Holding

The Supreme Court held that the High Court erred; under Section 43D(5) of the UAPA the court must be satisfied that there are reasonable grounds to believe the accusation is prima facie true, and the Designated Court's denial of bail was correct.

Summary

The National Investigation Agency (NIA) sought to deny bail to Zahoor Ahmad Shah Watali, accused No.10 in a case under the Unlawful Activities (Prevention) Act, 1967 (UAPA) and several IPC offences, alleging he was a key fund‑raiser for terrorist activities. The Delhi High Court granted bail, holding that the charge‑sheet did not reference other criminal cases and that certain statements and documents were inadmissible. On appeal, the Supreme Court held that at the bail stage the court must only form an opinion on the basis of broad probabilities and must be satisfied that there are reasonable grounds to believe the accusation is prima facie true under Section 43D(5) of the UAPA. The Court rejected the High Court’s detailed scrutiny of evidence, emphasized that admissibility issues are for trial, and considered the totality of the investigation report, seized documents, and protected‑witness statements. It concluded that reasonable grounds exist to believe the accusations are prima facie true, and therefore the bail order was erroneous. The Supreme Court set aside the High Court’s order, affirmed the Designated Court’s denial of bail, and allowed the appeal.

Issues considered

Whether a court, at the stage of considering bail under Section 43D(5) of the UAPA, must examine the merits of the evidence or merely assess broad probabilities of prima facie guilt.
Whether statements of protected witnesses recorded under Section 164 CrPC and documents kept in sealed covers can be disregarded as inadmissible at the bail stage.
The correct interpretation and application of the term "prima facie true" under the UAPA for bail decisions.
Whether the High Court erred in granting bail by analysing the charge‑sheet and evidence in detail.
Whether the provisions of Section 43D(5) of the UAPA apply from the FIR stage through trial and how they affect bail.

Legislation cited

Code of Criminal Procedure, 1973s. 161, s. 164, s. 173, s. 207, s. 34, s. 44
Indian Evidence Act, 1872s. 34
Indian Penal Code, 1860s. 120B, s. 121, s. 121A, s. 124A
Maharashtra Control of Organised Crime Act, 1999s. 21(4)
National Investigation Agency Act, 2008s. 21(1), s. 21(4)
Terrorist and Disruptive Activities (Prevention) Act, 1985s. 20(4), s. 20(8)
Unlawful Activities (Prevention) Act, 1967s. 13, s. 16, s. 17, s. 18, s. 20, s. 38, s. 39, s. 40, s. 43D

Subjects

bailUAPAprima facieSection 43Dprotected witnessterrorist financingevidentiary standardshigh court reversalspecial enactments

Judgment

1060 SUPREME COURT
[2019] 5REPORTS
S.C.R. 1060 [2019] 5 S.C.R.

A NATIONAL INVESTIGATION AGENCY
v.
ZAHOOR AHMAD SHAH WATALI
(Criminal Appeal No.578 of 2019)
B APRIL 02, 2019
[A. M. KHANWILKAR AND AJAY RASTOGI, JJ.]
Unlawful Activities (Prevention) Act, 1967 – Chapters IV
& VI – ss.13, 16, 17, 18, 20 and 38-40 – Respondent was named as
Accused No.10 in the FIR registered for offences punishable
C
u/ss.120B, 121 and 121A of IPC and ss.13,16,17,18,20 and 38-40
of the 1967 Act – Respondent filed application for bail before the
District and Sessions Judge, Special Court (NIA), New Delhi –
Rejected – Order reversed by the High Court – On appeal, held:
Elaborate examination or dissection of the evidence is not required
D to be done at the stage of considering the prayer for bail – Court
is merely expected to record finding on the basis of broad
probabilities regarding involvement of the accused in the
commission of the stated offence or otherwise – High Court
ventured into examining the merits and demerits of the evidence –
Question of discarding the document at this stage, on the ground of
E
being inadmissible in evidence, is not permissible – Issue of
admissibility of the document/evidence would be a matter for trial –
Taking into account the totality of the report made u/s.173 of CrPC,
the accompanying documents and the evidence already presented
to the Court, including the redacted statements of the protected
F witnesses recorded u/s.164 of CrPC there are reasonable grounds
to believe that the accusations made against the respondent are
prima facie true – Role attributed to the respondent is that of being
part of the larger conspiracy and to act as fund raiser and finance
conduit – High Court erroneously proceeded on the premise that
the charge-sheet makes no reference to any other criminal case
G
against the respondent – High Court adopted an inappropriate
approach whilst considering the prayer for grant of bail – Order
passed by the High Court granting bail to the respondent, reversed
– Order passed by the Designated Court rejecting the application
for grant of bail made by the respondent, affirmed – Penal Code,
H
1060
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1061
SHAH WATALI

