Punjab & Haryana High Court Denies Bail In 5,700 Kg Psychotropic Drugs Case, Says Corporate Licences Can't Shield NDPS Violations
The Punjab and Haryana High Court has dismissed eight connected regular bail petitions arising out of a massive seizure of over 1.37 crore psychotropic tablets, holding that the rigours of Section 37 of the NDPS Act are clearly attracted and that licensed pharmaceutical operations cannot, at this stage, dilute the gravity of organised diversion allegations.
Justice Sumeet Goel said, "The grant of bail, though discretionary, assumes a narrower compass where allegations pertain to organised diversion of regulated pharmaceutical substances into illicit channels under the guise of lawful business operations. Courts have consistently cautioned that entities operating within the pharmaceutical sector cannot be permitted to cloak unlawful activities behind the facade of licences or corporate structures, particularly where the allegations disclose large-scale commercial dealings capable of undermining the statutory framework of the NDPS Act. It is a settled principle that legality of form cannot defeat scrutiny of substance; the mere existence of licences or corporate entities does not, by itself, dispel a prima facie inference arising from surrounding circumstances."
In cases involving alleged diversion through layered business arrangements or intermediary entities, the Court is required to adopt a cautious approach, as complex offences pertaining to narcotics, often employ structured transactions or shell arrangements to distance principal actors from the physical recovery of contraband, it added.
Commercial Sophistication Cant Become Shield
The Court pointed that submission that the petitioners were operating through licensed entities or formal commercial channels, therefore, cannot be accepted at face value at this stage, particularly when the magnitude of the alleged recovery indicates a coordinated supply chain extending beyond isolated transactions. "Commercial sophistication cannot be permitted to become a shield against criminal accountability."
The petitions were filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 seeking regular bail in NCB Crime Case No. 51 dated 08.12.2024, registered under Sections 8, 22, 25, 27-A, 29, 35, 54 and 60 of the Narcotic Drugs and Psychotropic Substances Act, 1985.
As per the case of the Narcotics Control Bureau, the complaint pertains to recovery of a commercial quantity of contraband — 1,37,11,610 tablets weighing 5772.584 kg (including strips) — containing Alprazolam, Tramadol and Zolpidem Tartrate.
Senior counsel for the lead petitioner contended that the petitioner had been in custody since May 2025, mandatory provisions of the NDPS Act were not complied with and investigation stood complete and challan had been presented.
Out of 50 cited prosecution witnesses, none had been examined, the petitioner was a director of IKON Pharmachem Private Limited, a duly licensed pharmaceutical company operating under the Drugs and Cosmetics Rules, 1945;
All sales were effected to licensed distributors, including Embit Bio Medix and Section 37 NDPS Act was not attracted as no illegal sale was made.
Other petitioners similarly argued that they were licensed dealers or proprietors of pharmaceutical entities, were falsely implicated on the basis of disclosure statements of co-accused, and that no direct recovery had been effected from them. It was further submitted that nothing remained to be recovered and prolonged incarceration would serve no purpose.
Opposing the bail pleas, the NCB argued that the recovery involved huge commercial quantity, several petitioners were implicated through disclosure statements and subsequent recoveries and large quantities of psychotropic tablets were recovered during searches conducted on the basis of secret information. Some accused admitted to procuring and distributing psychotropic medicines through specific medical stores and Section 37 NDPS Act squarely barred grant of bail, it added.
The Court reiterated that while grant of bail is discretionary, such discretion must be exercised in a principled manner, especially in cases involving commercial quantities under the NDPS Act.
At the stage of regular bail, the Court held, it would not undertake a meticulous examination of the legality of commercial transactions or record definitive findings on rival claims. However, it cannot ignore the broader factual backdrop.
Significantly, the Court observed that where allegations disclose organised diversion of regulated pharmaceutical substances into illicit channels under the guise of lawful business operations, the scope for bail narrows considerably.
The Court held that the mere existence of drug licences or corporate structures does not automatically negate prima facie inferences arising from surrounding circumstances and legality of form cannot defeat scrutiny of substance.
In complex narcotics offences, structured or layered business arrangements may be used to distance principal actors from physical recovery and Commercial sophistication cannot become a shield against criminal accountability, added the Court.
Observing that, prima facie, the petitioners are accused of having dealings in narcotic substances with the firm(s) which exist only on papers and not physically and from the rival submissions as also the material brought forth before me, no cause is made out in favour of the petitioner(s) to meet with the rigors of Section 37 of the NDPS Act.
Observing that the factual milieu of the case in hand, especially the contraband alleged to be recovered being commercial in nature, the Court said that the petitions in hand deserve to be dismissed.
Title: Union of India through Sub Inspector, NCB, Amritsar Zonal Unit v. Sonu Singh