Mere Receipt Of Money Without Evidence Of Utilisation For Financing Illicit Trafficking Does Not Attract S.27A NDPS Act: J&K&L High Court

The High Court of Jammu & Kashmir and Ladakh has set aside an order cancelling bail granted to an accused facing trial under the Narcotic Drugs and Psychotropic Substances Act, 1985, holding that the concept of “financing illicit traffic” under Section 27-A is distinct from merely receiving consideration for the sale of narcotic substances.The Court observed that financing ordinarily connotes the provision, investment or channelisation of funds or resources for facilitating illicit trafficking activities, and that mere receipt of money, absent further material indicating such utilisation, may not satisfy the statutory requirements of Section 27-A.The Court was hearing a petition filed under Section 482 Cr.P.C. challenging order passed by the Second Additional Sessions Judge, Srinagar, whereby the Trial Court had recalled and cancelled the bail earlier granted to the petitioner.A Bench of Justice Sanjay Parihar, while observing that “the concept of 'financing illicit traffic' contemplated under Section 27-A is distinct from merely receiving consideration for the sale of narcotic substances. Financing ordinarily connotes the provision, investment or channelisation of funds or resources for facilitating illicit trafficking activities. The mere receipt of money, absent further material indicating that such funds were utilised for financing or facilitating illicit trafficking, may not, by itself, satisfy the statutory requirements of Section 27-A,” held that the Trial Court erred in cancelling bail in the absence of any supervening circumstance or misuse of liberty.The petitioner was facing trial in an FIR registered under Sections 8/21 and 27-A of the NDPS Act. No contraband was recovered from his possession and recoveries of 4.55 grams and 3 grams of heroin were effected from two co-accused. The petitioner was initially denied bail on the ground of alleged involvement under Section 27-A. However, after filing of the charge-sheet and framing of charges, his regular bail application was allowed by the Trial Court noting that the quantity was intermediate and the rigours of Section 37 were not attracted.Subsequently, the prosecution moved an application seeking cancellation of bail and alteration of charge, arguing that Section 27-A was attracted. The Trial Court, acting upon the said application, recalled and cancelled the bail holding that once Section 27-A was attracted, the statutory restrictions under Section 37 operated as a bar. Aggrieved, the petitioner approached the High Court.Court's ObservationThe Court noted that it was not in dispute that no contraband was recovered from the petitioner, and that the prosecution case primarily rested on allegations of financial transactions totalling approximately ₹2,14,150/-, statements of witnesses, and the assertion that co-accused had purchased heroin from the petitioner out of money generated through sale of gold ornaments.Referring to the Supreme Court's judgment in State of West Bengal v. Rakesh Singh (2022) 19 SCC 306, the Court observed that the expression “financing illicit traffic” occurring in Section 27-A carries a specific connotation and cannot be invoked merely on the basis of every transaction involving money. There must exist material indicating direct or indirect financing of activities constituting illicit trafficking as contemplated under the Act, the Court underscored. The Court further noted that the material relied upon by the prosecution, including bank transactions and witness statements, was already available when the Trial Court granted bail. No fresh material surfaced thereafter to constitute a supervening circumstance warranting cancellation of bail, it pointed. Citing Dolat Ram v. State of Haryana (1995) 1 SCC 349, the Court reiterated that very cogent and overwhelming circumstances are required for cancellation of bail once granted, and that rejection of bail and cancellation of bail stand on different footings. The Court observed, “... The application seeking cancellation of bail was not founded upon any subsequent conduct of the petitioner but was predicated entirely upon the assertion that the Trial Court had committed an error while granting bail in the first instance. Such a ground, by itself, would not ordinarily justify cancellation of bail once judicial discretion has already been exercised and the order granting bail has attained finality.”The Court also noted that the quantity of contraband allegedly recovered was only of intermediate quantity, and even if taken cumulatively, it would not constitute commercial quantity. Therefore, the rigours of Section 37 of the NDPS Act were not attracted.The High Court thus held that the impugned order cancelling bail was contrary to the settled principles of law, as there was no allegation or material indicating misuse of liberty, violation of bail conditions, interference with the course of justice, or any other supervening circumstance arising after the grant of bail. The cancellation...

Mere Receipt Of Money Without Evidence Of Utilisation For Financing Illicit Trafficking Does Not Attract S.27A NDPS Act: J&K&L High Court

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Mere Receipt Of Money Without Evidence Of Utilisation For Financing Illicit Trafficking Does Not Attract S.27A NDPS Act: J&K&L High Court

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