2025 (11) TMI 850 - SC - Indian Laws

Bail orders set aside and remanded for fresh Section 37 NDPS Act consideration, addressing Section 35 presumption and prosecution material

Union Of India Versus Vigin K. Varghese.

SC set aside the HC orders granting bail and remanded the matter to the HC for fresh consideration under Section 37 of the NDPS Act. The Court held the HC ... Seizure of approximately 50.232 kilograms of Cocaine imported from South Africa - grant of bail on the ground of parity in a connected prosecution arising from a seizure effected within a few days of the first - HELD THAT:- The High Court’s conclusion that there is no material to show that the applicant had any knowledge of the cocaine in the consignment has been arrived at without discussion of the statements of the respondent and circumstances relied upon by the prosecution, including the assertion that the respondent had placed the orders for import, controlled the logistics chain, coordinated with the overseas supplier, and was present when the consignment was opened. The High Court has not examined whether those circumstances, taken at face value for the limited purpose of bail, could prima facie indicate conscious control or involvement sufficient to attract the presumption of culpable mental state indicated under Section 35 of the NDPS Act. In the present case, the High Court has not undertaken the analysis of those twin requirements with reference to the material placed by the prosecution. The orders dated 22.01.2025 and 12.03.2025 do not advert to the allegation regarding the respondent’s prior involvement in a seizure of narcotic drugs and psychotropic substances only days prior to the seizure forming the subject matter of the present complaint, nor do they engage with the prosecution’s assertion as to the respondent’s role in arranging, importing, clearing and supervising the consignments. The omission to consider these factors bears directly upon the statutory satisfaction required by Section 37(1)(b). In the facts of this case, it would not be appropriate for this Court at the threshold stage itself to render findings on whether there are or not reasonable grounds, for believing that the respondent is not guilty, or on whether he is likely to commit any offence while on bail. That factual assessment, which the statute requires to be made and recorded with reasons, is one that the High Court must undertake upon a complete and fair appraisal of the rival contentions based on materials placed before it. The interests of justice would be met if the impugned orders are set aside and the matter is remitted to the High Court for fresh consideration of the respondent’s prayer for bail, keeping in view the parameters of Section 37 of the NDPS Act - Appeal disposed off by way of remand. ISSUES PRESENTED AND CONSIDERED 1. Whether bail can be granted under Section 37 of the NDPS Act where a commercial quantity of narcotic drugs is recovered, and what statutory satisfaction the Court must record before granting bail. 2. Whether prima facie material (including statements under Section 67, seizure memos, and other investigative material) indicating ordering, import, logistics control and presence at the time of opening the consignment is sufficient at bail stage to attract the presumption of culpable mental state under Section 35 or to deny bail under Section 37. 3. The relevance of alleged antecedent involvement in a closely connected prior seizure to the statutory satisfaction required under Section 37 and to the grant or denial of bail. 4. The extent to which considerations of prolonged custody/delay in trial, absence of antecedents, and risk factors (absconding/tampering) may be balanced against the statutory embargo in Section 37 when deciding bail applications. 5. Whether appellate interference is warranted where the High Court's bail orders do not advert to or analyze prosecutions' material on operative control and antecedent involvement. 6. Appropriate remedial course where High Court's bail orders are found to omit required statutory analysis (setting aside and remittal; interlocutory arrangements pending fresh consideration). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Applicability of Section 37 NDPS and required statutory satisfaction for bail Legal framework: Section 37 of the NDPS Act imposes a statutory embargo on bail in cases involving contraband of commercial quantity unless the Court records satisfaction of two twin requirements (including reasonable grounds to believe accused is not guilty or that accused is not likely to commit an offence while on bail), in addition to ordinary CrPC tests. Precedent Treatment: The High Court purported to apply the Section 37 framework but did not demonstrate assessment of the twin statutory conditions with reference to prosecution material. The Supreme Court emphasized deference to High Court discretion generally but noted distinct statutory footing for commercial-quantity NDPS offences. Interpretation and reasoning: The Court held that Section 37 obligates the Court to make and record a careful appraisal of the twin requirements based on material on record; mere invocation of general principles (e.g., liberty) without engaging statutory materials is insufficient. A finding that 'reasonable grounds exist to believe accused is not guilty' is a statutory threshold and must be supported by analysis of prosecution assertions and materials. Ratio vs. Obiter: Ratio - Courts must specifically address and record reasons addressing the twin statutory requirements of Section 37 with reference to the prosecution material before granting bail in commercial-quantity NDPS cases. Conclusions: The High Court's orders were inadequate because they did not undertake the required statutory analysis; therefore those orders could not stand without fresh consideration compliant with Section 37. Issue 2 - Sufficiency at bail stage of investigative material to attract presumptions under Section 35 and to deny bail under Section 37 Legal framework: Section 35 creates statutory presumptions concerning possession and culpable mental state where narcotics are found in certain circumstances; bail analysis at threshold