The case in question arose on July 22, 2022, when the Crime Branch of Delhi Police, acting on a tip-off, apprehended a key co-accused, Shammi Kumar Sunny Kumar. During a search of his bag, 500 grams of heroin and Rs. 22 lakh in cash were recovered. Shammi Kumar later implicated Pankaj, claiming that he had come into contact with the petitioner through his employment at a printing press, eventually working for Pankaj's travel and jewelry businesses. Shammi Kumar alleged that the money recovered from him belonged to Pankaj, who was also involved in financing the drug trade, specifically with co-accused Rajat Gupta.

Further investigation pointed to a rented flat in Delhi, where a substantial quantity of heroin (10.5 kg) was said to be stored, although no recovery was made from the location. Despite this, the police submitted that the accused was financing the illegal drug trade, with co-accused Rajat Gupta being a major player. Gupta’s documents, seized during the investigation, were also linked to Pankaj, which the prosecution claimed helped establish the petitioner’s role in the drug syndicate.

Pankaj, in his bail petition, strongly denied the charges, asserting that the only evidence against him was the disclosure statements made by the co-accused. He contended that no contraband was recovered from him, nor was any illegal financial transaction traced to his accounts. His defence also pointed out that the transactions in his bank account were legitimate business dealings and not linked to the drug trade.

The petitioner’s counsel further argued that no recovery was made from his person or premises, and hence, Section 37 of the NDPS Act (which imposes stringent conditions on granting bail in cases involving commercial quantities of drugs) should not apply to his case. The disclosure statements made by the co-accused, the counsel argued, could not be relied upon without any corroborative evidence, citing previous judgments in similar cases where bail was granted under comparable circumstances.

The prosecution, on the other hand, made a robust argument opposing bail, stressing the severity of the charges. The state argued that Pankaj was a central figure in an international drug syndicate and had been involved in the logistics of drug trafficking, with connections spanning across multiple regions. Moreover, the state pointed out Pankaj’s alleged involvement in another significant case related to the seizure of 3,000 kgs of heroin by the National Investigation Agency (NIA) at Mundra Port in Gujarat.

The state also presented evidence suggesting that Pankaj had provided financing for the drug trade and was implicated by multiple co-accused persons, even though no direct recovery had been made from him. It was further argued that Pankaj was a proclaimed offender in another case registered under the Unlawful Activities (Prevention) Act (UAPA), making his release on bail a matter of serious concern.

The Delhi High Court, while acknowledging the seriousness of the allegations and the nature of the offence, also observed that no direct recovery of contraband or incriminating evidence had been made from Pankaj. The court referred to the landmark Supreme Court rulings in Bharat Chaudhary & Ors. vs. Union of India (2021) and Tofan Singh vs. State of Tamil Nadu (2020), where the Apex Court had held that the disclosure statements of co-accused, in the absence of recovery, could not be considered sufficient grounds for denying bail.

The court also took into account the prolonged period of judicial custody that Pankaj had already served (more than 18 months), which, it noted, could be considered excessive in light of the lack of direct evidence against him. It cited the Supreme Court’s decision in Rabi Prakash vs. The State of Odisha (2023), which highlighted that prolonged incarceration, in the absence of sufficient grounds, undermines the fundamental right to personal liberty under Article 21 of the Constitution.

While the prosecution had argued that Pankaj’s role in the drug syndicate was well-documented through various disclosure statements and links to other co-accused, the court pointed out that these statements alone were insufficient to establish a strong case against the petitioner. The disclosure statements, it held, were not corroborated by material evidence like the recovery of drugs or contraband from Pankaj’s possession or residence.

In granting bail, the Delhi High Court set several conditions to ensure that the petitioner does not abscond or interfere with the investigation. These included furnishing a personal bond of Rs. 50,000 with one surety, surrendering his passport, and regularly reporting to the Investigating Officer. Additionally, Pankaj was directed to refrain from communicating with witnesses or tampering with evidence.

The court’s decision to grant bail in this high-profile case serves as an important reminder of the need for solid evidence when denying bail, particularly in NDPS cases. The ruling reiterates that disclosure statements of co-accused cannot, in isolation, form the basis for denying bail unless corroborated by tangible recovery or other substantive evidence.

The case also highlights the legal principles surrounding bail under the NDPS Act, emphasizing that even in cases involving commercial quantities of drugs, the onus is on the prosecution to establish a strong, direct connection between the accused and the contraband.

While the allegations against Pankaj are serious, the Delhi High Court’s decision underscores the importance of evidence in the legal process. Without substantial proof or recovery directly linking the accused to the drug syndicate, the court found that granting bail was justified, particularly given the long period of detention and the potential for prolonged trial proceedings. The ruling, therefore, not only impacts Pankaj’s case but also sets a crucial precedent for future bail applications under the NDPS Act.