto I l:45 am, and thercalier he u'as under medical examination at J.J.Hospital, Mumbai, upto (r.30 prn. A{ter his rnedical check-up, a transit remand application was rnade on 27.02.2026 belore the learned Additional Chief Judicial Magistrate. ['isplanade.
Mumbai. The petitioner No. [, who was arrested at 5:50 anl on 27.02.2026, was produced before the learned Additional Chicl' Judicial Magistra.te, Esplanade, Murnbai at 8:30 pm on 27.02.2026. rvithin 24 hours. Vide order dated 27.02.2026, 72 hours transit rcmand uas granted till 8:30 pm of 02.03.2026 by the said Court, lor production of the petitioner No.l before Lhe learned Special Judge for Trial o[ Cascs under Econom:c Offences, Hyderabad. Thereafter, he was produccd befclre the learned Special Judge for Trial of Cases under ljconornic Offlences, I{yderabad on 0l .03.2026 under Section 187(l ) of the Bharatil'a Nagarik , II SuraksheL Sanhita, 2023. The learned ASGI has rclbrrcd to the
il Panchanarna prepared upon search rvhich conclr-rded at 03:45 hours in the early hours of 27.02.2026. lt is submittcd that the specific averments rnade in the counter affidavit on these facts have remained untraversed by petitioner Nos.l and 2. Thereby they are deerned to have been admitted.
I-le submits that the arrest was preceded by search cum sulnmons upon the business/residential premises of the petitioner No.l. [t was only on account of his non-cooperation and evasive answers during recording of statements and that the competent authority after rccording his reasons to believe authorized his arrest. Learned ASGI turther subrnits that the Special Judge for Trial of Cases under Economic Offences, Hyderabad has accepted the request of the investigating agency to undertake custodial interrogation. [t is further subrnitted that thereafter summons have been issued on top three officials of M/s.Fino Pa1,'ments Bank to appear before the DGGI so that their statcrnents can be ,u*"n to confiont the petitioner No.l during custodial interrogation. Horvever, they have reflused to appear. It is further submitted that as per the data collccted by the DGGI, transactions of about Rs.10,000 crores have been found to be conducted without proper invoices. If the rate of tax on such transactions is computed, the amount of tax evasion discovered would coffle to about Its.2,800 crores. He has specitically referred to Section l4A of the CGST Act, as per which the petitioncr would be treatcd as sen'ice provider for { I
l \ all the persons rvhosc location is outside lndia. l-earned ASGI has reftrrcd to the judgrnent of thc apex court in V.Senthil Balaji vs. the State, rep. by Deputy Director{ rvhere case of economic oflcnces has been excluded under Section 35(3) of thc BNSS,2023. It is subrnitted that Lhe conrpetent authority has recorded sufficient grounds to arrest petitiont:r No.l based on cogent reasons which cannof be lbund fault rvith. Therelbre. there is no illegality in the arrest ol'the petitioner No.l intcnded {br carrying out effective investigation in case ol' a hugc fraudulent evasion o[ tax by the petitioner No. I company rvhich is thc rnain ag;lregator operating online gaming platform rvhere online garnin_u transacticns arc being performed through the platfonn provided by thc petitioner company. He has relied upon the Full Bench decision o{'thc Madras l-Iigh Court in Roshan Beevi vs. Joint Secretary to Governrnent of Tamil Nadus (para29).
