Mere Involvement In 'Grave Economic Offence' Not Organised Crime U/S 111 Of BNS: J&K&L High Court

A bench of Justice Sanjay Dhar has held that to bring an accused within the ambit of organised crime, it must be shown that the person has indulged in continuing unlawful activity, has been charge-sheeted more than once within the preceding ten years, and that cognisance has been taken by a competent court.

Justice Dhar, while dismissing the bail petitions of 3 accused persons in a ₹53 crore cyber and banking fraud observed that the invocation of Section 111 BNS by the Investigating Agency was legally unsustainable at this stage, as none of the accused had been previously charge-sheeted or faced cognizance in past cases.

The case arose from an FIR based on a complaint by one Firdous Ahmad Dar, who alleged that he was deceived by a probationary officer at J&K Bank's Kangan branch. It was alleged that the Bank officer lured Dar into investing in a high-return online trading scheme, misused his Aadhaar, PAN, and bank credentials, and diverted ₹5 lakhs to his father account under false pretences.

During investigation it emerged that the Officer's sister and her fiancé were also part of this fraudulent setup. Massive transactions totaling over ₹53 crores were found across multiple accounts linked to the accused.

It also came to fore that a second FIR had been registered against the trio at the Cyber Police Station, Srinagar, involving offences under the IT Act and BNS, and that the accused allegedly created and ran a fake online trading platform. Several banks and financial institutions were roped in during the probe. The accused were also found in possession of multiple bank accounts and cards, with inter-se transactions indicating a coordinated operation.

The petitioners, represented by Mr. Salih Pirzada, Mr. Aabid Hamid, Mr. Areeb Kawoosa, and Mr. Gagan Oswal, argued that the offence under Section 111 BNS was wrongly invoked since there were no prior charge-sheets or cognizance taken in the past 10 years. It was also submitted that they had spent more than 60 days in custody, entitling them to default bail under Section 187(3) BNSS, since the original offence under Section 318(4) BNS attracts a maximum sentence of 7 years.

Arguing that the invocation of grave charges appeared aimed at denying bail, it was added that one of the accused is undergoing treatment for cancer, and others are on medication and aged, hence, warranting bail on humanitarian grounds.

Justice Sanjay Dhar began by addressing the invocation of Section 111 BNS, holding,

“For bringing an activity of an accused within the definition of 'organized crime', it has to be shown that such person has indulged in continuing unlawful activity, which may include, inter alia, an economic offence. It is also to be shown that the concerned person must have been charge-sheeted before a court of competent jurisdiction more than once in the preceding ten years and that court should have taken cognizance of such offence.”

The Court noted that the only basis for invoking Section 111 was that the accused were also named in FIR of Cyber Police Station. However, no charge sheet had yet been filed, nor had any court taken cognizance in that case or any other prior matter. Hence, the invocation of Section 111 BNS was premature and without legal basis.

On the question of default bail, the Court held that though the petitioners had spent more than 60 days in custody, the offence under Section 316(5) BNS (criminal breach of trust by a banker or public servant) is punishable with life imprisonment. Observing that there was prima facie material against the accused for misusing account credentials of the complainant while serving in the bank, and against the others for being part of the conspiracy, the court remarked,

“… there is prima facie material on record to show that the petitioners are involved in commission of offence under Section 316(5) of BNS read with Section 61 BNS. Thus, it cannot be stated that the Investigating Agency has erroneously invoked the provisions of Section 316(5) read with Section 61 of BNS against the petitioners”

On the merits of regular bail, the Court noted that,

“Investigation is still in progress and is nowhere near completion. The allegations against the petitioners are serious in nature. Therefore, it is not a case where the petitioners, despite being involved in a grave offence, can be enlarged on bail at this stage.”

Citing the Supreme Court's rulings in P. Chidambaram v. Directorate of Enforcement and State through CBI v. Amarmani Tripathi, the Court reiterated that though economic offences do not bar bail per se, each case must be evaluated on its facts, especially where public trust and systemic abuse are involved.

The Court also rejected the contention regarding non-furnishing of arrest grounds, noting,

“They have not challenged their arrest nor have they challenged orders of remand passed by the learned Magistrate from time to time. Unless the petitioners/accused specifically allege that the grounds of arrest were not furnished to them, the burden of proving the same would not shift to the Investigating Agency”

Declining to consider the plea on medical grounds the court found no urgent medical complications from the documents on record. Hence, in view of the above considerations the found the petitions devoid of any merit and dismissed them.

Case Title: Aamir Bashir Magray Vs UT Of J&K

Citation: 2025 LiveLaw (JKL)

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