The Punjab and Haryana High Court has held that while possession of a narcotic substance may constitute an offence under the NDPS Act, possession of money or currency notes does not, per se, fall within the ambit of any prohibited act under the statute. The High Court also explained that mere recovery of some cash in conjunction with contraband does not, in itself, constitute an actus reus under the NDPS framework.

The High Court was considering two bail petitions in a case pertaining to the Narcotic Drug & Psychotropic Substance Act, 1985.

The Single Bench of Justice Anoop Chitkara held, “In the present matters, while possession of a narcotic substance by Amit Sharma may constitute an offence under the NDPS Act, possession of money or currency notes does not, per se, fall within the ambit of any prohibited act under the statute. Currency, being a legal tender, is by its very nature neutral and lawfully possessed. Hence, mere recovery of some cash in conjunction with contraband does not, in itself, constitute an actus reus under the NDPS framework. Sukhchain Masih was arraigned as an accused on the basis of the disclosure statement of Gagandeep Singh, who was arrested for possessing 5 grams of heroin and INR 1000/- as drug money.”

Advocate Amarjeet Singh Prajapati represented the Petitioner while AAG Akshay Kumar represented the Respondent.

Factual Background

As per the first FIR, the Police arrested one Gagandeep Singh (co-accused), for possessing 5 grams of heroin and INR 1000, which the Police termed as drug money. During his custodial interrogation, he disclosed the petitioner, Sukhchain, as the seller of heroin. Apprehending arrest, Sukhchain applied for anticipatory bail. The Special Court dismissed the same, but the High Court granted him interim anticipatory bail on merits and kept the matter for hearing on the question of law.

In the second FIR, it was alleged that the police recovered 21 grams of heroin and Rs 1000 drug money from the possession of one Amit Sharma. After analysing and appreciating the evidence from the FIR and the arguments addressed before the Court, and considering Amit’s pre-trial custody of two months, by a detailed order, the High Court granted interim regular bail on merits and adjourned the case for the State’s written response. Offences under Section 27-A of the NDPS Act were also invoked against the petitioners.

Reasoning

The Bench explained that as per the legislative mandate of section 27-A and sub-clauses (i) to (v) of clause (viii-b) of Section 2 of the NDPS Act, if any person is arraigned as an accused for financing illicit traffic or harboring any offender, the sentence that can be imposed on conviction shall be not less than 10 years but may extend up to 20 years; and fine between INR 1 Lac to 2 lacs or even more.

“The mischief is being played taking advantage of the provisions of Section 27-A of the NDPS Act because whenever Section 27-A is added as an offence in any FIR, the statutory rigors of Section 37 of the NDPS Act, 1985, apply, and the accused seeking bail must satisfy its twin conditions. On reading Section 37 of the NDPS Act, 1985, it is clearly inferable that to curb the drug menace, the legislature added teeth to make bail difficult for commercial quantities, drug finance, etc. The provisions are couched in negative language and explicitly mandate that to grant bail, the Court must record a finding that there are reasonable grounds for believing that the petitioner is not guilty of the offence”, it stated.

The Bench explained that Section 27-A and 2(viiib) of the NDPS Act nowhere, directly or indirectly, mentions any cash found along with the contraband as “Drug Money” or “Proceeds of Drug Sale”. “Since the legislature did not use the term “Drug Money” in section 27-A or 2(viiib) of the NDPS Act, this Court cannot import such words because apparently the usage looks like a folly. Before invoking section 27-A of the NDPS Act, one needs to show that the said money was to be used to finance the illicit traffic of drugs. Even when, along with contraband, any money or sovereign metal, etc., is recovered, section 27-A does not permit an investigator to treat such money, etc., automatically, as “financing illicit traffic”, it added.

The Bench was of the view that to label any discovered value proximate to narcotics as “drug money,” and then often leap to Section 27A, by giving an incorrect interpretation by analogy to the statute’s structure, would be contrary to its scope. As per the Bench, the finance of “illicit traffic”, within the meaning of Section 27-A of NDPS Act, connotes drug peddling on a regular and continuous basis, different from the illicit sale/purchase of contraband items. Thus, Section 27A indicates that financing is in respect of illicit traffic through which the financer expects monetary or other returns, it noted.

The Bench also observed, “Mere association with drug offenders or recovery of money from the accused who named another person as the seller of the drug, and when such a person is arraigned as a co-accused, merely based on disclosure statement of the principal accused of purchasing drugs from such co-accused and without any other allegation, such disclosure does not primafacie make out an offence of “financing illicit traffic” and is insufficient to invoke Section 27-A of the NDPS Act against such co-accused.”

The Bench, thus, allowed the Petition.

Cause Title: Sukhchain Masih @ Lalla v. State of Punjab (Neutral Citation: 2025:PHHC:158187)

Appearance

Petitioner: Advocate Amarjeet Singh Prajapati

Respondent: AAG Akshay Kumar, DAG Shaveta Sanghi, AAG Atul Gaur, AAG Birender Bikram Attray, Manish Bansal, Addl. PP Arav Gupta, Amicus Curiae Ashmeet Kaur Shah

Click here to read/download Order


Punjab & Haryana High CourtJustice Anoop Chitkara

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.