The Himachal Pradesh High Court has delivered a significant clarification on the admissibility of confessional statements under the Narcotic Drugs and Psychotropic Substances Act, reinforcing that mere association with an accused or proximity to contraband cannot substitute for direct evidence of culpability. This judgment reasserts foundational principles of criminal jurisprudence, particularly the presumption of innocence and the inadmissibility of police-recorded statements as confessions.
Background & Facts
The Dispute
The case arose from the recovery of 360 bottles of Zing Cirex-T syrup containing Triprolidine Hydrochloride and Codeine Phosphate from the rented room of Prajwal Sharma, an employee of CSD Life Sciences. The bottles, 14 of which bore the company’s label and 346 unlabeled, were recovered during a raid based on secret intelligence. The investigating agency arrested Prajwal Sharma and his co-accused Pardeep. Subsequently, the owners of CSD Life Sciences - Sachin Agnihotri and Vishal - and the Production Manager, Alok Dhar Dwivedi, were named as accused based solely on Prajwal Sharma’s statement that the bottles were stored at his behest.
Procedural History
- 05.12.2025: FIR registered under Sections 22 and 29 of the ND & PS Act at PS Baddi, Solan.
- January - February 2026: Bail petitions filed by Sachin, Vishal, and Alok before the Sessions Judge, Solan, were dismissed.
- 30.01.2026, 10.02.2026, 19.02.2026: High Court granted interim bail to the petitioners, subject to joining investigation.
- 06.03.2026: Petitioners sought confirmation of interim bail before the Himachal Pradesh High Court.
Relief Sought
The petitioners sought confirmation of interim bail, arguing that no contraband was recovered from their possession, their complicity was not established by independent evidence, and their arrest was based solely on inadmissible confessional statements under Section 67 of the ND & PS Act.
The Legal Issue
The central question was whether Section 67 of the ND & PS Act permits the use of a co-accused’s statement to establish criminal liability against owners or managers of a pharmaceutical company, when the contraband was not recovered from their possession and no independent evidence links them to the offense.
Arguments Presented
For the Petitioner
The petitioners relied on Tofan Singh v. State of Tamil Nadu and State by (NCB) Bengaluru v. Pallulabid Ahmad Arimutta to argue that statements recorded under Section 67 of the ND & PS Act are inadmissible as confessions under Section 25 of the Indian Evidence Act. They emphasized that the prosecution failed to establish conscious possession or mens rea on their part, and that their liability was being inferred solely from the position they held in the company, which violates the principle of individual criminal responsibility.
For the Respondent
The State contended that the commercial quantity of contraband, coupled with the fact that the room where it was stored was leased in the company’s name, created a prima facie case under Section 38 of the ND & PS Act. It argued that as owners and Production Manager, the petitioners were responsible for oversight and could not evade liability merely because the drugs were not found on their person. The State also cited irregularities found during drug inspections and the closure of the factory as circumstantial evidence of systemic misconduct.
The Court's Analysis
The Court undertook a rigorous analysis of the evidentiary and statutory framework governing liability under the ND & PS Act. It emphasized that possession under the Act requires conscious and physical control, and that vicarious liability cannot be imposed without proof of active participation or knowledge.
"It is also not in dispute that during investigation, police found that entire bulk of drug manufactured in the premises of the CSD Life Sciences was sent to Kanpur as per invoice and there is no record, if any, of 360 bottles recovered from the room of co-accused Prajwal Sharma."
The Court held that the confessional statement of Prajwal Sharma, recorded under Section 67, was inadmissible as a confession under Section 25 of the Evidence Act, as affirmed by the Supreme Court in Tofan Singh. The Court further noted that the mere fact that the room was leased in the company’s name, and that 14 bottles bore its label, did not establish mens rea or active involvement by the petitioners.
The Court distinguished between corporate liability and individual criminal liability, stating that the prosecution must prove personal culpability, not merely association. It cited Dataram Singh v. State of Uttar Pradesh and Sanjay Chandra v. CBI to underscore that bail is the rule, jail the exception, and that detention pending trial cannot be used as punishment or deterrence.
The Court also rejected the State’s argument that the commercial quantity of contraband automatically justified denial of bail, noting that Section 37 of the ND & PS Act permits bail if the court is satisfied the accused is falsely implicated and unlikely to reoffend. No such likelihood was established here.
The Verdict
The petitioners won. The Court confirmed their interim bail, holding that confessional statements under Section 67 of the ND & PS Act cannot be used to establish complicity against persons not in possession of contraband. The Court emphasized that mere ownership or managerial position does not equate to criminal liability without independent evidence of intent or participation.
What This Means For Similar Cases
Confessional Statements Cannot Substitute for Physical Evidence
- Practitioners must challenge the admissibility of Section 67 statements in all ND & PS cases where the accused was not in possession of contraband.
- Prosecution must now independently establish conscious possession, knowledge, or active involvement - not rely on co-accused statements.
- Courts must exclude such statements at the bail stage if they form the sole basis of accusation.
Corporate Position Alone Does Not Imply Criminal Liability
- Owners, directors, or managers cannot be prosecuted under ND & PS Act merely because contraband was found on premises they own or manage.
- Prosecution must prove personal participation or willful negligence - not infer guilt from corporate hierarchy.
- Defense should demand production of manufacturing logs, dispatch records, and inventory audits to disprove complicity.
Bail Cannot Be Denied Solely on Quantity or Corporate Link
- Even in cases involving commercial quantities, Section 37 permits bail if the accused is not a flight risk and has cooperated with investigation.
- Courts must apply the eight-pronged test from Prasanta Kumar Sarkar and avoid automatic denial based on offense severity.
- Petitioners who have joined investigation and surrendered documents should be granted bail unless there is concrete evidence of tampering or absconding.
