Senior Intelligence Officer, Hyd., vs Gurram Dasaratha Reddy, And 15 Others,
2025 Latest Caselaw 1009 Tel

Telangana High Court

Senior Intelligence Officer, Hyd., vs Gurram Dasaratha Reddy, And 15 Others, on 10 January, 2025

          THE HONOURABLE SRI JUSTICE K.SURENDER
                CRIMINAL APPEAL No.1719 OF 2005

JUDGMENT:

This appeal is filed by DRI (Directorate of Revenue

Intelligence), challenging the acquittal recorded by the Metropolitan

Sessions Judge, Hyderabad, in S.C.No.350/2002, vide Judgment

dt.30.06.2005, for the offences under Sections 22, 25, 27-A & 29 of

NDPS Act against A1; 22, 25-A, 27-A & 29 of NDPS Act against A2;

22, 27-A, 29 of NDPS Act against A3; 22, 29 of NDPS Act against

A4; 22, 25 & 29 of NDPS Act against A5; 22, 25 & 29 of NDPS Act

against A6; 22, 25 & 29 of NDPS Act against A7; 22 of NDPS Act

against A8; 22 & 25 of NDPS Act against A9; 22 of NDPS Act

against A10; 22 of NDPS Act against A11; 25-A & 31 of NDPS Act

against A12; 25-A of NDPS Act against A13 to A16.

2. The case of the prosecution is that specific intelligence was

gathered which indicated that Methaqualone, a Psychotropic

Substance specified in the schedule to Narcotic Drugs and

Psychotropic Substances Act, 1985 (for short 'NDPS Act') was being

manufactured at M/s.Neepa Chem Laboratories Private Limited,

located at Survey No.441, Brahmanpally Road, Bibinagar,

Nalgonda District and further being converted into tablets at

H.No.1-1, Masanpally Village, Basheerabad Mandal, Ranga Redddy

District. The gist of intelligence was recorded by LW.1-S.Yanadi

Reddy, Senior Intelligence Officer and in compliance with section

42 of the NDPS Act, LW.1-S.Yanadi Reddy reported the gist of

intelligence to his immediate official superior LW.2-

M.Subramanyam, Senior Deputy Director vide letter dated

9.05.2002. On the basis of search authorizations issued by LW.1-

S.Yadagiri Reddy, the officer of Directorate of Revenue Intelligence

along with Central Excise Officer conducted search at the above

mentioned premises on 10.05.2002 in the presence of independent

witnesses and the proceedings were drawn under the respective

panchanamas dated 10.05.2002.

3. The search party headed by LW.3-A.V.S.Mallikharjuna Rao,

Intelligence Officer conducted the search of Plant-II (New Shed) of

M/s.Neepa Chem Laboratories Private Limited, Survey No.441,

Brahmanpally Road, Bibinagar, Nalgonda District, in the presence

of two independent witnesses LW.4-P.Ramesh and LW.5-

I.Swamanna. At that time A8 was present and later A1, A2 and A3

came to the premises. The process of operations were in progress.

During the search, off-white coloured powder packed in 10

polythene bags on the machine floor and certain quantity of off

white coloured powder in the drying-chamber, besides other

chemicals, reaction mass and in-process residue were found. The

officers conducted tests on the off-white coloured powder with the

help of a field-test-kit brought by them and the same tested

positive for the presence of Methaqualone, a psychotropic

substance specified in the scheduled to the NDPS Act. The officers

also searched a Tata Safari vehicle bearing No.AP 9AC 9145 parked

at the said premises and recovered a passport bearing No.72723

issued in the name of A2 and a polythene cover containing off-

white coloured powder, which also tested positive for the presence

of Methaqualone. Before conducting the personal search of A1, A2,

A3 and A8, they were asked whether they would like to be searched

before a Magistrate or Gazetted Officer. They informed that they

had no objection to be searched before any Officer. Thereafter, the

personal search of the above accused persons was conducted

before LW.6-Shaik Khan Saheb, Superintendent of Central Excise

who is a Gazetted officer. Nothing was recovered from the personal

search of A1. The incriminating documents recovered from A2

include, among others, a slip showing requirement of bags which

later was identified as in the hand-writing of A1, cheque

No.862637, dated 31.05.2002 drawn in favour of M/s.Sain Chem

Pharma Private Limited for an amount of Rs.41,21,200/- signed by

one Prashant, which later admitted to be in the hand writing of A1

and a digital diary containing, among others, the telephone

numbers of A1, A3, A4, A7, A8, A9, A10 and A11. The

incriminating documents recovered from A3 include, among others,

a slip showing details of raw materials and a slip showing time

cycle of manufacturing process of Methaqualone. A small sachet

containing powder and a polythene cover containing dull white

powder were also recovered from A3. The incriminating documents

recovered from A8 include, among others, a diary in which details

of raw material were written and a paper slip containing

manufacturing process of Methaqualone, which was identified later

as in the hand-writing of A3. The officers have drawn

representative samples, in duplicate from the said powder, weighed

and placed them in heat sealed polythene covers, which were in

turn placed in paper envelopes and sealed with DRI seal. The

powder recovered from the TATA Safari vehicle was also weighed

and placed in a heat sealed polythene cover which was in turn

placed in a paper envelope and sealed with DRI seal. All the paper

envelopes were duly marked. Representative samples, in duplicate,

were also drawn from the chemicals, reaction mass and in-process

residue, were packed and sealed. The off-white coloured powder

recovered from the premises and from the Tata Safari vehicle was

packed, weighed and sealed with DRI seal. The officers have also

inventorised the plant and machinery used for the manufacture of

Methaqualone. Then the officers seized the powder weighing

686.811 kgs., chemicals, reaction mass, in-process residue, plant

and machinery, equipment and Tata Safari vehicle bearing No.AP

9AC 9145 on reasonable belief that the same are liable to

confiscation under the Act.