7 - Lr:arned Scnior Counsel for the petitioners, in reply., subrnits that thc approach of the DGGI to frame the petitioner No.l on alleged grounds of non-cooperation is not tenable in law. I-le has re{'erred to emails d;rted 14115.02.2026 and 18.02.2026 where the trail nrail shou,s undclivel'ed trpon the petitioner No.l . He has also referred to the decision a Criminal Appeal Nos.2284-228-5 of 202i. dated 07.08.2023 t uaNUttt.y002g/lggl
li of Pankaj Bansal vs. Union o[ India6 (para 25). w'hcrein it has been held that mere non-cooperation of a witness in rcsponse to the sumtllons rvould not be enough to render him/her liable to be arrested under Section 19 of the Prevention of Money Launderin_q Act, 2002 (hereinaflter rcf'erred to as 'PMLA Act'). The respondents have failed to shou'as to how the replies given by the petitiorrer No.l were characteriscd as evaslve It is not expected of the invcstigatin-e, agency to expcct an adrnission of guilt from the person summoned and anything short of'such adrnission would be an 'evasive reply'. [n such circumstances, the u,trole edifice for framing the grounds of arrest is untenable in larv. It is submitted that the petitioner No. I has cooperated in providing data and information about the relevant active program rnanagers with contact numbers rvith whom the relevant queries can be made by the investigating team of DGGL 8.
Learned ASGI has further submitted that none of thc submissions in reply are borne from the averments made in the rvrit petitions nor any reply has been filed to the counter affidavit. He has rclerred to the summons dated 26.02.2026, which contains thc list ol'merchants. The petitioner No.l however completely evaded replies to specific queries made during recording of statements on summons. Since the arrest has ,l a ('Crirrrinal Appcal Nos.305 l-3052 of 2023, dated 03.10.202i
l+ becrr rrrirde at 5:i0 hours in the nrclrning ol'27.02.2026 aftcr the search currr sei.zure errdcd at 3:45 hours in the earll rnorning o{'27.02.2026,thc petitiont:r No.l has been produced for obtaining transit perrnit rvithin the period of 24 hours as per the provisions contained under Article 22(2) ol the Con:;titution of India. Therefore. the writ petition rnay be disrnissed 9.
$ie havc considered the submissions of learned counsel for the parties and takcn note of the matcrials placed on record. We have also perused .he decisions relied upon by them.
10. '['ire narration of dates and events as borne out from the pleadings on record indicates that the matter pertains to evasion of GST by M/s.Fino Paymcnl.s Bank. of which the petitioner No.l is the CEO. The company provides BAPA services. The evidence gathered during investigation pointed out to identification of an organized syndicate involved in opcrating illegal online gaming websites with the assistance of assoc,ated fintech companies, including payment bank/aggregator.
payment gate\\'ay and third party technology service providers. A letter, dated 19.01 .2026 was issued to the authorised signatory of the M/s.Fino Payments Bank to provide data/details/documents pertaining to the entities, narnell, M/s.Oceanique Web Solutions Private Limited and M/s.Web',vin I'l' I{ub Solutions Private Limited. Thereafter, sumrnons
l5 was issucd upon authorised signatory o['the company on 25.01.2026, followed by summons dated 09.02.2026 to give evidence and to produce documents/things of the description in his possession; to produce documents related to partner/resellers along with associated merchants and details of merchants likc KYC, e-rnail ids. contact dctails, address, GSTIN, ['AN and transaction volume details of each merchant and partner; to provide mapping of merchants rvith thcir respective reseller/partner and to depose statement. The statement of thc authorised signatory, i.e., Shri Anup Amar Agarwal, was recorded on 09.02.2026 Still the required data was not being supplied. Again data rvas called for vide letter dated 11.02.2026. Even after the statement recordcd on 09.02.2026, the required data was not submitted. Thereaflter, summons was issued upon the petitioner No.l on his offtcial ernail address on 14.02.2026 to provide inforrnation and to appear before the Senior lntelligence Officer on 17.02.2026, which the petitioner No.l disputes as having not received. Thereafter, another summons was issued on the petitioner No.l on 18.02.2026, which again he claims to have not received. I{owever, the documents of delivery failure have not been brought on record by way of any reply affrdavit. Further email rvas served on 23.O2.2026 to the authorised signatory to provide infonnation and to { { appear in person on25.02.2026. Thereafter, the authorisation for scarch
