Financing Illicit Traffic U/S 27A NDPS Act Is Distinct From Mere Receipt Of Money For Sale Of Narcotics: J&K&L High Court

The Court observed that financing ordinarily involves the provision, investment, or channelisation of funds for facilitating illicit trafficking activities and that the mere receipt of money, without material demonstrating its use for financing such activities, may not by itself satisfy the statutory requirements of Section 27A.

Justice Sanjay Parihar while setting aside a trial court order that had cancelled the bail earlier granted to accused Kamran Mushtaq Lone in an NDPS case, observed, “…it cannot be overlooked 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”.

Advocate Aswad R. Attar appeared for the petitioner and Mohsin Qadiri, Sr. AAG appeared for the respondent.

According to the prosecution, intermediate quantities of heroin were recovered from two co-accused persons, while no contraband was recovered from the petitioner. The investigating agency alleged that the petitioner was involved in supplying narcotic substances and relied upon witness statements and bank transactions exceeding ₹2.14 lakh to invoke Section 27A of the NDPS Act.

The petitioner had initially been granted regular bail on May 14, 2024. However, the trial court later recalled and cancelled the bail after accepting the prosecution's contention that Section 27A was attracted and, consequently, the rigours of Section 37 of the NDPS Act became applicable.

Allowing the petition, the Court emphasized the settled distinction between rejection of bail and cancellation of bail. The Court noted that cancellation requires cogent and overwhelming circumstances such as misuse of liberty, tampering with evidence, influencing witnesses, absconding, or other supervening events arising after the grant of bail.

Examining the record, the Court found that all material relied upon by the prosecution, including witness statements, allegations regarding narcotics supply, and bank transactions, was already available when the trial court granted bail. No fresh circumstance had emerged thereafter to justify cancellation.

The Court further observed that while the prosecution's allegations may ultimately be tested during trial, the available material did not automatically establish "financing illicit traffic" as contemplated under Section 27A. The subsequent cancellation of bail therefore amounted to an impermissible review of the earlier judicial order rather than a legally sustainable exercise of cancellation jurisdiction.

Accordingly, the High Court restored the petitioner's bail subject to conditions requiring his appearance before the trial court, non-interference with witnesses, and restrictions on travel outside Jammu and Kashmir without prior permission.

Cause Title: Kamran Mushtaq Lone Through His Father v. Union Territory Of J&K Through S.H.O. P/S Parimpora Bail App/17/2026

Appearances:

Petitioner: Aswad R. Attar, Advocate.

Respondent: Haaris Khan, Assisting Counsel vice, Mohsin Qadiri, Sr. AAG.

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