# NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD SHAH WATALI

- **Citation:** [2019] 5 S.C.R. 1060
- **Court:** Supreme Court of India
- **Decided:** 2019-04-02
- **Case number:** Criminal Appeal No.578 of 2019
- **Bench:** A. M. Khanwilkar, Ajay Rastogi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/national-investigation-agency-v-zahoor-ahmad-shah-watali-33747
- **Pages:** 71

## Headnote

Unlawful Activities (Prevention) Act, 1967 - Chapters IV
& VI - ss.13, 16, 17, 18, 20 and 38-40 - Respondent was named as
Accused No.10 in the FIR registered for offences punishable
u/ss.120B, 121 and 121A of IPC and ss.13,16,17,18,20 and 38-40
of the 1967 Act - Respondent filed application for bail before the
District and Sessions Judge, Special Court (NIA), New Delhi -
Rejected - Order reversed by the High Court - On appeal, held:
Elaborate examination or dissection of the evidence is not required
to be done at the stage of considering the prayer for bail - Court
is merely expected to record finding on the basis of broad
probabilities regarding involvement of the accused in the
commission of the stated offence or otherwise - High Court
ventured into examining the merits and demerits of the evidence -
Question of discarding the document at this stage, on the ground of
being inadmissible in evidence, is not permissible - Issue of
admissibility of the document/evidence would be a matter for trial -
Taking into account the totality of the report made u/s.173 of CrPC,
the accompanying documents and the evidence already presented
to the Court, including the redacted statements of the protected
witnesses recorded u/s.164 of CrPC there are reasonable grounds
to believe that the accusations made against the respondent are
prima facie true - Role attributed to the respondent is that of being
part of the larger conspiracy and to act as fund raiser and finance
conduit - High Court erroneously proceeded on the premise that
the charge-sheet makes no reference to any other criminal case
against the respondent - High Court adopted an inappropriate
approach whilst considering the prayer for grant of bail - Order
passed by the High Court granting bail to the respondent, reversed
- Order passed by the Designated Court rejecting the application
for grant of bail made by the respondent, affirmed - Penal Code,
[2019] 5 S.C.R. 1060
1060
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1860 - ss.120B, 121 and 121A - Narcotic Drugs and Psychotropic
Substances Act, 1985 - Terrorist and Disruptive Activities
(Prevention) Act, 1985 - Maharashtra Control of Organised Crime
Act, 1999 - Code of Criminal Procedure, 1973 - ss.161, 164 and
173, 207 - Evidence Act, 1872 - s.34 - Bail .
Unlawful Activities (Prevention) Act, 1967 - s.43D -
Application of - Held: s.43D applies right from the stage of
registration of FIR for offences under Chapters IV and VI of the
1967 Act until the conclusion of the trial thereof.
Unlawful Activities (Prevention) Act, 1967 - Proviso to
s.43D(5) - Purport of - Discussed.
Bail - Grant of - Factors to be considered - Discussed.
Words & Phrases - "prima facie true", in context of 1967 Act
- Meaning of - Unlawful Activities (Prevention) Act, 1967.
Allowing the appeal, the Court
HELD: 1.1 Matters to be considered for deciding an
application for bail (i) whether there is any prima facie or
reasonable ground to believe that the accused had committed
the offence; (ii) nature and gravity of the charge; (iii) severity of
the punishment in the event of conviction; (iv) danger of the
accused absconding or fleeing, if released on bail; (v) character,
behaviour, means, position and standing of the accused; (vi)
likelihood of the offence being repeated; (vii) reasonable
apprehension of the witnesses being tampered with; and
(viii) danger, of course, of justice being thwarted by grant of bail.
When it comes to offences punishable under special enactments,
such as the Unlawful Activities (Prevention) Act, 1967,
something more is required to be kept in mind in view of the
special provisions contained in Section 43D of the 1967 Act,
inserted by Act 35 of 2008 w.e.f. 31st December, 2008. By virtue
of the proviso to sub-section (5), it is the duty of the Court to be
satisfied that there are reasonable grounds for believing that the
accusation against the accused is prima facie true or otherwise.
Under the special enactments such as Terrorist and Disruptive
Activities (

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SUPREME COURT REPORTS
[2019] 5 S.C.R.
 NATIONAL INVESTIGATION AGENCY
v.
ZAHOOR AHMAD SHAH WATALI
 (Criminal Appeal No.578 of 2019)
APRIL 02, 2019
[A. M. KHANWILKAR AND AJAY RASTOGI, JJ.]
