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REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL  APPEAL NO.  578  OF  2019 (Arising out of SLP(Crl.) No.7857 of 2018)

National Investigation Agency      …..Appellant(s)   :Versus:

Zahoor Ahmad Shah Watali     ....Respondent(s)

J U D G M E N T

A.M. K   hanwilkar   , 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

Officer­in­charge 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,

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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 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

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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,

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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PW28 and PW29 and documents including D­202 & D­214. 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 Star, that the accused never produced any supporting documents with respect to remittances received from NZ­International Dubai­ FZC, 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 /A­1, 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 D­152 read with statement of PW29 and D­154 (Expert’s Report), as per which the signatures of the accused on D­152 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/ D­152 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 (A­4), Farooq Ahmad Dar @ Bitta Karate

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(A­6) 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 D­3, D­4 (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 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.

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This was besides being provided appropriate medical attention to  Jail  hospital and in­patient 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 per­rectum 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.  

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.”  

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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

charge­sheet, 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

charge­sheet, was about 70 years. The High Court then

adverted to paragraph 17.6.5 onwards of the charge­sheet

[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 charge­sheet which is subtitled ‘Hawala’. 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 off­shore locations of India to fuel anti­India activities in

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Jammu and Kashmir. Reference is again made to the same incriminating document i.e. D No.132 (a).  

(ii) A­10 was bringing money from off­shore 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 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

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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  2013­14  and 2015­16 “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’) 2010­11 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 Appellant‟s cashier­cum­accountant Ghulam Mohd. Bhatt.”  

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

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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 A­3, A­4, A­

5 and A­6 and that  A­3 to A­12 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 charge­sheet 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 A­3 to A­10 and indicating clear meeting of

minds of the said accused in hatching the conspiracy in

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support of A­1 and A­2 and other Hurriyat leaders and other

terrorist organizations in J & K.   7. After noting the relevant facts emanating from the

charge­sheet 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

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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 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 charge­sheet. 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

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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. It held that it

was not possible to read Section 17 of the NIA or Section 44 of

the 1967 Act as an exception to Section 207 read with Section

173 Cr.P.C., which mandates that the accused shall be

supplied copies of the police report and other documents relied

upon by the prosecution  in the charge­sheet,  without  delay

and  free of  cost. It then proceeded to analyse  the  interplay

between Sections 207, 161, 164 and 173 of Cr.P.C. and opined

that even in respect of statements recorded under Section 161

of  Cr.P.C., there  was no  wholesale exclusion of the entire

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document from being provided to the accused.  What was

permitted was the redaction of such portion of the document

which could reveal the identity and address of the maker of

the statement.  Be it noted that the High Court did not think it

necessary to direct  the Designated Court to  first  decide the

application filed by the Investigating Agency under Section 44

of the 1967  Act before  proceeding  with the  hearing of the

appeal filed by the respondent. Instead, the High Court

preferred to exclude those statements kept in a sealed cover

from consideration. The High Court did not advert to Section

48 of the 1967  Act,  which  makes it amply clear that the

provisions of the Act shall have effect notwithstanding

anything inconsistent therewith contained in any enactment

other than the said Act etc. The High Court then went on to

observe that the charge­sheet made no reference to the

statements recorded  under  Section 164 of the  witnesses in

respect of  whom protection was sought by the  Investigating

Agency. The  High  Court distinguished the decision of this

Court in  K. Veeraswami Vs. Union of India and Ors.5

5  (1991) 3 SCC 655

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pressed into service by the Investigating Agency to buttress its

submission that it is not necessary that the charge­sheet must

contain detailed analysis of  the evidence, and that the Trial

Court ought to consider not only the narration in the charge­

sheet but also all documents accompanying thereto. The  High

Court,  however,  opined  that in the  context  of the  relatively

high burden placed on the accused in terms of the proviso to

Section 43D(5) of the 1967 Act, of having to demonstrate that

the prosecution had not been able to show that there existed

reasonable grounds to show that the accusation against him

was  prima facie true, the absence of any reference in the

charge­sheet to the statements  under Section 164  Cr.P.C.,

which  are  of a  higher  probative value than the statements

under Section 161 Cr.P.C., was significant. It thus observed

that such statements could not be kept back from the

accused. Resultantly, the statements of the protected

witnesses recorded under Section 164 Cr.P.C. were kept out of

consideration by the High Court, with liberty to the parties to

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independently make submissions before the Trial Court at the

appropriate stage.  

9. The High Court then straightaway proceeded to analyse

the efficacy of document D­132(a) forming part of the charge­

sheet. In light of the statement of Ghulam Mohammad Bhatt

from whom the same was recovered, it noted in paragraph 61

of the impugned judgment that it was unlikely that the

document D­132(a) was recovered from the residence of

Ghulam Mohammad Bhatt till 16th  August, 2017, and

thereafter proceeded to observe thus:  

“62.  While the genuineness and the evidentiary value of Document 132 (a) is yet to be established by the NIA at the trial,  since this one document is being relied upon by the NIA as being central to its case against the Appellant, it is but inevitable that the trial Court and now this Court has to discuss it in some detail for the purpose of deciding whether the Appellant can be released on bail.  

63. The question that arises is whether there is anything to show with reference to each of the dates mentioned in the above Document No. 132 (a) that the figures shown against the entry on each date (purporting to be specific amounts of money) was in fact received by the Appellant in his personal accounts or in the accounts of any of his entities. Although the case of the NIA  is  that the money has been received, there is no document or statement, which forms part of the charge sheet, which in fact indicates this.  

64. The above document is also relied upon by the NIA as providing proof of the linkages of the Appellant to A­1, through the entry dated 3rd May, 2015 and with the

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Pakistan High Commission (PHC) through the entries dated 15th and 20th October, 2016. Yet none from the PHC has been named,  much  less  statement of  such a person been recorded to  confirm  that those figures represented  money that was received from the PHC.  

65. The case of the NIA in the charge sheet is that the same document is also proof of the fact that the monies so received were passed on to the Hurriyat leaders. Reference is made to the fourth column of the above document where the names of some of the Hurriyat leaders are mentioned. However, there is nothing to show that the  money was received by the Appellant and then transmitted by him to any of the  named  Hurriyat leaders.  Nor  have any of the ‘prospective witnesses’ including Mr Bhatt made any statement to that effect.  

66. Mr. Luthra urged that the signature of the Appellant in the right  hand  bottom corner of the  document  has  been confirmed by the handwriting expert to match the specimen signature of the Appellant. In reply it was pointed out by Mr. Vikas Pahwa, learned Senior counsel for the Appellant, that the mere fact that the Appellant’s signature appeared on the document did not  mean that he had in fact signed the document in acceptance of the truth of its contents. According to him,  it is  too early to speculate whether  the Appellant when he signed the paper, if at all, put his signature on a blank green legal size paper which may be have then been used for legal purposes for an affidavit etc.  

67. It is indeed too early in the case to speculate whether the Appellant in fact signed the document after it was typed out and whether his signature amounts to accepting the truth of its contents or for that matter whether the contents of the document in question constitute conclusive proof of what the NIA alleges the document to be.  

68. In the circumstances, the Court is not satisfied that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by  the Appellant  or  his  business  entities,  can constitute material to even ‘prima facie’  connect the Appellant  with the crime  with  which  he is sought to be charged. The conclusion of the trial Court that this

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document shows the connection of the Appellant with the other accused as regards terrorist funding does not logically or legally flow from a plain reading of the document.”   

10. The High Court then adverted to the other documents. It

analysed the  concerned  documents  and concluded  that the

entire  bunch  of documents  did  not reveal that the trading

activities undertaken by the respondent were geared towards

funding of terrorist activities, as alleged in the charge­sheet. It

may be apposite  to reproduce the relevant  extract from the

impugned judgment in this regard, which reads thus:

“69. Mr. Luthra then referred to the statements of Mustaq Ahmad Mir and Shabbir Ahmad Mir, the reply of Mr Mustaq Ahmad Mir (Ex.D­214), the CFSL report dated 6th November, 2017 (document D­154); the seizure memo dated 3rd June, 2017 (document D­3) regarding the recovery being made from the residence of the Appellant; the seizure memo of the same  date of the recoveries from  the  office of the TFCPL (document D­4); and the bunch of papers seized from the Appellant [D­4(e)] referred to by the trial Court.  

70. Beginning with the last referred document, [D­4(e)], it is actually a bunch of documents, the first of which is a letter dated  28th  June,  2016,  written  by the  Prime  Minister of Pakistan Mr Mohammad Nawaz Sharif to the Appellant thanking him for the bouquet sent to him with wishes for his good health and well being.  

71. Then there is a letter dated 20th November, 2007 from the President of the Azad Jammu and Kashmir, Chambers of Commerce and Industry, addressed to the Appellant, appointing the Appellant as an Honorary Trade Consultant at Srinagar. It notes that Pakistan and India had initiated/undertaken a  number of Kashmir related  CBMs

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(confidence building measures) in the recent past to provide respite to the Kashmiris on both sides of the LoC (Line of Control):  

‘1.Pakistan and India have initiated/undertaken a number of Kashmir related CBMs in recent past to provide  respite to  the Kashmiris on both sides of the LoC. One such CBM which is under active consideration is commencement of trade between both parts of Kashmir. Necessary modalities including the items to be traded are being worked out.’  

72. The other documents reflect the correspondence carried out in the regular course of business between the Appellant’s business entities and other entities including the Al­Shafi  Group of  companies,  headquartered  at  Lahore.  A business invitation was extended to the  Appellant  on  7th February, 2014 by Mohd. Tariq Shafi, the director of Al­Shafi Group of companies to visit them for business negotiations. There is a letter of the same date addressed by Mr. Mohd. Tariq Shafi to the PHC in New Delhi for grant of Pakistan Business Visa to the Appellant.  

73. It must be noticed at this stage that the NIA does not dispute that the Appellant is a leading businessman in Kashmir. He runs a conglomerate of business entities and has been active  in the context of  the Indo­Pakistan trade. Nothing has been shown to this Court from the entire bunch of documents which would suggest that these trade activities were geared toward funding of terrorist activities, as alleged in the charge­sheet.”

11. The High Court then adverted to the statements of

Mustaq Ahmad Mir and Shabbir Ahmad Mir and noted that

the same  had  no evidentiary value since they  were  merely

statements  under Section 161 Cr.P.C.  and even  if taken at

their face  value, they would only indicate that  some of the

entries in the accounts and, in particular, the source of credit

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entries were not explained properly. Further, the accounts of

the entities of the respondent were regularly audited and  it

was not possible to prima facie conclude that these unknown

sources were, in fact, connected to the other accused and that

remittances were received from Pakistan or UAE for terrorist

activities. The Court noted that there must be something more

substantial than mere audited accounts that may have entries

that require explanation to the Income Tax Authorities. As a

result, the High Court concluded that the documents relied

upon by the Investigating Agency did not persuade the Court

to prima facie conclude that the respondent received money

from A­1  or  Pakistan  High  Commission  or  others  and  was

passing on the said funds to the Hurriyat leaders for funding

terrorist activities and stone­pelting.   The  High  Court also

adverted to the statement of the ‘protected  witness’  W­48

about the proximity of the respondent (Accused No.10) with A­

4 and A­6 and opined that the same could not be construed as

material that would enable the prosecution to show that

accusation against the respondent about his funding terrorist

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activities was  prima facie  true.   Lastly, the High Court dealt

with transaction of lease involving Naval Kishore Kapoor and

noted thus:  

“77. Turing to the transaction of  lease involving Mr. Naval Kishore  Kapoor, it is  explained on behalf  of the Appellant that only individuals domiciled in Kashmir can hold properties there. There was no declaration of ‘ownership’ of lands by the companies and in any event it was a lease. The lease itself has not been shown to be a sham transaction. As regards the NRE account, it is pointed out that it has since been closed and the fine amount was also paid. As regards the CDRs, it is pointed out that there may have been exchange  of calls  between the  Appellant  and A­6  but  not between the Appellant and A­3, A­4 or A­5. This cannot at this stage be said to constitute material to show that  the accusation of a criminal conspiracy between the Appellant and A­6 for commission of terrorist offences is prima facie true. It also emerged during the course of the hearing of this appeal that neither the APHC nor any of its 26 constituent organisations are ‘banned’ organisations within the meaning of the UAPA.”  