4. The entire search proceedings were reduced into writing

under panchanama dated 10.05.2002. In compliance with Section

57 of the NDPS Act, LW.3-A.V.S.Mallikarjuna Rao, Intelligence

Officer has submitted report regarding the above seizure to his

immediate official superior LW.1-S.Yanadi Reddy vide letter dated

10.05.2002.

5. Simultaneous search was also conducted by the team of

officers headed by LW.7-C.Sridev Kumar, Intelligence Officer at

H.No.1-1, Masanpally village, Basheerabad Mandal, Ranga Reddy

District on 10.05.2002 in the presence of two independent

witnesses LW.8-Shaik Riyaz Ahmed and LW.9-Mohd.Subhan. A.10

was present at that place. As a result of the search of the cattle

shed in the premises, the officers found powder, granules and

tablets which were tested by the officers with the help of a field test

kit and the same tested positive for Methaqualone. The tablets

contained ' * ' (star) marking on one side and 'M' marking on the

other side. The officers also found tablet punching machine, mass

mixer and a drier in the cattle shed. The officers also recovered

certain raw materials and equipment from the outer shed of the

premises. Before conducting his personal search, A10 was asked

whether he would like to be searched before a Magistrate or a

Gazetted officer. Thereafter, personal search of A10 conducted

before LW.10-R.Rajendran, Superintendent, Central Excise, who is

a Gazetted Officer, resulted in recovery of inter alia a telephone

diary and paper slips containing names and telephone numbers of

A2, A3, A7 and A12 and also the telephone number of Hotel

Manjeera, Hyderabad. Later, the officers searched a Maruti Omni

van bearing No.AP 10F 3145 found parked in the premises and as

a result of the search, tablets and powder were recovered. The

same tested positive for Methaqualone when tested with the help of

a field-test-kit. Then the officers searched the residential portion of

the premises and recovered certain documents. Representative

samples, in duplicate, were drawn from the material recovered from

the cattle shed and the Maruti Van, the same were weighed and

placed in heat sealed polythene covers, which were in turn placed

in paper envelopes and sealed with DRI seals. All the paper

envelopes were duly marked. Representative samples, in duplicate,

were also drawn from the raw material, and were weighed, packed

and sealed with DRI seal. The powder, granules and tablets

recovered from the premises and from the vehicle were packed,

weighed and sealed with DRI seal. The officers later seized the

Methaqualone in the form of tablets/powder/granules totally

weighing 602.50 kgs., and other raw materials on a reasonable

belief that the same are liable for confiscation under the Act. The

officers also seized the Maruti Omni Van bearing registration No.AP

10F 3145, tablet punching machine, mass mixer, drier and other

equipment on a reasonable belief that they are liable to

confiscation under the Act.

6. On the same day i.e. 10.05.2002, A1, A2, A3, A8, A10 and

A11 were summoned to DRI office and their statements were

recorded under section 67 of the Act.

7. On 14.05.2002, the officers of Directorate of Revenue

Intelligence headed by LW.13-Shivaji Rao, Intelligence Officer

searched the residence of A4, located at 19-91/4, plot NO.156,

East Kalyanpuri, Uppal, Hyderabad in the presence of two

independent witnesses LW.14-K.M.Avadhani and LW.15-

S.Srinivasa Rao, which resulted in recovery of inter alia diary

containing cell phone number 9849318712 of A2.

8. On 14.05.2002 the officers of Directorate of Revenue

Intelligence headed by LW.16-K.Lakshmipathi, Intelligence Officer,

searched Plot No.34, V.S.Nagar, Telephone Exchange Road,

Nacharam, Hyderabad, in the presence of LW.17-Y.Yugandhara

Rao and LW.18-D.Raja Sekhar and seized 2975 kgs. of Yellowish

green coloured fine powder on a reasonable belief that the same

was meant for using in the manufacture of Methaqualone. LW.13-

Shivaji Rao, Intelligence Officer who was present at that time in the

premises was summoned and the statement of M.R.Rahman who

was present was recorded by Shivaji Rao wherein he stated that he

is a friend of A9 and he allowed A9 to store the material.

Representative samples, in duplicate, were drawn which were

weighed, packed and sealed with DRI seal.

9. On 14.05.2002, A4, A5 and A6 were summoned to

Directorate of Revenue Intelligence Office and their statements

were recorded under Section 67 of the Act. The statement of A4

was recorded by LW.11-D.Aroop Das and the statements of A5 and

A6 were recorded by LW.1-S.Yanadi Reddy. As they were found to

have committed offences punishable under the Act, they were

arrested on 14.05.2002 by LW.1-S.Yanadi Reddy and LW.11-

D.Aroop Das and were remanded to judicial custody by the

Metropolitan Sessions Judge, Hyderabad.

