Financial Transactions With Co-Accused Alone Not Sufficient To Impose Embargo U/S 37 NDPS Act: Kerala High Court

The Kerala High Court on Thursday held that mere reliance on financial transactions and the confession of a co-accused should not be considered sufficient grounds for imposing an embargo of Section 37 of the Narcotic Drugs and Psychotropic Substances Act.

While refraining from making a conclusive finding at this stage, Justice Ziyad Rahman A.A held that the absence of substantial evidence raises reasonable doubt regarding the petitioners' involvement in the case.

"From the perusal of the case records, it can be seen that, apart from the aforesaid (financial) transactions, there is nothing to show the involvement of the petitioners. It is true that the documents indicate the monetary transactions between the petitioners and some of the accused persons, but the question that arises is whether the said transactions were in connection with the sale of Narcotic drugs. To establish the same, apart from the confession statements of the accused, there is nothing." 

The observation came in a bail application where the petitioners were accused of committing offences under Sections 22(c) and 29(1) of the NDPS Act.

The prosecution case was that in May 2022, three individuals were found in possession of MDMA in a car, leading to their immediate arrest. During the investigation, it was discovered that financial transactions were made by some of the accused for the purchase of the contraband. The petitioners were also found to be involved in these transactions.

The petitioners were subsequently arrested and have been in judicial custody since then. In their application for regular bail, they argued that there were no materials indicating the their involvement.

It was further pointed out that the petitioners were implicated only based on the confession statement of a co-accused, in which there was specific reference about the monetary transactions that occurred through their accounts. 

The Court found that since the quantity involved was commercial, Section 37 of the NDPS Act was attracted. 

However, Justice Rahman found force in the petitioners' contention. It agreed that the financial transactions between the petitioners and the other accused did not conclusively establish their involvement in the sale of narcotics.

It was also clarified that while this aspect will be further examined during the trial, the lack of substantial evidence raises reasonable doubt about the petitioners' involvement.

Considering that the petitioners had no prior criminal record and have been in custody since 07.02.2022, the Court deemed it appropriate to grant bail to the petitioners under strict conditions.

As such, the application was allowed with conditions.

Advocates Basil Chandy Vavachan, Charutha Bhaiju, Georgie Simon, Chandhana Bhaiju, Basil Scaria, Basil Sajan and Fathim Navas appeared for the petitioners. Senior Public Prosecutor C.S Hrithwik appeared for the State in the matter. 

Case Title: Amal E & Anr v. State of Kerala 

Citation: 2023 LiveLaw (Ker) 329 

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