J&K High Court Rejects Rs 50 Lakh Compensation Claim After NDPS FIR Closed as “Not Admitted”
The Srinagar Bench held that closing an NDPS investigation for want of admissible evidence itself demonstrates the Investigating Officer's bona fides, not malafide.
The Srinagar Bench of the High Court of Jammu & Kashmir and Ladakh has dismissed a petition under Section 482 of the Code of Criminal Procedure in which four residents of Karnah, Kupwara sought quashment of FIR No. 11/2023 and, separately, compensation of Rs 50 lakh each. The FIR had already been closed as “not admitted” by the time the court took up the matter, leaving the compensation prayer as the only live issue. Justice Shahzad Azeem, sitting singly, found no established violation of fundamental rights, no proof of malafide, and no material of custodial harassment — and accordingly rejected the compensation claim as wholly misconceived. The judgment was pronounced on 22 July 2026, reserved on 15 July 2026.
The FIR and What the Investigation Found
On 23 January 2023, police at Karnah received source information that the four petitioners — Javid Ahmad Lone, Raja Ikhlaq Akbar, Safeer Ahmad Gadwal, and Basit Khan, all residents of different villages in the Karnah area of Kupwara — were clandestinely involved in trafficking narcotic drugs and psychotropic substances smuggled from across the Line of Control. The information further alleged that the proceeds were being invested in movable and immovable properties to conceal their illicit origin.
On the strength of this information, FIR No. 11/2023 was registered at Police Station Karnah under Sections 8A, 27B, and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act).
During investigation, search warrants were obtained from the Executive Magistrate. Fourteen vehicles allegedly belonging to the accused were seized in the Magistrate's presence. Witness statements were recorded. Mobile phones were seized and sent to the Forensic Science Laboratory for analysis. Correspondence was made with revenue and other departments regarding properties allegedly acquired by the accused. At the end of this process, however, the Investigating Officer closed the case as “not admitted” on the ground that sufficient admissible evidence could not be gathered to file a charge sheet.
Petitioners' Challenge and Their Compensation Claim
The petitioners described themselves as respectable persons with clean antecedents and modest means of livelihood. They challenged the FIR on the grounds that it was vague, omnibus, and based on a concocted story, pointing out that no contraband was recovered at any stage. They also contended that one of the named accused had been in jail since 2018, which they said showed the FIR was registered with the ulterior motive of harassment and extortion.
In addition to quashment, each petitioner claimed Rs 50 lakh in compensation.
The Union Territory filed a status report asserting that the FIR was registered on credible information, investigation was conducted fairly and transparently, the petitioners were neither harassed nor arrested during investigation, and the petition had in any event become infructuous because the investigation was already closed.
Why the Court Found No Basis for Quashment
Justice Azeem observed at the outset that once investigation stood closed as “not admitted”, the FIR was no longer operational. The petition survived only to the extent of the compensation prayer.
On the registration of the FIR itself, the court applied the Constitution Bench decision of the Supreme Court in Lalita Kumari v. Government of Uttar Pradesh & Ors. (2014) 2 SCC 1, which holds that registration of an FIR under Section 154 CrPC is mandatory when the information discloses commission of a cognizable offence, and the police have no discretion to refuse registration or to conduct a preliminary inquiry to test the veracity of such information. The information received in this case disclosed cognizable offences under the NDPS Act. Registration of the FIR was, therefore, in discharge of a statutory duty.
Examining the Case Diary, the court found nothing to suggest the FIR was registered without any basis or with an oblique motive. Search warrants were obtained from the Executive Magistrate, vehicles were seized in his presence, and correspondence was made with revenue and other departments. The court held that these steps demonstrated investigation conducted in accordance with law, with no material indicating any lapse, high-handedness, or malafide on the part of the Investigating Officer or the SHO.
The court then addressed what it described as a very vital aspect: the Investigating Officer had closed the investigation when the evidence was found insufficient rather than attempting to manipulate or fabricate evidence to file a false charge sheet. The court held that this closure was itself a manifestation of the bona fide intention of the Investigating Officer. Had malafide or a motive to harass or extort existed, the I.O. could have attempted to drag the petitioners into prolonged trial through a false charge sheet. The fact that he did not was, in the court's view, telling.
It was specifically recorded in the status report that the petitioners were neither harassed nor subjected to arrest during investigation. The court found no allegation or material of custodial torture, prolonged illegal detention, or physical harassment on the record.
The Compensation Claim: Threshold Not Met
On the question of compensation, the court set out the applicable standard: compensation in writ jurisdiction or under inherent powers is an exceptional public law remedy available only when there is an established violation of fundamental rights, coupled with malafides or gross abuse of process causing demonstrable harm. Mere registration of an FIR on credible information of a cognizable offence, followed by closure as “not admitted”, does not constitute a violation of the petitioners' fundamental rights.
The court relied on the Supreme Court's decision in State of Rajasthan v. Jainudeen Shekh & Anr. (2016) 1 SCC 514, which dealt with compensation claims under the NDPS Act. In that case the Supreme Court held that even where accused persons were acquitted after an FSL report showed no contraband and there had been delay in testing, compensation cannot be awarded unless there is positive material showing malafide or false implication.
Applying that standard, the court found that the petitioners had not brought any such material on record. The compensation claim was accordingly rejected as wholly misconceived and unsupported by any established violation of fundamental rights or proof of malafides.
The Argument on Standalone Offences Under the NDPS Act
At a late stage in arguments, counsel for the petitioners canvassed a fresh point: that Sections 8A, 27B, and 29 of the NDPS Act are not standalone substantive offences and therefore the FIR did not disclose commission of a cognizable offence at all.
The court rejected this argument outright. The allegations in the FIR specifically disclosed that the petitioners and others were allegedly involved in trafficking narcotics from across the Line of Control into the Union Territory of Jammu & Kashmir, and that the proceeds were allegedly converted and transferred into buildings and immovable and movable properties to conceal or disguise their true nature and illicit origin. Taken at their face value at the threshold stage, these allegations prima facie disclosed involvement in illegal trafficking of narcotic drugs and laundering of proceeds, which falls within the ambit of the NDPS Act. Section 8A, which prohibits certain activities relating to property derived from NDPS offences and is punishable under Section 27B, was therefore attracted. The argument that the offences were not standalone substantive offences was held to be misconceived.
Outcome
Justice Azeem dismissed CRM(M) No. 261/2023 as bereft of merit. The prayer for quashment of the FIR did not survive independently given the closure of investigation. The prayer for compensation of Rs 50 lakh to each petitioner was rejected as misconceived and unsupported by any material showing malafides or violation of fundamental rights.
The Case Diary file was directed to be returned to the learned Government Advocate, Mr. Faheem Nisar Shah, for onward transmission to Police Station Karnah with due dispatch.