Unlawful Activities (Prevention) Act, 1967 - Chapters IV
& VI - ss.13, 16, 17, 18, 20 and 38-40 - Respondent was named as
Accused No.10 in the FIR registered for offences punishable
u/ss.120B, 121 and 121A of IPC and ss.13,16,17,18,20 and 38-40
of the 1967 Act - Respondent filed application for bail before the
District and Sessions Judge, Special Court (NIA), New Delhi -
Rejected - Order reversed by the High Court - On appeal, held:
Elaborate examination or dissection of the evidence is not required
to be done at the stage of considering the prayer for bail - Court
is merely expected to record finding on the basis of broad
probabilities regarding involvement of the accused in the
commission of the stated offence or otherwise - High Court
ventured into examining the merits and demerits of the evidence -
Question of discarding the document at this stage, on the ground of
being inadmissible in evidence, is not permissible - Issue of
admissibility of the document/evidence would be a matter for trial -
Taking into account the totality of the report made u/s.173 of CrPC,
the accompanying documents and the evidence already presented
to the Court, including the redacted statements of the protected
witnesses recorded u/s.164 of CrPC there are reasonable grounds
to believe that the accusations made against the respondent are
prima facie true - Role attributed to the respondent is that of being
part of the larger conspiracy and to act as fund raiser and finance
conduit - High Court erroneously proceeded on the premise that
the charge-sheet makes no reference to any other criminal case
against the respondent - High Court adopted an inappropriate
approach whilst considering the prayer for grant of bail - Order
passed by the High Court granting bail to the respondent, reversed
- Order passed by the Designated Court rejecting the application
for grant of bail made by the respondent, affirmed - Penal Code,
[2019] 5 S.C.R. 1060
1060
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1860 - ss.120B, 121 and 121A - Narcotic Drugs and Psychotropic
Substances Act, 1985 - Terrorist and Disruptive Activities
(Prevention) Act, 1985 - Maharashtra Control of Organised Crime
Act, 1999 - Code of Criminal Procedure, 1973 - ss.161, 164 and
173, 207 - Evidence Act, 1872 - s.34 - Bail .
Unlawful Activities (Prevention) Act, 1967 - s.43D -
Application of - Held: s.43D applies right from the stage of
registration of FIR for offences under Chapters IV and VI of the
1967 Act until the conclusion of the trial thereof.
Unlawful Activities (Prevention) Act, 1967 - Proviso to
s.43D(5) - Purport of - Discussed.
Bail - Grant of - Factors to be considered - Discussed.
Words & Phrases - "prima facie true", in context of 1967 Act
- Meaning of - Unlawful Activities (Prevention) Act, 1967.
Allowing the appeal, the Court
HELD: 1.1 Matters to be considered for deciding an
application for bail (i) whether there is any prima facie or
reasonable ground to believe that the accused had committed
the offence; (ii) nature and gravity of the charge; (iii) severity of
the punishment in the event of conviction; (iv) danger of the
accused absconding or fleeing, if released on bail; (v) character,
behaviour, means, position and standing of the accused; (vi)
likelihood of the offence being repeated; (vii) reasonable
apprehension of the witnesses being tampered with; and
(viii) danger, of course, of justice being thwarted by grant of bail.
When it comes to offences punishable under special enactments,
such as the Unlawful Activities (Prevention) Act, 1967,
something more is required to be kept in mind in view of the
special provisions contained in Section 43D of the 1967 Act,
inserted by Act 35 of 2008 w.e.f. 31st December, 2008. By virtue
of the proviso to sub-section (5), it is the duty of the Court to be
satisfied that there are reasonable grounds for believing that the
accusation against the accused is prima facie true or otherwise.
Under the special enactments such as Terrorist and Disruptive
Activities (Prevention) Act, 1985 (TADA), Maharashtra Control
of Organised Crime Act, 1999 (MCOCA) and the Narcotic Drugs
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SHAH WATALI
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and Psychotropic Substances Act, 1985, the Court is required to
record its opinion that there are reasonable grounds for
believing that the accused is "not guilty" of the alleged offence.
There is degree of difference between the satisfaction to be
recorded by the Court that there are reasonable grounds for
believing that the accused is "not guilty" of such offence and the
satisfaction to be recorded for the purposes of the 1967 Act that
there are reasonable grounds for believing that the accusation
against such person is "prima facie" true. [Paras 15, 17]
[1087-E-G; 1088-A; F-G; 1089-A-B]
1.2 By its very nature, the expression "prima facie true"
would mean that the materials/evidence collated by the
Investigating Agency in reference to the accusation against the
concerned accused in the first information report, must prevail
until contradicted and overcome or disproved by other evidence,
and on the face of it, shows the complicity of such accused in the
commission of the stated offence. It must be good and sufficient
on its face to establish a given fact or the chain of facts
constituting the stated offence, unless rebutted or contradicted.