10. On 15.05.2002, the officers of Directorate of Revenue

Intelligence headed by LW.19-S.Ravindranath, Intelligence officer

searched the table drawers and cupboards used by A4 at IICT,

Hyderabad in the presence of two independent witnesses LW.20-

S.Srinivas Rao and LW.21-G.Shyam Rao. As a result of the search

incriminating documents, among others, literature on

Methaqualone and two polythene sockets containing off-white

coloured powder were recovered. The powder on testing with the

help of the field test kit, tested positive for Methaqualone.

Representative samples, in duplicate were drawn, weighed the

same and kept in a heat sealed polythene cover which were in turn

kept in a paper envelope, marked and sealed with DRI seal. The

recovered powder was also weighed, packed and sealed with DRI

seal. The officers seized the said powder as the same is liable to

confiscation under the Act. The officers also seized the documents

in connection with the investigation.

11. On 18.05.2002, A9 was summoned to Directorate of Revenue

Intelligence office and his statement was recorded under Section 67

of the Act. As he was found to have committed offences under the

Act he was arrested by LW.11-D.Aroop Das on 18.05.2002 and

remanded to judicial custody by the Metropolitan Sessions Judge,

Hyderabad.

12. On 24.05.2002, the Directorate of Revenue Intelligence

officers headed by LW.22-M.V.Sreeram searched M/s.National

Pharma Lab, 3-4-495/A, Hiline Apartments, Barkatpura,

Hyderabad, in the presence of two independent witnesses LW.23-

S.Gyaneshwar and LW.24-P.V.Harikrishna. A15 was present in the

premises. During the search, the officers recovered among others a

diary work book containing references such as Nikitha Chemicals,

A4 (Acetic Anydride) and Sukesh Reddy-A14.

13. A14, A15 and A16 were summoned to Directorate of Revenue

Intelligence Office and their statements were recorded under

Section 67 of the Act.

14. On 06.06.2002, A7 was summoned to Directorate of Revenue

Intelligence Office and his statement was recorded by LW.11-

D.Aroop Das under Section 67 of the Act. As he was found to have

committed an offence under the Act, he was arrested.

15. A12 and A13 were summoned to Directorate of Revenue

Intelligence Office and their statements were recorded on

13.06.2002 and 17.06.2002 by LW.1-S.Yanadi Reddy under

Section 67 of the Act. As they were found to have committed an

offence under the Act, they were arrested.

16. Analysis reports for the samples sent to the Customs

Laboratory, Customs House, Chennai were received vide their

letters L.Nos.31 to 45/21-5-2002, dated 18.06.2002, L.Nos.46, 48,

62 and 76-77/21-5-2002 dated 22.07.2002, L.Nos.47, 61, 63, 78

and 79/21-5-2002 dated 22.07.2002, L.Nos.49-57/21-05-2002

dated 17.07.2002, L.Nos.58-60/21.05.2002 dated 18.07.2002 and

L.Nos.64-75/21.05.2002 dated 17.07.2002. The reports indicate

that the off-white coloured powder seized at M/s.Neepa Chem

Private limited, Bibinagar and powder, granules and tablets seized

at Masanpally, powder seized from the cupboard of A4 at IICT,

Powder seized from Tata Safari vehicle bearing registration

No.AP9AC 9145, powder and tablets seized from Maruthi Omni

bearing registration No.AP 10F 3145 and powder seized from the

person of A3 have tested positive for Methaqualone. The other

chemicals and raw material have also tested positive for the

respective substances. In respect of reaction mass seized from the

reactors at M/s.Neepa Chem Lab Private Limited the reports

indicate that the substance is composed of a complex organic

compound and in respect of in-process reside, the report indicate

that the substance is an aqueous solution containing organic

compounds. In respect of the Intermediary product seized from the

person of A3, the report indicates that the substance is composed

of complex organic compound.

17. From the investigation the following emerge;

a) That around February, 2002, A1 and A2 at the behest of A17 a

Dubai based narcotics dealer, hatched a conspiracy to

manufacture and supply 3 million Methaqualone tablets at the rate

of Rs.5/- per piece. In pursuit of the said common goal, A1 and A2

roped in A3 who is a post graduate in Chemistry having good

knowledge in the field of specialty chemicals and drugs. The trio

agreed to share the profits equally.

b) A1, using his past acquaintance contacted A5 and managed to

convince him to permit to use plant-II (new shed) in the factory

premises of M/s.Neepa Chem Lab Private Limited. A1 and A2

visited the factory premises, inspected the plant and machinery

and entered into a verbal understanding with A5 and A6 to rent out

the premises for manufacture for a consideration of Rs.1,00,000/-

per ton. A5 and A6 received an amount of Rs.70,000/- as advance

from A1 and A2 for letting out the factory premises. They also

loaned the materials from their factory stocks to A2 for the

manufacturing of Methaqualone as evident from the statement of

LW.45-Chille Satyanandam.

c) In pursuance of the said conspiracy and in the same transaction,

A2 has selected his in-laws' residence located in a remote village

called Masanpally as a safe place for carrying out the illicit activity.

He managed to convince A7, who is his brother-in-law, to allow

cattle shed in the premises to be used for manufacturing activity.

