No Supervening Circumstance, No Cancellation: J&K High Court Restores Bail Recalled Over Section 27-A NDPS Charge

The Jammu & Kashmir and Ladakh High Court set aside a trial court order cancelling bail where no misuse of liberty or fresh material had emerged after the original grant, holding the recall was effectively an impermissible review of a judicial order.

Justice Sanjay Parihar, sitting singly at the Srinagar bench of the High Court of Jammu & Kashmir and Ladakh, on 22 May 2026 set aside a trial court order that had recalled and cancelled bail granted to an accused in an NDPS case. The trial court had withdrawn the concession of bail on the ground that Section 27-A of the Narcotic Drugs and Psychotropic Substances Act — which deals with financing illicit traffic — was attracted, thereby triggering the stringent bail conditions under Section 37. The High Court found that no supervening circumstance had arisen after the original grant of bail on 14 May 2024, and that the prosecution's application for cancellation was founded entirely on an allegation that the trial court had erred at the time of granting bail — a ground that does not ordinarily justify cancellation of bail already granted.

The Accused, the FIR, and the Bail History

Kamran Mushtaq Lone is facing trial in FIR No. 10/2024, registered under Sections 8/21 and 27-A of the NDPS Act, before the Court of Second Additional Sessions Judge, Srinagar. The case arose from an incident on 30 January 2024, when a police party intercepted a vehicle bearing registration number HR05BK-1149 near Maloora, Srinagar. During the search, incriminating articles including a digital weighing scale, a broken sponge, and a syringe were recovered from the vehicle. No contraband was recovered from Lone himself. Intermediate quantities of heroin — 4.55 grams and 3 grams respectively — were recovered from co-accused Irshad Ahmad Mir and Imran Mir. Forensic examination confirmed the seized substance was Diacetyl Morphine (Heroin).

After charges were framed on 28 March 2024, Lone applied for bail. The trial court initially denied it on the ground that he was alleged to be involved in an offence under Section 27-A. He was subsequently granted short-term bail for his sister's marriage. On 14 May 2024, the trial court enlarged him on regular bail, having considered the prosecution's case including the Section 27-A allegations, and having noted that the quantity of contraband was not commercial in nature.

Within weeks, the prosecution moved an application seeking cancellation of that bail. It also sought alteration of the charge to formally include Section 27-A. The trial court, by order dated 3 July 2024, recalled and cancelled the bail, accepting the prosecution's contention that once Section 27-A was attracted, the restrictions under Section 37 operated as a bar to bail. Lone challenged that order before the High Court through Bail App No. 17/2026.

The Competing Arguments

Counsel for Lone, Mr. Aswad R. Attar, argued that the trial court had consciously granted regular bail after considering all available material, including the Section 27-A allegations. Between 14 May 2024 and the cancellation order of 3 July 2024, no material surfaced to show that Lone had misused his liberty, violated bail conditions, tampered with evidence, or interfered with witnesses. Counsel relied on State of West Bengal v. Rakesh Singh, (2022) 19 SCC 306, to argue that the quantity of contraband — even taken cumulatively across all accused — did not constitute a commercial quantity, and that the rigours of Section 37 were therefore not attracted. He further contended that the invocation of Section 27-A was unwarranted and was deployed solely to defeat Lone's claim for bail.

The prosecution, represented by Mr. Haaris Khan assisting Mr. Mohsin Qadiri, Senior AAG, opposed the petition. The respondents pointed to the investigation's findings: that co-accused Irshad Ahmad Mir, a drug addict undergoing treatment for substance use disorder, had sold his wife's gold ornaments at a jewellery shop on Hari Singh High Street and used the proceeds to purchase heroin from Lone. Suspicious transactions totalling over Rs. 2,14,150/- were detected in Lone's bank accounts. The prosecution also relied on the statement of PW-12 Shayan, who claimed Lone had been supplying narcotic substances to him over a considerable period. The respondents argued that once Section 27-A stood attracted, the trial court was fully justified in recalling the bail.