In one sense, the degree of satisfaction is lighter when the Court
has to opine that the accusation is "prima facie true", as
compared to the opinion of accused "not guilty" of such offence
as required under the other special enactments. In any case, the
degree of satisfaction to be recorded by the Court for opining
that there are reasonable grounds for believing that the
accusation against the accused is prima facie true, is lighter than
the degree of satisfaction to be recorded for considering a
discharge application or framing of charges in relation to offences
under the 1967 Act. The exercise to be undertaken by the Court
at this stage- of giving reasons for grant or non-grant of bail- is
markedly different from discussing merits or demerits of the
evidence. The elaborate examination or dissection of the
evidence is not required to be done at this stage. The Court is
merely expected to record a finding on the basis of broad
probabilities regarding the involvement of the accused in the
commission of the stated offence or otherwise. The High Court
ventured into an area of examining the merits and demerits of
the evidence. The approach of the High Court in completely
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discarding the statements of the protected witnesses recorded
under Section 164 of Cr.P.C., on the specious ground that the
same was kept in a sealed cover and was not even perused by
the Designated Court and also because reference to such
statements having been recorded was not found in the
charge-sheet already filed against the respondent is in complete
disregard of the duty of the Court to record its opinion that the
accusation made against the concerned accused is prima facie
true or otherwise. That opinion must be reached by the Court
not only in reference to the accusation in the FIR but also in
reference to the contents of the case diary and including the
charge-sheet (report under Section 173 of Cr.P.C.) and other
material gathered by the Investigating Agency during
investigation. The special provision, Section 43D of the 1967 Act,
applies right from the stage of registration of FIR for offences
under Chapters IV and VI of the 1967 Act until the conclusion of
the trial thereof. Soon after the arrest of the accused on the basis
of the FIR registered against him, but before filing of the
charge-sheet by the Investigating Agency; after filing of the first
charge-sheet and before the filing of the supplementary or final
charge-sheet consequent to further investigation under Section
173(8) Cr.P.C., until framing of the charges or after framing of
the charges by the Court and recording of evidence of key
witnesses etc. However, once charges are framed, it would be
safe to assume that a very strong suspicion was founded upon
the materials before the Court, which prompted the Court to form
a presumptive opinion as to the existence of the factual
ingredients constituting the offence alleged against the accused,
to justify the framing of charge. In that situation, the accused
may have to undertake an arduous task to satisfy the court that
despite the framing of charge, the materials presented along with
the charge-sheet (report under Section 173 of Cr.P.C.), do not
make out reasonable grounds for believing that the accusation
against him is prima facie true. Similar opinion is required to be
formed by the Court whilst considering the prayer for bail, made
after filing of the first report made under Section 173 of the Code,
as in the present case. For that, the totality of the material
gathered by the Investigating Agency and presented along with
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the report and including the case diary, is required to be
reckoned and not by analysing individual pieces of evidence or
circumstance. In any case, the question of discarding the
document at this stage, on the ground of being inadmissible in
evidence, is not permissible. For, the issue of admissibility of the
document/evidence would be a matter for trial. The Court must
look at the contents of the document and take such document
into account as it is. [Paras 17-19][1088-B-E; 1092-C-H;
1093-A-F]
1.3 In terms of Section 43D, it is the bounden duty of the
Court to peruse the case diary and/or the report made under
Section 173 of the Code and all other relevant material/evidence
produced by the Investigating Agency, for recording its opinion.
The issue regarding admissibility of the statements and efficacy
of the certificates given by the competent authority, appended to
the redacted statements would be a matter for trial and subject
to the evidence in reference to Section 463 of Cr.P.C.
[Paras 21, 23][1101-E-; 1102-C]
1.4 Taking into account the totality of the report made under
Section 173 of the Code and the accompanying documents and
the evidence/material already presented to the Court, including
the redacted statements of the protected witnesses recorded
under Section 164 of the Code, there are reasonable grounds to
believe that the accusations made against the respondent are
prima facie true. Further investigation is in progress. The
material produced by the Investigating Agency thus far (pending
further investigation) shows the linkage of the respondent
(Accused No.10) with A-3, A-4, A-5 and A-6 and, likewise,
linkages between the respondent (Accused No.10) and A-3 to
A-12, as revealed from the CDR analysis. The Chart A shows the
inter-linkages of the named accused inter se and Chart B showing the inter-linkages of the named accused with others and the
frequency of their interaction on phone during the relevant
period. The charge against respondent is not limited to Section
17 of the 1967 Act regarding raising funds for terrorist acts but
also in reference to Sections 13, 16, 18, 20, 38, 39 and 40 of the
1967 Act. Section 13 is in Chapter II of the 1967 Act. The
special provisions regarding bail under Section 43D(5), however,
are attracted in respect of the offences punishable under
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Chapters IV and VI, such as Sections 16, 17, 18, 20, 38, 39 and
40 of the 1967 Act. Sections 39 and 40 form part of Chapter VI,
whereas other sections (except Section 13) form part of Chapter
IV to which the subject bail provisions are applicable, mandating
the recording of satisfaction by the Court that there are
reasonable grounds for believing that the accusation against such
person is prima facie true. The accusation against the
respondent (Accused No.10) is that accused A-3 to A-10 are part
of the All Parties Hurriyat Conference which calls itself a
political front, whereas their agenda is to create an atmosphere
conducive to the goal of cessation of J & K from the Union of
India. The role attributed to the respondent (Accused No.10) is
that of being part of the larger conspiracy and to act as a fund
raiser and finance conduit. Ample material has been collected to
show the linkages between the Hurriyat leaders of the J & K
and terrorists/terrorist organizations and their continuous
activities to wage war against Government of India.
