Financial Transactions & Co-Accused Statements Insufficient For NDPS Detention: Himachal HC

Financial transactions and statements made by co-accused during investigation cannot form the sole basis for denying liberty under the Narcotic Drugs and Psychotropic Substances Act, the Himachal Pradesh High Court has ruled. The Court emphasized that unless the prosecution establishes a prima facie nexus between such transactions and drug trafficking, accused persons cannot be detained indefinitely despite the gravity of the charges.

Justice Rakesh Kainthla, sitting as a single bench, granted regular bail to four petitioners implicated in a heroin trafficking case. The Court noted that the police primarily relied on bank transfers and confessional statements, which are hit by the bars of admissibility under the Code Of Criminal Procedure and the Indian Evidence Act, 1872.

Key Takeaways

Evidence Threshold in NDPS Cases

Financial transactions between parties do not automatically prove involvement in drug trade unless explicitly linked to the sale of contraband.

Inadmissibility of Police Confessions

Statements made by co-accused during investigation are not substantive evidence and cannot be used to bypass bail requirements.

Criminal Antecedents Not a Bar

While relevant, a history of criminal activity cannot justify detention if the prosecution fails to establish a prima facie case in the current FIR.

Primacy of Personal Liberty

The principle of 'bail not jail' applies even in special statutes if the evidentiary material fails to meet the 'reasonable grounds' threshold.

Admissibility of Co-Accused Statements and Financial Records

The Court observed that the prosecution’s case against the petitioners rested heavily on financial transactions and disclosures by co-accused. Citing Dipakbhai Jagdishchandra Patel v. State of Gujarat ( "(2019) 16 SCC 547: (2020) 2 SCC (Cri) 361: 2019 SCC OnLine SC 588": 2019 CaseBase(SC) 3174) and Tofan Singh Versus State of Tamil Nadu ( "2021 (4) SCC 1": 2020 CaseBase(SC) 1147), the Bench reiterated that a confession made to a police officer is inadmissible. The Court further noted that even phone call records or bank transfers, without substantive proof of their relation to narcotics, are insufficient to satisfy the rigorous conditions of Section 37 of the Narcotic Drugs and Psychotropic Substances Act.

Regarding criminal history, the Court referred to Ayub Khan v. State of Rajasthan ( "2024 SCC OnLine SC 3763: 2024:INSC:994": 2024 CaseBase(SC) 837), noting that Abhishek Sahota’s antecedents could not be the sole reason to deny bail when the current material was lacking.

The Court has the following directions:

"(i) The petitioners will not intimidate the witnesses, nor will they influence any evidence in any manner whatsoever.

(ii) The petitioners shall attend the trial on each and every hearing and will not seek unnecessary adjournments.

(iii) The petitioners will not leave the present addresses for a continuous period of seven days without furnishing the addresses of the intended visit to the SHO concerned, the Police Station concerned and the Trial Court.

(iv) The petitioners will surrender their passports, if any, to the Court; and

(v) The petitioners will furnish their mobile numbers and social media contacts to the Police and the Court and will abide by the summons/notices received from the Police/Court through SMS/ WhatsApp/ Social Media Account. In case of any change in the mobile numbers or social media accounts, the same will be intimated to the Police/Court within five days from the date of the change."

The Court, in its reasoning, observed: "The police have also relied upon the financial transaction to connect the petitioners to the commission of the crime; however, that is not sufficient... the petitioners cannot be detained in custody based on the statement made by the co-accused and the financial transactions."

Ratio

Financial transactions and the disclosure statements of co-accused recorded by police officers do not constitute substantive evidence and are insufficient to establish a prima facie case for denying bail under the NDPS Act. Personal liberty cannot be curtailed based on materials hit by Section 25 of the Evidence Act and Section 162 of the Cr.P.C., even when the accused has prior criminal records, provided the current evidence is insufficient to connect them to the crime.

Background

The case arose from FIR No. 57 of 2026 registered at Police Station Palampur following the recovery of heroin from several individuals. The petitioners were not arrested at the spot, nor was any recovery effected from their person. They were implicated later based on bank transfers ranging from ₹50,000 to ₹1.5 lakh made to co-accused individuals. The State argued that the petitioners were part of a drug syndicate affecting the youth and should be denied bail due to the heinous nature of the offence. The Court, however, found that the investigation was complete and the charge sheet had been filed, concluding that no fruitful purpose would be served by further detention given the evidentiary gaps.

Case Details:
Case No.: Cr. MP(M) No. 1753, 1761, 1765 and 1868 of 2026
Neutral Citation: 2026:HHC:33761
Case Title: Shivanshu Dhiman vs. State of H.P. (and connected matters)
Appearances:
For the Petitioner(s): Mr Lakshay Parihar, Mr Jeevan Kumar, Mr Atharv Sharma, Mr Ajay Sharma (Senior Advocate)
For the Respondent(s): Mr Jitender Sharma (Additional Advocate General)

Source: 2026 CaseBase(HP) 9448