4 t6 was issur:d in [''onn GS'l'INS-01 undcr Section 67(2) olthe CGSI'Act on the business/residcntial prcmises ol' the cornpany h1 the Additional Cornmisl;ioner/Additional Director, DGGI recording his reasons to believe that goods or documents or othcr things relevant to the proceedings undcr the Act. A sumrnons was issued upon the petitioner No.l on 26.02.2026 to appear beforc the Senior Intelligence Officer at 6.30 pm on thc same da1'. It appears that thereafter a team of DGGI started to conduct search on the prernises of the company, which ended at 3.45 hours in the early rnorning on27.02.2026. In para 13 of the writ affidavit. a categorical statement has been made by petitioner No.l that the respondents initiated the process of recording of petitioner No.1's statement at 6.45 pm which continued till about 3.48 am on27.02.2026 and imr:ediately, thereafter the respondents handed over the grounds of arrest to the petitioner No.l. The arrest memo shows the arrest at 5.50 arn. The panchanama prepared upon the search also shows that it conclude<l at 3.45 hours in the early morning of 27.02.2026. Therefore, it is clear that after conclusion of the search at 3.45 hours in the early hours of 27.02.1t026 and recording of the statement of the petitioner No.1 till about 3.411 am on 27.02.2026, the petitioner r.vas put on arrest at 5.50 am on 27.02.2026. -fhe intirnation ol arrest was also sent to the petitioner No.2, rvh<, is thc u,ilb o[ petitioner No. I . The salne has also been received
l7 by her on the sarnc day. I{e rvas produced for uredical examination at St.
George l{ospital and then J.J.l{ospital. Mumbai. Therea[ter, he rvas produced bcfbre the learned Additional Chief Judicial Magistrate.
Esplanade. Murnbai at 8.30 pm for transit remand. Petitioncr No.l also made the said statement at para 14 of' the rvrit petition. However, it is contended on behalf of the petitioners that relying upon the judgment of Niranjan Singh (supra) that he was elfectively in custody since around 12.39 pm on 26.02.2026. As per paragraph 9 of the writ petition. the officers of DGGI entcred the office of the company at t2.30 pm on 26.02.2026 and after enquiring about him, entered the adjoining board roorn at 1.03 pm. Therefore, the petitioner was kept in duress by the investigating agency rvhich amounts to custody. However, the contention of the petitioner No.l does not merit acceptance since the ofhcials of the DGGI had entered the premises of the company on the basis of authorisation for search dated 26.02.2026 and also a summons o[ the same date upon the petitioner No.l to give statements to appear and give statement at 6.30 pm. The petitioner No.l also stated at para 13 ol'the writ affidavit that the recording of voluntary statement continued li'oui 6.45 pm on 26.02.2026 till 3.48 am on 27.02.2026. According to the petitioner No.1, thereafter he lvas handed over the grounds of arrest. -[hc search on the premises of the company concluded at 3.45 hours in ttre I
Iti early nrorning of 27.02.206. Therclbre, the contention of the petitioner No.l tl'at his lnovements \\'cre restricted arnounts to arrest frorn 1.03 prn on 2(t.32-2026 is not correct. Ilvcn acceptirlg the statement o{' thc petitioner No.l, if the arrest r.vas nrade alter 3.48 am on 27.02.2026,his production bcfore the learned Additional Chief Judicial Magistrate.
Esplanirde, Mumbai at 8.30 prn on 27.02.2026 for obtaining transit remand for his production before the learned Special .ludge for Trial of Cases trnder l:conomic Offences. I{yderabad was well within 24 hours period required under Article 22(2) of the Constitution of India. The respondents were granted transit pennit for 72 hours till 8.30 pm on 02.03.2')26 for his production befbre the learned Special Judge for Trial of Cases under Economic Offences. I-tyderabad. Thereafter, the petitioner No.l was produced before the lcarned Special Judge for Trial of Cases under llconomic Offences, Hydcrabad on 01.03.2026 under Section I 87( I ) rlf the BNSS, 2023. Learned Special Judge has thereafter granted custodie I interrogation of the petitioner No.l. The sequence of dates and events regarding the issuance of surnrnons upon the authorized signatory of the oompany, authorisation for search, surnmons dated 26.02.2026 upon tht: petitioner No. I and the consequent scarch on the premises of the compan / and recording of his staternent as stated in the counter affidavit have not been refuted by filing any reply affidavit. l-he reliance on the d
l9 .iudgrnent in Hem Prabhakar Shah (supra) is of no help to the petitioner No.l. Even as per the case of Hanumant Nazirkar (supra), including the period of medical examination at Mumbai, the petitioner No.l rvas produced before the learned Additional Chief Judicial Magistrate, Esplanade, Mumbai rnuch before the expiry of 24 hours period. I'he arrest memo also shows that the petitioner No.l was arrested at 5.50 arn on 27.02.2026. The petitioner No.l has also attested his signature on the arrest memo and receipt copy of it.