[Paras 24-28][1102-E-H; 1112-E-F; 1113-C-E]
1.5 The seizure memo described as document D-3/6, in
respect of search and seizure of articles/documents seized from
the premises of the respondent (Accused No.10) dated 3rd June,
2017, would unravel the activities of the respondent, including
regarding his financial deals. Another crucial document described
as D-3g/20 is a contact diary seized from the respondent vide
Memo D-3, which contains the Pakistan National name and
contact "TS 0092425765022...26A" whose name figures in
document D-132(a)/23. The Code "0092" pertains to Pakistan.
Another contact diary was seized from the respondent vide
Memo D-3, which, at page D-3h/28 contains the same name and
contact, namely, "TS 00923008459775/ 0092425765022". The
documents D-3j to D-3j/5 also indicate the involvement of the
respondent in terrorist activities, including that three cases of
TADA have been registered against him in the past and
investigated and one case of J & K PSA, 1978. The High Court
erroneously proceeded on the premise that the charge-sheet
makes no reference to any other criminal case against the
respondent. Additionally, the charge-sheet is accompanied with
documents D-9b and D-9c, which are photographs of ex-militant
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A-3 holding AK-47, seen with other terrorists. These photographs
were seized from the residence of the said ex-militant on 3rd June,
2017. The prosecution case is that the respondent (Accused
No.10) was in constant touch with the said ex-militant A-3, as
noticed from the inter-linkage chart. That fact is backed by the
CDR analysis report, also part of the charge-sheet. The
charge-sheet also contains document D-185/10, which is a
contact list of accused A-5 retrieved through forensic analysis,
having mobile numbers of persons associated with Hurriyat party;
and of one 'MCP' who is none other than the First Secretary of
Pakistan High Commission. His name also figures in document
D-132(a)/23. The Designated Court, besides adverting to the
aforementioned documents, also adverted to other documents
and the statements of the prospective witnesses (Ws-1, 28, 29,
38, 39, 43, 44, 48 and 52). The High Court has not appreciated
the said material which found favour with the Designated Court
to record its opinion that there are reasonable grounds for
believing that the accusation against the respondent is prima facie
true. The High Court adopted a tenuous approach - by first
discarding the document D-132(a) and then discarding the
statement of witnesses recorded under Section 161 and also the
statements recorded under Section 164, presented by the
Investigating Agency in a sealed cover. The High Court ought to
have taken into account the totality of the materials/evidences
which depicted the involvement of the respondent in the
commission of the stated offences and being a member of a larger
conspiracy, besides the offence under Section 17 for raising funds
for terrorist activities. Proviso to Section 43D(5) of the 1967 Act
mandates that the accused person involved in the commission of
offence referable to Chapters IV and VI of the 1967 Act shall not
be released on bail or on bond. However, the Court may release
such accused on bail only if it is of the opinion, on perusal of the
case diary and/or the report made under Section 173 of Cr.P.C.
that there are "no reasonable grounds" for believing that the
accusation against such person is prima facie true. Conversely,
if in the opinion of the Court, there are reasonable grounds for
believing that the accusation against such person is prima facie
true, the question of granting bail would not arise as the bar
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under the first part of the proviso of no bail in such cases would
operate. The fact that there is a high burden on the accused in
terms of the special provisions contained in Section 43D(5) to
demonstrate that the prosecution has not been able to show that
there exists reasonable grounds to show that the accusation
against him is prima facie true, does not alter the legal position
expounded in K. Veeraswami, to the effect that the charge-sheet
need not contain detailed analysis of the evidence. It is for the
Court considering the application for bail to assess the material/
evidence presented by the Investigating Agency along with the
report under Section 173 of Cr.P.C. in its entirety, to form its
opinion as to whether there are reasonable grounds for
believing that the accusation against the named accused is prima
facie true or otherwise. [Paras 29-31][1121-F-H; 1122-A-H;
1123-B-F]
1.6 The Designated Court had rightly rejected the bail
application after adverting to the relevant material/evidence
indicative of the fact that there are reasonable grounds for
believing that the accusation against the respondent is prima facie
true. The issue of admissibility and credibility of the material and
evidence presented by the Investigating Officer would be a
matter for trial. The High Court, in the present case, adopted an
inappropriate approach whilst considering the prayer for grant of
bail. The High Court ought to have taken into account the
totality of the material and evidence on record as it is and ought
not to have discarded it as being inadmissible. The High Court
clearly overlooked the settled legal position that, at the stage of
considering the prayer for bail, it is not necessary to weigh the
material, but only form opinion on the basis of the material
before it on broad probabilities. The Court is expected to apply
its mind to ascertain whether the accusations against the accused
are prima face true. [Paras 33-35][1128-E-F; 1129-B; E-G]
1.7 The Designated Court rightly opined that there are
reasonable grounds for believing that the accusation against the
respondent is prima facie true. The order passed by the High
Court granting bail to the respondent is reversed. In the present
case, the respondent is not entitled to grant of bail in connection
with the stated offences, particularly those falling under
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Chapters IV and VI of the 1967 Act. The impugned judgment
and order is set aside and, instead, the order passed by the
Designated Court rejecting the application for grant of bail made
by the respondent herein, is affirmed. [Paras 36-38][1130-A-D]
K. Veeraswami v. Union of India and Ors. (1991) 3 SCC
655 : [1991] 3 SCR 189 - followed.
