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HomeIndirect TaxesCustoms Broker’s Hearsay Statement, ₹1.5 Lakh Transfer Insufficient To Establish Nexus With...

Customs Broker’s Hearsay Statement, ₹1.5 Lakh Transfer Insufficient To Establish Nexus With Heroin Import: Bombay High Court Grants NDPS Bail

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The Bombay High Court has granted bail to a businessman accused of involvement in importing heroin concealed in a consignment of licorice roots, holding that the prosecution had failed to establish a sufficient prima facie nexus between him and the seized contraband.

The bench of Justice Milind N. Jadhav observed that the material against the applicant essentially comprised a co-accused’s confessional statement, the statement of a Customs House Clearing Agent which the Court characterised as hearsay, and a ₹1.5 lakh transfer allegedly made towards clearance of the consignment.

Buy Now: Indirect Tax Judgments E-Compilation – October 2026

Whether that payment related to the seized consignment and established the applicant’s criminal complicity would have to be examined during trial, the Court held.

The order was passed on September 7, 2026, and corrected or modified pursuant to a speaking-to-the-minutes order dated September 10, 2026.

The case arose from Crime registered with the Directorate of Revenue Intelligence. The applicant was arrested on November 30, 2022, for alleged offences under Sections 8(c), 21(c), 23, 27A, 28, 29, 30 and 35 of the Narcotic Drugs and Psychotropic Substances Act, 1985.

According to the prosecution case recorded in the order, the container was declared to contain licorice roots with a gross weight of 15,015 kg and a net weight of 13,500 kg. These figures represented the declared consignment weight, rather than a separately determined quantity of heroin.

The defence submitted that the container contained 436 bags. Samples of roots, wooden sticks and twigs taken from selected bags yielded mixed results, with some testing positive for heroin and others testing negative.

The prosecution relied on the chemical analysis report to contend that narcotic substances were present on the licorice roots, stems and twigs.

The applicant’s alleged involvement centred on a ₹1.5 lakh payment to the company account of accused No. 1, purportedly towards clearing the imported consignment.

The applicant had previously been granted bail on March 10, 2025. However, the Supreme Court set aside that order following a challenge.

As recorded by the High Court, both sides acknowledged that the earlier order had not recorded the satisfaction required under Section 37 of the NDPS Act. The applicant’s bail was cancelled on December 16, 2025, following which he surrendered.

While considering the fresh application, the High Court examined the twin statutory conditions: whether there were reasonable grounds for believing that the applicant was not guilty and whether he was unlikely to commit an offence while on bail.

The applicant’s counsel argued that the prosecution had not established his direct role in importing the contraband.

The defence maintained that accused No. 3, who was absconding, was the principal person behind the import, while accused No. 1 and the customs broker had handled clearance.

Counsel submitted that no contraband had been recovered from the applicant and that no electronic trail or documentary evidence independently connected him with the seized consignment.

The defence further argued that confessional statements, hearsay assertions and unsubstantiated electronic material could not establish the necessary prima facie case. It also relied on the applicant’s absence of criminal antecedents, his business in Ludhiana and his established ties to society.

Opposing bail, the prosecution submitted that the Customs House Clearing Agent’s statement explained the applicant’s role and that the ₹1.5 lakh transfer established his involvement in clearing the consignment.

The Special Public Prosecutor argued that the clearing agent was an independent witness whose statement deserved weight. The prosecution also stressed the scale of the seizure and the positive chemical analysis results.

Regarding the trial, the prosecution stated that although approximately 40 witnesses were contemplated, it intended to examine 15 key witnesses and endeavour to complete the proceedings within one year.

It relied on the Supreme Court’s decision in State of Punjab v. Balraj Singh @ Billa, concerning the seriousness of drug offences and their implications for national interests and public health.

The High Court found that the prosecution had not produced sufficient material establishing the applicant’s connection with the seized contraband.

It observed that the evidence against him was, prima facie, a co-accused’s confessional statement and hearsay evidence from the Customs House Clearing Agent. Whether the ₹1.5 lakh payment concerned clearance of the particular consignment and established complicity remained a matter for trial.

The Court also noted that the prosecution material prima facie indicated that the applicant had taken back the amount. This circumstance likewise required examination during trial.

In the absence of a recovery from the applicant or material establishing his direct involvement, the Court considered the allegation of conscious and culpable possession, or participation in importing the contraband, speculative and inferential at that stage.

These circumstances provided reasonable grounds for believing that the applicant was not guilty for the limited purpose of considering bail, satisfying the first condition under Section 37.

The Court acknowledged the substantial seizure but held that the prosecution had failed to demonstrate a reasonable prima facie nexus between the applicant and the contraband.

It found that the Supreme Court observations relied upon by the prosecution could not be applied generically without material connecting the particular applicant to the alleged offence.

The Court further observed that the prosecution had not established a money trail attributable to the applicant linking him with the seized contraband and the other accused.

On the second condition under Section 37, the Court considered that the applicant had no criminal antecedents, was engaged in business and had deep roots in society.

Taking these circumstances together with the substantial period of incarceration and the fact that the trial had not commenced, the Court concluded that continued detention was unnecessary.

The High Court directed the applicant’s release on a personal recognisance bond of ₹50,000 with one or two sureties of the same amount.

He must report to the investigating officer on the first Monday of every month between 10 a.m. and noon, cooperate with the trial and attend hearings unless specifically exempted. Seeking unnecessary adjournments could entitle the prosecution to apply for revocation of bail.

The applicant must deposit his passport with the trial court within one week of release and cannot leave India without its prior permission. He must not influence witnesses or tamper with evidence and must keep the investigating officer informed of his current address and mobile number.

The Court clarified that its observations were confined to deciding the bail application. The trial must be adjudicated independently on the evidence, uninfluenced by the prima facie findings in the bail order.

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Read More: Indirect Tax Judgments E-Compilation – October 2026

Mariya Paliwala
Mariya Paliwalahttps://www.jurishour.in/
Mariya is the Senior Editor at Juris Hour. She has 7+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started her career as a freelance tax reporter in the leading online legal news companies.

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