Mere Receipt Of Funds From Co-Accused Not 'Financing Illicit Trafficking': J&K&L High Court Grants Bail In NDPS Case

The Jammu & Kashmir and Ladakh High Court has granted bail to an accused charged under Section 27A of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), holding that mere receipt of funds from co-accused does not prima facie amount to financing of illicit trafficking unless there is material to show actual financing or harbouring within the meaning of the statute.

A bench of Justice Rajesh Sekhri observed that the statutory ingredients of Section 27A, financing illicit traffic and harbouring persons engaged in such activities, stand on different footing from mere involvement in sale or transportation of contraband captured under other provisions of the NDPS Act.

The petitioner along with co-accused Latif Ali and Sanjay Kumar was implicated in an NDPS case alleging involvement in sale and purchase of narcotic drugs.

A charge under Section 27A NDPS Act was also levied, which penalises anyone who finances, directly or indirectly, the activities specified in Section 2(viiib), or harbours any person engaged in such illicit activities.

The prosecution case was supported, in part, by the fact that certain amounts had been credited into the applicant's bank account by Latif Ali and Sanjay Kumar. However, neither physical recovery of contraband from the applicant's possession nor any direct material linking him to financing or harbouring activities was placed on record.

The Court recorded that no prima facie evidence existed to support the Section 27A charge against the applicant. The prosecution failed to show that the petitioner either provided funds to facilitate illicit trafficking or harboured any trafficker in the statutory sense.

Further, the contraband was recovered from co-accused Latif Ali's possession, and not from the applicant. Both Latif Ali and Sanjay Kumar had already been enlarged on bail by the trial court, and the prosecution had not sought cancellation of their bail to date.

The Court also noted that the applicant's involvement was anchored on statements made by a co-accused during custodial interrogation. Importantly, the Supreme Court in Tofan Singh v. State of Tamil Nadu (2021) 4 SCC 1 has held that confessional statements recorded under Section 67 NDPS Act by police officers are inadmissible at trial under Section 25 of the Evidence Act.

Further precedent, including the Supreme Court's decision in State by NCB v. Pallobid Ahmad Arimutta (2022), was discussed in context, underscoring that detailed examination of evidence is best left to the trial stage.

Taking note of the absence of prima facie evidence to sustain the Section 27A charge, and the lack of direct involvement of the applicant in the recovery of contraband, the High Court allowed the bail application.

Case-Title: Mazeed Ali vs UT of J&K, 2026

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