The present bail application has been filed under Section 439 Cr.P.C. on behalf of the petitioner, who is in custody in relation to F.I.R.
No.DRI/DZU/JRU/19/INT-4/2016 DATED 26.4.2017, for the offences under Sections 9(A), 22(C), 23(C), 25, 25(A), 27(A), 29 read with 2, 8, 8(A)
of NDPS Act and Rules 53(A), 64(A), 65(A), 66, 67 of NDPS Rules.
Facts in brief are that on 28.10.2016, the Officers of DRI, on receiving a prior information, conducted a raid at a godown No.G1, 347 located in the
Bhamashah Industrial Area, Kalwadwas, Udaipur, allegedly owned, controlled and operated by Subhash Dudani, Ravi Dudani and Nirmal Dudani. On
conducting an extensive search of the premises, a huge bulk of Methaqualone tablets weighing about 23320 kgs. was recovered. The contraband
psychotropic tablets were seized. Thereafter, search commenced for the three godown owners named above. Their statements were recorded under
Section 67 of the N.D.P.S. Act and it came to light from these statements to be specific, that of Subhash Dudani, that the petitioner had, at a
particular point of time provided the technical know how and had aided, Shri Subhash Dudani in commissioning an Acetic Anhydride (an essential
chemical required during manufacturing process of Methaqualone) manufacturing plant but the said endeavour did not fructify. The petitioner too was
interrogated under Section 67 of the N.D.P.S. Act and was arrested on 3.11.2016. Since then, he is in custody. The D.R.I. conducted thorough
investigation and finally, a complaint came to be filed against the principal accused Subhash Dudani and his collaborators for the offences under
Sections 8/22/25 and 29 of the N.D.P.S. Act. As against the present petitioner, charge-sheet was filed for the offences under Sections 9(A) read with
25(A) and 29 of the N.D.P.S. Act with a conclusion that he provided technical support for commissioning Acetic Anhydride plant to Subhash Dudani
knowing very well that the chemical could be illegally used for production of Methaqualone. The petitioner moved a bail application under Section 439
Cr.P.C. in the court of the learned Special Judge, N.D.P.S. Act Cases, Udaipur which was rejected on 1.7.2017 whereupon, the instant application for
bail has been filed in this Court.
Shri Vikas Balia, learned counsel representing the petitioner, placed reliance on the Hon'ble Supreme Court decision in the case of Nikesh Tarachand
Shah Vs. Union of India & Anr. reported in 2017 SCC Online SC 1355 and urged that the restrictions contained in Section 37 of the N.D.P.S. Act do
not operate against the present petitioner in his endeavour to seek bail because no incriminating recovery whatsoever was effected at his instance or
from his possession. He urged that the petitioner, a chemical engineer by profession, rightfully, lawfully and without any mensrea provided the
technical assistance and attempted commissioning of Acetic Anhydride plant in the premises of Subhash Dudani way-back in the year 2009.
However, the petitioner failed in his endeavour. Thereafter, Subhash Dudani procured a manufacturing plant of Acetic Anhydride commissioned
through M/s.Narain Lala of Gujarat. He urged that, neither from the statements of Subhash Dudani and his collaborators or that of the petitioner
recorded under Section 67 of the N.D.P.S. Act does it emerge that the petitioner was in any case aware that the Acetic Anhydride manufacturing
plant for the commissioning whereof he was engaged, would be used for illegal purposes. He urged that the petitioner came in touch with Subhash
Dudani in the month of June 2007 and did the job of epoxy quoting etc. in his industrial unit named Sun Opticals Limited for a fee of Rs.7 lacs. In the
year 2008, Subhash Dudani took the petitioner’s advise for setting up an alcohol/alcohol derivative plant which did not fructify. Later on, the
petitioner’s professional expertise was sought for setting up of an Acetic Anhydride plant. The petitioner apprised Shri Subhash Dudani that the
setting up of such plant required extensive and cumbersome legal process of getting permissions etc. from the government. Subhash Dudani apprised
the petitioner that the plant would be exported and set up outside the country. In April 2009, Subhash Dudani informed that the requisite permissions
had been obtained and formally engaged the petitioner to install and commission the plant. The petitioner visited the unit of Subhash Dudani at Gudli,
Udaipur and made an attempt for commissioning the plant. He spent total of 25 days in this endeavour but could not succeed. In the year 2011, the
petitioner was consulted by Subhash Dudani for setting up an ephedrine plant. The petitioner advised Subhash Dudani to contact one Dr.Ravi for this
purpose and the services of Dr.Ravi were obtained and he was paid a sum of Rs.33 lacs by way of consultancy fees through the petitioner. As per
Shr Balia, the fact regarding the petitioner having transferred this amount paid to him by Subhash Dudani to Dr.Ravi has been corroborated by
Investigating Officer from the relevant bank statements. For two years from 2011 onwards, the petitioner had no further dealings with Subhash
Dudani. In the year 2013, the petitioner was approached by Shri Dudani to set up a new partnership firm at Gujarat. However, the firm was created