Salim Khan v. Sanjai Singh and Anr. (2002) 9 SCC 670;
Ranjitsing Brahmajeetsing Sharma v. State of
Maharashtra and Anr. (2005) 5 SCC 294 : [2005] 3
SCR 345 - relied on.
Hitendra Vishnu Thakur and Ors. v. State of
Maharashtra and Ors. (1994) 4 SCC 602 : [1994] 1
Suppl. SCR 360 ; Niranjan Singh Karam Singh Punjabi,
Advocate v. Jitendra Bhimraj Bijjaya and Ors. (1990)
4 SCC 76 : [1990] 3 SCR 633 ; Manohar Lal Sharma
v. Union of India (2017) 11 SCC 783 ; Jayanta Kumar
Ghosh and Ors. v. State of Assam and Anr. (2010) 6
Gauhati Law Reports 727 ; Davender Gupta v.
National Investigating Agency (2014) SCC Online AP
192 ; Sanjay Chandra v. CBI AIR 2012 SC 830 :
[2011] 13 SCR 309 ; Central Bureau of Investigation
v. V. C. Shukla and Ors. (1998) 3 SCC 410 : [1998] 1
SCR 1153 ; Chenna Boyanna Krishna Yadav v. State
of Maharashtra and Anr. (2007) 1 SCC 242 : [2006]
10 Suppl. SCR 381 ; State of U.P. through CBI v.
Amarmani Tripathi (2005) 8 SCC 21 : [2005] 3 Suppl.
SCR 454 ; Khoday Distilleries Ltd. and Ors. v. State of
Karnataka and Ors. (1995) 1 SCC 574 : [1994] 4 Suppl.
SCR 477 - referred to.
Case Law Reference
[1994] 1 Suppl. SCR 360
 referred to
 Para 3
[1990] 3 SCR 633
 referred to
 Para 3
(2017) 11 SCC 783
 referred to Para 3
(2010) 6 G. L.Reports 727
 referred to
 Para 3
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[1991] 3 SCR 189
followed
Para 8
[2011] 13 SCR 309
referred to
Para 12
(2002) 9 SCC 670
relied on
Para 13
[1998] 1 SCR 1153
referred to
Para 14
[2005] 3 SCR 345
relied on
Para 14
[2006] 10 Suppl. SCR 381
referred to
Para 14
[2005] 3 Suppl. SCR 454
referred to
Para 15
[1975] 3 SCR 839
referred to
Para 23
[1994] 4 Suppl. SCR 477
referred to
Para 34
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 578 of 2019
From the Judgment and Order dated 13.09.2018 by the High Court
of Delhi at New Delhi in Criminal Appeal No. 768 of 2018.
K.K. Venugopal, Attorney General, R. Balasubramanian,
Ms. Suhasini Sen, Suchindran Bhaskar Narayan, Surinder Singh
(Sr. P. P./ NIA), B. V. Balaram Das, Advs. for the Appellant.
Shekhar Naphade, R. A. Jan, Sr. Advs., Shariq J. Reyaz, Abhikalp
Pratap Singh, Ms. S. Lakshmi Iyer, Shakil Ahmed Syed, Advs.for the
Respondent.
The Judgment of the Court was delivered by
A. M. KHANWILKAR, J. 1. Leave granted.
2. The respondent is named as Accused No.10 in the First Information Report dated 30th May, 2017, registered by the Officer-in-charge
of Police Station, NIA, Delhi, for offences punishable under Sections
120B, 121 and 121A of the Indian Penal Code ("IPC") and Sections
13,16,17,18,20,38,39 and 40 of the Unlawful Activities (Prevention) Act,
1967, (for short "the 1967 Act"). The respondent (Accused No.10)
filed an application for bail before the District and Sessions Judge,
Special Court (NIA), New Delhi, which came to be rejected on 8th June,
2018. That order has been reversed by the High Court of Delhi at New
Delhi in Criminal Appeal No.768/2018 vide order dated 13th September,
2018. The High Court directed release of the respondent on bail subject
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SHAH WATALI
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to certain conditions. That decision is the subject matter of this appeal
filed by the prosecuting agency - the appellant herein.