A7 agreed to rent out the shed for a consideration of Rs.1,500/- per

month. A7 also received Rs.25,000/- from A1 and A2 as advance

for the purpose of reconstruction of the cattle shed.

d) In pursuance of the said conspiracy and in the same

transaction, A17 provided A1 a finance of Rs.10 lakhs which was

used by A1 and A2 for procuring chemicals and raw materials

required for the manufacture of Methaqualone. A3 contributed an

amount of Rs.2 lakhs and A2 used contacts and procured

chemicals and raw materials worth Rs.6 lakhs on a loan basis. A1

and A2 procured chemicals from LW.40-P.V.K.S.B.Brahmananda

Rao who supplied the same on loan basis on the recommendation

of A5 and A6. A1 and A2 procured acetic anhydride and anthranilic

acid, the two precursors for manufacture of Methaqualone, from

A12 and A13. The anthranilic acid was procured using the name of

LW.36-G.Prashant. A1 also procured 3 MT of orthotoluidine

arranged by A17. The chemicals and raw materials were stored in

the factory without names and lables on the packing apparently to

keep the identity of the chemicals secret.

e) In pursuance of the said conspiracy and in the same transaction,

A1 procured tableting machine arranged by A17, A1 and A2 also

bought mass mixer from LW.37-M.V.Mallikarjun Rao, drier from

LW.48-K.Brahmam and punches from LW.34-V.Chittaranjan. The

above equipment required for tableting the Methaqualone

substance were installed at Masanapally.

f) In pursuance of the said conspiracy and in the same transaction,

A3 developed the process of manufacture of Methaqualone, tested

Mathaqualone samples, provided methods for improving the yield

and quality of Methaqualone substance and supervised the

production of Methaqualone in the factory. 10 grams of

Methaqualone was recovered and seized from his person.

g) In pursuance of the said conspiracy and in the same transaction

A1 and A2 also roped A4 into the conspiracy, a senior scientist in

the Indian Institute of Chemicals Technology, Hyderabad, who

knowingly tested Methaqualone samples, met A1, A2 and A3 and

discussed about the manufacture of Methaqualone and also

advised them how to improve the quality and yield of

Methaqualone. He also furnished literature and technical details of

Methaqualone to A2. A2 visited Indian Institute of Chemical

Technology on 06.03.2002, 19.03.2002, 01.04.2002 and

03.04.2002 in the name of Ramesh Kumar and met A4 in this

connection. A4 received Rs.12,000/- for extending the above

favour. 28 grams of Methaqualone was recovered from his personal

cupboard. Thus, A4 became party to the conspiracy.

h) Though A5 and A6 learnt about the manufacture of

Methaqualone in their factory through A3, they failed to stop the

illicit manufacture. They also did not bring this to the notice of the

directors of their company. Instead they had a meeting with A1, A2

and A3 at Hotel Taj Banjara on 09.05.2002, where they agreed to

continue to extend the facility of manufacture of methaqualone in

their factory for an additional consideration of Rs.5 lakhs and

profits, which A1 promised to give them. Thus, A5 and A6 became

parties to the conspiracy.

i) A7 having come to know of the manufacture of Methaqualone

tablets at his Masanpally premises, failed to stop the same for a

financial consideration. He actively assisted A1 and A2 in the

procurement, handling and transport of punching machine, mass

mixer and drier. At the behest of A1 and A2, he visited Mumbai on

31.03.2002 and stayed in A1-Fatah Guest House in the assumed

name of Rajkumar and received a standard Methaqualone sample

from an unidentified person sent by A.17 and delivered it to A1 and

A2. On 10.05.2002 he carried the methaqualone sample

manufactured at the behest of A1 and A2 and stayed in the same

hotel in the assumed name of Vinod Patel for delivering the same to

a person to be sent by A17.

j) A8 at the behest of A3 actively assisted A3 in the manufacture of

methaqualone substance in the factory premises.

k) A9 assisted A1 and A2 in procurement, handling and transport

of chemicals and equipment used in the manufacture of

methaqualone as evident from the statements of LW.33-

M.A.Rahman, LW.35-Y.R.P.Shetty, LW.36-G.Prashant, LW.37-

M.V.Mallikarjun Rao, LW.48-K.Brahmam, LW.49-B.Mallesh,

LW.50-N.V.Krishna Rao, LW.51-Mohd.Ghouse, and LW.59-

Bhattacharya. At the behest of A1 and A2, A9 carried

Methaqualone sample to Mumbai and stayed in Madina Hotel on

30.04.2002 in the name of Mohd.Hasan and delivered the same to

an unknown person sent by A17. A9 installed the tableting

machine, mass mixer and drier in the cattle shed at Masanpally

village. He permitted A2 to use his Maruti Van bearing No.AP 10F

3145 from which 4 kgs. of Methaqualone powder and tablets were

recovered and seized.

l) A10 knowingly assisted in the tableting of methaqualone

substance at the cattle shed in Masanpally village at the behest of

A1 and A2. He was present in the premises when the search was

conducted by the officers on 10.05.2002.