12. Having said thus, the High Court proceeded to conclude

that the order passed by the Designated Court was cryptic and

unsustainable both on facts and in  law. It then went on to

observe that there was nothing on record to indicate the

previous criminal involvement of the respondent in any offence

or the possibility of the respondent fleeing from justice, if

released on bail. Further, the respondent who was a

septuagenarian and was suffering from various medical

22

ailments, was in judicial custody for more than a year and had

not tampered with the evidence or interfered with any of the

‘prospective/protected’  witnesses. The High Court then went

on to rely on the dictum in  Davender Gupta Vs. National

Investigating Agency6  and  Sanjay Chandra Vs. CBI  7.

Finally, the High Court directed the release of respondent on

bail and issued directions in that regard subject to conditions

stated in the concluding part of the impugned judgment which

reads thus: “Conclusion  82. The impugned order dated 8th June, 2018 of the trial Court is accordingly set aside. The Appellant is directed to be released on bail subject to his furnishing a personal bond in the sum of Rs.2 lakhs with two sureties of like amount to the satisfaction  of the trial  Court, and further subject to the following conditions:  

(i) The Appellant shall report to the IO in charge of the case as and when required. He shall provide to the IO as well as the trial Court the mobile phone on which he can be contacted and his current address where he will be available. He will keep both the IO and the trial Court informed promptly if there is any change in either.  (ii) He will not influence or intimidate the proposed/prospective Crl.A.768/2018 Page 40 of 40 prosecution  witnesses  or tamper  with the  evidence  of the prosecution in any manner.  (iii) The Appellant will surrender his passport before the trial Court at the time of execution of the bail bonds. He will not travel out of the country without prior permission of the trial Court.  

6  (2014) SCC Online AP 192 7  AIR 2012 SC 830

23

(iv) If there is any breach of the above conditions, it will be open to the NIA to apply to the trial Court for cancellation of bail.  

83. It is clarified that the observations of this Court in this order both on facts and law are  based on the  materials forming  part of the charge sheet and are prima facie in nature and for the limited purpose of considering the case of the  Appellant for grant of  bail. They  are  not intended to influence the decisions of the trial Court at any stage of the case hereafter.  

84. The appeal is allowed in the above terms.”

13. The view so taken by the High Court has been assailed by

the Investigating  Agency – the  appellant  herein, on  diverse

counts. According to the appellant, the High Court has

virtually conducted a mini trial and even questioned the

genuineness of the documents relied upon by the Investigating

Agency. In that, the High Court adopted a curious approach in

finding fault with the Investigating Agency for not naming any

official from the High Commission of Pakistan as accused or

recording their statements as witnesses, for inexplicable

reasons.   In so observing, the High Court clearly overlooked

the fact that the officials of the High Commission are accorded

diplomatic immunity. Not only that, while considering the

statements of witnesses recorded under Section 161 of

24

Cr.P.C., the High Court went on to observe that the same were

inadmissible in evidence and discarded it from consideration

for forming opinion as to whether the accusations against the

respondent (Accused No.10) were prima facie true. The Court,

however, was obliged to consider all the statements recorded

under Section 161 of  Cr.P.C. in light of the exposition in

Salim  Khan  Vs. Sanjai  Singh  and  Anr.  8  Similarly, the

statements recorded under Section 164, which were produced

in a sealed cover, had been completely discarded. The

approach of the  High Court, to  say  the  least,  contends the

learned Attorney General, was tenuous and not permissible at

the stage of consideration of prayer for bail. The analysis done

by the High Court  is  bordering on being perverse as  it  has

virtually conducted a mini trial at the stage of consideration of

the  prayer for  bail.  According to the  appellant, the  charge­

sheet filed against the respondent was accompanied by

documentary evidence, statements of prospective witnesses

and other evidence which indicated complicity of the

respondent and reinforced the aspect that the accusations 8  (2002) 9 SCC 670

25

made against him were prima facie true. It is submitted that at

the stage of consideration of bail, the totality of the evidence

available against the respondent must be reckoned and ought

to be taken into account as it is, without anything more. The

question of admissibility of such evidence would be a matter

for trial. The sufficiency or insufficiency of the evidence cannot

be the  basis to answer the  prayer for grant  of bail.   It is

contended that after considering the statements of protected

witnesses recorded under Section 164 of the Code, the same

reinforces the accusations made against the respondent

(Accused No.10) as being  prima facie  true. Accordingly,  it is

submitted that the  High  Court order  be set  aside  and the

application for bail preferred by the respondent (Accused

No.10) be rejected.  

14. Learned counsel for the respondent, on the other hand,

submits that the  High  Court justly came to hold that no

evidence  was forthcoming to indicate the complicity of the

respondent in the commission of the alleged offences and that

the documents and evidence relied upon by the Investigating

26

Agency were not enough to sustain the accusations,  much

less as being  prima facie  true. It is submitted that the

accusations made against the respondent in the charge­sheet

do not fall under Chapters IV and VI of the 1967 Act.  Further,

the pivotal document D­132(a) was not sufficient to fasten any

criminal liability upon the respondent.  As a matter of fact, the

said document is a loose sheet of paper and cannot be looked

at in view of the mandate of Section 34 of the Evidence Act. To

buttress this submission, reliance has been placed on Central

Bureau of Investigation Vs. V.C. Shukla and Ors.9   In any

case, the said document itself cannot and does not prima facie

suggest that the funds, as shown, were received and disbursed

in the manner described in the document.   Further, there is

no independent corroboration forthcoming much less to

establish the  complicity  of the respondent in  attracting the

imperatives of  Section 17 of  1967 Act. It is  submitted  that

even if the contents of the said document were taken as it is,

with the exception of accused  No.4 (Altaf Ahmad Shah  @

9  (1998) 3 SCC 410

27

Fantoosh), no other person to whom the amount was paid or

from whom the amount was received, has been arrayed as an

accused in the charge­sheet. The statements of witnesses

recorded under Section 161 or Section 164 of Cr.P.C. do not

mention anything about the involvement of the respondent in

commission of the stated offences. The statements of the co­

accused cannot be considered as admissions, much less used

against the respondent. Further, there  was  no evidence to

indicate the involvement of the respondent in the larger

conspiracy much less regarding terrorist activity. It is

submitted that the High Court was justified in analysing the

materials on record to satisfy itself as to whether the

accusations  made  against the respondent  were  prima facie

true. That enquiry was permissible in terms of the exposition

in  Ranjitsing Brahmajeetsing Sharma Vs. State of

Maharashtra and Anr.10   and  Chenna Boyanna Krishna

Yadav Vs. State of Maharashtra and Anr.11   According to

the respondent, no fault can be found with the High Court and

10  (2005) 5 SCC 294  11  (2007) 1 SCC 242

28

the view taken by the High Court, being a possible view, did

not  require any  interference  in exercise  of the power under

Article 136 of the Constitution of India. It is finally submitted

that this Court, if it so desires, may impose additional

conditions  whilst  upholding the order of  bail  passed by  the

High Court.  

15. Before we proceed to analyse the rival submissions, it is

apposite to restate the settled legal position about matters to

be considered for deciding an   application for bail,  to   wit,

(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

29

justice being thwarted by grant of bail. (State of U.P. through

CBI Vs. Amarmani Tripathi12).  

16. When it comes to offences punishable under special

enactments, such as the 1967 Act, 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.   Sub­sections (5), (6) and (7)

thereof read thus:  

“43D. Modified application of certain provisions of the Code.­    xxx xxx xxx xxx (5) Notwithstanding anything contained in the Code, no person accused of an offence punishable under Chapters IV and VI of this Act shall, if in custody, be released on bail or on  his own  bond  unless the  Public Prosecutor  has been given an opportunity of being heard on the application for such release: Provided that such accused person shall not be released on bail or on his own bond if the Court, on a perusal of the case diary or the report made under section 173 of the Code is of the opinion that there are reasonable grounds for believing that the accusation against such person is prima facie true.  

(6) The restrictions on granting of bail specified in sub­ section (5) is in addition to the restrictions under the Code or any other law for the time being in force on granting of bail.

 (7) Notwithstanding anything contained in sub­sections (5) and (6), no bail shall be granted to a person accused of an offence  punishable  under this  Act, if  he is  not  an  Indian citizen and has entered the country unauthorisedly or illegally except in very exceptional circumstances and for reasons to be recorded in writing.”  

12  (2005) 8 SCC 21 (para 18)

30

 17. By virtue of the proviso to sub­section (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. Our attention was invited to the

decisions of this  Court,  which has had an occasion to deal

with similar special provisions in TADA and  MCOCA. The

principle underlying those decisions may have some bearing

while  considering the  prayer for  bail in relation to  offences

under the 1967 Act as well. Notably, under the special

enactments such as TADA, MCOCA and the Narcotic Drugs

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. By its

31

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. Nevertheless, we may take

32

guidance from the exposition in the case of  Ranjitsing

Brahmajeetsing Sharma  (supra), wherein a three­Judge

Bench of this Court was called upon to consider the scope of

power of the Court to grant bail. In paragraphs 36 to 38, the

Court observed thus:  

“36.  Does this statute require that before a person is released on bail, the court, albeit prima facie, must come to the conclusion that he  is not  guilty  of  such offence? Is  it necessary for the court to record such  a finding?  Would there be any machinery available to the court to ascertain that once the  accused is enlarged  on  bail,  he  would  not commit any offence whatsoever?

37.  Such findings are required to be recorded only for the purpose of  arriving at an objective finding on the basis of materials on record only for grant of bail and for no other purpose.

38. We are furthermore of the opinion that the restrictions on the power of the court to grant bail should not be pushed too far. If the court, having regard to the materials brought on record, is satisfied that in all probability he may not be ultimately convicted, an order granting bail may be passed. The satisfaction of the court as regards his likelihood of not committing an offence while on bail must be construed to mean an offence under the Act and not any offence whatsoever be it a minor or major offence. … What would further be necessary on the part of the court is to see the culpability of the accused and his involvement in the commission of an organised crime either directly or indirectly. The court at the time of considering the application for grant of bail shall consider the question from the angle as to whether he was possessed of the requisite mens rea….”

And again in paragraphs 44 to 48, the Court observed:    

33

“44. The wording of Section 21(4), in our opinion, does not lead to the conclusion that the court must arrive at a positive finding that the applicant for bail has not committed an offence under the Act. If such a construction is placed, the court intending to grant bail must arrive at a finding that the applicant has not committed such an offence. In such an event, it will be impossible for the prosecution to obtain a judgment of conviction of the applicant. Such cannot be the intention of the legislature. Section 21(4) of MCOCA, therefore, must be construed reasonably. It must be so construed that the court is able to  maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. Similarly, the court will be required to record a finding as to the possibility of his committing a crime after grant of bail. However, such an offence in futuro must be an offence under the  Act  and not  any  other  offence.  Since it is  difficult to predict the  future conduct of  an accused, the court  must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence. 45.  It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. 46.  The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained  in sub­section  (4)  of  Section 21 of the  Act, the court  may have to  probe  into  the matter  deeper  so as  to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby.