1860 – ss.120B, 121 and 121A – Narcotic Drugs and Psychotropic A
Substances Act, 1985 – Terrorist and Disruptive Activities
(Prevention) Act, 1985 – Maharashtra Control of Organised Crime
Act, 1999 – Code of Criminal Procedure, 1973 – ss.161, 164 and
173, 207 – Evidence Act, 1872 – s.34 – Bail .
Unlawful Activities (Prevention) Act, 1967 – s.43D – B
Application of – Held: s.43D applies right from the stage of
registration of FIR for offences under Chapters IV and VI of the
1967 Act until the conclusion of the trial thereof.
Unlawful Activities (Prevention) Act, 1967 – Proviso to
s.43D(5) – Purport of – Discussed. C
Bail – Grant of – Factors to be considered – Discussed.
Words & Phrases – “prima facie true”, in context of 1967 Act
– Meaning of – Unlawful Activities (Prevention) Act, 1967.
Allowing the appeal, the Court D
HELD: 1.1 Matters to be considered for deciding an
application for bail (i) whether there is any prima facie or
reasonable ground to believe that the accused had committed
the offence; (ii) nature and gravity of the charge; (iii) severity of
the punishment in the event of conviction; (iv) danger of the
E
accused absconding or fleeing, if released on bail; (v) character,
behaviour, means, position and standing of the accused; (vi)
likelihood of the offence being repeated; (vii) reasonable
apprehension of the witnesses being tampered with; and
(viii) danger, of course, of justice being thwarted by grant of bail.
When it comes to offences punishable under special enactments, F
such as the Unlawful Activities (Prevention) Act, 1967,
something more is required to be kept in mind in view of the
special provisions contained in Section 43D of the 1967 Act,
inserted by Act 35 of 2008 w.e.f. 31st December, 2008. By virtue
of the proviso to sub-section (5), it is the duty of the Court to be
G
satisfied that there are reasonable grounds for believing that the
accusation against the accused is prima facie true or otherwise.
Under the special enactments such as Terrorist and Disruptive
Activities (Prevention) Act, 1985 (TADA), Maharashtra Control
of Organised Crime Act, 1999 (MCOCA) and the Narcotic Drugs
H
1062 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B
satisfaction to be recorded for the purposes of the 1967 Act that
there are reasonable grounds for believing that the accusation
against such person is “prima facie” true. [Paras 15, 17]
[1087-E-G; 1088-A; F-G; 1089-A-B]
1.2 By its very nature, the expression “prima facie true”
C 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
D 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
E 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
F discharge application or framing of charges in relation to offences
under the 1967 Act. The exercise to be undertaken by the Court
at this stage- of giving reasons for grant or non-grant of bail- is
markedly different from discussing merits or demerits of the
evidence. The elaborate examination or dissection of the
evidence is not required to be done at this stage. The Court is
G merely expected to record a finding on the basis of broad
probabilities regarding the involvement of the accused in the
commission of the stated offence or otherwise. The High Court
ventured into an area of examining the merits and demerits of
the evidence. The approach of the High Court in completely
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1063
SHAH WATALI

discarding the statements of the protected witnesses recorded A
under Section 164 of Cr.P.C., on the specious ground that the
same was kept in a sealed cover and was not even perused by
the Designated Court and also because reference to such
statements having been recorded was not found in the
charge-sheet already filed against the respondent is in complete
B
disregard of the duty of the Court to record its opinion that the
accusation made against the concerned accused is prima facie
true or otherwise. That opinion must be reached by the Court
not only in reference to the accusation in the FIR but also in
reference to the contents of the case diary and including the
charge-sheet (report under Section 173 of Cr.P.C.) and other C
material gathered by the Investigating Agency during
investigation. The special provision, Section 43D of the 1967 Act,
applies right from the stage of registration of FIR for offences
under Chapters IV and VI of the 1967 Act until the conclusion of
the trial thereof. Soon after the arrest of the accused on the basis
D
of the FIR registered against him, but before filing of the
charge-sheet by the Investigating Agency; after filing of the first
charge-sheet and before the filing of the supplementary or final
charge-sheet consequent to further investigation under Section
173(8) Cr.P.C., until framing of the charges or after framing of
the charges by the Court and recording of evidence of key E
witnesses etc. However, once charges are framed, it would be
safe to assume that a very strong suspicion was founded upon
the materials before the Court, which prompted the Court to form
a presumptive opinion as to the existence of the factual
ingredients constituting the offence alleged against the accused,
F
to justify the framing of charge. In that situation, the accused
may have to undertake an arduous task to satisfy the court that
despite the framing of charge, the materials presented along with
the charge-sheet (report under Section 173 of Cr.P.C.), do not
make out reasonable grounds for believing that the accusation
against him is prima facie true. Similar opinion is required to be G
formed by the Court whilst considering the prayer for bail, made
after filing of the first report made under Section 173 of the Code,
as in the present case. For that, the totality of the material
gathered by the Investigating Agency and presented along with
H
1064 SUPREME COURT REPORTS [2019] 5 S.C.R.

A the report and including the case diary, is required to be
reckoned and not by analysing individual pieces of evidence or
circumstance. In any case, the question of discarding the
document at this stage, on the ground of being inadmissible in
evidence, is not permissible. For, the issue of admissibility of the
document/evidence would be a matter for trial. The Court must
B
look at the contents of the document and take such document
into account as it is. [Paras 17-19][1088-B-E; 1092-C-H;
1093-A-F]
1.3 In terms of Section 43D, it is the bounden duty of the
Court to peruse the case diary and/or the report made under
C Section 173 of the Code and all other relevant material/evidence
produced by the Investigating Agency, for recording its opinion.
The issue regarding admissibility of the statements and efficacy
of the certificates given by the competent authority, appended to
the redacted statements would be a matter for trial and subject
D to the evidence in reference to Section 463 of Cr.P.C.
[Paras 21, 23][1101-E-; 1102-C]
1.4 Taking into account the totality of the report made under
Section 173 of the Code and the accompanying documents and
the evidence/material already presented to the Court, including
E the redacted statements of the protected witnesses recorded
under Section 164 of the Code, there are reasonable grounds to
believe that the accusations made against the respondent are
prima facie true. Further investigation is in progress. The
material produced by the Investigating Agency thus far (pending
further investigation) shows the linkage of the respondent
F (Accused No.10) with A-3, A-4, A-5 and A-6 and, likewise,
linkages between the respondent (Accused No.10) and A-3 to
A-12, as revealed from the CDR analysis. The Chart A shows the
inter-linkages of the named accused inter se and Chart B show-
ing the inter-linkages of the named accused with others and the
G frequency of their interaction on phone during the relevant
period. The charge against respondent is not limited to Section
17 of the 1967 Act regarding raising funds for terrorist acts but
also in reference to Sections 13, 16, 18, 20, 38, 39 and 40 of the
1967 Act. Section 13 is in Chapter II of the 1967 Act. The
special provisions regarding bail under Section 43D(5), however,
H are attracted in respect of the offences punishable under
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1065
SHAH WATALI