m) A11 acting as driver of A1, actively assisted in handling and

transportation of machines, equipment and raw materials used in

connection with the manufacture of methaqualone. He transported

methaqualone substance from the factory premises to Masanpally

village using Tata Safari vehicle bearing registration No.AP 9 AC

9145 as evident from the statement of LW.45-Chille Satyanandam.

n) A1 and A2 also transported the methaqualone substance from

factory to Masanapally using Tata Safari vehicle bearing

registration No.AP 9 AC 9145 and Maruthi Omni bearing

registration No.AP 10F 3145 as evident from the statement of

LW.45. The Tata Safari vehicle bearing registration No.AP 9AC

9145 from which 281 grams of methaqualone powder was

recovered belongs to M/s.GDR International India Limited,

represented by A1.

o) The investigation revealed that A16 who has been carrying on

business in chemicals in the name of Nikita Chemicals, purchased

acetic anhydride from one Vikas of Mumbai whose identity could

not be established. In the month of August, 2001, A16 sold the

said acetic anhydride to A15 who in turn sold the same to A12 and

A13 and the same was sent to M/s.Coastal Labs, Sullurpet, as

evident from the statement of LW.44-Y.Murali Manohar.

p) In the month of April, 2002, when A2 required acetic anhydride

for the manufacture of methaqualone, which was brought from

Sullurpet to Hyderabad by engaging M/s.Kranthi road Transport

Private limited, Uppal Branch, Hyderabad, vide Lorry Receipt

Nos.54653 and 54654 dated 05.04.2002. A2 has taken the delivery

of the said acetic anhydride in 8 drums as evident from the

statement of LW.39. A1, A2 and A13 travelled from Secunderabad

to Sullurpet on 04.04.2002 in connection with the transportation of

the said acetic anhydride. A12 and A13 also sold 5,000 kgs. of

anthranilic acid required for the manufacture of methaqualone to

A2 in the month of April, 2002 as evident from the statements of

LW.33-M.A.Rahaman, LW.35-R.Y.P.Setty, LW.36-G.Prashant,

LW.53-M.Pratap Reddy and LW.54-D.Vijaya Bhaskar Reddy. The

said acetic Anhydride and anthranilic acid were used in the

manufacture of methaqualone which was seized.

q) the acetic anhydride is a controlled substance as specified in

standing order No.198(E) dated 24.03.1993 issued under Section

9A of the Act. A2, A12 to A16 have not followed the prescribed

procedure and maintained any records or filed any returns in

respect of the above said acetic anhydride, as required under the

Narcotic Drugs or Psychotropic Substances (Regulation of

Controlled Substance) Order, 1993 thereby contravened Section

25-A of the Act.

18. The trial Court charged the accused as under:

Accused Number Section contravened Punishable under sections A1 8(c), 24, 27A, 29 25, 25, 27A, 29 A2 8(c), 9A, 27A, 29 22, 25A, 27A, 29 A3 8(c), 27A, 29 22, 27A, 29 A4 8(c), 29 22, 29 A5 8(c), 25, 29 22, 25, 29 A6 8(c), 25, 29 22, 25, 29 A7 8(c), 25, 29 22, 25, 29

A9 8(c), 25 22, 5

A12 9A, 31 25A, 31 A13 9A 25A A14 9A 25A A15 9A 25A A16 9A 25A A17 27A, 29 27A, 29

19. Reasons given by the Court below to acquit the accused;

The trial Court found that there was Non-compliance with

Section 42 of the NDPS Act.

The Court observed that;

"......

When the Intelligence officer working under PW.50 gathered the information and submitted the said information to PW.50 orally and PW.50 recorded the same into chits and later he sent the same to PW.54, but the same process is not contemplated under

the NDPS Act. Ex.P.295 does not satisfy the requirement of Sec.42(1) of the Act or 42(1) of the Act...... If really PW.50 received the information from his subordinates either by way of chits or he reduced into writing on the chits whenever his subordinates informed about the present offence. PW.50 ought to have preserved the said chits to corroborate his evidence that he sent the gist of information as in Ex.P.295 to his superior officer after verifying the said chits. Under the above circumstances, the contention of Sri Kumar that PW.50 violated the mandatory provisions of Sec.42(1) of the NDPS Act is to be accepted. In view of my above discussion, Sec.42 of the NDPS Act which is mandatory one is not complied, and the accused persons are entitled for acquittal since the trial itself would vitiate."

20. The trial Court also found that there was Non-compliance

with Sec.50 of the NDPS Act.

The Court observed that;

"......

But in view of my discussion, the contention of Sri B.Adinarayana Rao that search of some of the accused was conducted by the concerned officers by complying provisions of Sec.50 of the NDPS Act cannot be sustained. In fact, PW.4 and PW.7 who are gazette officers on the member of search party. Hence their evidence cannot be taken into consideration.

The principle laid down in the decision reported in K.Mohanan v. State of Kerala [2000 SCC (Cri) 1228] rendered by their Lordships of the Supreme Court in the above cited case, is squarely applicable to the facts of the

present case, if the evidence of PW.1 is taken into consideration on the aspect of search. Hence the search of the accused conducted by concerned officers in this case is in violation of mandatory provisions of Sec.50 of the NDPS Act."