3. The Designated Court opined that there are serious allegations
against the respondent Zahoor Ahmad Shah Watali (Accused No.10) of
being involved in unlawful acts and terror funding in conspiracy with
other accused persons; he had acted as a conduit for transfer of funds
received from terrorist Accused No.1 Hafiz Muhammad Saeed, ISI,
Pakistan High Commission, New Delhi and also from a source in Dubai,
to Hurriyat leaders/secessionists/terrorists; and had helped them in waging
war against the Government of India by repeated attacks on security
forces and Government establishments and by damaging public
property including by burning schools etc. It then noted that the
accusation against the respondent (Accused No.10) was of being a part
of a larger conspiracy to systematically upturn the establishment to cause
secession of J & K from the Union of India. Keeping in mind the
special provisions in Section 43D of the 1967 Act and the exposition in
Hitendra Vishnu Thakur and Ors. Vs. State of Maharashtra and
Ors.,1 Niranjan Singh Karam Singh Punjabi, Advocate Vs. Jitendra
Bhimraj Bijjaya and Ors.2, Manohar Lal Sharma Vs. Union of
India3 and Jayanta Kumar Ghosh and Ors. Vs. State of Assam and
Anr.4, it proceeded to analyse the material on record and observed thus:
"7.5 Let me now see whether on the basis of the material on
record, allegations against the accused are prima facie made out
or not. Mindful of the fact that this is not the stage to examine and
analyze the evidence placed on record in detail, let me refer to the
same. Allegation against the accused that certain businesses of
his, were just a front/ sham for routing of funds received from
abroad/ terrorist A-1/ High Commission, Pakistan/ Dubai/other
sources and that there were, unaccounted financial transactions,
is prima facie borne out from statement of the witnesses PW1,
PW28 and PW29 and documents including D-202 & D-214. It
has also come in the statements of PW38 & PW39, who prepared
balance sheets of accused's firms/companies namely Trison Farms
and Constructions Pvt. Limited, M/s Trison International, M/s Yasir
Enterprises, M/s 3Y, M/s Kashmir Veneer Industries & M/s Three
1 (1994) 4 SCC 602
2 (1990) 4 SCC 76
3 (2017) 11 SCC 783
4 (2010) 6 Gauhati Law Reports 727
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Star, that the accused never produced any supporting documents
with respect to remittances received from NZ-International DubaiFZC, owned by him; and that he did not even inform about the
actual execution of business despite asking of PW39. The fact
that the balance sheets of M/s Trison International, M/s 3Y were
forcefully got signed from the protected witness PW43 without
providing him any document, has come in his statement. It has
also come in the statement of PW44 that the audit report of the
aforesaid companies were got signed from him without producing
books for verification."
Again in paragraph 7.8 to 7.10 the Court observed:
"7.8 The fact that the accused received money from abroad /
A-1, chief of proscribed (terrorist) organization, HCP (High
Commission, Pakistan) and others and was passing on the said
funds to Hurriyat leaders, is prima facie borne out from D-152
read with statement of PW29 and D-154 (Expert's Report), as
per which the signatures of the accused on D-152 were compared
with his admitted handwriting and were verified and found to be
similar. In view of the same, the Ld. Defence counsel's argument
that the said document/ D-152 cannot be looked into at all even to
form prima facie opinion, cannot be accepted. Thus, the judgment
of Hon'ble Supreme court in Manohar Lal Sharma's Case
(Supra), relied upon Ld. Defence counsel is also of no assistance
to the accused.
7.9 Further, the association/proximity of Altaf Ahmad Shah @
Fantoosh (A-4), Farooq Ahmad Dar @ Bitta Karate (A-6) with
accused, is also prima facie borne out from the statement of
protected witness PW48. Accused's links with people who have
role in governance of Pakistan and with Hurriyat leaders has also
prima facie come on record vide statement of PW52, documents
D-3, D-4 (e) etc. and other material on record.
7.10 In view of the above facts and circumstances, the statements
of witnesses/material/documents and other material placed on
record by NIA, offences as alleged against the accused are prima
facie made out. Therefore, in view of the bar under proviso to
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD
SHAH WATALI [A. M. KHANWILKAR, J.]
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[2019] 5 S.C.R.
Section 43D(5) UA(P) Act, the accused's prayer for bail cannot
be granted."
Further the Court observed:
"8.1.1 Ld. Special PP, NIA also submitted that the applicant/
accused is an influential person/ business man and has a great
clout in the valley, as has come in the statement of PW48. All the
witnesses are known to the applicant/ accused. There is every
likelihood of the applicant/accused influencing/ intimidating
witnesses/ tempering with evidence, in the event of his release
even on interim bail."
4. The respondent had also prayed for grant of bail on health
grounds, which plea was duly considered and rejected in the following
words:
"8.2 I have duly considered the submissions made by both the
sides. Perusal of the record reveals that as and when requested
by the accused, he was provided medical treatment from time to
time. Pursuant to the directions of this court, the accused was
taken to the premier medical institute of India/AIIMS for necessary
medical examination. This was besides being provided appropriate
medical attention to Jail hospital and in-patient treatment at Dr.
RML hospital from 01.09.2017 to 05.09.2017. As per medical status
report dated 26.09.2017, the accused was extensively evaluated
at Dr. RML Hospital for chest pain and cause of cardiac disease
was ruled out. Even subsequently, the accused was reviewed at
Central Jail Hospital and detailed blood investigation was carried
out and medication was provided. On his complaint of anxiety,
severe low back pain and bleeding per-rectum on 24.09.2017, the
accused was admitted to M.I. Room, Dispensary, Central Jail
No. 8/9 from 24.09.2017 to 26.09.2017. Vide subsequent report
dated 11.10.2017, Medical Officer I/c, Central Jail Tihar,
Dispensary 8/9, reported that the accused was getting treatement
under regular follow up of Medicine Specialist, jail visiting SR
surgery. It may further be mentioned that accused was constantly
reviewed at short intervals and was provided all advised
medication.
