The appellate court upheld the trial court's acquittal due to non-compliance with mandatory provisions of the NDPS Act, emphasizing the need for substantial evidence for conviction.

JUDGMENT:

This appeal is filed by DRI (Directorate of Revenue Intelligence), challenging the acquittal recorded by the Metropolitan Sessions Judge, Hyderabad, in S.C.No.350/2002, vide Judgment dt.30.06.2005, for the offences under Sections 22, 25, 27-A & 29 of NDPS Act against A1; 22, 25-A, 27-A & 29 of NDPS Act against A2; 22, 27-A, 29 of NDPS Act against A3; 22, 29 of NDPS Act against A4; 22, 25 & 29 of NDPS Act against A5; 22, 25 & 29 of NDPS Act against A6; 22, 25 & 29 of NDPS Act against A7; 22 of NDPS Act against A8; 22 & 25 of NDPS Act against A9; 22 of NDPS Act against A10; 22 of NDPS Act against A11; 25-A & 31 of NDPS Act against A12; 25-A of NDPS Act against A13 to A16.

2. The case of the prosecution is that specific intelligence was gathered which indicated that Methaqualone, a Psychotropic Substance specified in the schedule to Narcotic Drugs and Psychotropic Substances Act, 1985 (for short ‘NDPS Act’) was being manufactured at M/s.Neepa Chem Laboratories Private Limited, located at Survey No.441, Brahmanpally Road, Bibinagar, Nalgonda District and further being converted into tablets at H.No.1-1, Masanpally Village, Basheerabad Mandal, Ranga Redddy District. The gist of intelligence was recorded by LW.1-S.Yanadi Reddy, Senior Intelligence Officer and in compliance with section 42 of the NDPS Act, LW.1-S.Yanadi Reddy reported the gist of intelligence to his immediate official superior LW.2- M.Subramanyam, Senior Deputy Director vide letter dated 9.05.2002. On the basis of search authorizations issued by LW.1- S.Yadagiri Reddy, the officer of Directorate of Revenue Intelligence along with Central Excise Officer conducted search at the above mentioned premises on 10.05.2002 in the presence of independent witnesses and the proceedings were drawn under the respective panchanamas dated 10.05.2002.

3. The search party headed by LW.3-A.V.S.Mallikharjuna Rao, Intelligence Officer conducted the search of Plant-II (New Shed) of M/s.Neepa Chem Laboratories Private Limited, Survey No.441, Brahmanpally Road, Bibinagar, Nalgonda District, in the presence of two independent witnesses LW.4-P.Ramesh and LW.5- I.Swamanna. At that time A8 was present and later A1, A2 and A3 came to the premises. The process of operations were in progress. During the search, off-white coloured powder packed in 10 polythene bags on the machine floor and certain quantity of off white coloured powder in the drying-chamber, besides other chemicals, reaction mass and in-process residue were found. The officers conducted tests on the off-white coloured powder with the help of a field-test-kit brought by them and the same tested positive for the presence of Methaqualone, a psychotropic substance specified in the scheduled to the NDPS Act. The officers also searched a Tata Safari vehicle bearing No.AP 9AC 9145 parked at the said premises and recovered a passport bearing No.72723 issued in the name of A2 and a polythene cover containing off- white coloured powder, which also tested positive for the presence of Methaqualone. Before conducting the personal search of A1, A2, A3 and A8, they were asked whether they would like to be searched before a Magistrate or Gazetted Officer. They informed that they had no objection to be searched before any Officer. Thereafter, the personal search of the above accused persons was conducted before LW.6-Shaik Khan Saheb, Superintendent of Central Excise who is a Gazetted officer. Nothing was recovered from the personal search of A1. The incriminating documents recovered from A2 include, among others, a slip showing requirement of bags which later was identified as in the hand-writing of