requires consideration whether prima facie material indicates conscious possession/control. Precedent Treatment: The High Court declined to treat prosecution material as sufficient to show knowledge or conscious control, but did so without discussing key investigative materials including statements under Section 67 and other circumstances urged by prosecution. Interpretation and reasoning: The Court observed that the High Court failed to examine whether allegations - that accused ordered the consignment, imported using firm's IEC, supervised clearance and delivery, coordinated with an overseas supplier, and was present when container was opened - when taken at face value for bail purposes, could prima facie indicate conscious control or attract the Section 35 presumption. The Court held such an appraisal is required before concluding absence of knowledge. Ratio vs. Obiter: Ratio - At bail stage in NDPS commercial-quantity cases, courts must evaluate whether prosecution's prima facie material could indicate conscious control/culpable mental state and thus bear on the statutory disqualification under Section 37. Conclusions: The High Court's non-engagement with those materials rendered its finding of absence of knowledge unsound; a proper assessment must be undertaken on remand. Issue 3 - Relevance of antecedent involvement in connected prior seizure Legal framework: Allegations of prior, closely connected seizures and involvement in the same network are relevant to the statutory satisfaction under Section 37 and to assessment of guilt, risk of offending on bail, and credibility of prosecution case. Precedent Treatment: The prosecution placed before the Court an earlier seizure (198.1 kg methamphetamine and 9.035 kg cocaine) allegedly traceable to the same network; the High Court's orders did not notice or answer this assertion. Interpretation and reasoning: The Court held that omission to consider antecedent seizure materially affects the statutory satisfaction required by Section 37. The High Court should have adverted to and evaluated the prosecution's allegation of earlier involvement when recording the requisite satisfaction for bail. Ratio vs. Obiter: Ratio - Prior closely connected seizures and alleged antecedent involvement must be considered and addressed in reasons when applying Section 37 to bail determinations. Conclusions: Failure to address antecedent allegations was a material omission warranting setting aside and remittal for fresh consideration. Issue 4 - Role of prolonged custody/delay, absence of antecedents, and liberty considerations vis-à-vis statutory embargo Legal framework: While Article 21 and liberty concerns (including prejudice from prolonged custody and trial delay) are relevant, they must be harmonized with the specific statutory requirements of Section 37 in commercial-quantity NDPS matters. Precedent Treatment: The High Court relied on absence of antecedents and likely trial delay to justify bail; the Supreme Court recognized these as relevant but insufficient absent statutory analysis. Interpretation and reasoning: The Court accepted that prolonged incarceration without trial and delay not attributable to accused are important, but held they cannot override the statutory embargo unless the statutory twin satisfactions are explicitly addressed. The balancing exercise must be reasoned and founded on the material before the Court. Ratio vs. Obiter: Ratio - Considerations of custody duration and trial delay may justify bail only if the Section 37 conditions are expressly and properly considered and recorded with reasons. Conclusions: The High Court's reliance on delay and liberty without required Section 37 reasoning was inadequate; those factors must be weighed in a reasoned manner alongside statutory requirements on remand. Issue 5 - Appellate intervention where High Court omits required statutory analysis Legal framework: Appellate courts ordinarily defer to discretionary bail decisions; however, when statutory prescription (Section 37) is not complied with, appellate interference is appropriate. Precedent Treatment: The Supreme Court observed deference but emphasized the distinct statutory regime for commercial-quantity NDPS offences and the necessity of recorded satisfaction; it intervened to set aside the High Court orders for omission to consider material. Interpretation and reasoning: The Court found that because the High Court did not undertake or record the analysis mandated by statute, appellate intervention was required to ensure proper compliance with Section 37 and to protect the integrity of the statutory scheme. Ratio vs. Obiter: Ratio - Where a statute mandates specific satisfactions and reasoned recording, failure to do so justifies appellate remand despite general deference to trial/Higher Court discretion. Conclusions: Interference was warranted; impugned orders set aside and remitted for fresh decision in conformity with statutory requirements. Issue 6 - Appropriate remedial course and interim arrangement Legal framework: When appellate court sets aside bail orders for procedural/statutory infirmity, it may remit for fresh consideration and prescribe interim arrangements. Precedent Treatment: The Court set aside the High Court orders and remitted the matter back for fresh consideration within a specified time frame, while maintaining the operative interim bail terms until fresh decision, subject to cancellation on infraction. Interpretation and reasoning: The Court balanced interests by remitting for reasoned re-evaluation of Section 37 requirements and preserving existing interim bail benefits to avoid immediate incarceration pending re-examination, with explicit provision for immediate cancellation if bail conditions are breached. Ratio vs. Obiter: Ratio - Remittal for fresh reasoned consideration is the appropriate remedy where statutory analysis is lacking; maintaining interim bail terms may be ordered subject to strict caveats. Conclusions: Impugned orders set aside; matter remitted for fresh decision within four weeks with directions to consider Section 37 materials and observations; interim bail continued on existing terms subject to cancellation for breach.