Chapters IV and VI, such as Sections 16, 17, 18, 20, 38, 39 and A
40 of the 1967 Act. Sections 39 and 40 form part of Chapter VI,
whereas other sections (except Section 13) form part of Chapter
IV to which the subject bail provisions are applicable, mandating
the recording of satisfaction by the Court that there are
reasonable grounds for believing that the accusation against such
B
person is prima facie true. The accusation against the
respondent (Accused No.10) is that accused A-3 to A-10 are part
of the All Parties Hurriyat Conference which calls itself a
political front, whereas their agenda is to create an atmosphere
conducive to the goal of cessation of J & K from the Union of
India. The role attributed to the respondent (Accused No.10) is C
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.
D
[Paras 24-28][1102-E-H; 1112-E-F; 1113-C-E]
1.5 The seizure memo described as document D-3/6, in
respect of search and seizure of articles/documents seized from
the premises of the respondent (Accused No.10) dated 3rd June,
2017, would unravel the activities of the respondent, including
regarding his financial deals. Another crucial document described E
as D-3g/20 is a contact diary seized from the respondent vide
Memo D-3, which contains the Pakistan National name and
contact “TS 0092425765022…26A” whose name figures in
document D-132(a)/23. The Code “0092” pertains to Pakistan.
Another contact diary was seized from the respondent vide F
Memo D-3, which, at page D-3h/28 contains the same name and
contact, namely, “TS 00923008459775/ 0092425765022”. The
documents D-3j to D-3j/5 also indicate the involvement of the
respondent in terrorist activities, including that three cases of
TADA have been registered against him in the past and
investigated and one case of J & K PSA, 1978. The High Court G
erroneously proceeded on the premise that the charge-sheet
makes no reference to any other criminal case against the
respondent. Additionally, the charge-sheet is accompanied with
documents D-9b and D-9c, which are photographs of ex-militant
H
1066 SUPREME COURT REPORTS [2019] 5 S.C.R.

A A-3 holding AK-47, seen with other terrorists. These photographs
were seized from the residence of the said ex-militant on 3rd June,
2017. The prosecution case is that the respondent (Accused
No.10) was in constant touch with the said ex-militant A-3, as
noticed from the inter-linkage chart. That fact is backed by the
CDR analysis report, also part of the charge-sheet. The
B
charge-sheet also contains document D-185/10, which is a
contact list of accused A-5 retrieved through forensic analysis,
having mobile numbers of persons associated with Hurriyat party;
and of one ‘MCP’ who is none other than the First Secretary of
Pakistan High Commission. His name also figures in document
C D-132(a)/23. The Designated Court, besides adverting to the
aforementioned documents, also adverted to other documents
and the statements of the prospective witnesses (Ws-1, 28, 29,
38, 39, 43, 44, 48 and 52). The High Court has not appreciated
the said material which found favour with the Designated Court
to record its opinion that there are reasonable grounds for
D
believing that the accusation against the respondent is prima facie
true. The High Court adopted a tenuous approach - by first
discarding the document D-132(a) and then discarding the
statement of witnesses recorded under Section 161 and also the
statements recorded under Section 164, presented by the
E Investigating Agency in a sealed cover. The High Court ought to
have taken into account the totality of the materials/evidences
which depicted the involvement of the respondent in the
commission of the stated offences and being a member of a larger
conspiracy, besides the offence under Section 17 for raising funds
for terrorist activities. Proviso to Section 43D(5) of the 1967 Act
F
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.
G 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
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1067
SHAH WATALI

under the first part of the proviso of no bail in such cases would A
operate. The fact that there is a high burden on the accused in
terms of the special provisions contained in Section 43D(5) to
demonstrate that the prosecution has not been able to show that
there exists reasonable grounds to show that the accusation
against him is prima facie true, does not alter the legal position
B
expounded in K. Veeraswami, to the effect that the charge-sheet
need not contain detailed analysis of the evidence. It is for the
Court considering the application for bail to assess the material/
evidence presented by the Investigating Agency along with the
report under Section 173 of Cr.P.C. in its entirety, to form its
opinion as to whether there are reasonable grounds for C
believing that the accusation against the named accused is prima
facie true or otherwise. [Paras 29-31][1121-F-H; 1122-A-H;
1123-B-F]
1.6 The Designated Court had rightly rejected the bail
application after adverting to the relevant material/evidence D
indicative of the fact that there are reasonable grounds for
believing that the accusation against the respondent is prima facie
true. The issue of admissibility and credibility of the material and
evidence presented by the Investigating Officer would be a
matter for trial. The High Court, in the present case, adopted an
inappropriate approach whilst considering the prayer for grant of E
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 F
material, but only form opinion on the basis of the material
before it on broad probabilities. The Court is expected to apply
its mind to ascertain whether the accusations against the accused
are prima face true. [Paras 33-35][1128-E-F; 1129-B; E-G]
1.7 The Designated Court rightly opined that there are G
reasonable grounds for believing that the accusation against the
respondent is prima facie true. The order passed by the High
Court granting bail to the respondent is reversed. In the present
case, the respondent is not entitled to grant of bail in connection
with the stated offences, particularly those falling under
H
1068 SUPREME COURT REPORTS [2019] 5 S.C.R.

