Telangana High Court Refuses Challenge To Arrest Of Fino Payments Bank CEO In ₹840 Crore GST Case

The Telangana High Court has upheld the arrest of Fino Payments Bank CEO Rishi Nand Kishore Gupta in an alleged ₹840 crore GST evasion case, holding that the 24-hour safeguard under Article 22(2) of the Constitution was not violated and observing that his contention of being in custody prior to arrest did “not merit acceptance.”

Dismissing his writ petition, a Division Bench of Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin held that Gupta was produced before the Magistrate within 24 hours of his arrest.

The court further found that the grounds of arrest disclosed sufficient material showing his involvement in offences under Sections 132(1)(a) and 132(1)(i) of the CGST Act.

Gupta had approached the High Court seeking a declaration that his arrest by officers of the Directorate General of GST Intelligence (DGGI) was arbitrary, illegal, and violative of Articles 14, 19, 21 and 22(2) of the Constitution.

He also challenged the remand order dated March 1, 2026 passed by the Special Judge for Economic Offences, Hyderabad, and sought release on bail.

According to the petition, on February 26, 2026, around 12 GST officers entered the Mumbai office of Fino Payments Bank, instructed employees not to leave, and sought out Gupta. Officers allegedly entered his chamber at about 1:03 pm, later moved to a board room, and required him to remain with them. He was served summons under Section 70 of the CGST Act, and his statement was recorded from the evening until about 3:48 am on February 27.

Gupta contended that although the arrest memo recorded his arrest at 5:50 am on February 27, he had effectively been under restraint since the previous afternoon. On that basis, he argued that his production before the Additional Chief Judicial Magistrate, Esplanade, Mumbai, at 8:30 pm on February 27 was beyond the constitutionally permitted 24-hour period.

The respondents, however, pointed to a sequence of communications beginning January 2026 seeking merchant and transaction details relating to Oceanique Web Solutions Private Limited and Webwin IT Hub Solutions Private Limited, alleging repeated non-compliance.

According to the DGGI, authorisation for search was issued on February 26 under Section 67(2) of the CGST Act. The search concluded at 3:45 am on February 27, after which Gupta's statements were recorded. He was formally arrested at 5:50 am after the competent authority recorded reasons to believe his involvement in the alleged offences. He was thereafter medically examined and produced before the Additional Chief Judicial Magistrate, Esplanade, Mumbai, at 8:30 pm the same day.

Accepting this sequence, the High Court rejected Gupta's contention that his arrest commenced at 1:03 pm on February 26. The Bench noted that the officers had entered the premises pursuant to a valid search authorisation and summons, and that even on Gupta's own case, his statement continued until about 3:48 am on February 27, after which the grounds of arrest were handed over.

The court observed that the search concluded at 3:45 am and the arrest was effected at 5:50 am on February 27. On that basis, his production before the Magistrate later that evening was within the constitutionally mandated period.

The bench also found that the grounds of arrest disclosed sufficient material. It noted allegations that Fino Payments Bank had facilitated an organised syndicate operating illegal online gaming platforms through associated fintech entities, payment aggregators, gateways, and shell merchants, involving transactions of about Rs. 3,000 crore and estimated GST evasion of around Rs. 840 crore.

The grounds for arrest referred to the use of dummy programme managers and shell entities for routing funds, as well as the alleged failure to carry out inspections, audits, and risk monitoring despite contractual obligations.

Holding that these materials were sufficient to justify the arrest for cognizable and non-bailable offences under the CGST/SGST Act, the Court declined to interfere.

The bench also took note of the respondents' reliance on the Supreme Court's ruling in V. Senthil Balaji, observing that procedural safeguards applicable in ordinary cases do not operate in the same manner in economic offences. It added that the same principle would apply to Section 35(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Concluding that the petitioner had “failed to make out any grounds to interfere” and that no violation of Article 22(2) was established, the High Court dismissed the writ petition.