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8.3 It has also come in order sheet dated 03.01.2018 that as per
medical report of accused received from AIIMS New Delhi, the
accused was evaluated in seven speciality/ superspeciality OPDs
but was not found to be suffering from any specific ailment except
for his known history of Type 2 diabetes mellitus, hypertension &
hypothyroidism for which requisite medications to be taken
regularly, were already prescribed. The Colonoscopy test of the
accused was scheduled for 15.01.2018. Medical status report of
accused Zahoor Ahmad Shah Watali received from the Medical
Officer Incharge, Central Jail Dispensary, Tihar, New Delhi,
mentioned that the accused despite being counseled several times
to continue his treatment at AIIMS Hospital, refused to visit AIIMS
for treatment/further management.
9.0 From the above, it is evident that the applicant/ accused is
being provided necessary medical attention/ treatment as and when
prayed for, not only inside the jail but also at AIIMS and other
Govt. Hospitals. Thus, taking into account the law as laid
down in Redual Hussain Khan's case (Supra), no ground
for grant of interim bail on health grounds is made out.
9.1 However, Jail Superintendent is directed to provide
proper medical care and treatment to the applicant/ accused,
as requested/ called for."
5. The respondent carried the matter before the High Court by
way of Criminal Appeal No.768 of 2018 under Section 21(1) read with
Section 21(4) of the National Investigation Agency Act, 2008. The High
Court noticed that after filing of the charge-sheet, accused Nos.11 and
12 had been granted regular bail, while accused Nos.1 and 2 had not
been arrested. Rest of the accused, including the respondent (Accused
No.10), were in judicial custody. The respondent (Accused No.10) was
arrested on 17th August, 2017 and had been in judicial custody since
then. His age, as indicated in the charge-sheet, was about 70 years. The
High Court then adverted to paragraph 17.6.5 onwards of the
charge-sheet [report under Section 173 of the Code of Criminal
Procedure (Cr.P.C.)] and summarized the allegations against respondent (Accused No.10) as follows:
"18. Specific to the Appellant are the allegations made in
Paragraph 17.6.5 of the charge-sheet which is subtitled 'Hawala'.
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD
SHAH WATALI [A. M. KHANWILKAR, J.]
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This being the principal allegation against the Appellant, requires
to be summarized as under:
(i) The Appellant is one of the conduits to bring money from
off-shore locations of India to fuel anti-India activities in Jammu
and Kashmir. Reference is again made to the same incriminating
document i.e. D No.132 (a).
(ii) A-10 was bringing money from off-shore locations to India
"by layering it through the scores of firms and companies he has
opened". Reference is made to an NRE account of the Appellant
at the J&K Bank where, from 2011 till 2013, he is said to have
received Rs.93, 87, 639. 31 from 'unknown sources'.
(iii) The Appellant was showing foreign remittances under 'other
income' in his proprietorship M/s Trison International, Srinagar.
Foreign remittances in the sum of Rs.2,26,87,639.31 were received
by the Appellant in different accounts from 2011 to 2016. It is
repeated that Rs.93,87,639.31 was received in his NRE account
from 2011 to 2013.
(iv) It is stated that Rs.14 lacs were remitted in the account of a
medical college in Jammu through NEFT on 9th April, 2013 against
the fees deposited for his son (who incidentally is a medical
doctor and through whom the present appeal has been filed). It is
stated that Rs.60 lacs were remitted in the current account of the
Appellant in J&K Bank. Rs.5 lacs were remitted in the account
of M/s Trison Farms and Constructions Pvt. Limited ('TFCPL').
It is stated that all these foreign remittances "are from unknown
sources".
(v) On 7th November, 2014, one Nawal Kishore Kapoor (who
initially was a witness but has, since the filing of the charge-sheet,
been arrayed as an accused himself), a resident of United Arab
Emirates ('UAE') entered into an agreement with TFCPL, whose
Managing Director ('MD') is the Appellant to take land
measuring 20 kanals in Budgam in J&K on lease in consideration
of a sum of Rs.6 crores as premium and Rs.1,000/- annual rent
for an initial period of 40 years which could be extended through
mutual agreement. In the said agreement, TFCPL was declared
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as the absolute owner of the land. Mr. Kapoor remitted a total
sum of Rs.5.579 crores in 22 instalments between 2013 and 2016
to the Appellant.
(vi) During investigation it was revealed that no land exists in the
name of TFCPL as per the balance sheet of that company.
Further, it was ascertained that Rs.5,57,90,000 was mobilized by
Mr. Kapoor from unknown sources and remitted to Appellant to
lease a piece of land which does not even exist in the name of
TFCPL and therefore the agreement itself lacks legal sanctity.
According to the NIA, this "proves that the said agreement was a
cover" created by the Appellant "to bring foreign remittances from
unknown sources to India".