A Chapters IV and VI of the 1967 Act. The impugned judgment
and order is set aside and, instead, the order passed by the
Designated Court rejecting the application for grant of bail made
by the respondent herein, is affirmed. [Paras 36-38][1130-A-D]
K. Veeraswami v. Union of India and Ors. (1991) 3 SCC
B 655 : [1991] 3 SCR 189 – followed.
Salim Khan v. Sanjai Singh and Anr. (2002) 9 SCC 670;
Ranjitsing Brahmajeetsing Sharma v. State of
Maharashtra and Anr. (2005) 5 SCC 294 : [2005] 3
SCR 345 – relied on.
C Hitendra Vishnu Thakur and Ors. v. State of
Maharashtra and Ors. (1994) 4 SCC 602 : [1994] 1
Suppl. SCR 360 ; Niranjan Singh Karam Singh Punjabi,
Advocate v. Jitendra Bhimraj Bijjaya and Ors. (1990)
4 SCC 76 : [1990] 3 SCR 633 ; Manohar Lal Sharma
D v. Union of India (2017) 11 SCC 783 ; Jayanta Kumar
Ghosh and Ors. v. State of Assam and Anr. (2010) 6
Gauhati Law Reports 727 ; Davender Gupta v.
National Investigating Agency (2014) SCC Online AP
192 ; Sanjay Chandra v. CBI AIR 2012 SC 830 :
[2011] 13 SCR 309 ; Central Bureau of Investigation
E v. V. C. Shukla and Ors. (1998) 3 SCC 410 : [1998] 1
SCR 1153 ; Chenna Boyanna Krishna Yadav v. State
of Maharashtra and Anr. (2007) 1 SCC 242 : [2006]
10 Suppl. SCR 381 ; State of U.P. through CBI v.
Amarmani Tripathi (2005) 8 SCC 21 : [2005] 3 Suppl.
F SCR 454 ; Khoday Distilleries Ltd. and Ors. v. State of
Karnataka and Ors. (1995) 1 SCC 574 : [1994] 4 Suppl.
SCR 477 – referred to.
Case Law Reference
[1994] 1 Suppl. SCR 360 referred to Para 3
G
[1990] 3 SCR 633 referred to Para 3
(2017) 11 SCC 783 referred to Para 3
(2010) 6 G. L.Reports 727 referred to Para 3

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1069
SHAH WATALI

[1991] 3 SCR 189 followed Para 8 A
[2011] 13 SCR 309 referred to Para 12
(2002) 9 SCC 670 relied on Para 13
[1998] 1 SCR 1153 referred to Para 14
[2005] 3 SCR 345 relied on Para 14 B
[2006] 10 Suppl. SCR 381 referred to Para 14
[2005] 3 Suppl. SCR 454 referred to Para 15
[1975] 3 SCR 839 referred to Para 23
C
[1994] 4 Suppl. SCR 477 referred to Para 34
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 578 of 2019
From the Judgment and Order dated 13.09.2018 by the High Court
of Delhi at New Delhi in Criminal Appeal No. 768 of 2018. D
K.K. Venugopal, Attorney General, R. Balasubramanian,
Ms. Suhasini Sen, Suchindran Bhaskar Narayan, Surinder Singh
(Sr. P. P./ NIA), B. V. Balaram Das, Advs. for the Appellant.
Shekhar Naphade, R. A. Jan, Sr. Advs., Shariq J. Reyaz, Abhikalp
Pratap Singh, Ms. S. Lakshmi Iyer, Shakil Ahmed Syed, Advs.for the E
Respondent.
The Judgment of the Court was delivered by
A. M. KHANWILKAR, J. 1. Leave granted.
2. The respondent is named as Accused No.10 in the First Infor- F
mation Report dated 30th May, 2017, registered by the Officer-in-charge
of Police Station, NIA, Delhi, for offences punishable under Sections
120B, 121 and 121A of the Indian Penal Code (“IPC”) and Sections
13,16,17,18,20,38,39 and 40 of the Unlawful Activities (Prevention) Act,
1967, (for short “the 1967 Act”). The respondent (Accused No.10)
G
filed an application for bail before the District and Sessions Judge,
Special Court (NIA), New Delhi, which came to be rejected on 8th June,
2018. That order has been reversed by the High Court of Delhi at New
Delhi in Criminal Appeal No.768/2018 vide order dated 13 th September,
2018. The High Court directed release of the respondent on bail subject
H
1070 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B 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
C property including by burning schools etc. It then noted that the
accusation against the respondent (Accused No.10) was of being a part
of a larger conspiracy to systematically upturn the establishment to cause
secession of J & K from the Union of India. Keeping in mind the
special provisions in Section 43D of the 1967 Act and the exposition in
D 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:
E “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
F abroad/ terrorist A-1/ High Commission, Pakistan/ Dubai/other
sources and that there were, unaccounted financial transactions,
is prima facie borne out from statement of the witnesses PW1,
PW28 and PW29 and documents including D-202 & D-214. It
has also come in the statements of PW38 & PW39, who prepared
G balance sheets of accused’s firms/companies namely Trison Farms
and Constructions Pvt. Limited, M/s Trison International, M/s Yasir
Enterprises, M/s 3Y, M/s Kashmir Veneer Industries & M/s Three
1
(1994) 4 SCC 602
2
(1990) 4 SCC 76
3
(2017) 11 SCC 783
H 4
(2010) 6 Gauhati Law Reports 727
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1071
SHAH WATALI [A. M. KHANWILKAR, J.]

Star, that the accused never produced any supporting documents A
with respect to remittances received from NZ-International 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
B
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:
C
“7.8 The fact that the accused received money from abroad /
A-1, chief of proscribed (terrorist) organization, HCP (High
Commission, Pakistan) and others and was passing on the said
funds to Hurriyat leaders, is prima facie borne out from D-152
read with statement of PW29 and D-154 (Expert’s Report), as
per which the signatures of the accused on D-152 were compared D
with his admitted handwriting and were verified and found to be
similar. In view of the same, the Ld. Defence counsel’s argument
that the said document/ D-152 cannot be looked into at all even to
form prima facie opinion, cannot be accepted. Thus, the judgment
of Hon’ble Supreme court in Manohar Lal Sharma’s Case E
(Supra), relied upon Ld. Defence counsel is also of no assistance
to the accused.
7.9 Further, the association/proximity of Altaf Ahmad Shah @
Fantoosh (A-4), Farooq Ahmad Dar @ Bitta Karate (A-6) with
accused, is also prima facie borne out from the statement of F
protected witness PW48. Accused’s links with people who have
role in governance of Pakistan and with Hurriyat leaders has also
prima facie come on record vide statement of PW52, documents
D-3, D-4 (e) etc. and other material on record.
7.10 In view of the above facts and circumstances, the statements G
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

