Monetary Payment for Transactions Does Not Constitute Financing Under Section 27-A of the NDPS Act

On 12.07.2025, police raided a house in Khowai based on secret information regarding a drug deal.

They found four persons counting money and packing suspected heroin; two escaped, while the accused-petitioners (Atul Debbarma and Pratap Chandra Singh) were detained.

Recovery consisted of 9.20 grams of heroin (intermediate quantity) and Rs. 10,385/- in cash.

The police filed a charge-sheet under Sections 21(b), 25, 27-A, and 29 of the NDPS Act.

The accused have been in custody since July 2025, and 15 out of 22 prosecution witnesses have been examined.

The petitioners sought bail, arguing that Section 27-A (financing illicit traffic) was inapplicable, thereby removing the residency of Section 37 rigours.

Whether the recovery of a specific amount of money from the spot of a drug deal, or the act of a solitary transaction, constitutes "financing" under Section 27-A of the NDPS Act.

Whether the rigours of Section 37 of the NDPS Act apply to a case involving an intermediate quantity when the charge under Section 27-A is prima facie unsustainable.

The Court interpreted Section 27-A of the NDPS Act (punishment for financing illicit traffic) in light of the definition of "illicit traffic" under Section 2(viii-b).

It relied on the legislative intent derived from the 1988 UN Convention against Illicit Traffic.

The Court differentiated between "investing" one's own money for a transaction (covered by other penal sections) and "financing," which implies supplying or providing funds to facilitate or sustain the illegal activities of others.

It referred to Rakesh Singh v. State of West Bengal [2022] 14 SCR 538, noting that a solitary transaction does not typically amount to "financing."

The Court cited various High Court precedents (Bombay, Kerala, Punjab & Haryana) to establish that "drug money" or sale proceeds are not synonymous with "financing."

The Court analyzed the materials on record and the testimonies of the 15 examined witnesses, finding no evidence of "financing" or structural support for a trafficking network by the accused.

It noted that while Section 2(viii-b) includes "financing" as an element of illicit traffic, the term "finance" in Section 27-A connotes a degree of continuity or the provision of resources to enable the operation of others, rather than mere transactional-level procurement.

In this case, there was no evidence that the recovered Rs. 10,385/- was intended to "finance" the trade as defined by law.

Since the recovery involved an intermediate quantity of heroin (9.20 grams) and the Section 27-A charge lacked prima facie support, the Court held that the strict bail conditions under Section 37 (which apply only to commercial quantities or specific sections like 27-A) were not triggered.

Consequently, the rigours of Section 37 did not apply.

The bail applications were allowed, and the accused were ordered to be released on a bond of Rs. 1,00,000/- each with one surety, subject to conditions including regular court attendance, remaining within the State of Tripura, and weekly reporting to the Special Judge.

The Court clarified these observations were limited to the bail disposal and would not affect the trial.