34

47. In Kalyan Chandra Sarkar v. Rajesh Ranjan13 this Court observed: (SCC pp. 537­38, para 18)

‘18. We agree that a conclusive finding in regard to the points urged by both the sides is not expected of  the court considering a bail application. Still one should not forget, as observed by this Court in the case  Puran  v. Rambilas14 : (SCC p. 344, para 8) ‘Giving reasons is  different from discussing  merits  or demerits. At the stage of granting bail a detailed examination of evidence and elaborate documentation of the merits of the case has not to be undertaken. … That did not mean that whilst granting bail some reasons for prima facie concluding why bail was being granted did not have to be indicated.’ We respectfully agree  with the above dictum of this Court. We also feel that such expression of prima facie reasons for granting bail is a requirement of law in cases where such orders on bail application are appealable, more so because of the fact that the appellate  court  has every  right to  know the basis for granting  the bail.  Therefore,  we are not in agreement with the argument addressed by the learned counsel for the accused that the High Court was not expected even to indicate  a  prima facie finding  on  all points  urged before it while granting bail, more so in the background of the facts of this case where on facts it is established that a  large number of  witnesses who were examined after the respondent was enlarged on bail had turned hostile and there are complaints made to the court as to the threats administered by the respondent or his supporters to witnesses in the case. In such circumstances, the Court was duty­bound to apply its mind  to the allegations put  forth by  the  investigating agency and ought to have given at least a prima facie finding in regard to these allegations because they go to the very root of the right of the accused to seek bail. The non­consideration of these vital facts as to the allegations of threat or inducement made to the witnesses by the respondent during the period he was on bail  has vitiated the conclusions arrived at by the High Court while granting bail to the respondent. The other ground  apart from the ground  of incarceration

13  (2004) 7 SCC 528 14  (2001) 6 SCC 338

35

which appealed to the High Court to grant bail was the fact that a large number of  witnesses are yet to be examined and there is no likelihood of the trial coming to an end in the near future. As stated hereinabove, this ground on the facts of  this case  is also not sufficient either individually or coupled with the period of incarceration to release the respondent on bail because of the serious allegations of tampering with the witnesses made against the respondent.’

48. In Jayendra Saraswathi Swamigal v. State of T.N.15  this Court observed: (SCC pp. 21­22, para 16)

‘16.  … The considerations which normally weigh with the court in granting bail in non­bailable offences have been  explained  by this  Court in  State  v.  Capt. Jagjit Singh16  and  Gurcharan Singh  v.  State (Delhi  Admn.)17

and basically they are — the nature and seriousness of the offence; the character of the evidence; circumstances which are peculiar to the accused; a reasonable possibility of the presence of the accused not being secured at the trial; reasonable apprehension of witnesses being tampered with; the larger interest of the public or the State and other similar factors which may be relevant in the facts and circumstances of the case.’ ”

18. A priori, the exercise to be undertaken by the Court at

this stage ­ of giving reasons for grant or non­grant 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

15  (2005) 2 SCC  13 16  (1962) 3 SCR 622 17  (1978) 1 SCC 118

36

probabilities regarding the involvement of the accused in the

commission of the stated offence or otherwise. From the

analysis of the impugned judgment, it appears to us that the

High Court has ventured into an area of examining the merits

and demerits of the evidence.  For, it noted that the evidence

in the form of statements of witnesses under Section 161 are

not admissible. Further, the documents pressed into service

by the Investigating Agency were not admissible in evidence. It

also noted that it was unlikely that the document had been

recovered from the residence of Ghulam Mohammad Bhatt till

16th August, 2017 (paragraph 61 of the impugned judgment).

Similarly, the approach of the High Court in completely

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 our opinion,

in complete disregard of the duty of the Court to record its

37

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 charge­sheet (report under

Section  173 of  Cr.P.C.)  and other  material  gathered by the

Investigating Agency during investigation. Be it noted that 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. To wit, soon after the arrest of the accused on the

basis of the FIR registered against him, but before filing of the

charge­sheet  by the Investigating  Agency;  after filing  of the

first charge­sheet and before the filing of the supplementary or

final  charge­sheet  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

38

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 charge­sheet (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.  19. For that, the totality of the  material gathered by the

Investigating Agency and presented along with 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

39

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.   20. The question is whether there are reasonable grounds for

believing  that the accusations made against the respondent

(Accused  No.10)  are  prima facie  true.  That  will  have to  be

answered keeping in mind the totality of materials including

the one presented along with the police report. Be it noted that

the prosecution is relying on several documents forming part

of the first  charge­sheet (pending  further investigation) filed

against the respondent (Accused No.10) allegedly showing his

involvement in the commission of the stated offences.

Reference has been made to some of the crucial documents

mentioned in the chart handed over to the Court by the

appellant. The same, inter alia, read thus:

NIA CASE NO.RC­10/2017/NIA/DLI TERROR FUNDING IN JAMMU & KASHMIR

EVIDENCES FILED WITH CHARGE­SHEET (Excluding Supplementary Charge sheet)

Against Accused Zahoor Ahmed Shah Watali (A­10)

Exhibit Details of Documents

D­1 Order no.11011/26/2017­IS.IV, dated 30.05.2017 of Sh. N.S.

40

Bisht, Under Secretary, GOI, MHA, New Delhi.

D­2 FIR No.RC­10/2017/NIA/DLI dated 30.05.2017, PS NIA New Delhi.

D­3 Seizure  memo dated 03.06.2017 in respect of search and recovery of articles/documents seized from the  premises of accused Zahoor Ahmed Shah Watali (A­10).

D­3a Income Tax Returns of Three Star Enterprises seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3b Income Tax Returns of Trisons Farms and Construction Pvt. Ltd. seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3c Acknowledgment ITR­4 of Yamin Zahoor Shah seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3d Acknowledgment ITR­4 of Yawar Zahoor Shah seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3e Income Tax Returns of M/s Three Y seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3f Income Tax Returns in respect of Yasir Enterprises seized from the premises  of  accused  Zahoor  Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3g One blue colour small pocket diary seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3h One blue booklet containing I.D.D Codes and Phone numbers seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.  

D­3i A bunch of  papers related to Pakistan Steel  Mill  Corp. Ltd. seized from the premises of accused Zahoor Ahmed Shah

41

Watali (A­10) dated 03.06.2017.

D­3j A bunch of papers containing  Court documents related to Zahoor Ahmad Shah Watali seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.  

D­3k A bunch of papers containing  Misc. documents related to Zahoor Ahmed Shah seized from the premises of accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­3l A bunch of papers containing various letter heads related to Zahoor  Ahmad seized from the premises  of  accused Zahoor Ahmed Shah Watali (A­10) dated 03.06.2017.

D­4 Production cum Seizure Memo dated 03.06.2017 regarding the seizure of documents/articles from the office of accused Zahoor Ahmad Shah  Watali (A­10) i.e. Trison Farms and Construction Pvt. Ltd.  

D­4a Copies of documents related to N.Z. International, Yasir Enterprises, Trison Farms & Construction, Trison International, Trison Power Pvt. Ltd., M/s 3Y, Kashmir Veneer Industry along with Passport details of Zahoor Ahmad Shah Watali (A­10) and his family members seized from the office of accused  Zahoor  Ahmad  Shah Watali i.e. Trison  Farms and Construction Pvt. Ltd.

D­4b Copy of order number DMS/PSA/37/2011 dated 28.09.2011 issued by District Magistrate Srinagar regarding detention of one Tariq Ahmad Khan @ SanjMolvi seized from the office of accused Zahoor Ahmed Shah Watali (A­10) i.e. Trison Farms and Construction Pvt. Ltd.

D­6c One blue  Colour  Diary “Evergreen  Traders”  seized from  the premises of accused Altaf Ahmad Shah @ Fantoosh (A­4) on 03.06.17.

D­6e A press Note containing anti India talks seized from the premises of accused Altaf Ahmad Shah @ Fantoosh (A­4) on 03.06.17.

42

D­6f A program issued on 04.08.2016 under the signature of Syed Ali Shah  Geelani,  Chairman,  All Party  Hurriyat  Conference seized from the premises of accused  Altaf Ahmad  Shah  @ Fantoosh (A­4) on 03.06.17.

D­6g One paper containing details of amount received from chairman and others showing an amount of Rs.1,15,45,000/­ seized from the premises of accused  Altaf Ahmad  Shah  @ Fantoosh (A­4) on 03.06.17.

D­7a Two letters dated 10.03.2006 and 17.03.2006) written by the Area Commander of Hizbul Mujahideen (HM) to accused Nayeem Khan (A­5) seized from the house of accused nayeem Khan dated 03.06.2017.

D­7b Letter heads of proscribed terrorist organization Lashkar e Toiba (LeT), Jammu  & Kashmir seized from the house of accused Nayeem Khan (A­5) dated 03.06.2017.

D­7c Letter written to Pakistan Embassy by accused Nayeem Khan (A­5) for recommending Visa to visit Pakistan seized from the house of accused Nayeem Khan dated 03.06.2017.

D­7d Letter heads of National Front containing pro Pak and anti­ India talks in urdu seized from the house of accused Nayeem Khan (A­5) dated 03.06.2017.

D­7e One letter head of Mujahidin Jammu & Kashmir seized from the house of accused Nayeem Khan (A­5) dated 03.06.2017.

D­7g A bunch of hand written and printed papers containing recommendation Letters written to Pakistan Embassy for Visa for  students  etc.  seized from the  house  of  accused  Nayeem Khan (A­5) dated 03.06.2017.

D­9a Hand written (Urdu) letters from LeT on the letter head titled as “Lashkar­e­Tuibah Jammu Kashmir Head Office Muzafarabad.”  seized  from the  house of  accused Shahid­ul­ Islam @ AftabHilali Shah (A­3) on 03.06.2017.

D­9b A photograph of Aftab Hilali Shah @ Shahid­ul­Islam holding

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AK­47 with other cadres seized from the residence of AftabHilali Shah @ Shahid­Ul­Islam (A­3) on 03.06.2017.

D­9c Phograph of  Aftab Hilali  Shah @ Shahid­ul­Islam (A­3)  with Proscribed terrorist organization Hizbul Mujahiddin Chief Syed Salahuddin (A­2) seized from the residence of AftabHilali Shah @ Shahid­Ul­Islam (A­3) on 03.06.2017.

D­9d 04  hand  written loose  papers seized from  the residence of AftabHilali Shah @ Shahid­Ul­Islam (A­3) on 03.06.2017.

D­9e One letter head in respect of All Parties Hurriyat Conference addressed to Deputy High Commissioner, High Commission of Pakistan New Delhi from Media advisor APHC, Advocate Shahidul Islam for issuing the Visa seized from the residence of Aftab Hilali Shah @ Shahid­Ul­Islam (A­3) on 03.06.2017.

D­9g List of active militants (year 2016­17) of different outfits in the valley seized from the residence of Aftab Hilali Shah @ Shahid­ Ul­Islam (A­3) on 03.06.2017.

D­11d The photocopy of the hand written letter written by Afzal Guru to SAS  Geelani seized from the premises of  Mohd. Akbar Khandey @ Ayaz Akbar (A­7) on 04.06.17.

D­19 Letter no.22/NIA/CIV/CR/17/6547 dated 12.07.2017 from Sh. Kulbir Singh, AIG (CIV), PHQ, J&K Srinagar in reply NIA Letter No. RC­10/2017/NIA providing details pertaining to case RC­10/2017 to CIO NIA.