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1072 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B 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.”
C 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
D by the accused, he was provided medical treatment from time to
time. Pursuant to the directions of this court, the accused was
taken to the premier medical institute of India/AIIMS for necessary
medical examination. This was besides being provided appropriate
medical attention to Jail hospital and in-patient treatment at Dr.
E 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,
F severe low back pain and bleeding per-rectum on 24.09.2017, the
accused was admitted to M.I. Room, Dispensary, Central Jail
No. 8/9 from 24.09.2017 to 26.09.2017. Vide subsequent report
dated 11.10.2017, Medical Officer I/c, Central Jail Tihar,
Dispensary 8/9, reported that the accused was getting treatement
G 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.

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1073
SHAH WATALI [A. M. KHANWILKAR, J.]

8.3 It has also come in order sheet dated 03.01.2018 that as per A
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
B
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 C
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 D
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.” E
5. The respondent carried the matter before the High Court by
way of Criminal Appeal No.768 of 2018 under Section 21(1) read with
Section 21(4) of the National Investigation Agency Act, 2008. The High
Court noticed that after filing of the charge-sheet, accused Nos.11 and
12 had been granted regular bail, while accused Nos.1 and 2 had not F
been arrested. Rest of the accused, including the respondent (Accused
No.10), were in judicial custody. The respondent (Accused No.10) was
arrested on 17th August, 2017 and had been in judicial custody since
then. His age, as indicated in the charge-sheet, was about 70 years. The
High Court then adverted to paragraph 17.6.5 onwards of the
charge-sheet [report under Section 173 of the Code of Criminal G
Procedure (Cr.P.C.)] and summarized the allegations against respon-
dent (Accused No.10) as follows:
“18. Specific to the Appellant are the allegations made in
Paragraph 17.6.5 of the charge-sheet which is subtitled ‘Hawala’.
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1074 SUPREME COURT REPORTS [2019] 5 S.C.R.

A This being the principal allegation against the Appellant, requires
to be summarized as under:
(i) The Appellant is one of the conduits to bring money from
off-shore locations of India to fuel anti-India activities in Jammu
and Kashmir. Reference is again made to the same incriminating
B document i.e. D No.132 (a).
(ii) A-10 was bringing money from off-shore locations to India
“by layering it through the scores of firms and companies he has
opened”. Reference is made to an NRE account of the Appellant
at the J&K Bank where, from 2011 till 2013, he is said to have
C 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
D 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
E 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”.
F
(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
G 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

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1075
SHAH WATALI [A. M. KHANWILKAR, J.]

as the absolute owner of the land. Mr. Kapoor remitted a total A
sum of Rs.5.579 crores in 22 instalments between 2013 and 2016
to the Appellant.
(vi) During investigation it was revealed that no land exists in the
name of TFCPL as per the balance sheet of that company.
Further, it was ascertained that Rs.5,57,90,000 was mobilized by B
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”. C

(vii) The Chartered Accountant (‘CA’) who signed the audited
balance sheet of M/s Trison International., TFCPL and M/s Yasir
Enterprises for various years between 2013-14 and 2015-16 “did
so without seeing any supporting documents”. According to the
NIA, the balance sheets of the above entities/companies were D
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. E
(viii) TFCPL raised an unsecured loan of Rs.2,65,55,532/- from
the Directors of the company, i.e. the Appellant, his wife, and his
three sons in the Financial Year (‘FY’) 2010-11 in the form of
both cash and cheque and this was used to repay the secured
loan of Rs.2,94,53,353/- in the books of J&K Bank. The source F
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 G
Appellant “shows his proximity with Pakistani Establishment”. It
is stated that the name of Tariq Shafi figures in the document of
foreign contributions seized from the house of the Appellants
cashier-cum-accountant Ghulam Mohd. Bhatt.”

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1076 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 6. The High Court also adverted to the accusations against
respondent (Accused No.10) in paragraphs 17.9 and 17.10 of the charge-
sheet, to the effect that CDRs relied upon by the prosecution revealed
that the accused persons were in contact “with each other, with some
militants/OGWs (Over Ground Workers) and the hawala conduit” i.e.
the respondent (Accused No.10) and the other accused, that the
B
respondent (Accused No.10) was in constant contact on telephone with
A-3, A-4, A-5 and A-6 and that A-3 to A-12 were in contact with each
other, either directly or indirectly. In paragraph 17.10 of the charge-
sheet, it is stated that respondent (Accused No.10) was a known hawala
dealer and financer and a number of cases were registered against him,
C which were being investigated by the sister investigating agencies. The
High Court, however, noted that the charge-sheet neither gave details of
the other cases registered and being investigated against the respondent
nor revealed the details thereof to the Court. The High Court also noted
accusations against the respondent (Accused No.10) in paragraphs 18.10,
18.13 and 18.14, revealing the linkage between A-3 to A-10 and
D
indicating clear meeting of minds of the said accused in hatching the
conspiracy in support of A-1 and A-2 and other Hurriyat leaders and
other terrorist organizations in J & K.
7. After noting the relevant facts emanating from the
charge-sheet filed against the respondent, the High Court adverted to
E 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
F 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
G observed that the statements of the proposed/prospective witnesses
recorded under Section 161 Cr.P.C. did not constitute admissible
evidence. Those could only be used to confront the witnesses who would
subsequently appear at the trial. It noted that this crucial aspect had to
be kept in view while referring to such statements at that stage. The
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1077
SHAH WATALI [A. M. KHANWILKAR, J.]

