Monetary transactions for specific drug purchases do not constitute "financing illicit traffic" under Section 27A NDPS Act.

On July 12, 2025, police raided the house of one Pradip Chandra Singha based on secret information regarding drug processing

The applicants, Atul Debbarma and Pratap Chandra Singh, were apprehended on the spot while allegedly counting money and packing 9.20 grams of heroin

An amount of Rs. 10,385 was recovered from the floor

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

The accused sought bail, contending that Section 27-A (financing illicit traffic) was inapplicable, thereby removing the rigorous bail restrictions of Section 37 of the NDPS Act

1. Whether the recovery of a specific amount of money from the spot of a drug transaction, or the act of purchasing drugs for self-investment, constitutes "financing illicit traffic" under Section 27-A of the NDPS Act.

2. Whether the rigors of Section 37 of the NDPS Act apply to the accused when the quantity of contraband is intermediate and the charge under Section 27-A is prima facie unsustainable.

The Court interpreted Section 27-A of the NDPS Act, 1985, in light of the 1988 United Nations Convention against Illicit Traffic

It applied Section 2(viii-b) of the NDPS Act, which defines "illicit traffic"

The Court relied on *Rhea Chakraborty v. Union of India* (Bombay HC) regarding the definition of "financing" as providing funds to make an activity operational

The Court relied on *Rakesh Singh v. State of West Bengal* (Calcutta HC/Supreme Court) holding that solitary transactions do not necessarily constitute financing

The Court relied on *Sukhchain Masih v. State of Punjab* (P&H HC) asserting that "drug money" or sale proceeds are not automatically "financing" under Section 27-A

The core rule established is that "financing" requires the supply of funds by a third party to facilitate or sustain the trade, rather than a mere transactional investment by the primary actor

The Court analyzed the legislative intent behind Section 27-A, distinguishing between "investing" one’s own money in a transaction (punishable under other sections) and "financing," which implies supplying funds to facilitate someone else’s illegal activity

Upon reviewing the testimonies of 15 examined witnesses and the statements of unexamined witnesses, the Court found no specific evidence or materials indicating that the accused had "financed" illicit traffic as defined by law

The Court observed that the mere presence of Rs. 10,385 on the floor and the act of packing an intermediate quantity of drugs did not prima facie attract the higher threshold of Section 27-A

Consequently, since Section 27-A was not applicable and the quantity was intermediate (not commercial), the strict limitations on bail under Section 37 were not triggered

It held that intermediate quantity cases without the applicability of Section 27-A allow for the exercise of regular bail discretion

The High Court allowed the bail applications, directing the release of Atul Debbarma and Pratap Chandra Singh on a bond of Rs. 1,00,000 each with one surety

Conditions were imposed, including regular court attendance, a prohibition on leaving the state without permission, and a requirement to report to the trial court weekly