D­20 Scrutiny report of Inspector Vinay Kumar related to 07 CDs received vide letter no. 22/NIA/CIV/CR/17/6547 dated 12.07.2017 from PHQ, J&K Srinagar along with photo album.

D­42 Letter  dated  27.06.2017 from TV Today  Network  Ltd. India Today Group Mediaplex, Film City, Sector 16A, Noida to CIO, NIA forwarding exact, true and correct copy of India Television’s raw footage.

D­43 Letter no. RC­10/2017/NIA/DLI/7831 dated 14.06.2017 to DG, BSF, Lodhi Road, New Delhi for providing details of stone­ pelting, burning of schools & college buildings and damage to

44

Govt. property as reported in Kashmir Valley since July, 2016.

D­44 Letter no. 26/Kmr/Ops(B)W/BSF/17/18758 dated 2/3 August  2017 from Director  General,  BSF (Ops  Directorate), New  Delhi to  CIO,  NIA details of stone­pelting, burning of schools & college buildings and damage to Govt. property as reported in Kashmir Valley since July, 2016.

D­63 Letter dated 28.08.2017 from  Nodal  Officer Vodafone, New Delhi to CIO NIA forwarding certified copies of CDR, CAF and 65B Certificate in respect of mobile Nos. 9796158864 & 9811813796.  

D­65 Letter dated 01.12.2017 from Nodal Officer, Reliance Jio Infocomm. Ltd., Delhi to CIO, NIA forwarding certified copies of CDR, CAF and 65B Certificate in respect of mobile nos. 7006046476, 7006208314 & 7889521803.

D­70 The transcripts  of the audio­video  of  sting operation by the reporters of India  Today related to accused  Mohd.  Nayeem Khan (A­5).

D­71 The transcripts  of the audio­video  of  sting operation by the reporters of India Today related to accused Farooq Ahmad Dar @ Bitta Karate (A­6).

D­75 Letter No. 22/NIA­III/CIV/CR/17/10275­76 dated 23.09.2017 from Sh. Kulbir Singh AIG (CIV), J&K PHQ, Srinagar to CIO NIA forwarding details of accused persons of the case.  

D­127 Letter No. I&O/IMS/T­ACT/3/2015 NIA/10011 dated 03.08.2017 from  Sh.  Vishwas  Kumar  Singh, (W­196), ASP, I&O, NIA New Delhi to CIO, NIA.

D­130 Seizure  memo dated 16.08.2017 in respect of search and seizure of articles/documents found from the premises of Ghulam Mohd. Rather@Gulla (W­29).

D­132 Seizure  memo dated 16.08.2017 in respect of search and seizure of articles/documents found from the premises of Ghulam Mohd. Bhatt (W­29).

D­132a Various  miscellaneous papers related financial transactions seized from the premises of Ghulam Mohd. Bhatt (W­29) on

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16.08.2017.

D­132b One small diary title Arun (11)  Notes Pad seized from the premises of Ghulam Mohd. Bhatt (W­29) on 16.08.2017.

D­132c One green colour diary of 2009 seized from the premises of Ghulam Mohd. Bhatt (W­29) on 16.08.2017.

D­132e One brown colour diary of 2010 seized from the premises of Ghulam Mohd. Bhatt (W­29) on 16.08.2017.

D­132f One dark brown colour diary mark Frankford  (A division of Ultramark group) seized from the premises of Ghulam Mohd. Bhatt (W­29) on 16.08.2017.

D­133 Seizure  memo dated 16.08.2017 in respect of search and seizure of articles/documents found from the premises of Ghulam Mohd. Bhatt@Mohd. Akbar (W­29).

D­135 Seizure  memo dated 16.08.2017 in respect of search and seizure of articles/documents found from the premises of Dr. Peerzada Kaiser Habeeb Hakeem.

D­135a One transparent file folder of Trison International group  of companies  seized  from the  premises  of  Dr.  Peerzada  Kaiser Habeeb Hakeem on 16.08.2017.

D­135b One orange colour file folder of account statement of  M/s Three Star Enterprises for the year of 2005­06 seized from the premises of Dr. Peerzada Kaiser Habeeb Hakeem on 16.08.2017.

D­135c One Khaki colour folder of Johar Enterprises stamp paper file no.47/P seized from the premises of Dr. Peerzada Kaiser Habeeb Hakeem on 16.08.2017.

D­137 Seizure  memo dated 26.08.2017 in respect of search and seizure of articles/documents found from the office of Zahoor Ahmad Shah Watali (A­10) i.e. Trison Farms and Construction Pvt. Ltd.

D­137a One ledger and cash book of Trison Farms and construction Pvt. Ltd. Baba Dharam Das Complex, Khayam Srinagar for the

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year 2010­11 seized from the office of Trison farms and construction private Limited on 26.08.2017.

D­137b One ledger and cash book of M/S Yasir Enterprises, Baghat Barzullah, Sanat Nagar, Srinagar for the year of 2010­11 seized from the office of Trison farms and construction private Limited on 26.08.2017.

D­137c One ledger and cash book of  M/S Three Y, Sanat Nagar, Srinagar for the year 2010­11 seized from the office of Trison farms and construction private Limited on 26.08.2017.

D­137d One ledger and cash book of M/S Tirson International for the year 2010­11 seized from the office of Trison farms and construction private Limited on 26.08.2017.

D­137f A bunch of documents related to Enforcement Directorate seized from the office of Trison farms and construction private Limited on 26.08.2017.

D­154 Letter report  no.  CFSL­2017/D­993/3953  dated  06.11.2017 from CFSL, (CBI), Lodhi Road, New Delhi to CIO NIA containing  handwriting  examination report  alonwith  original seizure seized from the house of  Ghulam  Mohd. Bhat r/o Tarahama.

D­167 Memoramdum for specimen voice sample in respect of accused Mohd. Nayeem Khan (A­5) dated 31.07.2017.

D­168 Memorandum for specimen voice smaple in respect of accused Farooq Ahmed Dar @ Bitta Karate (A­6) dated 31.07.2017.

D­169 Letter No. I&O/IMS/DE/33/2017/NIA dated 29.11.2017 from, Inspector, IMS, NIA New Delhi to CIO NIA alongwith transcripts of conversation and videos.

D­183 Technical analysis report in respect of accused Farooq Ahmad Dar @ Bitta Karate (A­6) forwarded vide Inter office note No.RC­10/2017/NIA/DLI/reports/1351 dated 10.12.2017.  

D­184 Report  on Protest  calendar taken out  from the open source alongwith source path forwarded vide Inter office note No.RC­ 10/2017/NIA/DLI/reports/1351 dated 10.12.2017.

D­197 Letter No.D.III.a/2017­Ops (NIA) dated 25.07.2017 from 2 I/C

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(Ops/Int.),  Office of Inspector  General  CRPF, Brein  Nishat, Srinagar, J&K to CIO NIA.

D­204 Original agreement documents between M/s Trison Farms and Mr. Nawal Kishore Kapoor dated 07.11.2014.

D­205 Notice  under section  43 (F)  UA(P)  Act dated  30.11.2017 to Nawal Kishore Kapoor (W­28) for furnishing information/document from Insp T TBhutia, NIa, New Delhi.

D­206 Reply dated 4.12.201of Notice under section 43(f) of UA(P) Act dated 30.11.2017 from Nawal Kishore Kapoor (W­28).  

D­207 Notice to witness under Section Cr.P.C.& 43 (F) of UA (P) Act dated 07.11.2017 to CVO, SBI, Mumbai to provide bank account  details of account  no.274724019  of  Nawal  Kishore Kapoor (W­28) from Sh Jyotiraditya, DC.

D­208 Letter No. Gen/2017­18/46 dated 18.11.2017 from Asst. General Manager, SBI NRI Branch, Jalandhar, Punjab forwarding certified copies of account opening form and account statement of account number 20074724019 of Nawal Kishore Kapoor (W­28).

D­211 Letter No. F.No. ITO/W­3(4) Antg/2017­18/3540 dated 20.10.2017/11.12.2017 from Income Tax  Officer, Anantnag containing income tax return details for last six years in respect of accused Zahoor Ahmad Shah Watali (A­10).

D­212 Production cum receipt  memo dated 17.11.2017 related to documents  produced by Naval  Kishore  Kapoor (W­28)  along with documents.

D­220 Production cum Receipt  Memo  dated  14.12.2017 related to production of  copy  of text  audit  reports  and audit financial statements  of  Ms.  Trison Farms and Construction Pvt.  Ltd. Etc. along with received documents.  

D­222 Inter office Note No.I&O/IMS/DE/33/2017/NIA/722 dated 17.01.2017 from Inspector S.K. Tyagi, IMS to CIO NIA forwarding 03 video clips Indentifying the voice of Hafiz Saeed

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along certificate 65 B of IEA.

D­224 Letter No.F. No. T­3/1/FE/SRZO/2013 dated 12.12.17 from Sh.  Sharad  Kumar, (W­1) Assistant  Director,  Directorate of Enforcement,  Government of India,  Durani  House  Rajbagh, Srinagar to Sh. Ajeet Singh, SP NIA (W­229) forwarding alongwith enclosures therein proceedings against accused Zahoor Ahmed Shah Watali (A­10) under the FEMA Act.

D­248 Letter No. RC­10/2017/NIA/DLI/354 dated 11.01.2018 from Sh. Rajesh Kumar, Inspector NIA (W­209) to CIO forwarding of report on international linkage, India Hit report and report on Pakistani based Hurriyat representative along with 65­B Certificate.

D­252 No. RC­10/2017/NIA/DLI/646 dated 15.01.2018 received from SI Sangram Singh, NIA (W­220) pertaining to transcripts of downloaded videos.

D­256 Letter No.  RC­10/2017/NIA/DLI/5706  dated 26.12.2017 to GM (CM), Nodal Officer, BSNL, 4th Floor, Telephone Exchange, Trikuta Nagar, Near RBI Jammu, J&K from CIO NIA to provide CDRs, CAF and 65 Certificate of mobile nos. mentioned in the letter.  

D­257 Certified copies of CDRs, CAF and Form 65 B of  mobile numbers 9419011561, 9419504376, 9419075468, 9419547999, 9419006355, 9419008421, 9419001097 & 9469037774 (BSNL J&K) received from BSNL, J&K.

D­259 Letter of Nodal Officer Bharti Airtel Ltd. Forwarding certified copies of CDR, CAF of mobile numbers 9596070530, 9906519595, 8494071470 & 8491001561 alongwith certificate u/s 65B of Indian Evidence Act.”  

 (emphasis supplied in italics and bold)

21. During the hearing, emphasis was placed by the learned

Attorney General on documents D­132, D­132(a)/23, D­3/6,

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D­3g/20, D­3h/28, D­3j to D­3j/5, D­9b, D­9c, D­154 and D­

185/10. Besides these documents, our attention was also

invited to the statements of Ghulam Mohammad Bhatt (W­29)

dated 30th August, 2017, and 23rd November, 2017, as well as

the redacted statements of protected witnesses (“Charlie”,

“Romeo”, “Alpha”, “Gamma”, “Pie”, “Potter”, “Harry” and “xxx”)

recorded under Section 164, which have now been taken on

record by the Designated Court in terms of order dated 11th

January, 2019.   Notably, the order passed by the Designated

Court permitting redaction of those statements has not been

assailed by the respondent. In our opinion, the High Court,

having noticed that the Designated Court had not looked at

the stated  statements  presented in  a  sealed cover, coupled

with the fact that the application under Section 44 filed by the

Investigating Agency was pending before the Designated Court,

and before finally answering the prayer for grant of bail,

should have directed the Designated Court to first decide the

said application and if allowed, consider the redacted

statements, to form its opinion as to whether there are

50

reasonable   grounds  for believing that  the accusation made

against the respondent is prima facie true or otherwise. For, 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. We could have relegated the parties before the High

Court but the counsel appearing for the respondent, on

instructions, stated that the respondent would prefer to await

the decision of the Designated Court and, depending on the

outcome of the application under Section 44 of the Act, would

contest the proceedings before this Court itself. Accordingly, at

the request of the respondent,  we  kept the  present  appeal

pending.   Since the Designated Court has finally disposed of

the application preferred by the Investigating Agency vide

order dated 11th  January, 2019, the correctness whereof has

not been challenged by the respondent, the redacted

statements  of the  concerned protected witnesses  have  been

taken on record.

