Kunal Mehta Alias Goldee Vs State of U.P. (Allahabad High Court)
Prayagraj: The Allahabad High Court has rejected the bail applications filed by Kunal Mehta, also known as Goldee, in connection with cases involving the registration of fake GST firms. The court cited the gravity of the economic offence and relied on its own previous order in a related matter while denying relief to the applicant.
Kunal Mehta had sought bail in two separate cases registered under various sections of the Indian Penal Code, including charges of cheating, forgery, and criminal conspiracy, stemming from alleged fraudulent activities related to Goods and Services Tax (GST) registrations.
The applicant’s legal counsel argued that Kunal Mehta was not initially named in the First Information Report (FIR) and his involvement surfaced only through the confessional statement of a co-accused. The defence contended that such a confessional statement alone cannot be treated as conclusive evidence. It was also submitted that no incriminating material was recovered directly from the applicant, and he had no direct connection with the registration of the fake GST firms mentioned in the FIR and by other co-accused.
Highlighting the period the applicant has already spent in judicial custody since March 4, 2024, and noting that the charge sheet in the case had been filed on May 20, 2024, the defence invoked the principle that an accused should not be subjected to indefinite detention after the conclusion of the investigation. Reliance was placed on the Supreme Court judgment in Sanjay Chandra v. CBI, a case often cited in arguments for bail based on prolonged incarceration post-charge sheet filing.
The applicant’s counsel also informed the court that they were adopting the arguments previously made by counsel for other co-accused in a batch of related bail applications, which were decided by the Allahabad High Court in the case of Rajiv Jindal v. State of U.P. (Criminal Misc. Bail Application No. 53010 of 2023).
Conversely, the learned Additional Government Advocate (AGA) representing the State opposed the bail plea. The State submitted that documents directly linked to a specific fake GST firm were recovered from the applicant, indicating his active involvement in the fraudulent scheme designed to illegally obtain GST benefits through fabricated registrations.
The State’s counsel further emphasized that in cases concerning economic offences, the Supreme Court has consistently held that statements made by co-accused and confessional statements are relevant materials that courts must consider while evaluating a bail application. It was argued that the court is obligated to examine all material gathered during the investigation, irrespective of its eventual evidentiary value at trial, when deciding on bail for such serious offences.
The High Court, in its order, delved into the legal principles governing the admissibility of information received from an accused in police custody, particularly in light of Section 27 of the Indian Evidence Act, 1872. The court explained that Section 27 serves as a crucial exception to the general rule under Sections 25 and 26, which render confessions made to police officers or while in police custody inadmissible. Section 27 allows for the admission of specific information provided by an accused that directly leads to the discovery of a relevant fact. The court underscored, referencing the landmark Supreme Court judgments in Pulukuri Kotayya and others King Emperor and State of Uttar Pradesh v. Deoman Upadhyaya, that only that precise portion of the statement which distinctly relates to and leads to the discovery of a fact is admissible.
Applying this principle to the present case, the court noted that based on information provided by previously arrested co-accused, the investigating agency located an office premises and recovered vital materials such as laptops, mobile phones, SIM cards, and fake invoices. The court concluded that the discovery of these facts, stemming from information received, is admissible under Section 27 and connects individuals to the alleged forgery and GST evasion. This analysis countered the applicant’s argument that confessional statements were entirely devoid of evidential value for the purpose of bail consideration.
The court also reflected on the fundamental principle of “bail is the rule, jail is the exception,” acknowledging its importance in upholding personal liberty and the presumption of innocence. However, the court pointed out that this principle is not absolute and is subject to exceptions based on various factors, including the nature and gravity of the offence, the potential for the accused to abscond or tamper with evidence, and the risk posed to society.
Crucially, the court highlighted that economic offences, particularly those involving large-scale fraud, money laundering, and corruption, are viewed with severity because they significantly impact the economic stability and fabric of society. The court observed that the present case involved an alleged money trail amounting to crores of rupees, originating from the fraudulent registration of fake firms using stolen identity documents, thus affecting the public at large.
Referring to the related bail applications that were decided earlier, the High Court explicitly stated that the case of the present applicant was “squarely covered” by the detailed order passed on August 31, 2024, in Rajiv Jindal v. State of U.P., where bail had been denied to the co-accused.
Regarding the applicant’s reliance on the Sanjay Chandra judgment concerning the period of detention, the court distinguished its applicability. While acknowledging that the period of custody is a factor to be considered, the court indicated that in the context of serious economic offences, other factors, such as the nature and gravity of the alleged crime and the potential impact on the economy, can outweigh the duration of detention.
Based on the totality of the submissions, the nature of the accusations, the alleged role of the applicant, and significantly, in light of the detailed reasons recorded in the Rajiv Jindal order, the Allahabad High Court concluded that the applicant, Kunal Mehta alias Goldee, was not entitled to be released on bail. Accordingly, both bail applications were rejected by the court.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
