UNION OF INDIA versus PRATEEK SHUKLA

[2021] 2 S.C.R. 570

[2021] 2 S.C.R.

UNION OF INDIA

PRATEEK SHUKLA

(Criminal Appeal No. 284 of 2021)

BMARCH 08, 2021

[DR DHANANJAYA Y CHANDRACHUD ANDM. R. SHAH, JJ.]

Narcotic Drugs and Psychotropic Substances Act, 1985:

Cs. 37 – Complaint u/s.8,9A,25A,23 and 29 of the Act – Allegingthat the respondent was part of an international drug syndicateinvolved in diversion of controlled substance – Bail granted byHigh Court – Appeal to Supreme Court – Held: The bail was grantedwithout applying legal norms provided u/s. 37 – The reasons forgranting bail do not reflect application of mind to the seriousnessDof the offence involved – Bail liable to be cancelled.

Allowing the appeal, the Court

HELD: 1. Ex facie, there has been no application of mindby the High Court to the rival submissions and, particularly, tothe seriousness of the allegations involving an offence punishableEunder the provisions of the NDPS Act. Merely recording thesubmissions of the parties does not amount to an indication of ajudicial or, for that matter, judicious application of mind by theSingle Judge of the High Court to the basic question as to whetherbail should be granted. [Para 11][575-D-E]F

2.1 The provisions of Section 37 of the NDPS Act providethe legal norms which have to be applied in determining whethera case for grant of bail has been made out. There has been aserious infraction by the High Court of its duty to apply the law.The order granting bail is innocent of an awareness of the legalGprinciples involved in determining whether bail should be grantedto person accused of an offence under the NDPS Act.[Para 11][575-E-F]

2.2 The High Court was clearly not justified in grantingbail and the reasons provided by the High Court, do not reflectapplication of mind to the seriousness of the offence which isH

involved. The allegations against the respondent indicate thathe was member of an international drug syndicate involved inthe diversion of controlled substance; therefore, merely statingthat the respondent as an educated person with Bachelor ofTechnology “may not commit any offence” is an extraneouscircumstance that the High Court should not have consideredwhen granting bail for an offence under the NDPS Act. Whiledetermining that the respondent should be granted bail, the HighCourt has erroneously applied the law to the circumstances.[Paras 12 and 13][576-D-E]

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.284 of 2021

From the Judgment and Order dated 07.05.2019 of the High Courtof Judicature at Allahabad in Misc. Bail Application No. 9873 of 2019.

Praveen Agrawal, Gautam Kumar Laha, Advs. for the Appellants.K. M. Nataraj, ASG., Ms. Binu Tamta, Vatsal Joshi, Sharath N.Nambiar, B. V. Balaram Das, Advs. for the Appellant.

P. R. Rajhans, Jyoti Kumar Singh, Mrs. Paroma Sengupta, VishalArun, Advs. for the Respondents

The Judgment of the Court was delivered by

DR. DHANANJAYA Y CHANDRACHUD, J.

1. Delay condoned.

2. Leave granted.

3. This appeal arises from judgment and order of Single Judgeof the High Court of Judicature at Allahabad dated 7 May 2019, bywhich bail was granted to the respondent, who is alleged to be involvedin the commission of offences punishable under the provisions of theNarcotic Drugs and Psychotropic Substances Act 1985[1].

4. The allegation is that, on 18 October 2018, secret information

was received by an intelligence officer in the Delhi Zone of the NarcoticsControl Bureau[2] that huge quantity of acetic anhydride had beenpurchased by company by the name of Altruist Chemicals PrivateLimited[3]; and that the Company had not submitted its quarterly returnsfor April – June 2018 and July – September 2018, as required under the

1 “NDPS Act”

2 “NCB”

3 “Company”