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22. Accordingly,  we  have  analysed the  matter  not only in

light of the accusations in the FIR and the charge­sheet or the

police report made under Section 173, but also the

documentary evidence and statements of the prospective

witnesses recorded under Sections 161 and 164, including the

redacted statements of the protected witnesses, for considering

the prayer for bail.  

23. As regards the redacted statements, objection of the

respondent  was that the  certificate  given  by the  competent

authority is not in conformity with the certificate required to

be given in terms of Section 164(4) of Cr.P.C.   This objection

has  been  justly  countered  by the learned  Attorney  General

with the argument that the objection borders on the issue of

admissibility of the said statements.  We find force in the

submission that 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. and cannot be overlooked

52

at this stage. Viewed thus, the exposition in the case of

Ramchandra  Keshav  Adke (dead) by  LRs.  and  Ors.  Vs.

Govind Joti Chavare  and  Ors.18, in paragraph  25 of the

reported judgment will be of no avail to the respondent.  

24. After having analyzed the documents and the statements

forming part of the charge­sheet as well as the redacted

statements now taken on record, we disagree with the

conclusion recorded by the High Court. In our opinion, 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.  Be  it  noted, further  investigation  is in

progress.  We may observe that since the prayer for bail is to

be rejected, it  may  not be appropriate for us to dilate on

matters which may eventually prejudice the respondent

18  (1975) 1 SCC 559 = AIR 1975 SC 915

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(Accused  No.10) in any  manner in the course of the trial.

Suffice it to observe that the material produced by the

Investigating Agency thus  far (pending  further investigation)

shows the linkage of the respondent (Accused No.10) with A­3,

A­4, A­5 and A­6 and, likewise, linkages between the

respondent (Accused No.10) and A­3 to A­12, as revealed from

the CDR analysis. The  Chart A  showing the inter­linkages 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 are as

under:

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55

56

25. The summing up of the outcome of the investigation done

until filing  of the first report is  noted in  paragraph 17.10,

which reads thus:

“17.10 SUMMING UP: Hence, as has been discussed above, the investigation has established that:­

1. The terrorist and Hurriyat leaders have a close nexus with the active militants, OGWs and stone­pelters in Kashmir Valley. They are closely coordinating with each other and have formed a  terrorist gang to  achieve their common goal  of secession from the Union of India by way of an armed rebellion.  

2. To fuel the secessionist activities, Pakistan is providing funds to the Hurriyat leaders and the same are channelized through Hawala,  LoC trade and other means. Sometimes,  the  funds are provided directly by Pakistan High Commission in India.  

3. Hurriyat has convenor/representative(s) in Pakistan who liaise with Pakistan agencies and also with the Kashmir Cell of the ISI, the United Jehad Council and the Jamaat­Ud­Dawah.  

4. The  benefits  drawn  out of the  LoC trade  are reaching the Hurriyat leaders for fuelling the unrest in the Valley.  

5. Funds are raised locally by way of collecting donations from the common people in the name of Zakat and Betul Maal.  

6. The Hurriyat leaders are working in a systematic and organized manner as per the  instructions of  their Pakistani handlers  by setting up a  network of their  cadres  at  village level, block level and District level.  

7. The  High  Commission of Pakistan organizes functions and meetings in  New Delhi, to  which  the  Hurriyat leaders from Kashmir are invited and they are given instructions and funds so that the unrest in the Valley can be fuelled in an organized manner.

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8. The  Hurriyat leaders are raising funds from the Pakistani establishments/agencies in the  name of  helping the youth injured/killed during the action of security forces.  

9. The  families  of the active  militants and killed  militants are supported by the Hurriyat leaders financially, socially as well as  by  arranging for the  higher  education of their  wards  in Pakistan.  

10. The  Hurriyat leaders  attend the funeral of  killed  militants, eulogise them as  ‘martyrs’,  hail their anti­India activities as ‘gallant’ and deliver speeches against the Government of India and motivate the youth of Kashmir to join militancy for the so­ called freedom of Kashmir by way of an armed struggle. They misguide the common  man  by spreading false propaganda against the Government of India.  

11. To further this conspiracy, the Hurriyat leaders, the terrorists/terror organizations and stone­pelters are working in tandem and they are getting financial and logistic support from Pakistan.”

26. The accusation and charge against the accused,

including the respondent, is in  paragraph 18  of the report

which reads thus:

“18. CHARGE   :

18.1 In the instant case, there is sufficient evidence in the form of incriminating  documents, statements  of  witnesses and digital evidence that establishes beyond any reasonable doubt that the  accused  persons i.e. the  Hurriyat leaders, terrorists and stone­pelters have been orchestrating violence and unrest in Jammu & Kashmir as a part of well­planned conspiracy under the overall patronage and financial support of  Pakistani  Establishment  and agencies  and that  all the accused persons were acting in pursuance of their common goal i.e. to achieve secession of the State of Jammu  & Kashmir from the Union of India by waging a war against the Government of India.

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18.2 The documentary evidences seized during various searches such as letters of the banned terrorist organizations seeking financial assistance from the Hurriyat leaders, blank letterheads of terror organisations, conversations between Hafiz  Saeed @ Burhan Wani,  Hafiz Saeed and Asiya Andrabi, support extended by Hafiz Saeed and Syed Salahuddin to the protest calendars issued by the Hurriyat leaders, all these show that  Hurriyat and terror organizations are working hand in glove. Their common objective is to attain secession of Jammu & Kashmir from the Union of India and to achieve this objective, they have established a network of cadres throughout Kashmir Valley who motivate and incite the youth to attack all symbols of Indian authority, especially Indian security forces who have been deployed there for the maintenance of law and order. To achieve their objective, they are mobilizing funds from all possible sources.  They are getting funds from Pakistani Establishment through the Pakistan High Commission; the funds  are being remitted to India from  offshore locations through hawala and accused A­10 Zahoor Ahmad Shah Watali is  an  important  conduit for the same. They are raising funds through local donations such as Zakaat & Betulmaal, etc. They are generating funds by resorting to illegalities and irregularities such as under­ invoicing and cash­dealings in LoC barter trade. All this money is used to fund stone­pelting, to support the families of killed and active militants and to help pellet victims and to fuel terrorism in Jammu & Kashmir with the ultimate objective of breaking Jammu  & Kashmir away from the Union of India.  

18.3 They are all working in sync to achieve their greater goal.  The  nexus  between the  Pakistani agencies,  Hurriyat leaders and terror organizations is amply substantiated by the chats retrieved from  their email accounts,  WhatsApp, Facebook profiles and Websites and also from the statements  of the  protected  witnesses.  Their  nexus with hawala conduit, Zahoor Watali is also substantiated by the documentary and digital evidence.  

18.4 Though the Constitution of Jammu & Kashmir, 1957, declares the State of Jammu & Kashmir to be an integral part of India, and the said pronouncement is irrevocable, the

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accused persons have been incessantly engaged in violence and carrying out subversive  and secessionist activities in Jammu & Kashmir by waging a war against the Government of India.  

18.5 Hence, as discussed in the foregoing paras, the evidence collected during investigation, prima facie, establishes a case against all the accused persons for conspiring to wage war against the Government of India by way of establishing a network of cadres of banned terrorist organizations LeT & HM as well as cadres in the garb of so­ called political front viz., the All Parties Hurriyat Conference.

18.6 The scrutiny of the documents and the recovery from the digital devices have provided a large data of incriminating material in which the above accused A­3 to A­12 are a part of a gang who with the help of A­1 & A­2 and others  collaborate and coordinate with each other to form strategies and action plan to launch massive violent protests, hartaals, bandhs, strikes, processions, demonstrations during which stone pelting is organised on security forces and government establishments.  These documents and digital evidences clearly indicates an action plan to instigate general public to observe strikes, hold anti­India protests through press releases, social media and use of Immams and mosques. The recovery of protest calendars from A­4 and the direct impact of such orchestrated protests have led to enormous loss of life and property which have been explained in detail.  

18.7 The investigation have revealed linkage of A­1 and A­2 with A­3 to A­12 in a web of directions being passed through e­mails,  SMSs,  WhatsApp,  videos and other means of communication to form a clear nexus between the above accused and the leaders of Hurriyat Conference.  The recovery of a number of incriminating videos in  which the separatists leaders and accused are exhorting the general public, sympathizing with the militants, seeking support and donations to carry out militant activities and instigating general public,  especially youth to raise a revolt and launch violence against security forces and wage a war against Government of India, is clearly established.

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18.8 The secessionists, especially the leaders of the Hurriyat Conference and the accused are a part of the terrorist designs to raise funds to propagate their  ideology and agenda of secessionism and subversive activities prejudicial to the  law of  the  land. The  investigations have clearly  brought out that the  Hurriyat  has formed  a  well­ developed network of cadres with district presidents, block level leaders and workers who collect donations from public, businessmen, apple growers and draw gains from profits of unregulated LoC trade.  The money is routed through a complex system of hawala transfers and cash couriers using conduits such as A­10 who gathers money from Pakistan High Commission in New Delhi and through fake and bogus  companies floated in  UAE and other countries and delivers the funds to the Hurriyat leadership for subversive activities.  

The documents recovered and statements of witnesses to that effect also clearly establish the mechanism of funding and complicity  of the  accused in  generating funds for its further use in organizing violent protests, assistance to the militants and creating an atmosphere of terror, chaos and uncertainty.  

18.9 During the investigation about the past conduct of the accused, it is ascertained that as A­1 is a designated terrorist being the  head of proscribed terror organisation Lashker­e­Toiba, A­2 is the head of proscribed organisation Hizb­Ul­Mujahideen. A­3, A­4, A­5, A­6, A­8, A­9 are former militants with various cases of terrorism against them and have been detained under the Public Safety Act on numerous occasions. A­10 is a known hawala dealer and financer and has a number of cases against him which are being investigated by sister investigation agencies.  

18.10  The CDR Linkages and technical analysis of social media clearly establish that the accused A­3 to A­ 10 are in constant communication with each other and there is a clear meeting of minds of the above accused in hatching the conspiracy with the support of A­1 and A­2 as well as other secessionist leaders of the Hurriyat

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Conference and other proscribed terrorist organizations of Jammu & Kashmir.  

18.11  This  case is  a terror  conspiracy  case in which  the terrorist act is not a single act of terror like an incident or series of incidents. It is a terrorist act as defined under UA (P) Act­1967 wherein the intention is to threaten the unity, integrity and sovereignty  of India by striking terror  in the people  or  any  section  of  people in India  by  overawing  by means of criminal  force or show of  criminal force causing death of any public functionary or attempts to cause death of any public functionary. The terrorist gang of the accused above, have also committed terrorist act as they have disrupted the essential services and daily life of the citizenry of Jammu & Kashmir and have caused damage and destruction of property in India intended to be used in connection  with  any other purpose of the  Government  of India, any State Government or any of their agencies.  