Rejection of Bail Versus Cancellation of Bail

Justice Parihar identified the core legal question: whether the trial court was justified in recalling its earlier bail order in the absence of any supervening circumstance or misuse of the concession of bail.

The Court restated the settled distinction between refusal of bail at the initial stage and cancellation of bail already granted. Cancellation requires cogent and overwhelming circumstances — misuse of liberty, interference with the course of justice, tampering with evidence, intimidation of witnesses, likelihood of absconding, or other supervening events. The Court cited Dolat Ram v. State of Haryana, (1995) 1 SCC 349, and X v. State of Telangana, (2018) 16 SCC 511, for the proposition that very cogent and overwhelming circumstances are necessary before bail already granted can be cancelled.

Applying that standard, the Court found that after 14 May 2024, Lone had not violated any bail condition, attempted to influence witnesses, tampered with evidence, absconded, or otherwise misused his liberty. The prosecution's application for cancellation was not founded on any subsequent conduct. It rested entirely on the assertion that the trial court had committed an error when it originally granted bail. The Court held that such a ground, by itself, does not ordinarily justify cancellation of bail once judicial discretion has been exercised and the order has attained finality.

Section 27-A and the Meaning of “Financing Illicit Traffic”

The Court then examined whether the prosecution's reliance on Section 27-A was well-founded at this stage. Section 27-A of the NDPS Act penalises financing illicit traffic and harbouring offenders. Where it is attracted, Section 37 imposes stringent conditions on the grant of bail.

Justice Parihar referred to the Supreme Court's analysis in State of West Bengal v. Rakesh Singh, (2022) 19 SCC 306, which held that the expression “financing illicit traffic” carries a specific connotation and cannot be invoked merely on the basis of every transaction involving money. There must be material indicating direct or indirect financing of activities constituting illicit trafficking. The same position had been followed by a coordinate bench of the High Court in Mohd. Aslam v. UT of J&K, CRM(M) No. 157/2025 read with Bail App No. 297/2024.

The Court drew a distinction between receiving consideration for the sale of narcotic substances and financing illicit traffic. Financing, the Court observed, ordinarily connotes the provision, investment, or channelisation of funds or resources for facilitating illicit trafficking activities. The mere receipt of money, absent further material showing those funds were utilised to finance or facilitate illicit trafficking, may not by itself satisfy the statutory requirements of Section 27-A.

On the facts, no contraband was recovered from Lone. The prosecution's case rested on witness statements, bank transactions, and the allegation that amounts were transferred to his account by persons who allegedly purchased narcotics from him. The Court noted that these very allegations — the bank transactions, the witness statements, and the Section 27-A applicability — were already before the trial court when it granted bail on 14 May 2024. No fresh material had surfaced thereafter.

The Trial Court's Order as an Impermissible Review

Justice Parihar held that in these circumstances, the subsequent order recalling the earlier bail effectively amounted to a review of the merits of the grant of bail rather than a cancellation founded upon legally recognised grounds. Criminal courts do not possess the power to review their own judicial orders except where specifically authorised by statute. The exercise undertaken by the trial court therefore required to be set aside.

The Court was careful to note that the allegations against Lone are serious and the prosecution remains at liberty to establish them at trial. The determinative issue in the bail proceedings was not ultimate culpability but whether the conditions necessary for cancellation of bail had been satisfied. They had not.

Order

The High Court set aside the trial court's order dated 3 July 2024. Lone was directed to be admitted to bail on furnishing a personal bond and surety of Rs. One Lac to the satisfaction of the trial court, subject to the following conditions:

• He shall appear before the trial court on each and every date of hearing unless exempted by the court.
• He shall not directly or indirectly influence, threaten, or induce any prosecution witness.
• He shall not leave the territorial jurisdiction of the Union Territory of Jammu and Kashmir without prior permission of the trial court.
• If he indulges in any act prejudicial to the fair conduct of the trial, the prosecution shall be at liberty to seek cancellation of bail.

The petition was disposed of along with connected applications. The Court directed that nothing stated in the order shall prejudice the parties at trial and that the observations are confined to the context of the bail proceedings.