S.27A NDPS Act Cannot Be Triggered By Bank Entries Or Custodial Statements Alone, Proof Of Financing Or Harbouring Needed: J&K&L High Court

Holding that Section 27-A of the NDPS Act cannot be mechanically invoked merely on the basis of bank transactions or custodial statements of co-accused, the High Court of Jammu & Kashmir and Ladakh has ruled that the prosecution must disclose prima facie material showing deliberate financial facilitation of illicit drug trafficking or active harbouring, clearly distinct from routine monetary dealings or alleged association.Justice Rajesh Sekhri made these observations while granting anticipatory bail to a man implicated in an NDPS case largely on the strength of custodial disclosures and banking entries.The Court was dealing with an application seeking anticipatory bail in connection with FIR for offences under Sections 8, 21 and 22 of the NDPS Act, with the prosecution additionally invoking Section 27-A alleging financing of illicit traffic and harbouring of offenders.As per the prosecution, during naka duty police intercepted a motorcycle and recovered an intermediate quantity of heroin (chitta) from the conscious possession of one Latief Ali. A weighing machine, a mobile phone and cash were also seized. On this basis, an FIR was registered. During investigation, the police alleged that the present applicant, Mazeed Ali, was the main supplier and financier of the contraband network, relying on statements made by co-accused while in custody and on certain amounts credited to the applicant's bank accounts.Apprehending arrest, the applicant first approached the Principal Sessions Judge, Udhampur, who declined relief after noticing large sums credited into his bank accounts by co-accused. He thereafter moved the High Court.Appearing for the applicant, Mr. Abhinav Sharma, Senior Advocate, assisted by Mr. Abhimanyu Sharma, contended that no recovery whatsoever had been effected from the applicant and that he had been falsely implicated solely on the basis of custodial statements of his brother and co-accused. It was argued that the bank transactions relied upon by the prosecution represented legitimate loans for vehicle purchases and family transactions, duly reflected in account statements. Emphasis was also placed on the fact that the main accused from whose possession contraband was recovered had already been granted bail.Court's Observations:The Court began by reiterating that the power to grant bail is discretionary and must strike a balance between societal interest and the presumption of innocence, taking into account the gravity of the offence, the nature of accusations, and the likelihood of tampering with evidence.Examining the statutory framework, the Court undertook a detailed analysis of Section 27-A NDPS Act in conjunction with the definition of “illicit traffic” under Section 2(viiib). The Court underscored that the Act draws a clear distinction between offences relating to possession, sale, purchase or transportation of narcotic drugs and the distinct offence of financing illicit traffic or harbouring offenders.“There is a clear distinction between engagement in the sale, purchase, transportation, warehousing or concealment of narcotic drugs and 'financing' of illicit traffic or 'harbouring' of offenders,” the Court observed, noting that the latter operates in a separate and narrower field.While acknowledging that narcotic transactions inevitably involve money, the Court clarified that every monetary transaction linked to an accused cannot be elevated to 'financing' within the meaning of Section 27-A.“Financing, in common parlance, means providing funds to facilitate illicit activities. A mere payment of sale consideration or receipt of money does not amount to financing,” Justice Sekhri held.The Court further explained that a financier typically facilitates an activity without being privy to the actual sale transaction, whereas a seller or purchaser participates directly in the trade. Similarly, the concept of harbouring, the Court said, requires an element of active protection or shielding from legal action, not mere association or relationship.Applying these principles to the facts, the Court found no prima facie material to suggest that the applicant had ever provided funds to any co-accused or financed illicit trafficking. The record only showed amounts credited into his account, with no evidence of funds flowing from him to support narcotic activities.“I do not find the factual foundation to verify the allegation that the petitioner, at any point of time, directly or indirectly indulged in financing illicit traffic or harboured any person engaged in such activities,” the Court said.Another crucial factor weighed by the Court was that no contraband had been recovered from the applicant's conscious possession, while the co-accused from whom recovery was effected had already been granted bail, which had not been challenged by the prosecution.The Court also took note that the applicant's implication stemmed largely from statements made by a co-accused while in custody. Relying on settled law,...

S.27A NDPS Act Cannot Be Triggered By Bank Entries Or Custodial Statements Alone, Proof Of Financing Or Harbouring Needed: J&K&L High Court

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S.27A NDPS Act Cannot Be Triggered By Bank Entries Or Custodial Statements Alone, Proof Of Financing Or Harbouring Needed: J&K&L High Court

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