High Court then noted that the Investigating Agency had recorded the A
statements of the witnesses under Section 164 of Cr.P.C. but had kept
the same in a sealed cover enclosed to the charge-sheet. The High
Court noted that the statements at serial Nos.277 and 278 were of
protected witnesses “Charlie” and “Romeo” respectively, and those at
serial Nos.279 to 284 were described as statements of protected
B
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 C
before the Designated Court. Here, it may be mentioned that during the
pendency of the present appeal before this Court, the said application
has been decided in favour of the Investigating Agency vide order dated
11th January, 2019 passed by the Designated Court. We shall refer to
this a little later.
D
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 E
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
charge-sheet, 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 F
opined that even in respect of statements recorded under Section 161 of
Cr.P.C., there was no wholesale exclusion of the entire 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 G
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
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1078 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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 charge-sheet
made no reference to the statements recorded under Section 164 of the
witnesses in respect of whom protection was sought by the
B
Investigating Agency. The High Court distinguished the decision of this
Court in K. Veeraswami Vs. Union of India and Ors.5 pressed into
service by the Investigating Agency to buttress its submission that it is
not necessary that the charge-sheet must contain detailed analysis of
the evidence, and that the Trial Court ought to consider not only the
C 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,
D
the absence of any reference in the charge-sheet 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
E Section 164 Cr.P.C. were kept out of consideration by the High Court,
with liberty to the parties to independently make submissions before the
Trial Court at the appropriate stage.
9. The High Court then straightaway proceeded to analyse the
efficacy of document D-132(a) forming part of the charge-sheet. In
F 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 D-132(a) was recovered from the
residence of Ghulam Mohammad Bhatt till 16th August, 2017, and
thereafter proceeded to observe thus:
G “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
5
H (1991) 3 SCC 655
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1079
SHAH WATALI [A. M. KHANWILKAR, J.]

the purpose of deciding whether the Appellant can be released on A
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 B
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.
C
64. The above document is also relied upon by the NIA as
providing proof of the linkages of the Appellant to A-1, through
the entry dated 3rd May, 2015 and with the 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 D
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 E
fourth olumn 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 F
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 G
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

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1080 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B 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
C 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
document shows the connection of the Appellant with the other
D 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
E respondent were geared towards funding of terrorist activities, as
alleged in the charge-sheet. 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
F Mir and Shabbir Ahmad Mir, the reply of Mr Mustaq Ahmad Mir
(Ex.D-214), the CFSL report dated 6th November, 2017
(document D-154); the seizure memo dated 3rd June, 2017
(document D-3) regarding the recovery being made from the
residence of the Appellant; the seizure memo of the same date of
G the recoveries from the office of the TFCPL (document D-4);
and the bunch of papers seized from the Appellant [D-4(e)]
referred to by the trial Court.
70. Beginning with the last referred document, [D-4(e)], it is
actually a bunch of documents, the first of which is a letter dated
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1081
SHAH WATALI [A. M. KHANWILKAR, J.]

28th June, 2016, written by the Prime Minister of Pakistan A
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 B
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 (confidence building measures) in the
recent past to provide respite to the Kashmiris on both sides of
the LoC (Line of Control): C

‘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 D
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 Al-Shafi Group of
companies, headquartered at Lahore. A business invitation was E
extended to the Appellant on 7th February, 2014 by Mohd. Tariq
Shafi, the director of Al-Shafi 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. F
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 Indo-Pakistan trade. Nothing has been shown to
this Court from the entire bunch of documents which would G
suggest that these trade activities were geared toward funding of
terrorist activities, as alleged in the charge-sheet.”
11. The High Court then adverted to the statements of Mustaq
Ahmad Mir and Shabbir Ahmad Mir and noted that the same had no
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1082 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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 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,
B
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
C Investigating Agency did not persuade the Court to prima facie
conclude that the respondent received money from A-1 or Pakistan High
Commission or others and was passing on the said funds to the Hurriyat
leaders for funding terrorist activities and stone-pelting. The High Court
also adverted to the statement of the ‘protected witness’ W-48 about
the proximity of the respondent (Accused No.10) with A-4 and A-6 and
D
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 activities was prima facie true. Lastly, the
High Court dealt with transaction of lease involving Naval Kishore Kapoor
and noted thus:
E “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
F 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 A-6 but not
between the Appellant and A-3, A-4 or A-5. This cannot at this
stage be said to constitute material to show that the accusation of
G a criminal conspiracy between the Appellant and A-6 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.”
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1083
SHAH WATALI [A. M. KHANWILKAR, J.]

12. Having said thus, the High Court proceeded to conclude that A
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
B
respondent who was a septuagenarian and was suffering from various
medical 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 C
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 D
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 E
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. F
(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 G
Court at the time of execution of the bail bonds. He will not

6
(2014) SCC Online AP 192
7
AIR 2012 SC 830
H
1084 SUPREME COURT REPORTS [2019] 5 S.C.R.

A travel out of the country without prior permission of the trial
Court.
(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.
B 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
C 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
D 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
E 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 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
F (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
G 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

8
H (2002) 9 SCC 670
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1085
SHAH WATALI [A. M. KHANWILKAR, J.]

bordering on being perverse as it has virtually conducted a mini trial at A
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 made against
B
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 C
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
D
(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 Agency were not enough to E
sustain the accusations, much less as being prima facie true. It is
submitted that the accusations made against the respondent in the
charge-sheet do not fall under Chapters IV and VI of the 1967 Act.
Further, the pivotal document D-132(a) was not sufficient to fasten any
criminal liability upon the respondent. As a matter of fact, the said F
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 G
document. Further, there is no independent corroboration forthcoming
much less to establish the complicity of the respondent in attracting the

