Seizure of Assets Without Clear Nexus Under NDPS Act is Abuse of Process: Kerala HC

In a significant ruling concerning the powers of investigating agencies under the Narcotic Drugs and Psychotropic Substances (NDPS) Act, the High Court of Kerala has clarified the thresholds required for the seizure of property alleged to be "illegally acquired." The court, presided over by Justice V.G. Arun, quashed a police notice that sought to confiscate a scooter on the grounds that it was purchased with proceeds from drug-related crimes, noting that such actions must be based on cogent material rather than mere assumptions.

Case Background: A Question of Timing

The petitioners, Usman Kunju and his wife, challenged a notice issued by the Inspector of the Cherupulassery Police Station. The notice proposed the confiscation of the couple’s Honda scooter (Registration No. KL-29-S-4412) under Section 68F of the NDPS Act.

The police had alleged that the scooter was purchased using proceeds from the narcotic deals of the petitioners' son, who was an accused in a 2025 criminal case. However, the petitioners pointed out a fundamental chronological disconnect: the scooter was purchased in November 2020, at which time their son was only 14 years old, while the alleged criminal activities occurred in 2025.

Arguments Presented

The petitioners contended that "by no stretch of imagination" could a vehicle purchased years before the alleged offences be classified as property derived from those crimes. They argued that the initiation of forfeiture proceedings was an arbitrary abuse of process.

Conversely, the prosecution relied on the plain text of Section 68F of the NDPS Act. The Public Prosecutor argued that an investigative officer is empowered to seize property if there is "reason to believe" that the asset in question is illegally acquired, maintaining that the officer was acting within the scope of their statutory authority.

Legal Analysis: Defining the Threshold

The High Court’s analysis centered on the procedural requirements laid out in Sections 68E and 68F of the NDPS Act. Justice V.G. Arun emphasized that the power to freeze assets is not unrestrained. Before any seizure occurs, the officer must: 1. Be satisfied, based on information, that the property is "illegally acquired." 2. Record the reasons for this satisfaction. 3. Conduct an inquiry, investigation, or survey to trace and identify the property.

Crucially, the Court clarified that "reason to believe" cannot be based on mere conjecture. Invoking the Supreme Court precedent in Aslam Mohammod Merchant v. Competent Authority and Others , the Court reaffirmed that a direct nexus must exist between the specific property and the illegal earnings derived from the contravention of the NDPS Act.

Key Observations

The judgment laid down firm guidelines for investigating officers:

> "The power to seize or freeze a property can be exercised only if there is reason to believe, based on inquiry, investigation or survey, that the property is illegally acquired. The ‘reason to believe’ should be based on cogent materials and not mere assumptions."

Addressing the specific absurdity of the case, the Court observed:

> "The Investigating Officer cannot have a case that the petitioners' son had derived income by contravening the provisions of the NDPS Act way back in the year 2020."

Court's Decision

Finding the seizure notice to be an abuse of process due to the obvious lack of nexus between the asset and the alleged crime, the Court allowed the Criminal M.C. and quashed the notice (Annexure-C).

This decision serves as a vital reminder to law enforcement agencies that the extraordinary powers of forfeiture under the NDPS Act are subject to strict evidentiary standards. It safeguards citizens against the arbitrary seizure of personal property and reinforces the principle that investigative actions must be grounded in logical and factual reality, not speculative theories of "illegally acquired" wealth. Future investigations will now be expected to demonstrate a clear temporal and financial link between the property and the alleged illegal activity before initiating such drastic measures.