only on papers but could not be registered and no business was done in its name. In May 2016, the petitioner took a personal loan of Rs.10 lacs from
Subhash Dudani, which was transferred to him through the firm named M/s.Sherry Drinks owned by Shri Dudani. The petitioner repaid the said
amount by a bank transfer in June 2016 itself. As per Shri Balia, there is not even a semblence of evidence on record so as to link the petitioner with
either the Acetic Anhydride or Methaqualone manufactured by Shri Subhash Dudani or recovered from his premises. Admittedly, the petitioner who
was lawfully engaged for this purpose, could not succeed in commissioning the Acetic Anhydride plant in the year 2009. He provided his services to
Shri Dudani only for a limited and specific purpose of providing the technical know how but the attempt proved abortive. He further submitted that a
technical expert is not required to have any licence for commissioning a manufacturing plant of any controlled substance. The onus would be on the
manufacturer to obtain the necessary permissions etc. before starting production. He further urged that the highest allegations of the D.R.I. as against
the petitioner are only limited to an abortive attempt of manufacturing Acetic Anhydride, apparently the restrictions of Section 37 of the N.D.P.S. Act
would not apply to the petitioner. Sh.Balia further urged that Acetic Anhydride has wide spread applications in manufacturing processes of various
kinds and as such, the petitioner’s bonafides cannot be doubted and he cannot be imputed mensrea for the offences. He relied upon the following
observations in Nikesh Tarachand Shah’s judgment:
“32. When we come to paragraph 2 of Part A of the Schedule, this becomes even more apparent. Sections 19, 24, 27A and 29 of the Narcotic
Drugs and Psychotropic Substances Act, 1985 are all sections which deal with narcotic drugs and psychotropic substances where a person is found
with, what is defined as, “commercial quantity†of such substances. In each of these cases, under Section 37 of the NDPS Act, a person
prosecuted for these offences has to meet the same twin conditions which are contained in Section 45 of the 2002 Act. Inasmuch as these Sections
attract the twin conditions under the NDPS Act in any case, it was wholly unnecessary to include them again in paragraph 2 of Part A of the
Schedule, for when a person is prosecuted for an offence under Sections 19, 24, 27A or 29 of the NDPS Act, together with an offence under Section
4 of the 2002 Act, Section 37 of the NDPS Act would, in any case, be attracted when such person is seeking bail for offences committed under the
2002 Act and the NDPS Act.
33. Also, the classification contained within the NDPS Act is completely done away with. Unequals are dealt with as if they are now equals. The
offences under the NDPS Act are classified on the basis of the quantity of narcotic drugs and psychotropic substances that the accused is found with,
which are categorized as: (1) a small quantity, as defined; (2) a quantity which is above small quantity, but below commercial quantity, as defined; and
(3) above commercial quantity, as defined. The sentences of these offences vary from 1 year for a person found with small quantity, to 10 years for a
person found with something between small and commercial quantity, and a minimum of 10 years upto 20 years when a person is found with
commercial quantity. The twin conditions specified in Section 37 of the NDPS Act get attracted when bail is asked for only insofar as persons who
have commercial quantities with them are concerned. A person found with a small quantity or with a quantity above small quantity, but below
commercial quantity, punishable with a one year sentence or a 10 year sentence respectively, can apply for bail under Section 439 of the Code of
Criminal Procedure without satisfying the same twin conditions as are contained in Section 45 of the 2002 Act, under Section 37 of the NDPS Act. By
assimilating all these three contraventions and bracketing them together, the 2002 Act treats as equal offences which are treated as unequal by the
NDPS Act itself, when it comes to imposition of the further twin conditions for grant of bail. This is yet another manifestly arbitrary and discriminatory
feature of the application of Section 45.†and urged that the embargo of Section 37 of the N.D.P.S. Act would only apply in cases where, contraband
is directly recovered from the accused and thus, the petitioner from whom, no contraband substance was ever recovered, is entitled to be enlarged on
bail.
Per contra, learned counsel Shri B.P.Bohra representing the respondent No.2 DRI vehemently opposed the submissions
advanced by Shri Balia and contended that the petitioner is deeply entrenched in conspiracy with the principal accused Shri Subhash Dudani for
manufacturing of Acetic Anhydride, a controlled substance which is a crucial and indispensible ingredient required in the manufacturing process of
Methaqualone. He was undoubtedly, having knowledge that Shri Dudani would be using the illegally manufactured controlled substance in production
of Methaqualone. Thus, as per Shri Bohra, the petitioner’s role in this case is not limited as a technical hand and is rather that of an active
collaborator in the attempt to manufacture a controlled substance without licence. On these grounds, he craved rejection of the petitioner’s bail
application.