ANarcotic Drugs and Psychotropic Substances (Regulation of ControlSubstances) Order 2013. It has been alleged that based on suspicionof diversion, team of the NCB proceeded to the Company’s registeredoffice situated at 001, AG Block, Sector 45, Noida. On the premisesbeing found locked, the owner was called to the spot. The owner allegedlyinformed the NCB team that the premises had been let out to personBby the name of Himanshu Rana, who is co-accused in the complaintwhich has been lodged against the respondent. The lock was broken,upon which quantity of 896 gms of acetic anhydride and 1.885 kg ofamphetamine is alleged to have been found in the premises. During thecourse of the search, documents relating to company by the name ofCM/s Griffin International were found and it was revealed that therespondent and an Afghan national by the name of Bismillah KhanAhmadzai were the Directors of the Company. Notices were issued tothe respondent and to Himanshu Rana, following which the statement ofthe respondent was recorded under Section 67 of the NDPS Act. It hasbeen alleged that the disclosure revealed that huge quantity of theDcontrolled substance, acetic anhydride, was purchased and diverted to agodown situated at Village Karheda, Ghaziabad. During the search andseizure of the premises, quantity of 9650 kgs of acetic anhydride wasalleged to have been recovered and empty drums of acetic anhydridewere also found. Notices under Section 67 of the NDPS Act were alsoEissued to one Shamsuddin and Bismillah Khan Ahmadzai. It has beenalleged that the respondent, the co-accused Himanshu Rana andShamsuddin disclosed that Bismillah Khan Ahmadzai is Director ofthe Company involved in its day to day affairs. Bismillah Khan Ahmadzaiwas apparently residing in the US and was arrested on his return toIndia. The residential premises of Shamsuddin Qarizada were searchedFand 500 gms of acetic anhydride was allegedly recovered. It has beenalleged that on 21 October 2018, search was conducted at the residentialpremises of the respondent which yielded, inter alia, recovery of:

(i)An arms license issued in the name of one Mohit Kaushik,which had the photograph of the co-accused Himanshu Rana;

(ii)A Cheque Book of the respondent and an entity called SkylineCompany bearing the name and address of the respondent;

(iii)The rubber stamps of Griffin International, Shiv Shakti TradingCompany and the Company (Altruist Chemicals PrivateHLimited);

(iv)A rent agreement executed between one DharmendraPandey and Mohit Kaushik, proprietor of SkylineInternational;

(v)A letter head and import-export certificate of companynamed White World Multi Cane (I) Private Limited, whichmentioned the name of the co-accused, Pawan KumarSharma, as Director, but had the photograph of therespondent; and

(vi)Certain bank documents – letters addressed to the NCB andan agreement between the co-accused Himanshu Rana andBismillah Khan Ahmadzai.

5. The respondent was arrested during the course of theinvestigation on 22 October 2018. The lab report dated 27 October 2018allegedly confirmed the presence of acetic anhydride and hydrochloricacid, though the presence of amphetamine has not been specificallyrecorded and has been sent for further verification. Based on thisevidence, complaint was lodged on 21 December 2018 for offencesunder Sections 8, 9A, 25A, 23 and 29 of the NDPS Act. It was allegedthat all the accused were members of an international drug syndicateand had entered into conspiracy for diversion, illegal storage, sale,purchase and export of the controlled substance.6. The respondent filed bail application which was initiallyrejected by the Additional Sessions Judge III, Gautam Budh Nagar on 6February 2019. Thereafter, bail application was moved before the HighCourt, which resulted in the impugned order dated 7 May 2019.

7. Mr K M Nataraj, learned Additional Solicitor General appearingon behalf of the appellant, submits that:

(i)The respondent is alleged to be part of an internationalsyndicate involved in diversion of controlled substance;

(ii)The respondent is Director of Altruist Chemicals PrivateLimited;

(iii)Having regard to the incriminating material which has beenrecovered during the course of the investigation, as set outin the complaint, the involvement of the respondent primafacie has been shown to exist;

A(iv)In matter involving serious violations of the NDPS Act, theSingle Judge of the High Court was not justified in grantingbail;

(v)Under the NDPS Act, the burden of proof lies on the accusedand not the prosecution and the High Court has wronglyBreversed the burden of proof; and

(vi)Absolutely no valid reasons have been indicated in thejudgment of the Single Judge for the grant of bail.

8. Pursuant to the notice that was issued by this Court on 16December 2020, the respondent has been served. On 15 February 2021,Cthe hearing of the proceedings was posted on 8 March 2021 on therequest of the learned counsel appearing on behalf of the respondent,who had recently entered appearance, for filing counter affidavit. Acounter affidavit has been filed.

