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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 PETITIONNO: 6657 OF 2026

Between:

1Shri. 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 PETITIONNo.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 (Anah 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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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

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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

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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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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

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lrstoy 2 scc 559

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SCC online SC 240

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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

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'zOzs

SCC,Jnl-inc Bom 2508

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\'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

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garning websites rvith the assistancc of associated fintech companies, a

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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

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SuraksheL Sanhita, 2023. The learned ASGI has rclbrrcd to the

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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

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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

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uaNUttt.y002g/lggl

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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

evaslveIt 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

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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

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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

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appear in person on25.02.2026. Thereafter, the authorisation for scarch

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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

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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.

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search on the premises of the company concluded at 3.45 hours in ttre

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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

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.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 companywas

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

SAPARESH KUMAR STNGH

(For His Lordships Kind

AND

r)

One Fair Copy to the Hon'ble Sri JusticeG..MOHIUDDIN

To

1.

2.

3.

4.

5.

6.

7.

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

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DATED:2310312026

WP.No.6657 of 2026

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