(vii) The Chartered Accountant ('CA') who signed the audited
balance sheet of M/s Trison International., TFCPL and M/s Yasir
Enterprises for various years between 2013-14 and 2015-16 "did
so without seeing any supporting documents". According to the
NIA, the balance sheets of the above entities/companies were
sent to the CA by Mustaq Mir, Cost Accountant and Shabir
Mir, CA from Wizkid Office, Srinagar through email and he was
asked to sign on them in Delhi without showing any documents.
According to the NIA, this also clearly showed that the Appellant
was remitting money received from unknown sources to India.
(viii) TFCPL raised an unsecured loan of Rs.2,65,55,532/- from
the Directors of the company, i.e. the Appellant, his wife, and his
three sons in the Financial Year ('FY') 2010-11 in the form of
both cash and cheque and this was used to repay the secured
loan of Rs.2,94,53,353/- in the books of J&K Bank. The source
of money with the Directors could not be explained satisfactorily
by the Appellant.
(ix) The seizure from the house of the Appellant of a list of ISI
officials and a letter from Tariq Shafi, proprietor of Al Shafi Group
addressed to the PHC recommending grant of visa to the
Appellant "shows his proximity with Pakistani Establishment". It
is stated that the name of Tariq Shafi figures in the document of
foreign contributions seized from the house of the Appellants
cashier-cum-accountant Ghulam Mohd. Bhatt."
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD
SHAH WATALI [A. M. KHANWILKAR, J.]
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6. The High Court also adverted to the accusations against
respondent (Accused No.10) in paragraphs 17.9 and 17.10 of the chargesheet, to the effect that CDRs relied upon by the prosecution revealed
that the accused persons were in contact "with each other, with some
militants/OGWs (Over Ground Workers) and the hawala conduit" i.e.
the respondent (Accused No.10) and the other accused, that the
respondent (Accused No.10) was in constant contact on telephone with
A-3, A-4, A-5 and A-6 and that A-3 to A-12 were in contact with each
other, either directly or indirectly. In paragraph 17.10 of the chargesheet, it is stated that respondent (Accused No.10) was a known hawala
dealer and financer and a number of cases were registered against him,
which were being investigated by the sister investigating agencies. The
High Court, however, noted that the charge-sheet neither gave details of
the other cases registered and being investigated against the respondent
nor revealed the details thereof to the Court. The High Court also noted
accusations against the respondent (Accused No.10) in paragraphs 18.10,
18.13 and 18.14, revealing the linkage between A-3 to A-10 and
indicating clear meeting of minds of the said accused in hatching the
conspiracy in support of A-1 and A-2 and other Hurriyat leaders and
other terrorist organizations in J & K.
 7. After noting the relevant facts emanating from the
charge-sheet filed against the respondent, the High Court adverted to
the conclusions recorded by the Trial Court. It then proceeded to analyse
the relevant provisions of the 1967 Act and the principle underlying the
decisions of this Court concerning the Terrorist and Disruptive
Activities (Prevention) Act, 1985 ("TADA") and the Maharashtra
Control of Organised Crime Act, 1999 ("MCOCA"), in light of the
exposition in Hitendra Vishnu Thakur (supra) and Niranjan Singh
Karam Singh Punjabi (supra), and posed a question to itself as to
whether the material gathered by the NIA in the present case could
have enabled the Trial Court to come to the conclusion that there were
reasonable grounds for believing that the accusation against the
respondent (Accused No.10) was prima facie true. After so noting, it
observed that the statements of the proposed/prospective witnesses
recorded under Section 161 Cr.P.C. did not constitute admissible
evidence. Those could only be used to confront the witnesses who would
subsequently appear at the trial. It noted that this crucial aspect had to
be kept in view while referring to such statements at that stage. The
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High Court then noted that the Investigating Agency had recorded the
statements of the witnesses under Section 164 of Cr.P.C. but had kept
the same in a sealed cover enclosed to the charge-sheet. The High
Court noted that the statements at serial Nos.277 and 278 were of
protected witnesses "Charlie" and "Romeo" respectively, and those at
serial Nos.279 to 284 were described as statements of protected
witnesses "Romeo", "Alpha", "Gamma", "Pie", "Potter", "Harry" and
"xxx". These statements were kept in a sealed cover and not supplied to
the respondent (Accused No.10). Further, these statements were
presumably not perused by the Designated Court. Notably, the
application moved by the Investigating Agency under Section 44 of the
1967 Act to accord protection to those witnesses remained pending
before the Designated Court. Here, it may be mentioned that during the
pendency of the present appeal before this Court, the said application
has been decided in favour of the Investigating Agency vide order dated
11th January, 2019 passed by the Designated Court. We shall refer to
this a little later.
8. Reverting to the judgment of the High Court, it opined that the
said statements under Section 164 of Cr.P.C. could not be considered,
as copies thereof had not been provided to the respondent. It then
proceeded to hold that Section 44 of the 1967 Act merely permitted the
identity and address of such witnesses to be kept secret by the Court.