9. Learned counsel appearing on behalf of the respondent hasDadverted to the counter affidavit, which has been filed on behalf of therespondent. The contention of the respondent, as set out before thisCourt, by Mr Vishal Arun, learned counsel, is that:

(i)The respondent had resigned as Director of the Companyon 4 May 2018 having joined the Company earlier in theEmonth of January 2018;

(ii)The quarterly returns in respect of acetic anhydride for theperiod January 2018 to March 2018 had been submitted tothe concerned office of the NCB;

(iii)After his resignation on 4 May 2018, the respondent has hadFno relationship with the Company and may not be heldresponsible for the non-filing of the quarterly returns;

(iv)The documents which have been filed before the trial Courtwould indicate that the alleged purchase orders for thecontrolled substance as well as the delivery at the premisesGof the Company took place after the resignation of therespondent;

(v)After the respondent had resigned from the position of aDirector in the Company, intimation was furnished to theNCB on 22 May 2018; andH

(vi)The purchase orders are from the month of June 2018, bywhich date the respondent had no connection with theCompany.

10. While evaluating the merits of the rival submissions in thecontext of the correctness of the order passed by the High Court grantingbail, it would be necessary, at the outset, to note the reasons whichweighed with the High Court in doing so. The High Court having recordedthe submissions of the respondent and of the learned counsel for theNCB has indicated the following reasons for grant of bail:

“Having considered the submissions and having perused thematerial on record, without commenting on the merits of the matter,prima facie, it appears that the applicant may not be guilty of anyoffence and considering his clean past and being an educatedperson as submitted that, he has degree in Bachelor ofTechnology (B.Tech.) may not commit any offence in future, Iam of the view that the applicant has made out case for bail.”

11. Ex facie, there has been no application of mind by the HighCourt to the rival submissions and, particularly, to the seriousness of theallegations involving an offence punishable under the provisions of theNDPS Act. Merely recording the submissions of the parties does notamount to an indication of judicial or, for that matter, judiciousapplication of mind by the Single Judge of the High Court to the basicquestion as to whether bail should be granted. The provisions of Section37 of the NDPS Act provide the legal norms which have to be applied indetermining whether case for grant of bail has been made out. Therehas been serious infraction by the High Court of its duty to apply thelaw. The order granting bail is innocent of an awareness of the legalprinciples involved in determining whether bail should be granted to aperson accused of an offence under the NDPS Act. The contention ofthe respondent that he had resigned from the Company, Altruist ChemicalsPrivate Limited, must be assessed with reference to the allegations inthe criminal complaint which has been filed in the Court of the Districtand Sessions Judge. Gautam Budh Nagar (Annexure P-6). The relevantpart of the complaint reads as follows:

“18. That during investigation of the case, letter dated 27.11.2018was sent to the Registrar of Companies for providing details ofthe Directors etc of the company in question i.e. U/s AltruistChemicals Pvt Ltd and vide its report dated 03.12.2018 Registrar

Aof Companies provided the said information and from the perusalof said information/documents, it reveals that accused PrateekShukla and Bismillah Khan are the Directors. Accused HimanshuRana was also Director but he has resigned from the directorship.From the perusal of the documents, it also reveals that they hadregistered the company, i.e., Altruist Chemical Pvt. Ltd. At 001,BBlock Ab-Sector-45, Noida, which is residential area and accusedpersons also obtained Unique Registration No. from the NCB onthe above said premises.”

12. We may also note at this stage the contention of the respondentin the application for bail which was filed before the High CourtC(Annexure P-8) that he had transferred 99% of his shareholding in theCompany to Bismilla Khan Ahmadzai. Bismilla Khan Ahmadzai, as theprosecution alleges at this stage, is an Afghan national. The applicationfor bail which had been filed before the High Court as well as the counteraffidavit which has been filed in the present proceedings suppress moreDthan what they disclose. Be that as it may, we are of the view that theHigh Court was clearly not justified in granting bail and the reasonsprovided by the High Court, as we have already indicated above, do notreflect application of mind to the seriousness of the offence which isinvolved. Indicating that the respondent as an educated person with aBachelor of Technology “may not commit any offence” is an extraneousEcircumstance which ought not to have weighed with the High Court inthe grant of bail for an offence under the NDPS Act.

13. For the above reasons, we are of the view that the High Courthas mis-applied the law to the facts in arriving at decision for the grantof bail to the respondent. We accordingly allow the appeal and set asideFthe impugned judgment and order of the High Court dated 7 May 2019.As consequence, the bail which has been granted by the High Court tothe respondent shall stand cancelled. The respondent shall surrenderforthwith as result of the cancellation of bail by the present order ofthis Court.G14. Pending application, if any, stands disposed of.

Kalpana K. Tripathy

Appeal allowed.