18.12  The analysis of documentary evidences seized during the searches, the statement of witnesses and the incriminating material recovered from the digital media seized from the accused clearly bring out the fact that with the active support and connivance of Pakistani establishments, Pakistani agencies, terrorist groups operating from Pakistani soil, the above accused have hatched  a criminal conspiracy to engage in violence and carry out subversive and secessionist activities in Jammu & Kashmir and to achieve their objectives, have established a network of cadres who are funded through Pakistani agencies via hawala dealers, local conduits and also by raising funds through local donations and by generating illegal profits through the  barter LoC trade. The accused have used these funds for organised stone pelting through a set charter of protests and demonstrations which are issued in the form of “protest calendars” on regular basis resulting in an atmosphere of chaos, terror, uncertainty and fear in the State of Jammu & Kashmir. The main aim and objective of this entire conspiracy is to secede the State of Jammu & Kashmir, which is an integral part of India, from the Union of India and wage war against the Government of India to meet the objectives.

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18.13 Hence, the accused persons are liable for prosecution under the following sections of law:­

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 Accuse d

Name of  Accused

Liable for prosecution under sections  of law

A­1 Hafiz  Muhammad  Saeed

section 120B, 121, 121A &124A of IPC,  section 13, 16, 17, 18, 20, 38, 39 & 40  of Unlawful Activities (Prevention) Act,  1967.

A­2 Mohd. Yusuf Shah @ Syed Salahuddin

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 38, 39 & 40  of Unlawful Activities (Prevention) Act,  1967.   

A­3 Aftab Ahmad Shah @  Aftab Hilali  Shah @  Shahid­ul­ Islam

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities (Prevention) Act,  1967.   

A­4 Altaf Ahmad  Shah @  Fantoosh

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities (Prevention) Act,  1967.   

A­5 Nayeem  Ahmad Khan

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities (Prevention) Act,  1967.   

A­6 Farooq  Ahmad Dar  @ Bitta  Karate

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities (Prevention) Act,  1967.   

A­7 Md. Akbar  Khanday

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities (Prevention) Act,  1967.   

A­8 Raja  Mehrajuddin Kalwal

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities (Prevention) Act,  1967.   

A­9 Bashir  Ahmad Bhat  @ Peer  Saifullah

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities (Prevention) Act,  1967.   

A­10 Zahoor  Ahmad Shah Watali

section 120B, 121, 121A & 124A of IPC,  section 13, 16, 17, 18, 20, 39 & 40 of  Unlawful Activities(Prevention) Act,1967.

A­11 Kamran  Yusuf

section 120B, 121 & 121A  of IPC,  section 13, 16, 18 & 20 of Unlawful  Activities (Prevention) Act, 1967.   

A­12 Javed  Ahmad Bhat

section 120B, 121 & 121A  of IPC,  section 13, 16, 18 & 20 of Unlawful

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18.14  The sanction for prosecution under section 45(1)(i)(ii) of the UA (P) Act in respect of the accused persons for the offences under section 13, 16, 17, 18, 20, 38, 39 and 40 of the UA (P) Act and under section 196 CrPC for the offences under section 121, 121A and 124A of IPC has been accorded by the Ministry of Home Affairs, Government of India vide order  No.11011/26/2017/IS­IV  dated  16th  January,  2018. The sanction  for  prosecution under section 188 CrPC has also been accorded by Government of India vide order No.11011/26/2017/IS­IV dated 16th  January, 2018 for the offences committed outside of India.

18.15  It is  therefore,  prayed that, the Hon’ble  Court  may please take cognizance of the offences under sections 120B, 121, 121A & 124A of the IPC, sections 13, 16, 17, 18, 20, 38, 39 & 40 of the Unlawful Activities (Prevention) Act, 1967 in respect of the accused A­1 to A­12 (As per the mentioned in para 18.13), issue process to the accused persons and try the aforesaid accused persons and punish them in accordance with law.”  

(emphasis supplied in italics and bold)

27. 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 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

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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.    

28. Reverting to the documents  on which emphasis has been

placed,  document  D­132  is the  Seizure  Memo of  properties

seized from the premises of Ghulam Mohammad Bhatt (W­29),

the then Munshi/Accountant of the respondent (Accused

No.10).   Document D­132(a) is the green page document,

seized during the search of the residence of said  Ghulam

Mohammad Bhatt, containing information about foreign

contributions  and expenditures of the respondent (Accused

No.10) during 2015/2016. Whether this document is

admissible in evidence would be a matter for trial. Be that as it

may,  besides the  said  document, the  statement  of  Ghulam

Mohammad Bhatt (W­29) has been recorded on 30th  August,

2017 and 1st  November, 2017. Whether the credibility of the

said witness should be accepted cannot be put in issue at this

stage. The statement does make reference to the diaries

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recovered from his residence showing transfer of substantial

cash amounts to different parties, which he has explained by

stating that cash transactions were looked after by the

respondent (Accused  No.10)  himself.  He  had  admitted the

recovery of the green colour document from his residence,

bearing signature of the respondent (Accused No.10) and

mentioning about the cash amounts received and disbursed

during the relevant period between 2015 and 2016. The

accusation against the respondent (Accused  No.10) is that

accused  A­3 to A­10 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. Regarding

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the funding of terrorist activities in J & K and, in particular,

the involvement of the respondent (Accused No.10), the

charge­sheet mentions as under:  

“17.6 Funding of Secessionist and Terrorist Activities in Jammu & Kashmir: If publicity and propaganda is oxygen for the terror groups, terror financing is its life­blood.  Terror financing  provides funds for recruitment, operationalization of training and training camps, procurement of arms and ammunition, operational cost of planning and resources for terrorist acts, running of underground networks, well­planned stone pelting, school burnings, targeted attacks, provision of legal support for terrorists and over­ground workers facing judicial process, ex­gratia payment for  militants killed in terrorist operations, regular payments to the families of terrorists and militants killed or convicted, funds for propaganda to clergy as well as relief measures for civilian population and also in case of natural disasters. The investigation in the case has revealed that the secessionists are mobilizing funds from all possible sources to fuel unrest and support the on­going secessionist and terrorist activities in Jammu & Kashmir.  

17.6.1 Funding from Pakistan: i) The Hurriyat leaders are receiving funds from Pakistan through conduits and also from the Pakistan High Commission directly.  It was substantiated by an incriminating document seized from the house of Ghulam Mohd. Bhatt druing search. Ghulam Mohd. Bhatt worked as the cashier­cum­accountant with accused  A­10 Zahoor Ahmad Shah  Watali, a known Hawala conduit.   The document clearly shows that accused A­10 Zahoor Ahmad Shah Watali was receiving money from Accused A­1 Hafiz Saeed (Head of Jamaat­ ud­Dawa), from the ISI, from the Pakistan High Commission at New Delhi and also from a source based in Dubai. Accused A­10 was remitting the same to the Hurriyat leaders, separatists and stone­pelters of Jammu & Kashmir. The said document has been

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maintained in regular course of  his business  and is signed by accused Zahoor Watali himself. This document clearly shows that Hurriyat leaders were receiving funds from Pakistan through the officials of Pakistan High Commission and through accused A­10 Zahoor Watali.  

The signature of Accused A­10 Zahoor Watali has also been verified  and  as  per the expert report, his signature on the questioned document matches with his specimen handwriting as well as his admitted handwriting.  

ii) Further, the role of  Pakistan in  funding secessionist activities also surfaced in the scrutiny of the  un­edited version of the audio/video furnished by the office of India Today T.V. News Channel wherein accused A­5 Nayeem Khan admits that the secessionists and terrorists of the Valley are receiving  financial support from Pakistan  and would have received approximately Rs.200 crores to organise anti­India protests and agitations after the killing of Burhan Wani, the Commander of the proscribed terror organisation Hizb­ul­Mujahiddin. He further speaks about funds reaching them  from Saudi  Arabia/Dubai through  Hawala  via  Delhi (Balimaran/Chandni Chowk). He admits that S.A.S. Geelani (Chairman, APHC­G),  Mirwaiz Umar Farooq  (APHC­M) and Yasin Malik (JKLF)  are  receiving funds  from Pakistan.  He further admits the pivotal role played by the Pakistan High Commission  to convey and receive instructions from Pakistan. Nayeem Khan also stated that the accused  Hafiz Mohd Saeed  has supported S.A.S. Geelani, Chairman, APHC­G by paying at  least  10­12 crores during anti­India agitation after killing of Burhan  Wani. Accused Nayeem Khan further admitted that, if funded, he can fuel unrest in the Valley any time.  

iii) Similarly, the scrutiny of the audio/video of the sting operation also reveals accused  A­6 Farooq Ahmad Dar Bitta Karate admitted that the funds are being sent by Pakistan to the secessionists and terrorists in the Kashmir Valley  including him for organizing forcible closures, anti­India protests and processions and stone­ pelting on the security forces. He further claimed that he has

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his cadres in every part of Kashmir who can act on his call at  any  given  point  of time and  fuel  unrest in the  Valley. When given an offer of financial support, accused Bitta Karate put forth a demand of Rs.70 crores for fuelling unrest upto six months.  

The  voice samples  of Nayeem Khan and Farooq Ahmad Dar @ Bitta Karate have been forensically examined and the CFSL report has confirmed the match with their voices.

iv) Further, the investigation has revealed that the senior­ most officials of the High Commission of Pakistan were in regular contact with the Hurriyat leaders. The High Commission of Pakistan in New Delhi used to organise functions and meetings in New Delhi, to which the Hurriyat leaders from Kashmir were invited and they were given instructions and funds on a regular basis.  These funds were given to various allied groups of  the APHC and investigation have revealed that a First Secretary level officer of Pakistan High Commission in New Delhi would act as a channel and A­10 Zahoor Ahmed Shah Watali would act as a courier to deliver the funds to the Hurriyat leadership. These funds as explained above were used to foment the secessionist and separatist activities and unrest in the valley in an organized manner.  One such invitation card from the Pakistan High Commission was seized from the house of A­6 Farooq Ahmad Dar @ Bitta Karate:­

On the occasion of the National Day Pakistan High Commissioner and

Mrs. Salman Bashir Request the pleasure of the company of

Mr. Farooq Ahmed Dar At a Reception

on Friday, 22 March 2013 from 1930 to 2100 hrs.

Venue:                        R.S.V.P. 2/50­G, Shantipath, Tel.               011­24121819 Chanakyapuri, New Dehli           Fax 011­26872339

               Dress: National/Lounge Suit/Uniform  E­mail:pakhcnd@gmail.com

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(Please bring this card with you)

Investigation has also established that the accused A­4 was in direct contact with the High Commissioner of Pakistan in New Delhi  and would  apprise  him about the  situation in Jammu & Kashmir.  

17.6.2  Funding from  Terrorist Organisations based in Pakistan: During the course of investigation, it is also ascertained that the separatists and secessionists of Jammu & Kashmir were also receiving money from the terrorists and terrorist organizations operating out of Pakistan/PoK.  The incriminating document seized from the house of Ghulam  Mohd. Bhatt  who  worked as a cashier­cum­ accountant  with accused A­10 Zahoor  Watali shows that Zahoor Watali  received money from accused A­1 Hafiz Saeed, Head of JuD and Chief of proscribed terror organisation Lashkar­e­Toiba and remitted it to the Hurriyat leaders  espousing the  cause  of secession  of Jammu & Kashmir from the Union of India.  