I l.
The authorisation of arrcst dated 27.02.2026 shows that on the basis of evidence gathered during the investigation the company was found involved in operating illegal online garning websites with the assistance of fintech companies including payrnent bank/aggregator, payrnent gateway and third party technology service providers of whorn the petitioner No.l is alleged to be the masterminded involved in the syndicate. An amount of Rs.3,000 crores approximately is involved. The tax involved is Rs.840 crores approximately. Therefore, the offence was committed by the petitioner No.I under Section 132(l)(a) and 132(lXi) of the CGST/SGST Act, 2017, which is cognizable and non-bailable offence, punishable rvith an imprisonment of a tenn that may extend upto 5 years and with fine. in terms of Section 132(5) of the said Act. Three ,c programme managers/rcsellers rvith whom the company was associated
l0 rvere lbund to be non-lunctioning and dutnttrl' during the process ol' investig;rtion. It allcges that the colllpany u'ith the assistance of these progralnrne managcrs/resellers opened bank accounts of large number of shell ertities for movement of rnoney frorn online gaming r.vithout payment of appropriate GST. As pcr the agrecment signed between the compan',' and its prograrnme managers/rcscllers, thc company was responsible for periodic inspections and audits ol its merchant for associatr:d risk rnonitoring. llowevcr, investigation revcaled that no such inspections or audits were conducted by the company to identifl, risky merchants or shell entities involved in online rnoney gaming syndicate which aJrpeared to be a systemic failure on the part of the company due to involvenrent of petitioner No.l, u,ho is the CEO of the company. in the online g,aming syndicate. His recent visits abroad including foreign jurisdiction from where online garning syndicate is operating, indicated his closr: association with the syndicate. Further, fbr onboarding of merchants, the Company has utilised the services of M/s.Adsum Advisorl' Services Private Limited, rvhich u'as found to be involved in online gaming syndicate. Based on the aforcsaid records the Additional Director General. DGGI, had reasons to believe that the petitioner No.l is the mastermind of online real money gaming racket involving several / shell entities and persons operating lrorn lbreign jurisdiction. He had
2t failcd to cooperatc in the ongoing investigation. 'l'herefore, the authorisation of arrest rvas issued 12. The grounds of arrest, u'hich is annexed to the arrest rnerlo, dated 27.02.2026, reads as under - Shri Rislri Cupta. CEO, M/s.Fino Payments Bank Limited is one of the masterminds involved in provision of online real tnoney gamin-t services s'ithout issuance of invoices through various gaming websites/rnobile apps and various shell entities under the disguise as mcrchatrt entities, program manager/resellers and evaded tax by not declarirrg the actual turnovers in the GST Returns of the rnerchant entilies.
- [n response to this office lener dated 19.01.2026 M/s.Fino Payments bank submitted invoices issued to two of the mercltants viz.. M/s.Oceanique Web Solutions Private Limited (in short 'M/s.Oceanique') and M/s.Webwin IT Hub Solutions Private Limited (in short'M/s.Webrvin' ).