21. Trial Court further held that seizure was not legal.

The trial Court observed as;

"............it can be said that even the complainant has not proved that the powder that was found either in the factoryor in the cattle shed of factory at A1 at Masanapaly is Methaqualone as defined in Schedule-I under Psychotropic substance of the NDPS Act. Under the said circumstances, it can be said that the prosecution failed to prove that charges leveled against A1 beyond all reasonable doubt."

22. Learned Special Public Prosecutor for DRI submitted that the

field test kit is a customized testing kit designed by experts in

United Nations. The said test kits were used by the seizing officers

to come to a preliminary confirmation about the presence of

specific contraband for enabling them to seize the same. It requires

no technical expertise to operate the said test kit. After preliminary

confirmation of presence of specific illicit NDPS substances, the

material is seized on a reasonable belief and the samples from the

seized material are drawn in such manner as specified in the

prescribed instructions laid down under the Act and the said

samples are forwarded to the competent and authorized

laboratories for conducting further tests by experts to determine

the presence of illicit drug. Hence, the Trial Court failed to

appreciate the procedures laid down.

23. In the present case, the said test report was given by

Chemical Examiner to the government CFSL, Chennai, who are

designated as experts under Sec.293 of Cr.P.C. The trial Court has

examined such chemical examiners who have given the test report

confirming that the forwarded samples were tested for presence of

Methaqualone.

24. Ex.P295 has been submitted by PW.50 to his superior officer

PW.54 on 09.05.2022 and the searches were conducted on

10.05.2022. The said Ex.P.295 is undoubtedly the gist of

intelligence. It is not mandated in Sec.42(1) of NDPS Act that the

pieces of information received over a period of time should be made

as evidence. Mere non production of such chits would vitiate the

entire trial proceedings is absolutely incorrect. The said Ex.P.295 is

the gist of intelligence gathered by the officer who had been

receiving the information over a period of time and the same has

been documented in the form of intelligence when the same was

figured out as actionable intelligence. No serious prejudice is

caused to the accused by non-production of such chits. The gist of

intelligence under Ex.P.295 has resulted in seizure of huge

quantity of contraband. The said Ex.P.295 has been submitted by

PW.50 to his superior officer PW.54 and all the compliances under

sec.42(1) are met with.

25. The respective accused have expressed their willingness to be

searched before the gazette officer and accordingly respective

accused were searched on person by the seizing officer before a

gazette officer. Such submission of the prosecution has been

documented in respective panchanama marked Ex.P.17, Ex.P72

and the same was ignored by the Trial Court. Further, it is the

conclusion of trial Court that no recovery was made on the person

of many accused, still it concluded that Trial was vitiated due to

non-compliance of Sec.50. Such conclusion of non-compliance of

Sec.50 by trial Court would have gained prominence had the

personal search of the accused was not conducted before the

presence of Gazetted officer or a Magistrate which is not so in the

present case.

26. Further, the provision of sec.50 of NDPS Act does not

envisage that the person being searched has to be told about their

right to be searched before the gazette officer or Magistrate.

27. The voluntary statement of A.1 under Section 67 of NDPS Act

cannot be considered as truth and the prosecution cannot be put

to blame that they could not establish the money trail of Rs.10

lakhs between A.1 and A.17. The seizure of huge quantities of

contraband from respective places prove the case of prosecution

beyond doubt with regard to manufacture and possession of illicit

drug. Not establishing the link between A.17 and A1 will not vitiate

the case of the prosecution. Further, the statement of A.1 under

Sec.67 is a voluntary statement given out of his free will.

28. Learned Special Public Prosecutor relied on the following

Judgments.

    i.      Mohd.Younus and another v. State of Telangana 1

    ii.     Karnail Singh v. State of Haryana 2

    iii.    Madan Lal and another v. State of H.P. 3

    iv.     Om Prakash Sood v. Union of India and another 4





  2018 SCC OnLine Hyd 1965

  (2009) 8 Supreme Court Cases 539

  (2003) 7 Supreme Court Cases 465

  (2003) 7 Supreme Court Cases 473




    v.      Krishna Kanwar (smt) Alias Thakuraeen v. State of

            Rajasthan 5

    vi.     Tata Power Company Limited v. BSES Ltd. And others 6

    vii.    Jagdish Budharoji Purohit v. State of Maharashtra7

29. Learned Counsel for the accused argued on the findings of

the trial Court being reasonable. He argued that:

i. The complaint was filed stating that the conspiracy of

manufacturing 3 million Methaqualone tablets was hatched by

A17, A1 & A2. No material evidence was found regarding A17,

giving advance of Rs.10,00,000/- to A.1 and any association of the

accused with A.17.

ii. The claim of DRI officials that seizure of contraband substances

which is worth more than 6 crores was an alleged advance of

Rs.10,00,000/- is beyond any rational reasoning and establishes

that the investigation is totally false.

iii. Nothing has been specified related to the field test kit or change

of colour of the sample with test kit or procedure followed while

testing with the kit in the Panchanama. PW.1 confirms that he has

not prepared any test notes while conducting the tests and he has

not placed any such notes in the sample papers. PW.1 also

(2004) 2 Supreme Court Cases 608

(2004) 2 Supreme Court Cases 620

(1998) 7 Supreme Court Cases 270

confirms that he has taken signatures of the accused on the outer

covers of the samples but not on polythene covers containing the

samples. He also admits that from the polythene covers itself it is

not possible to say from which accused the substance was seized.