17.6.3 Local Donations/Zakat/Baitulmal: During the course of investigation, it is established that the Hurriyat  has its  network of cadres at districts and local levels. There are District Presidents and block level leaders who have the responsibility to raise the funds through donation during the religious festivals and month of Ramzan. In a well­established system, the receipt books are printed and funds are collected from shopkeepers, businessmen and residents of Kashmir. The money is also collected to become  a  member of the  Tehreek­e­Hurriyat. Selected members are made as Rukuns and are tasked to propagate the separatist ideology of Hurriyat. These Rukuns act as foot soldiers and ensure that bandhs and hartaals are successful. They also lead the processions and participate in stone pelting.  

Investigation also established that various District Presidents collect Rs.5 to 10 Lac per district as Baitulmal. Funds are also collected from apple­growers and businessmen who are compelled to donate to Hurriyat

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central office. This  money is  used for administrative and operational  purposes of  organizing protests  and strikes as well as for aid to militants and their families.  

The seizure of unaccounted receipts of an amount of Rs.1,15,45,000/­ from accused A­4 Altaf Ahmad Shah Fantoosh also shows that money is being raised by way of donations. Similarly, records pertaining to the collection of funds were also seized from the house of accused A­8 Mehrajuddin Kalwal, who was also the District President of Tehreek­e­Hurriyat for Srinagar and Ganderbal.  

Further, during the course of investigation, it is also established that the Hurriyat leadership appeals to the public to contribute money generously by way of donations for their so­called freedom movement. This is clearly reflected in the  Website  of the Hurriyat Conference viz. www.huriyatconference.com, which shows a message from S.A.S. Geelani  “Help the families of martyrs and prisoners….. people should come forward for donations in the  month of Ramadan as the number of people affected by this movement is large”.  This substantiates that  Hurriyat is raising funds through donations and using the same to fuel secessionist activities and to support the families of killed and jailed terrorists.  

17.6.4 LOC Trade: During the course of investigation, it has been established that the secessionist and separatist leaders are raising funds through LoC trade by way of directing the Kashmiri traders to do under­invoicing of the goods  which  were imported through LoC barter trade. They sell the goods to the traders in Delhi and a part of the profit of the same is shared with the Hurriyat leaders and other separatists, which in turn is used on anti­India propaganda, for mobilizing the public to organise protests and stone­pelting and to support families of killed/jailed  militants. The hawala operators based in Srinagar,  New  Delhi and other parts of the country and abroad are being used to transfer the funds so generated. The investigation has revealed that the funds are generated by resorting to sale of third­party goods,  under­weighing, under­invoicing, large­scale dealings in cash and committing irregularities in maintenance of records. This modus­

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operandi leads to generation of huge cash surpluses on the Indian side which are then channelized through several formal banking channels as well as cash couriers and hawala dealers to the separatists and secessionists active in Jammu & Kashmir.  

Investigation has revealed that a significant number of traders engaged in cross LoC trade have relatives across the border who are closely associated with banned terrorist organizations, especially  Hizb­Ul­Mujahideen. Investigation has also revealed that certain ex­militants and their family members are using proxy companies and are registered as traders. During the course of investigation, use of LoC trade route for smuggling  of contraband and weapons  has  also come to light. A separate investigation is underway regarding the irregularities in the LoC trade.  

17.6.5 Hawala: Apart from the above mentioned sources and channels, the secessionists depend heavily on the hawala network and conduits to bring money from off­shore locations to India to fuel­anti­India activities in Jammu & Kashmir.  

i) During the course of investigation, it was ascertained that accused A­10 Zahoor Ahmad Shah Watali is one such conduit. The seizure of the incriminating document from the house of his cashier­cum­accountant viz. Ghulam Mohd. Bhatt regarding the foreign contributions received by Zahoor Ahmad Shah Watali from Paskistani establishment and terror organizations and their further remittance to the  Hurriyat leaders and secessionists of Jammu & Kashmir clearly shows that he was an active channel to transmit funds from abroad to India to fuel secessionist  activities  and to wage a war against the Government of India.  

ii) During the course of investigation, it is revealed that accused A­10 Zahoor Ahmad Shah Watali was bringing money from off­shore locations to India by layering it through the scores of firms and companies he has opened.  It  was ascertained that Zahoor Ahmad Shah Watali has an NRE A/c No.0252040200000505 in J&K

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Bank and he received foreign remittances to the tune of Rs.93,87,639.31/­ in this account from 2011 till 2013 from unknown sources.  

iii) During the course of investigation, it was also ascertained that the accused Zahoor Ahmad Shah Watali  was showing foreign remittances under  ‘other income’  in his proprietorship firm viz. Trison International, Srinagar. From the analysis of his bank accounts, it has been ascertained that foreign remittances to the tune of Rs.2,26,87,639.31 were received by the accused Zahoor Ahmad Shah Watali in different accounts from the year 2011 to 2016. An amount of  Rs.93,87,639.31/­ came in Zahoor Ahmad Shah  Watali A/c No.NRE­0252040200000505 in J&K Bank from 2011 to 2013. An amount of Rs.14 lakh was remitted in the account of Acharya Shri Chander College of Medical Sciences (ASCOMs), Jammu account No.1213040100000229 on 09.04.2013 through  NEFT against fee deposited for his son, viz.,  Yawar Zahoor Shah Watali. An amount of Rs.60 lakh was remitted in current account of accused Zahoor Ahmad Shah Watali in J&K Bank A/c No.CD4508. An amount of Rs.5 lakh was remitted in the account of Trison Farms & Constructions Pvt. Ltd. A/c OTN­10162. The investigation has revealed that all these foreign remittances are from unknown sources.  

iv) During the course of investigation, it was also revealed that on 07.11.2014, one Naval Kishore Kapoor, son of Om Prakash Kapoor, resident of P.O. Box­8669, Aman, U.A.E. entered into  an  agreement  with  Trison  Farms and Constructions Pvt. Ltd. through its Managing Director Zahoor Ahmad Shah Watali to take a piece of land measuring 20 Kanals in Sozeith Goripora Nagbal, Budgam on lease in consideration of an amount of Rs.6 crore  as premium  and  Rs.1000/­ annual rent for  an initial period of 40 years extendable as may be mutually agreed between the parties. In the agreement, M/s Trison Farms and Constructions Pvt. Ltd. was

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declared to be the absolute owner of the piece of land in question.  Mr.  Naval  Kishore  Kapoor remitted  a total amount of Rs.5.579 crores in 22 instalments between 2013 and  2016  to the  accused  Zahoor  Ahmad Shah Watali.  

v) During the course of investigation, it was ascertained that no land exists in the name of M/s Trison Farms and Constructions Pvt. Ltd. as per the balance sheets of the said company. (AY 2011­12 to 2016­17). It was also ascertained that the large sum of money i.e. Rs.5,57,90,000 was mobilized by Naval Kishore Kapoor from unkown sources and remitted to the accused Zahoor Ahmad Shah Watali over a period of 2 years to lease a piece of land which is not even existing in the name of the company mentioned as first party in the agreement and the agreement itself lacks legal sanctity.  This  proves that the  said  agreement was a ‘cover’ created by the accused Zahoor Ahmad Shah Watali to bring foreign remittances from unknown sources to India.  

vi) During the course of investigation, it is also ascertained that the Chartered Accountant, who signed the audited balance sheets of the firms belonging to the accused A­10 Zahoor Ahmad Shah Watali viz. M/s Trison International (2013­14 and 2015­16), Trison Farms & Constructions Pvt. Ltd. (2013­14 and 2015­16), M/s 3Y (2012­13, 2013­14 and 2015­16) and M/s Yasir Enterprises (2013­14 and 2015­16) did so without seeing any supporting documents. The balance sheets of these companies were sent to him by one Mustaq Mir, Cost Accountant and Shabir Mir, Chartered Accountant from Wizkid Office, Srinagar through email and he was asked to sign on them in Delhi  without showing any documents.  

This clearly shows that Zahoor Watali  was remitting money received from unknown sources to India.

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vii) The investigation has also revealed that in the FY 2010­ 11,  a firm belonging  to  accused A­10 Zahoor Ahmad Shah Watali and his family members viz., Trison Farms and Constructions Pvt.  Ltd. raised  unsecured  loan of Rs.2,65,55,532/­ from the Directors of the company, i.e. the accused Zahoor Ahmad Shah Watali, his wife Sarwa Begum and his sons Yassir Gaffar Shah, Yawar Zahoor & Yamin Zahoor in the form of both cash and cheque and the same was used towards repayment of 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 accused Zahoor Ahmad Shah Watali.  

viii) The seizure from the house of accused  A­10  Zahoor Ahmad Shah Watali, of  a list of ISI officials  and  a letter from Tariq  Shafi,  proprietor  of  AI  Shafi  group addressed to Pakistan High Commission recommending grant of visa to Zahoor Watali shows his proximity with Pakistani establishment. It is pertinent to mention here that the name of Tariq Shafi figures in the document of foreign contributions seized from the house of Zahoor Watali’s cashier­cum­accountant viz., Ghulam Mohd. Bhatt.”     

(emphasis supplied in italics and bold)

29. In  reference to these accusations, the entry in the diaries

and the green­colour document, recovered from the residence

of Ghulam Mohammad Bhatt, is significant. Further, the

seizure  memo  described as document  D­3/6, 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

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regarding his financial deals. Another crucial document

described as D­3g/20 is a contact diary seized from the

respondent vide  Memo  D­3, which contains   the Pakistan

National name and contact “Tariq Shafi 0092425765022…

26A”  whose name figures in document D­132(a)/23. The Code

“0092” pertains to Pakistan. Another contact diary was seized

from the respondent vide Memo D­3, which, at page D­3h/28

contains the same name and contact,  namely, “Tariq  Shafi

00923008459775/ 0092425765022”. The documents D­3j to

D­3j/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 charge­sheet  makes  no

reference to any other criminal case against the respondent.

Additionally, the charge­sheet is accompanied with documents

D­9b and D­9c,  which are photographs of  ex­militant  Aftab

Hilali Shah @ Shahid­ul­Islam (A­3) holding AK­47, seen with

other terrorists. These photographs were seized from the

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residence of the said ex­militant on 3rd  June, 2017. The

prosecution case is that the respondent (Accused No.10) was

in constant touch with the said ex­militant Aftab Hilali Shah @

Shahid­ul­Islam (A­3), as noticed from the inter­linkage chart

depicted above. That fact is backed by the CDR analysis

report,  also part  of the  charge­sheet.  The charge­sheet  also

contains document D­185/10, which is a contact list of

accused Nayeem Khan (A­5) retrieved through forensic

analysis,  having mobile numbers of persons associated with

Hurriyat party;  and of one Mudasir Cheema Pak who is none

other than the First Secretary of Pakistan High Commission.

His name also figures in document D­132(a)/23. The

Designated Court, besides adverting to the aforementioned

documents, also adverted to other documents and the

statements of the prospective witnesses (Ws­1, 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

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facie  true.   The view so expressed by the Designated Court

commends  to  us.  Suffice it to  observe that the  High Court

adopted a tenuous approach ­ by first discarding the

document D­132(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. As aforesaid, 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.  

30. In the case of  Niranjan Singh Karam Singh Punjabi

(supra), the Court essentially considered the scope and ambit

of the enquiry by the Trial Court at the stage of “discharge”. In

that  context, the  Court  made observations in  paragraphs 6

and 8 of the said judgment which must be understood

accordingly. In the present case, however, we are called upon

to consider the prayer for bail  in the context of the purport of

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the proviso to Section 43D(5) of the 1967 Act which 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 under the first part of the proviso of no bail in

such cases would operate.

31. 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  (supra), to the

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effect that the charge­sheet 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.  