- The entities ItvUs.Oceauique and M/s-Webrvin were verified and found to be non-existent and a Panchanama in this regard has been drawn on 05.01.2026. Further, it was found that the said entities were involved in routing of funds by establishing platforms involved in providing taxable services (online money garning) without issuance of invoices tlrrough the website/mobile apps l.
hft ps://funinrnatch360.corn/ and 2. Racejett.
- During inspection of [r,I/s.Fino Payments Bank Lirnited dated 09.02.2026 they have provided details of program managers/resellers working rvith M/s.Firto Payments Bank Limited.
Out of these, three resellers/program managers viz., M/s.PS Rao Digital Solutions (OPC) Private Lirnited, M/s.Billexpress Solutions Private Limited and M/s.Powerfin 'Iechnology Private Limited were found to be non operational/dummy entities established for routing of funds for online money gaming based on evidence obtained during proceedings.
- These program managers/resellers have onboarded around 36 shell entities through BAPA service of M/s.Fino Payments Bank Limited. Based on the evidences gathered it appears that they are involved in routing of money linked with online garning.
- Upon analysis ol' CSTRI of M/s.Fino Payments Bank Limited, based on the taxable valuc of services provided by
a1 \{/s.lrino Payrnents Eank l-irnitcd to thc atror''c said rrrerclrants :rrboardcd to M/s.Fino Payrrrents Bank Lirrrited throuqh thc tlrree ron-opcration eutitics nreutioncd above, it is noticcd tlrat the :axablc value is approximatel-r, Rs.28 crores during llre period .01.10.202i to 30.09.2025). lf the service fccs is assunred as 0.75% .hen the total amount received by those entitics rvill be .rpproxinrately Rs.3000 crores. Accordingll. the total amount of norrey routed through rnercharrts linked to tlre onlinc gaming :'esellers/program managers with M/s.Firro Pay,rnents l]arrk appears ,o be around 2500 crores. Evidence gathered during investigation lrcinted to identification of an organized syndicate involved ilr r)perating illegal online ganring websites rvith assistancr.r,e of irssociated fintech companies including payment bank/aqqregator, l)ayment gateway and third party technology servicc providers, '.r,herein Shri Rishi Gupta is one of the masterrninds involved in this :;yndicate and the amount of tax involved is approxinrately' Rs.840 orores (840 crores i.e., 28% of Rs.3,000 crores approx).
,\ccordingly. it appears that the offence conrnritted b_r, Shri Rishi (lupta attracts the provisions of Section 132(lXa) and l12(l)(i) of (IGST/SCST Act,2017 which caused huge loss to the Covernnrent l:xchcquer which is a cognizable and non-bailable offence and the :,ame is punishable with an imprisonment of a term that nray'exteud rrpto 5 years and with fine, in tenns of Sectiorr 132(5) of tlre said ,\ct.
- Three programme managers/resellers with whorn M/s.Fino I)ayments Bank was associated r.vere found to be non lirnctioning : nd dumrny during the process of investigation. Fino Pavment Bank rvith the assistance of these program managers/resellers routed lunds to large number of shell entities of online ganring without Jrayment of appropriate GST. As per the agreement signcd between I:ino Payments Bank and its program manager/resellers, M/s.Fino ['ayments Bank was responsible for periodic inspections and audits c,f its merchant for associated risk monitoring. However. they have failed in their duty and it appears to be a systcmic failure on part of lulls.Fino Payments Bank Limited in online gaming syndicate with irvolvement of top executive of the Bank i.e.. CEO.
- Evidence gathered during investigation pointed to i,Jentification of an organized syndicate involved in operating i legal online gaming websites with assistance of associated fintech cornpanies including payment aggregator, payment gatervay, third party service provider and technology service providers. rvherein Shri Rishi Gupta is one of the masterminds involved in this syndicate of Rs.3,000 crores and the amount of tax involved is t.s.840 crores approx (GST @28% on Rs.3000 crores approx).