9
(1998) 3 SCC 410
H
1086 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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 @ 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 charge-sheet. The statements of witnesses
recorded under Section 161 or Section 164 of Cr.P.C. do not mention
B
anything about the involvement of the respondent in commission of the
stated offences. The statements of the co-accused cannot be consid-
ered 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
C 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
D
fault can be found with the High Court and 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.
E 15. Before we proceed to analyse the rival submissions, it is
apposite to restate the settled legal position about matters to be consid-
ered 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)
F severity of the punishment in the event of conviction; (iv) danger of the
accused absconding or fleeing, if released on bail; (v) character, behaviour,
means, position and standing of the accused; (vi) likelihood of the
offence being repeated; (vii) reasonable apprehension of the witnesses
being tampered with; and (viii) danger, of course, of justice being thwarted
by grant of bail. (State of U.P. through CBI Vs. Amarmani Tripathi12).
G
16. When it comes to offences punishable under special
enactments, such as the 1967 Act, something more is required to be kept
10
(2005) 5 SCC 294
11
(2007) 1 SCC 242
12
(2005) 8 SCC 21 (para 18)
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1087
SHAH WATALI [A. M. KHANWILKAR, J.]

in mind in view of the special provisions contained in Section 43D of the A
1967 Act, inserted by Act 35 of 2008 w.e.f. 31st December, 2008. Sub-
sections (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 B
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 C
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) D
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 sub-sections (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 E
entered the country unauthorisedly or illegally except in very
exceptional circumstances and for reasons to be recorded in
writing.”
17. By virtue of the proviso to sub-section (5), it is the duty of the
Court to be satisfied that there are reasonable grounds for believing that F
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
G
as well. Notably, under the special enactments such as TADA, MCOCA
and the Narcotic Drugs and Psychotropic Substances Act, 1985, the

H
1088 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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 re-
corded for the purposes of the 1967 Act that there are reasonable grounds
B
for believing that the accusation against such person is “prima facie”
true. By its very nature, the expression “prima facie true” would mean
that the materials/evidence collated by the Investigating Agency in ref-
erence to the accusation against the concerned accused in the first in-
formation report, must prevail until contradicted and overcome or dis-
C proved 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
D
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
E application or framing of charges in relation to offences under the 1967
Act. Nevertheless, we may take guidance from the exposition in the
case of Ranjitsing Brahmajeetsing Sharma (supra), wherein a three-
Judge 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:
F
“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,
G 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.

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1089
SHAH WATALI [A. M. KHANWILKAR, J.]

38. We are furthermore of the opinion that the restrictions on the A
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
B
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 C
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:
“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 D
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 prosecu-
tion to obtain a judgment of conviction of the applicant. Such can- E
not 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 F
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 G
nature and manner in which he is alleged to have committed the
offence.

H
1090 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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.
B 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 sub-section
(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
C 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
D case on the basis of evidence adduced at the trial, without in any
manner being prejudiced thereby.
47. In Kalyan Chandra Sarkar v. Rajesh Ranjan13 this Court
observed: (SCC pp. 537-38, para 18)
‘18. We agree that a conclusive finding in regard to the points
E 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
F 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.’
G 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

13
(2004) 7 SCC 528
14
(2001) 6 SCC 338
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1091
SHAH WATALI [A. M. KHANWILKAR, J.]

orders on bail application are appealable, more so because of A
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
B
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 C
circumstances, the Court was duty-bound 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 non-consideration of these vital facts
D
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 which appealed to the High Court
to grant bail was the fact that a large number of witnesses are E
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
F
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. 21-22, para 16)
‘16. … The considerations which normally weigh with the court G
in granting bail in non-bailable 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
15
(2005) 2 SCC 13
16
(1962) 3 SCR 622
17
(1978) 1 SCC 118 H
1092 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B
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 non-grant of bail - is markedly
different from discussing merits or demerits of the evidence. The
elaborate examination or dissection of the evidence is not required to be
C done at this stage. The Court is merely expected to record a finding on
the basis of broad probabilities regarding the involvement of the accused
in the commission of the stated offence or otherwise. 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
D 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
E 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-
F sheet already filed against the respondent is, in our opinion, in complete
disregard of the duty of the Court to record its opinion that the
accusation made against the concerned accused is prima facie true or
otherwise. That opinion must be reached by the Court not only in
reference to the accusation in the FIR but also in reference to the
contents of the case diary and including the charge-sheet (report under
G 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
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1093
SHAH WATALI [A. M. KHANWILKAR, J.]

accused on the basis of the FIR registered against him, but before filing A
of the charge-sheet by the Investigating Agency; after filing of the first
charge-sheet and before the filing of the supplementary or final charge-
sheet consequent to further investigation under Section 173(8) Cr.P.C.,
until framing of the charges or after framing of the charges by the Court
and recording of evidence of key witnesses etc. However, once charges
B
are framed, it would be safe to assume that a very strong suspicion was
founded upon the materials before the Court, which prompted the Court
to form a presumptive opinion as to the existence of the factual
ingredients constituting the offence alleged against the accused, to jus-
tify the framing of charge. In that situation, the accused may have to
undertake an arduous task to satisfy the court that despite the framing C
of charge, the materials presented along with the charge-sheet (report
under Section 173 of Cr.P.C.), do not make out reasonable grounds for
believing that the accusation against him is prima facie true. Similar
opinion is required to be formed by the Court whilst considering the
prayer for bail, made after filing of the first report made under Section
D
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 E
inadmissible in evidence, is not permissible. For, the issue of admissibility
of the document/evidence would be a matter for trial. The Court must
look at the contents of the document and take such document into
account as it is.
20. The question is whether there are reasonable grounds for F
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 charge-sheet (pending further G
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:
H
1094 SUPREME COURT REPORTS [2019] 5 S.C.R.

