NDPS Act | P&H High Court Flags Trend Of Labelling 'Petty Cash' Found On Accused As Drug Money, Says S.37 Not Applicable

The Punjab and Haryana High Court has raised concerns over a growing trend in which even small amounts of money recovered from accused individuals are being labeled as "drug money" under the Narcotic Drugs and Psychotropic Substances (NDPS) Act.

The Court clarified that in such instances, the stringent bail conditions under Section 37 of the NDPS Act would not be applicable, and bail considerations should follow the standard legal framework applicable to regular offences.

"Section 27A is subject to the provisions of Section 37 of the NDPS Act. Recently, there has been a trend observed where even petty amounts recovered from the accused are labeled as drug money. No explanation is provided for how such petty amounts, which could be for personal expenses or travel expenses, are considered drug money. In such a background, S. 37 of the NDPS Act shall neither attract in law nor through its inclusion in the FIR. When the restrictions of Section 37 of the NDPS Act do not attract, the factors for bail become similar to the offence regular statutes," said the Court.

Section 27A is a provision that criminalizes the financing of illicit drug trafficking and the harboring of offenders. It is designed to target the financial and logistical support networks of drug syndicates.

Section 37 states that bail should not be granted to an accused in case of commercial quantity or offence under Section 27A, unless the accused is able to satisfy twin conditions i.e. reasonable ground for believing that the accused is not guilty of such an offence and that the accused would not commit an offence or is not likely to commit an offence, if granted bail.

The Court was hearing a regular bail plea under Sections 21(b), 27(a), 29/61/85 of NDPS Act. It was alleged that based on a chance recovery, the Police seized 150 grams of heroin from the petitioner's possession.

In addition to 150 grams of heroin from polythene bag, the police allegedly had also recovered Rs. 2500 from the said polythene bag.

The Court noted that when the quantity is less than commercial, the restrictions of Section 37 of the NDPS Act will not attract, and the factors for bail become similar to the offence under regular statutes.

The judge pointed that the police had no evidence to term such money as drug money, and forgetting the statutory mandate of S. 23 (1) and (2) of BSA, 2023, invoked the stringent penal provision of S. 27-A just to trigger the legislative restrictions placed on bail through S. 37 of NDPS Act.

"At the stage of invocation of S. 27-A, there was no prima facie evidence of financing, directly or indirectly. Thus, the rigors of S. 37 of the NDPS Act shall also not attract," it added.

Considering that the petitioner had been in custody for over 2 months and he is not required in any other case, the Court directed to  release him on bail in the FIR.

Ms. Aayushi, Advocate for Mr. Umesh Aggarwal, Advocate for the petitioner.

Mr. Jatin Kundu, A.A.G., Punjab.

Title: Karandeep Singh v. State of Punjab

Citation: 2025 LiveLaw (PH) 404

Click here to read order