Financial Transactions & Co-Accused Statements Insufficient For 'Organised Crime' Charge Under S.111 BNS Without Prior Charge-Sheets: Himachal Pradesh High Court - 2025-07-09

Financial Transactions and Co-Accused Statements Insufficient to Prove ‘Organised Crime’ Under BNS, Holds HP High Court While Granting Bail

Shimla , HP – In a significant ruling clarifying the scope of new penal provisions, the Himachal Pradesh High Court has granted bail to an accused in a major drug syndicate case, holding that financial transactions and call detail records (CDRs) alone are insufficient to deny bail. The Court, presided over by Hon’ble Mr. Justice RakeshKainthla , further held that to invoke the stringent 'organised crime' charge under Section 111 of the Bharatiya Nyaya Sanhita (BNS), the prosecution must show that the accused was previously charge-sheeted in multiple cases.

The Court granted regular bail to the petitioner, Vipul , who was arrested in connection with FIR No. 30 of 2025, registered under Sections 21 and 29 of the Narcotic Drugs and Psychotropic Substances (NDPS) Act and Section 111 of the BNS.

Background of the Case

The case stems from the arrest of two individuals, Sohan Lal and Geeta Shreshta , from whom 26.68 grams of heroin were recovered on March 3, 2025. A subsequent investigation into their financial and call records revealed a sprawling network involving numerous individuals. The police claimed Sohan Lal was running an organised crime syndicate, leading to the arrest of dozens of people, including the petitioner, Vipul . The prosecution's case against Vipul was based on his phone conversations with the main accused (343 calls with Sohan Lal and 53 with Geeta Sreshta ) and financial transactions totaling ₹27,801.

Arguments at the Bar

Petitioner's Counsel, Mr. Karan Singh Kanwar, argued that Vipul was falsely implicated. He contended that there was no substantive material against his client apart from the statement of a co-accused, CDRs, and minor bank transactions, which are legally insufficient to establish his involvement in the alleged crime.

State's Counsel, Mr. Ajit Sharma, Deputy Advocate General, vehemently opposed the bail plea. He submitted that the petitioner was part of a dangerous organised syndicate responsible for supplying heroin, a drug adversely affecting the youth, and prayed for the petition's dismissal.

Court's Analysis: Dissecting the Evidence

Justice RakeshKainthla conducted a meticulous analysis of the evidence presented and the applicable legal principles, particularly under the NDPS Act and the new BNS.

1. On Co-Accused Statements and CDRs: The Court reiterated the established legal position that a confessional statement made by a co-accused to a police officer is inadmissible as evidence against another accused. Citing the landmark Supreme Court ruling in Tofan Singh v. State of Tamil Nadu , the bench affirmed that such statements are hit by Section 25 of the Indian Evidence Act and cannot form the basis for conviction or detention.

"Therefore, no advantage can be derived by the prosecution from the confessional statement made by the co-accused implicating the petitioner."

Similarly, relying on its own precedents, the Court held that CDRs and financial transactions, without corroborating evidence linking them directly to drug trafficking, are not sufficient to establish a prima facie case under the NDPS Act.

2. Defining 'Financing' under the NDPS Act: The prosecution had argued that the financial transactions constituted 'financing' of illicit drug traffic, an offence under the NDPS Act. The Court rejected this broad interpretation, concurring with the Bombay High Court's reasoning in Rhea Chakraborty v. Union of India .

"Financing will have to be interpreted to mean to provide funds for either making that particular activity operational or for sustaining it... simply providing money for a particular transaction... will not be financing of that activity."

The judgment emphasized that the legislature consciously used different words like "sale," "purchase," and "financing," which must be given distinct meanings to avoid making parts of the statute redundant.

3. Interpreting 'Organised Crime' under Section 111 BNS: The Court delved into the newly enacted Section 111 of the BNS, which defines and punishes 'organised crime'. A key ingredient of this offence is "continuing unlawful activity," which is defined as an activity for which more than one charge-sheet has been filed before a competent court within the preceding ten years, and the court has taken cognizance.

Citing recent judgments from the Kerala, Karnataka, and Andhra Pradesh High Courts, Justice Kainthla observed:

"It is apparent from the bare perusal of the Section that a person should indulge in a specified activity... in respect of which more than one charge sheet has been filed before a Court within the preceding period of ten years and the Court has taken cognisance of such offence."

Since it was undisputed that no prior charge-sheet existed against the petitioner, the Court concluded that the offence under Section 111 BNS was prima facie not attracted.

Final Decision

Finding the evidence against the petitioner legally weak and the stringent conditions for invoking 'organised crime' and 'financing' unsatisfied, the Court allowed the bail petition. Vipul was ordered to be released on furnishing bail bonds of ₹1,00,000, subject to conditions including not tampering with evidence, attending trial, and surrendering his passport.

The Court clarified that its observations were limited to the disposal of the bail petition and would not influence the merits of the trial.