I have given my thoughtful consideration to the arguments advanced at the bar and have gone through the material available on record.
Manifestly, the following facts are admitted from the record:
1. That no contraband or controlled substance was ever recovered from the present petitioner.
2. That the petitioner is a qualified chemical engineer and was providing the technical know how to Shri Subhash Dudani to set up various kinds of
industrial equipment/machinery since the year 2007. Many other persons who have not been charge-sheeted, were also engaged in similar professional
relationship with Subhash Dudani.
3. That from the statements of various accused persons and witnesses examined during the course of the investigation under Section 67 of the
N.D.P.S. Act, it emerges that the petitioner’s attempt to commission a manufacturing plant of Acetic Anhydride for Subhash Dudani in the year
2009 proved abortive because Ketone gas crucial for successful production of Acetic Anhydride could not be generated.
4. That it is also not in dispute that Acetic Anhydride was manufactured by Subhash Dudani and his associates for the first time in the plant procured
from M/s.Narain Lala of Gujarat in the year 2013.
5. That from the statements of the accused petitioner as well as that of Subhash Dudani recorded under Section 67 of the N.D.P.S. Act, it is quite
clear that when Shri Subhash Dudani asked the petitioner to set up the Acetic Anhydride manufacturing plant, the petitioner immediately apprised him
that setting up of such a plant required extensive permissions from the government whereafter, Shri Subhash Dudani conveyed to the petitioner that
the requisite permissions had been received from the government. The petitioner may have acted with negligence in proceeding with the attempt to
commission the plant without verifying the licence allegedly procured by Shri Dudani but whether such ignorance was bonafide or not would have to
be seen at the appropriate stage of the trial. For the present, it cannot be denied that the petitioner’s attempt to commission the plant failed in the
year 2009. Thereafter, there were some stray incidents of the petitioner’s contact with Shri Dudani but at no point of time, does the prosecution
claim with any conviction that the petitioner was aware regarding Subhash Dudani being involved in in illicit trade of Methaqualone.
6. That the so-called partnership deed entered into between the petitioner and Shri Subhash Dudani in the year 2013 to set up an industry at Gujarat
only exists on paper and no actual business was done in furtherance thereof.
7. That the sole transaction of the petitioner with Shri Dudani after the year 2013 pertains to the receipt of loan of Rs.10 lacs from his firm named
M/s.Sherry Drinks in the month of May 2016 and is supported by authentic bank documents. The petitioner repaid the said amount a month later.
8. That the only material evidence to link the petitioner with the alleged offences is in the form of the statements of the petitioner and the other co-
accused recorded under Section 67 of the N.D.P.S. Act.
Manifestly thus, the highest case of the prosecution as against the petitioner would not exceed beyond an abortive attempt to set up a plant for
manufacturing of Acetic Anhydride and that too in this year 2009. The accused petitioner, admittedly advised Shri Subhash Dudani to procure the
requisite permissions etc. from the Government before making the attempt to set up the plant and Shri Dudani in turn, informed the petitioner that the
requisite permissions had been received whereafter, the petitioner attempted commissioning of the plant.
On a bare perusal of Section 37A of the NDPS Act, manifestly the offence under Section 9 read with 25(A) of the Act with which the petitioner
charged, would not be covered by the embargo against bail postulated in the said provision. There is hardly any evidence on the record of the case to
satisfy the Court regarding the petitioner having acted in connivance with Shri Dudani in relation to the illegal manufacture and trade of Methaqualone.
Manifestly, the petitioner’s case is totally distinguishable from that of the co-accused Gunjan Dudani and Parmeshwar Vyas, who have been
denied bail by this Court. This Court refrains from making any comment on the argument advanced by Shri Balia based on the Supreme Court
decision in Nikesh Tarachand Shah’s case (supra) that the restriction of Section 37 of the Act would not apply to a case where, the accused is not
found in possession of the contraband. In any event, from the evidence available on record and the admitted case of the prosecution, the petitioner can
at best be said to have made an abortive attempt to manufacture Acetic Anhydride without ensuring that Sh.Subhash Dudani had a valid licence for
commissioning the plant. In this background, this Court is inclined to accept the instant bail application and enlarge the petitioner on bail.
Consequently, the bail application is allowed. It is ordered that the accused-petitioner namely Atul Dilip Mhatre arrested in connection with F.I.R.
No.DRI/DZU/JRU/19/INT-4/2016 DATED 26.4.2017 shall be released on bail; provided he furnishes a personal bond of Rs.5,00,000/- and two
surety bonds of Rs.2,50,000/- each to the satisfaction of the learned trial court with the stipulation to appear before that Court on all dates of hearing
and as and when called upon to do so.Â