Samples of powder taken was not furnished by the accused. The

admissions made by the witnesses in the Cross-examination clearly

establish beyond reasonable doubt that the alleged samples

collected are not intact and does not bear any identity from whom

and from where the samples were drawn and sealed in the covers

for sending them to Chemical Examiners.

iv. The accused persons voluntarily visiting the DRI office and

receiving summons and subsequently getting arrested and

produced before the Magistrate is false.

v. None of the Accused know the details of Methaqualone and some

of the accused are not even properly educated.

vi. Nothing has been recovered from the personal search of A1.

There were no details of weighing scales used in the search &

Seizure Operations. There is no evidence as to how the samples

were drawn from the alleged seizure when the weighment of the

samples is in grams to kilograms. There is no evidence as to how

the small quantities of contraband substance was measured during

Search & Seizure. The witness PW.11's deposition in Cross-

examination that he has carried weighing scale to IICT premises

during the search & seizure is not corroborated by any material

evidence on record and it is only an afterthought.

vii. There is no evidence that the Panch witnesses have signed &

authorized on the test Memos prepared while sampling the alleged

seized contraband substances. As per PW.2, in his cross-

examination the identity slips were not found affixed to the

envelops containing the samples. There is no evidence on record

that the DRI official have not carried any covers, polythene bags &

gunny bags for sampling the alleged contraband substance found

in both the locations (neepa Chem & Masanapally) and the same

was also asserted by multiple witnesses. There is no evidence on

record which establishes that DRI officials have carried heat

sealing equipment for sealing the sampled polythene covers. Also

the covers containing the samples were not pasted and were only

stapled with all the signatures on one side and DRI seal on the

other side of the covers. PW.1 confirms that the Panch Slips were

not placed inside the sample covers.

viii. As per PW.11 there is only one Brass Seal in DRI Hyderabad

office. On 10.05.2002, two locations were simultaneously searched.

One at Neepa Chem Laboratory Private Limited in Bibi Nagar and

other at residence of Sri M.Madhusudan Reddy at Masanpally

Village. As per the complaint, two teams were deployed after alleged

meeting at 5:30 A.M. on 10.05.2002, wherein both teams started

their search & seizure around 8:30 A.M. and both teams reached

DRI office at 8:30 p.m. & 9:30 p.m. Both the locations have

approximately 200 k.m distance between them and they have to

pass through Hyderabad. With one brass seal of DRI, the

Panchnamas, sampling of contraband substances, statements

recorded simultaneously at both the locations on the same day is

beyond comprehension.

ix. There is no evidence on record that the Neepa Chem Labs

Private Limited has any association with A1. All the invoices & bills

of the chemical substances are in the name of Neepa Chem Labs

Private Limited and there is no correlation on factual and evidence

basis as to how these invoices can be used to implicate the accused

alleged to have been present at location of Neepa Chem Private

Limited.

30. In this case, even the evidence of PW.50 would disclose that

he received information from his subordinates through chits and

after preparing the chits as in Ex.P295, he destroyed the said chits.

If PW.50 really received the information from his subordinates

either by way of chits or he reduced into writing on the chits

whenever his subordinates gave information about the present

offence, PW.50 ought to have preserved the said chits to

corroborate his evidence that he sent the gist of information as in

Ex.P295 to his superior officer after verifying the said chits. Section

42 of the NDPS Act which is a mandatory one, is not complied.

31. The evidence of the seizure officers PW.1 and PW.5 is that

they tested the powder found in the factory at Bibinagar and also

at Masanpally with the help of the testing kit and the said powder

tested positive for Methaqualone. Thereafter, the said samples were

sent for analysis and examiners also opined that the sample is of

Methaqualone and submitted their report. PW.1 and PW.5 are not

experts who can give opinion that the said powder is Methaqualone

with the help of the testing kit available with them. It is not even

explained by the prosecution that they are competent to test the

narcotic substance and give their opinion with regard to the same.

The chemical name of Methaqualone is mentioned in Schedule-I

under the caption by 'Psychotropic Substances' in NDPS Act. As

per the same, the chemical name of 'Methaqualone' is "2-Methys-3-

0-toyl-4 (3H)-quinazolinone". But experts have not stated that they

found the same chemical in the said powder. If the said chemical

name is not found in the experts report, the opinion given by the

experts that it is 'Methaqualone' cannot be accepted.

32. The search and seizure is illegal since the complainant has

not complied with the provisions of Sec.42 of the NDPS Act; the

charge leveled against A3 also cannot be sustained. Some powder

and incriminating material was recovered from the drawer and the

cup-board of A.4 in the office and that itself is not sufficient to

come to a conclusion that A.4 conspired with A.1 to A3 and

participated in the conspiracy in preparing the Methaqualone. The

complainant has to prove that A.4 knew Methaqualone is a

narcotic substance and the possession of it or providing

information regarding the improvement in the quality of

Methaqualone is an offence under NDPS Act. No evidence is

adduced to substantiate the same.

33. The allegation made against A.5 and A6 is that they let out

their premises for the purpose of manufacture of Methaqualone.

