The Allahabad High Court, Lucknow Bench, has granted bail to 70-year-old advocate Naresh Kumar Gupta in a Central Bureau of Investigation (CBI) corruption case arising out of allegations of an illegal settlement of CGST proceedings involving officials of the CGST Department, Jhansi.
The bench of Justice Subhash Vidyarthi has recorded a prima facie view that the private parties had not willingly approached the public servants to induce them to improperly perform their official duties. Instead, according to the allegations, the public servants had allegedly devised a conspiracy in which the private parties were entangled and subsequently compelled to pay money for settlement of the matters. The Court therefore observed that, prima facie, the case did not appear to be one of inducement by the private parties.
According to the prosecution case recorded in the High Court order, certain CGST officials in Jhansi were allegedly involved in corrupt activities in connivance with private persons and were allegedly demanding bribes for extending favourable treatment in tax-violation proceedings.
The applicant was an advocate representing some of the co-accused persons who were proprietors or connected with firms facing CGST proceedings. The prosecution alleged that he acted as a middleman between the private parties and the concerned CGST officials.
The FIR named seven persons initially, including Gupta. The allegations subsequently involved CGST officials Prabha Bhandari, IRS, Deputy Commissioner, and Superintendents Anil Kumar Tiwari and Ajay Sharma, along with persons connected with the firms under investigation.
The prosecution case relates to searches conducted on December 18, 2025, at the premises and godowns of M/s Jai Ambey Plywood and M/s Jai Durga Hardware.
During the searches, the authorities allegedly detected substantial undeclared stock and documents relating to suspected tax violations. The CBI alleged that the private parties thereafter attempted to settle the matter through Gupta, who allegedly contacted CGST Superintendent Anil Kumar Tiwari and offered to settle the matter in exchange for illegal gratification.
The investigation further alleged that the CGST proceedings were accompanied by irregularities in the preparation and custody of search-related documents. The charge-sheet referred to incomplete seizure documentation, blank columns in seizure memos and failure to record the number of pages of seized documents. It also alleged that the mandatory post-search report was not submitted within the prescribed period.
A significant allegation in the case was that the CGST officials allegedly demanded ₹1.5 crore for settling the tax proceedings.
The High Court order records the prosecution allegation that the officials had demanded ₹1.5 crore and that there was an attempt to reduce the tax liability to ₹50 lakh in exchange for the alleged payment. The prosecution further alleged that Prabha Bhandari insisted on the ₹1.5 crore amount.
The investigation alleged that ₹70 lakh was ultimately arranged for delivery. The prosecution case was that ₹30 lakh had already been delivered earlier and that further money was being arranged as part of the alleged settlement.
The order sets out the sequence of events leading to the recovery of the cash.
According to the search and trap proceedings described in the order, Raju Mangtani travelled to Gupta’s residence carrying a white cotton bag. The bag was subsequently placed in Gupta’s Baleno car. Gupta and Mangtani then proceeded to a Bikanerwala restaurant, where Ajay Sharma also arrived.
After leaving the restaurant, the vehicles moved towards another location. Gupta allegedly stopped his Baleno car, while Ajay Sharma arrived in another vehicle. The order states that Gupta took the white cotton bag from his car and placed it on the front co-driver seat of Ajay Sharma’s vehicle.
CBI officials then intercepted the vehicles and recovered the bag. Upon counting, the cash was found to be ₹69,94,000.
The CBI subsequently filed a charge-sheet on February 27, 2026, against eight accused persons, including two firms.
The accused named in the charge-sheet included Prabha Bhandari, Anil Kumar Tiwari, Ajay Sharma, Naresh Kumar Gupta, Rajendra Kumar Mangtani, Tejpal Mangtani, M/s Jai Ambe Plywood and M/s Jai Durga Hardware.
The charge-sheet alleged that Gupta acted as an intermediary between the public servants and representatives of the firms. It also alleged that the manner in which the search proceedings were conducted, including alleged deficiencies in seizure documentation and custody of seized material, was used as leverage during negotiations.
The prosecution also relied upon the alleged recovery of four sacks containing business records of the searched firms from a store near the garage at the residence of co-accused Anil Kumar Tiwari.
The High Court order records the allegation that three sacks and certain documents listed in the December 18 seizure list were missing from official custody. The CBI alleged that their recovery from a private residence indicated that seized material had been removed from official custody.
The charge-sheet alleged that these circumstances indicated misuse of official position and use of seized material during negotiations concerning the tax proceedings.
Appearing for Gupta, his counsel argued that he was a 70-year-old advocate with no criminal history and had remained in custody since December 31, 2025.
It was submitted that the investigation had already been completed and the charge-sheet had been filed on February 27, 2026. However, the trial court had not even taken cognizance of the offences by the time the bail application was considered. The defence also pointed out that the prosecution proposed to examine 47 named witnesses, besides unnamed witnesses, meaning that the trial was likely to take considerable time.
The defence further argued that no recovery had been made from Gupta, that he was not a partner in any of the firms and that he had not arranged the alleged bribe money.
It was also argued that Gupta was not a public servant and, therefore, the substantive offence under Section 7 of the Prevention of Corruption Act could not be made out against him.
The Court also considered several intercepted telephone conversations relied upon by the prosecution.
One conversation on December 19, 2025, concerned Gupta asking Raju Mangtani whether he had obtained the keys. Another conversation on December 26 contained a reference by Mangtani that “70” was ready. The Court noted that another conversation did not contain a reference to any demand or payment of money.
In a later conversation on December 29, Gupta allegedly asked Raju Mangtani to bring the entire amount in cash and stated that he would dispose of the matter within a day or two.
The CBI argued that the conversations had to be considered together with the surrounding conduct and alleged movement of the money. According to the prosecution, Raju Mangtani had taken the money from Tejpal Mangtani and handed it over to Gupta shortly before the alleged delivery to the public servants.
While considering the prosecution case, the High Court observed that the allegations indicated that Prabha Bhandari, Deputy Commissioner, had allegedly conspired with other officials and that the applicant advocate was alleged to have acted as a middleman.
The Court noted the prosecution allegation that the officials had deliberately committed illegalities during the raid and in preparing search and seizure documentation, followed by an alleged demand of ₹1.5 crore for settlement of the matter.
After considering the circumstances, the High Court held that the applicant had made out a case for enlargement on bail.
The Court particularly took into account that the advocate was 70 years old, had no criminal history, had been in jail since December 31, 2025, and that the investigation had already been completed. The Court also noted that the charge-sheet had been filed but cognizance had not yet been taken and that the trial had not commenced.
The Court also took note of the fact that co-accused Rajendra Kumar Mangtani alias Raju Mangtani had already been granted bail.
The High Court allowed the bail application and directed that Naresh Kumar Gupta be released on bail upon furnishing a personal bond and two sureties of the like amount to the satisfaction of the concerned Magistrate/Court.
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