/.ccordingly the offence committed by Shri Rishi Gupta attracts the provisions of Section 132(l)(a) and I32(l)(i) of the CGS'I-/SGST 1,ct- 2017. rvhich caused huge loss to the Government [:xchequer I
l3 which is a cogniz.able artd tton-bailablc t'll'ence and the santc is ptrnislrlrhlc uitlt utt itttpri:rtrttttettt tll'a tutrtr tltat tlta-r e'xtetrd upttl 5 ycars arttl rr itlt lirrc. itt tct'ttt. ol sccliott l-llt5) ol'tlrc' said Act.
13. '['he grounds ol'arrcst shou,s that thcrc were sufficient materials collected durirre. invcstigertion ihowing pctitioner No.l as tlne of thc lnastenninds involvecl in thc s) ndicatc causing tax cvasion of approxirnatelv Rs.840 crores (i.c.. 28% of tts.3,000 crores approximatell-) which attracl.ed the provisions ol'scctiotts 132(tXa) and 132(l)(i) of the CCST/SGSI' Act. 2017. rr,hiclr i: a crxlnizahlc trncl norr-bailable offence.
It furthcr indicatcs that thc contpan\ r.r,as lound to bc associated with non- functiclning and dutlttt-r prograut rrtartaqcrsri rcscllcrs. The company routed lunds to a largc nurnber ol'shcll errtities o['ortlittc garning without paytnenL of appropriatc GS'l'. lt is pcrtillcrlt to rc['cr to provisions ol' Section t4A of'the C(iSl'Act. uhich proridcs that the company would be treated as a service provider lbr all thc persons whose location is situated outside tndia. In V.Senthil llalaji (supra) relied trpon by the respondents. it r.r'as ohscrvcd that thc'rccluirctnent ol'Section 4lA of the Code of Criminal Proccdurc- l9l3 w'as rtot lneatll to apply to case involving cc()n()n'ric olll'rrccs. Ilrc sarttc o[rscrvalitln rvould apply to Section 35(3) of tlNSS.2023 i.c.. ccrtain categories ol'of,fences including economic ofl'ences like the prescnt one.
l-t 14. 'l'hcrcfirrc. \\'c arc ol'thc consiclcrctl opiniorr tlrat the petitioners have tailcd to rnake out arlv grouncls to intcrf'ere irr the mattcr. 'fhe allegatiorr of violation of'Article 22(,2) o{' thc Clonstitution ol- Inclia is not madc out. The grounds of arrest cornmunicated lcl thc petitigncr No.l.
shou's that sufficient material \\,crc collcctecl dr,rring investigation shclu'ing tlte involvcment of, petitioncr No.l in the oflcncc undcr Section 132( I ).a) and lll( I )(i) ol'thc CGS I S(;S I Acr. l0 t 7.
15. l'he rvrit pctiticlrr bcing 'uvithout rncrit. is. thcrcl'ore. disrnissed Therc rhall be no order as to costs.
\4iscel laneous applications pcnding. i [' an-v- shaI I stan<J closccl.
/TRUE COPYII One Fair Copy to THE HONOURABLE THE CHTEF J SD/. A.JAYASREE SISTANT REGISTRAR SECTION OFFICER S APARESH KUMAR STNGH (For His Lordships Kind AND r) One Fair Copy to the Hon'ble Sri Justice G.
.MOHIUDDIN To 1.
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PSK.
TKS (For His Lordships Kind perusal) 11 LR Cc,pies.
The Under Secretary, Union of lndia Ministry of Law, Justice and company Affairs, New Delhi.
The secr,:tary, Telangana Advocates Association Library, High court Buildings Hyderabad.
One CC tc SRI S.ABHTJEETH REDDy, Advocate [OpUC] one cc tc sRt N B^t-1yJ4\l9AR g,,,qefylls-o_tigrigr_Qenlerat of tndia [opUC] ONE CC t.r SRI IVI.P.KASHYAP, SENIOR Sb FON-CEICIOCUCI Two CD Copies .a+)
HIGH COURT DATED:2310312026 WP.No.6657 of 2026 E HES 1 2O ilflfrW * DISMISSING THE WRIT PETITION WITHOUT COSTS $*