The Kerala High Court has clarified that mere financial transactions and call records, without direct evidence linking an accused to the physical possession or transportation of narcotics, are insufficient to deny bail under the stringent provisions of the NDPS Act. This ruling reinforces the principle that pre-trial detention must be justified by concrete, case-specific evidence, not speculative inferences.
Background & Facts
The Dispute
The applicants, accused Nos. 4 and 6 in Crime No. 844/2025 of Railway Police Station, Ernakulam, are charged under Sections 20(b)(ii)(C) and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985, for allegedly conspiring to transport 52.835 kg of cannabis via the Tatanagar-Ernakulam Express (Train No. T 18189). The contraband was seized from accused Nos. 1, 2, and 3, who were onboard the train. The applicants were not present at the time of seizure.
Key Facts
- The contraband was seized from the platform on 25.11.2025, during the arrival of Train No. T 18189 at Ernakulam Railway Station.
- Accused Nos. 1 and 4 were temporary staff employed on the train.
- Accused No. 5 allegedly procured the cannabis using funds provided by Accused No. 6.
- Accused No. 4 allegedly received the contraband from Accused No. 5 and handed it to Accused No. 1, who distributed portions to Accused Nos. 2 and 3.
- Accused No. 6 (applicant in B.A. No. 2666/2026) had financial transactions totaling ₹15,00,000 with Accused No. 2 and his mother.
- Accused No. 6 claimed the transactions were related to his garment business and provided a plausible explanation.
- Accused No. 4 (applicant in B.A. No. 2739/2026) had frequent call records with Accused Nos. 1 and 5.
- No physical evidence, such as recovered drugs, incriminating documents, or eyewitness testimony, directly connects either applicant to the transportation or possession of cannabis.
Procedural History
- 25.11.2025: First Information Report (FIR) registered at Railway Police Station, Ernakulam.
- 18.02.2026: Accused No. 6 (Thabras O.E.) remanded to judicial custody.
- 24.03.2026: Accused No. 4 (Debu Mehata) remanded to judicial custody.
- 08.05.2026: Sessions Court, Ernakulam, rejected earlier bail applications.
- 04.06.2026: Bail applications filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, heard jointly by the High Court.
The Parties' Positions
For the Applicants
The applicants contended they were falsely implicated. Their counsel argued that:
- No material evidence directly links them to the contraband.
- Financial transactions are explainable and not inherently incriminating.
- Call records between co-workers and acquaintances are common and do not establish criminal conspiracy.
- The prosecution has filed its final report, indicating the investigation is complete and custody is no longer necessary for probe purposes.
For the Respondent/State
The Senior Public Prosecutors opposed bail, asserting:
- The applicants were integral to the conspiracy, even if not physically present during seizure.
- The financial flow and communication patterns indicate active participation.
- The gravity of the offence under the NDPS Act warrants strict application of Section 37.
Relief Sought
The applicants sought regular bail with reasonable conditions, arguing that continued detention without direct evidence violates the presumption of innocence and the proportionality principle under Section 483 of the BNSS.
The Legal Issue
The central question was whether Section 37 of the NDPS Act mandates denial of bail solely on the basis of financial transactions and call records, in the absence of direct evidence connecting the accused to the contraband.
Arguments Presented
For the Appellant/Petitioner
The applicants’ counsel relied on State of Punjab v. Baldev Singh and Kunwar Singh v. State of U.P. to argue that Section 37 of the NDPS Act requires a prima facie case of direct involvement, not circumstantial inferences. They emphasized that the final report has been filed, negating the need for custody to aid investigation. The financial transactions were explained as legitimate business dealings, and call records between co-workers lacked indicia of criminal intent.
For the Respondent/State
The State contended that the pattern of transactions and communications, coupled with the scale of the offence, satisfies the threshold under Section 37. They cited Narayan Singh v. State of Maharashtra to argue that conspiracy can be inferred from indirect links, and that the seriousness of drug trafficking justifies continued detention.
The Court's Analysis
The Court examined the nature of evidence against both applicants and found it wholly circumstantial. It noted that Section 37 of the NDPS Act imposes a high threshold for bail denial, requiring the court to be satisfied that there are reasonable grounds to believe the accused is guilty and that he is likely to commit further offences. The Court held that neither financial transactions nor call records, standing alone, meet this standard.
"The fact that there are frequent calls between accused persons does not, by itself, establish a criminal conspiracy. Where the accused are co-workers, such communication is commonplace and lacks the necessary corroboration to attract the rigour of Section 37."
The Court further observed that the prosecution’s case rests on a chain of allegations without any direct evidence tying the applicants to the physical movement or possession of the contraband. The explanation offered by Accused No. 6 regarding the ₹15,00,000 transactions was not rebutted with contrary evidence. The Court emphasized that bail is the rule and jail is the exception, particularly where the investigation is complete and custody serves no further investigative purpose.
The Court also distinguished this case from those involving recovered contraband, seized weapons, or confessional statements, where Section 37’s strictures are more readily applicable.
The Verdict
The applicants succeeded. The Court allowed the bail applications and directed the release of both accused on the following conditions: (i) execution of a personal bond of ₹1,00,000 each with two solvent sureties of like amount; (ii) full cooperation with the investigation; (iii) appearance before the investigating officer every Saturday between 10.00 a.m. and 11.00 a.m. until further orders; (iv) no commission of any NDPS-related offence while on bail; (v) no contact with prosecution witnesses or tampering with evidence; (vi) no departure from the State of Kerala without court permission; and (vii) any application for modification or cancellation of bail to be filed before the trial court.
What This Means For Similar Cases
Circumstantial Evidence Alone Cannot Trigger Section 37 NDPS Act
- Practitioners must now argue that Section 37 of the NDPS Act cannot be invoked merely on financial links or call logs unless corroborated by direct evidence of involvement.
- Where the accused is not in possession of contraband and the final report is filed, courts should scrutinize whether custody is genuinely necessary for investigation.
Final Report as a Factor in Bail Decisions
- The filing of a final report weakens the State’s argument for continued custody under the pretext of investigation.
- Courts may now treat the completion of investigation as a factor favoring bail, especially in non-violent, non-possessory roles.
Co-Worker Communications Are Not Inherently Suspicious
- Call records between individuals with legitimate professional contact (e.g., train staff) cannot be treated as prima facie evidence of conspiracy.
- Prosecutors must provide additional context - such as coded language, timing of calls relative to the crime, or known criminal associations - to establish criminal intent.