32. In the case of  Hitendra Vishnu Thakur  (supra), the

Court was called upon to consider the following questions as

noted in the opening paragraph of the judgment, viz.:   

“In this batch of criminal appeals and special leave petitions (criminal) the three meaningful questions which require our consideration  are: (1)  When can  the  provisions  of  Section 3(1) of the  Terrorist and  Disruptive  Activities (Prevention) Act, 1987 (hereinafter referred to as the TADA) be attracted? (2) Is the 1993 Amendment, amending Section 167(2) of the Code  of  Criminal  Procedure  by  modifying  Section  20(4)(b) and adding a new provision as 20(4)(bb),  applicable to the pending  cases  i.e. is it retrospective in operation? and  (3) What is the true ambit and scope of Section 20(4) and Section 20(8) of TADA in the matter of grant of bail to an accused brought before the Designated Court and the factors which the Designated Court has to keep in view while dealing with an application for grant of bail under Section 20(4) and for grant of extension of time to the prosecution for further investigation under clause (bb) of Section 20(4) and incidentally whether the conditions contained in Section 20(8) TADA control the grant of bail under Section 20(4) of the Act also?  We shall take up for consideration these questions in seriatim”

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The focus essentially was on matters relevant for consideration

of  application for bail  on the ground of default  in filing the

charge­sheet within the statutory period. Indeed, one of  the

questions was about  the scope of the provisions relating  to

grant of  bail in respect  of  offence punishable  under special

enactment TADA. That has been discussed in paragraphs 13

and 14 of the reported judgment, which reads thus:

“13. We would, therefore, at this stage like to administer a word of caution to the Designated Courts regarding invoking the provisions of TADA  merely because the investigating officer at some stage of the investigation chooses to add an offence under same (sic some) provisions of TADA against an accused person, more often than not while opposing grant of bail, anticipatory or otherwise. The Designated Courts should always consider  carefully the material  available on the record and apply their mind to see whether the provisions of TADA are even prima facie attracted.

14.  The  Act  provides for the constitution  of one  or  more Designated Courts either by the Central Government or the State Government by notification in the Official Gazette to try specified cases or class or group of cases under the Act. The Act makes every  offence punishable  under  the Act  or  any rule made thereunder to be a cognizable offence within the meaning of Section 2(c) of the CrPC. The Act vests jurisdiction in the Designated Court to try all such offences under the Act by giving precedence over the trial of any other case  against an  accused in  any  other court (not  being  a Designated Court) notwithstanding anything contained in the Code or any other law for the time being in force. The conferment  of  power  on  the  Designated  Courts to try the offences triable by them, punishable with imprisonment for a term not exceeding three years or with fine or with both, in a summary manner in accordance with the procedure prescribed in the CrPC notwithstanding anything contained

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in Section 260(1) or 262 CrPC by applying the provisions of Sections 263­265 of the Act is a marked departure. The right of appeal straight to the Supreme Court against any judgment, sentence or order not being an interlocutory order vide Section 19(1) of the Act demonstrates the seriousness with which Parliament has treated the offences under TADA. An onerous duty is therefore cast on the Designated Courts to take extra care to scrutinise the material on the record and apply their mind to the evidence and documents available with the investigating agency before charge­ sheeting an accused for an offence under TADA. The stringent provisions of the Act coupled with the enhanced punishment prescribed for the offences under the Act make the task of the Designated Court even more onerous, because the graver the offence, greater should be the care taken to see that the offence must strictly fall within the four corners of the  Act before a charge is framed against an accused person.  Where the  Designated  Court without as much as even finding a prima facie case on the basis of the material on the record, proceeds to charge­sheet an accused under any of the provisions of TADA, merely on the statement  of the  investigating agency, it  acts  merely  as a post office of the investigating agency and does more harm to meet the challenge arising out of the ‘terrorist’ activities rather than deterring terrorist activities. The remedy in such cases would be worse than the disease itself and the charge against the State of misusing the provisions of TADA would gain acceptability, which would be bad both for the criminal and the society. Therefore, it is the obligation of the investigating agency to satisfy the Designated Court from the material collected by it during the investigation, and  not merely  by  the  opinion  formed by  the  investigating agency, that the activity of the ‘terrorist’ falls strictly  within the parameters of the provisions of TADA before seeking to charge­sheet an accused under TADA. The Designated Court must record its satisfaction about the existence of a prima facie case on the basis of the material on the record before it proceeds to frame  a charge­sheet against an accused for offences covered by TADA. Even after an accused has been charge­sheeted for an offence under TADA and the prosecution leads evidence in the case, it is an obligation of the  Designated  Court to take extra care to examine the evidence with a view to find out whether the provisions of the Act apply or not. The Designated Court is, therefore,

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expected to carefully examine the evidence and after analysing the same come to a firm conclusion that the evidence led by the prosecution has established that the case of the accused falls strictly within the four corners of the Act before recording a conviction against an accused under TADA.”

Again, in paragraph 22 of the said judgment, the Court

observed thus:

“22.  ….The two provisions operate in different and independent fields. The basis for grant of bail under Section 20(4), as already noticed, is entirely different from the grounds on which bail may be granted under Section 20(8) of the Act. It would be advantageous at this stage to notice the provisions of Section 20(8) and (9) of the Act.

‘(8) Notwithstanding anything contained in the Code, no person accused of an offence punishable under this Act or  any rule  made thereunder  shall, if in  custody,  be released on bail or on his own bond unless— (a) the Public Prosecutor has been given an opportunity to oppose the application for such release, and (b) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. (9) The limitations on granting of bail specified in sub­ section (8) are in addition to the limitations under the Code or any other  law for  the  time being  in  force on granting of bail.’

As would be seen from the plain phraseology of sub­section (8) of Section 20, it commences with a non obstante clause and in its operation imposes a ban on release of a person accused of an offence punishable under TADA or any rule made thereunder on bail unless the twin conditions contained in clauses (a) and (b) thereof are satisfied. No bail can be granted under Section 20(8) unless the Designated Court is satisfied after notice to the public prosecutor that there are reasonable grounds for believing that the accused is not guilty of such an offence and that he is not likely to commit any offence while on bail. Sub­section (9) qualifies

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sub­section (8) to the extent that the two conditions contained in clauses (a) and (b) are  in addition  to the limitations prescribed under the Code of Criminal Procedure or any other law for the time being in force relating to the grant of bail. Strictly speaking Section 20(8) is not the source of power of the Designated Court to grant bail but it places further limitations on the exercise of its power to grant bail in cases under TADA, as is amply clear from the plain language of Section 20(9). The Constitution Bench in Kartar Singh case19 while dealing with the ambit and scope of sub­ sections (8)  and  (9)  of  Section  20  of the  Act  quoted with approval the following observations from Usmanbhai case20: (SCC p. 704, para 344)

‘Though there is no express provision excluding the applicability of Section 439 of the Code similar to the one contained in Section 20(7) of the Act in relation to a case involving the arrest of any person on an accusation of having committed an offence punishable  under the Act or any rule made thereunder, but that result must, by necessary implication, follow. It is true that the source of power of a Designated Court to grant bail is not Section 20(8) of the Act as it only places limitations on such power. This is made explicit  by Section 20(9) which enacts that the limitations  on  granting  of  bail specified in Section 20(8) are ‘in addition to the limitations under the Code or any other law for the time being in force’.  But it does not necessarily follow that the power of a Designated Court to grant bail is relatable to Section 439 of the Code. It cannot be doubted that a Designated Court is ‘a court other than the High Court or the Court of Session’ within the meaning of Section 437 of the Code. The exercise of the power to grant bail by a Designated Court is not only subject to the limitations contained therein, but is also subject to the limitations placed by Section 20(8) of the Act.’

and went on to add: (SCC p. 704, para 345)

‘Reverting to Section 20(8), if either of the two conditions mentioned therein is not satisfied, the ban operates and the accused person cannot be released on bail  but of course it is subject to  Section  167(2) as  modified  by

19  (1994) 3 SCC 569 20  (1988) 2 SCC 271

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Section 20(4) of the TADA Act in relation to a case under the provisions of TADA.’

Thus, the ambit and scope of Section 20(8) of TADA is no longer  res integra  and from the above discussion it follows that both the provisions i.e. Section 20(4) and 20(8) of TADA operate in different situations and are controlled and guided by different considerations.”  

33. We fail to understand as to how this decision will be of

any avail to the respondent.   In our opinion, 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.  

34. With reference to the document D­132(a), the High Court

was impressed by the argument that the same  would be

inadmissible. To buttress that opinion of the High Court, the

respondent would rely on the decision of this Court in  V.C.

Shukla    (supra).   Further,  it was submitted that in light of

Section 34 of the Evidence Act, the said document could not

be admitted in evidence, since it was not an entry in the books

of  account regularly kept  in the course of  business. In any

case, that document by itself  would not be sufficient  in the

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absence of any independent evidence. Learned Attorney

General, relying on the underlying principle in  Khoday

Distilleries Ltd. and  Ors. Vs. State of  Karnataka  and

Ors.21, would contend that there cannot be business in crime

and,  as  such,  Section  34 of the  Evidence  Act  will  have  no

application. He further submits that the prosecution may use

the facts  noted in the said  document  and  prove the same

against the respondent by other evidence. This argument need

not detain us. For, we find force in the argument of the

learned Attorney General that the issue of admissibility and

credibility of the material and evidence presented by the

Investigating Officer would be a matter for trial. Furthermore,

indubitably, the prosecution is not solely relying on the

document D­132(a)  recovered from the residence of Ghulam

Mohammad Bhatt  (W­29). There are also other incriminatory

documents recovered from respondent (Accused No.10) himself

during the search, including other independent evidence,

which, indeed, will have to be proved during the trial.  

21  (1995) 1 SCC 574 (para 60)

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35. The appellant has relied on the exposition in  Salim

Khan (supra), to contend that in cases where the High Court

adopted a totally erroneous approach, as in the present case,

discarding the crucial material/evidence which is referred to in

the report under Section 173 Cr.P.C. and presented before the

Designated Court, then the order granting bail  by the High

Court cannot be countenanced. The argument of the

respondent is that the said decision would make no difference

as it is concerning an application for cancellation of bail made

by the informant. However, we find force in the argument of

the appellant that 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

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to apply its mind to ascertain whether the accusations against

the accused  are  prima face true. Indeed, in the present case,

we are not called upon to consider the prayer for cancellation

of bail as such but to examine the correctness of the approach

of the High Court in granting bail to the accused despite the

materials and evidence indicating that accusations made

against him are prima facie true.  

36. In a decision of this Court in Chenna Boyanna Krishna

Yadav (supra), to which reference has been made, the Court

has re­stated the twin conditions to be considered by the

Court before grant of bail in relation to MCOCA offences. We

are of the view that in the present case, the Designated Court

rightly opined that there are reasonable grounds for believing

that the accusation against the respondent is prima facie true.

As we are not  inclined to accept the prayer for bail, in our

opinion, it is not necessary to dilate on other aspects to

obviate prolixity.  

37. A fortiori, we deem it proper to reverse the order passed

by the High Court granting bail to the respondent. Instead, we

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agree with the conclusion recorded by the Designated Court

that in the  facts of  the present case,  the respondent  is  not

entitled to grant of bail in connection with the stated offences,

particularly   those falling  under  Chapters IV and VI  of the

1967 Act.  

38. Accordingly, this appeal succeeds. 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.    39. All pending applications are also disposed of.

…………………………..….J.           (A.M. Khanwilkar)

…………………………..….J.        (Ajay Rastogi)

New Delhi; April 02, 2019.