Emphasising that absence of drug recovery from accused not enough for discharge, the Bombay High Court has held that repeated financial transactions with co-accused, coupled with digital communications, create sufficient grave suspicion to proceed with trial under Sections 27A and 29 of the NDPS Act. The Court also held that the material collected during investigation, including bank transactions and digital communications with co-accused, was sufficient to raise a prima facie case requiring a full trial.
The Court found that the applicant could not seek discharge merely because no contraband was recovered from him, since the allegation was of financing illicit drug trafficking under Section 27A of the NDPS Act. Further, the applicant’s claim that the money transfers were legitimate payments connected with his courier business was held to be a disputed factual issue that can be adjudicated only after evidence is led during trial.
While statements recorded under Section 67 of the NDPS Act may face evidentiary restrictions following Tofan Singh, the prosecution was relying on independent material such as forensic analysis of mobile phones and digital communications. The Court clarified that the applicant’s earlier release on bail was largely influenced by the period of incarceration and did not amount to a finding that the prosecution case lacked substance.
Briefly, the case arose from an FIR registered in February 2024 concerning the seizure of more than 1,837 kilograms of Mephedrone (MD). During the investigation, the Narcotics Control Bureau alleged that Nishant S. Modi, a courier businessman and proprietor of “Express Hub International and Cargo,” had transferred approximately Rs. 17.17 lakhs to co-accused persons on multiple occasions. The prosecution claimed that these transactions formed part of the financing of illicit drug trafficking. His mobile phones were seized and forensic analysis allegedly revealed WhatsApp calls, voice calls and other communications with co-accused persons. He was arrested on 17 September 2024 and later granted bail by the High Court. Thereafter, he sought discharge from the case, which was rejected by the Special Court.
The applicant argued that the money transfers were part of legitimate courier business dealings, particularly towards packing, handling and export-related services. He contended that there was no recovery of contraband from him, no direct connection with the seized drugs, and no material establishing either financing of drug trafficking or criminal conspiracy. He also relied on the Supreme Court’s ruling in Tofan Singh to contend that statements recorded under Section 67 of the NDPS Act could not be used as confessional evidence.
A Single Judge Bench of Justice M.M. Sathaye noted that the quantity of narcotic substance involved was extraordinarily large and the allegations related to a serious offence affecting society at large. The Court observed that the existence of financial transactions between the applicant and co-accused persons was undisputed and that the prosecution had also relied upon digital evidence recovered from the applicant’s mobile phone as corroborative material.
The Court held that the applicant’s explanation that the transactions were genuine courier business payments could not be conclusively accepted at the discharge stage. Whether the payments represented legitimate business dealings or financing of illicit drug trafficking was a matter requiring evidence during trial. The Court further found apparent inconsistencies in the applicant’s explanation regarding GST registration timelines and the period during which the questioned transactions took place.
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The Court also observed that documents and KYC details allegedly supporting the applicant’s business transactions could not be treated as proved at this stage. Since the applicant himself questioned the evidentiary value of his Section 67 statement, the documents accompanying that statement could not automatically be accepted as proof of his defence. These issues, according to the Court, could only be adjudicated after a full trial.
The High Court clarified that the earlier order granting bail was primarily based on the applicant’s period of incarceration and did not amount to a finding that no case existed against him. Therefore, the bail order could not support a claim for discharge.