The case of the prosecution is that one day prior to their search,

A.5 and A.6 came to know that A.1 to A.3 were manufacturing the

Methaqualone in the said premises. If so, how did the DRI officials

come to know what happened on the previous night on 09.05.2002

in Taj Banjara Hotel, where A.5 and A6 are alleged to have met A.1

to A.3 and discussed as to why Methaqualone powder was being

manufactured in their premises. Hence the evidence adduced on

this aspect by the prosecution with regard to knowledge of A.5 and

A6 of manufacturing Methaqualone cannot be believed.

34. Charges leveled against A.7 are that he played a role in

getting raw material and the machine and got the same fixed at

Masanapally and other places and allowed the premises for

conversion of Methaqualone powder into tablets. But, the evidence

which is on record is not sufficient to come to a conclusion that A.7

had knowledge that Methaqualone is a Narcotic Substance and the

preparation of Methaqualone in his cattle shed, is an offence. Apart

from it, the search itself is illegal.

35. Charge leveled against A.8 is that he was found in the Neepa

Chem Laboratory. As per the case of the prosecution he is the

person who was managing the manufacturing of the Methaqualone

in the said Neepa Chem laboratory. But, the evidence which is on

record is not sufficient to come to a conclusion that A.8 had

knowledge that the product which was being manufactured in the

said factory is Methaqualone.

36. The offence alleged against A.10 is that he is the person who

was present at the cattle shed of Masanapally village participating

in the manufacturing process at that place. It may be that PW.10

was present at that place and he was indulging in the

manufacturing process, but, the evidence on record is not

sufficient to come to a conclusion that A.10 had knowledge that

Methaqualone is a Narcotic substance and its manufacturing is an

offence under NDPS Act.

37. The allegations made against A9 is that he allowed the use of

his vehicle to carry Methaqualone powder from Neepachem

Laboratories to Masanapally and he also stored Anthranalic acid in

the godown of Rehman. The complainant has not placed any

material to show that A.9 had knowledge that the Anthranalic acid

is Narcotic substance and storing the same is an offence.

38. The allegation made against A.11 is that while acting as a

driver of A.1, he actively participated in getting raw material in

connection with the manufacturing of Methaqualone and he

transported the Methaqualone from the factory premises to the

Masanapally village using Tata Safari vehicle belonging to A.1. But,

the complainant has not placed any evidence to show that A.11

had knowledge that the powder which is being carried by him from

the factory to Masanapally is Methaqualone.

39. The learned Public Prosecutor mainly places reliance on the

Judgment of the Honourable Supreme Court in Jagdish Budharoji

Purohit's case (supra 7) and argued that once the spot test was

determined as Methaqualone, the Honourable Supreme Court held

that the said finding initially about the substance would suffice.

The Apex Court held in the facts of the case that the chemical

examiner received the samples in a sealed condition. In the 313

Cr.P.C. examination, the accused did not state about closing the

factory and taken over by someone else. The facts in the Jagdish

Budharoji Purohit's case differs from the facts on hand. All the

accused denied being involved in manufacturing any kind of

Narcotic substance. Further, the trial Judge has also found favour

with the defence version that the sealing of the samples was not

proper and tampered with.

40. In Ravi Sharma v. State (Government of NCT of Delhi) and

another 8, the Hon'ble Supreme Court held that while dealing with

an appeal against acquittal, the appellate court has to consider

whether the trial Court's view can be termed as a possible one,

particularly when evidence on record has been analysed. The

reason is that an order of acquittal adds up to the presumption of

innocence in favour of the accused. Thus, the appellate court has

to be relatively slow in reversing the order of the trial court

rendering acquittal.

(2022) 8 Supreme Court Cases 536

41. In Ghurey Lal v. State of Uttar Pradesh 9 the Hon'ble

Supreme Court after referring to several Judgments regarding the

settled principles of law and the powers of appellate Court in

reversing the order of acquittal, held at para 70, as follows:

"70. In the light of the above, the High Court and other appellate Courts should follow the well-settled principles crystallized by number of Judgments if it is going to overrule or otherwise disturb the trial court's acquittal:

1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has "very substantial and compelling reasons" for doing so.

A number of instances arise in which the appellate court would have "very substantial and compelling reasons" to discard the trial court's decision. "Very substantial and compelling reasons" exist when:

i) The trial court's conclusion with regard to the facts is palpably wrong:

ii) The trial court's decision was based on an erroneous view of law;

iii) The trial court's judgment is likely to result in "grave miscarriage of justice";

iv) The entire approach of the trial court in dealing with the evidence was patently illegal;

v) The trial court's judgment was manifestly unjust and unreasonable;

vi) The trial court has ignored the evidence or misread the material evidence or has ignored material documents like dying declarations/report of the ballistic expert, etc.

vii)This list is intended to be illustrative, not exhaustive.

2. The appellate court must always give proper weight and consideration o the findings of the trial court.

3. If two reasonable views can be reached__ one that leads to acquittal, the other to conviction __the High Courts/appellate courts must rule in favour of the accused."

42. As discussed above, since the violation of Sections 42 and 50

of NDPS Act are apparent, and the chemical formula of

(2008) 10 Supreme Court Cases 450

Methaqualone was not specified in the FSL reports, the finding of

the learned Sessions Judge cannot be interfered with.

43. Accordingly, Criminal Appeal is dismissed.

___________________ K.SURENDER, J Date:10.01.2025 tk