A NIA CASE NO.RC-10/2017/NIA/DLI
TERROR FUNDING IN JAMMU & KASHMIR

EVIDENCES FILED WITH CHARGE-SHEET
(Excluding Supplementary Charge sheet)
B Against Accused Zahoor Ahmed Shah Watali (A-10)
Exhibit Details of Documents
D-1 Order no.11011/26/2017-IS.IV, dated 30.05.2017 of Sh. N.S.
Bisht, Under Secretary, GOI, MHA, New Delhi.
D-2 FIR No.RC-10/2017/NIA/DLI dated 30.05.2017, PS NIA New
Delhi.
C D-3 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 (A-10).
D-3a Income Tax Returns of Three Star Enterprises seized from the
premises of accused Zahoor Ahmed Shah Watali (A-10) dated
03.06.2017.
D-3b Income Tax Returns of Trisons Farms and Construction Pvt. Ltd.
D
seized from the premises of accused Zahoor Ahmed Shah Watali
(A-10) dated 03.06.2017.
D-3c Acknowledgment ITR-4 of Yamin Zahoor Shah seized from the
premises of accused Zahoor Ahmed Shah Watali (A-10) dated
03.06.2017.
D-3d Acknowledgment ITR-4 of Yawar Zahoor Shah seized from the
E premises of accused Zahoor Ahmed Shah Watali (A-10) dated
03.06.2017.
D-3e Income Tax Returns of M/s Three Y seized from the premises of
accused Zahoor Ahmed Shah Watali (A-10) dated 03.06.2017.
D-3f Income Tax Returns in respect of Yasir Enterprises seized from
the premises of accused Zahoor Ahmed Shah Watali (A-10) dated
F 03.06.2017.
D-3g One blue colour small pocket diary seized from the premises of
accused Zahoor Ahmed Shah Watali (A-10) dated 03.06.2017.
D-3h One blue booklet containing I.D.D Codes and Phone numbers
seized from the premises of accused Zahoor Ahmed Shah Watali
(A-10) dated 03.06.2017.
G D-3i A bunch of papers related to Pakistan Steel Mill Corp. Ltd. seized
from the premises of accused Zahoor Ahmed Shah Watali (A-10)
dated 03.06.2017.
D-3j A bunch of papers containing Court documents related to Zahoor
Ahmad Shah Watali seized from the premises of accused Zahoor
Ahmed Shah Watali (A-10) dated 03.06.2017.
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1095
SHAH WATALI [A. M. KHANWILKAR, J.]

A
D-3k A bunch of papers containing Misc. documents related to Zahoor
Ahmed Shah seized from the premises of accused Zahoor Ahmed
Shah Watali (A-10) dated 03.06.2017.
D-3l A bunch of papers containing various letter heads related to Zahoor
Ahmad seized from the premises of accused Zahoor Ahmed Shah
Watali (A-10) dated 03.06.2017.
D-4 Production cum Seizure Memo dated 03.06.2017 regarding the B
seizure of documents/articles from the office of accused Zahoor
Ahmad Shah Watali (A-10) i.e. Trison Farms and Construction Pvt.
Ltd.
D-4a 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 C
with Passport details of Zahoor Ahmad Shah Watali (A-10) and his
family members seized from the office of accused Zahoor Ahmad
Shah Watali i.e. Trison Farms and Construction Pvt. Ltd.
D-4b 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 (A-10) i.e. Trison Farms and D
Construction Pvt. Ltd.

D-6c One blue Colour Diary “Evergreen Traders” seized from the
premises of accused Altaf Ahmad Shah @ Fantoosh (A-4) on
03.06.17.
D-6e A press Note containing anti India talks seized from the premises of
accused Altaf Ahmad Shah @ Fantoosh (A-4) on 03.06.17. E
D-6f 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 (A-4) on
03.06.17.
D-6g One paper containing details of amount received from chairman and
others showing an amount of Rs.1,15,45,000/- seized from the F
premises of accused Altaf Ahmad Shah @ Fantoosh (A-4) on
03.06.17.
D-7a Two letters dated 10.03.2006 and 17.03.2006) written by the Area
Commander of Hizbul Mujahideen (HM) to accused Nayeem Khan
(A-5) seized from the house of accused nayeem Khan dated
03.06.2017.
D-7b Letter heads of proscribed terrorist organization Lashkar e Toiba G
(LeT), Jammu & Kashmir seized from the house of accused
Nayeem Khan (A-5) dated 03.06.2017.
D-7c Letter written to Pakistan Embassy by accused Nayeem Khan (A-5)
for recommending Visa to visit Pakistan seized from the house of
accused Nayeem Khan dated 03.06.2017.
H
1096 SUPREME COURT REPORTS [2019] 5 S.C.R.

A
D-7d Letter heads of National Front containing pro Pak and anti-
India talks in urdu seized from the house of accused Nayeem
Khan (A-5) dated 03.06.2017.
D-7e One letter head of Mujahidin Jammu & Kashmir seized from
the house of accused Nayeem Khan (A-5) dated 03.06.2017.
B D-7g 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 (A-5) dated 03.06.2017.
D-9a Hand written (Urdu) letters from LeT on the letter head titled
as “Lashkar-e-Tuibah Jammu Kashmir Head Office
C Muzafarabad.” seized from the house of accused Shahid-ul-
Islam @ AftabHilali Shah (A-3) on 03.06.2017.
D-9b A photograph of Aftab Hilali Shah @ Shahid-ul-Islam holding
AK-47 with other cadres seized from the residence of
AftabHilali Shah @ Shahid-Ul-Islam (A-3) on 03.06.2017.
D-9c Phograph of Aftab Hilali Shah @ Shahid-ul-Islam (A-3) with
D Proscribed terrorist organization Hizbul Mujahiddin Chief
Syed Salahuddin (A-2) seized from the residence of
AftabHilali Shah @ Shahid-Ul-Islam (A-3) on 03.06.2017.
D-9d 04 hand written loose papers seized from the residence of
AftabHilali Shah @ Shahid-Ul-Islam (A-3) on 03.06.2017.
D-9e One letter head in respect of All Parties Hurriyat Conference
E 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 @ Shahid-Ul-Islam (A-3) on 03.06.2017.
D-9g List of active militants (year 2016-17) of different outfits in the
valley seized from the residence of Aftab Hilali Shah @
F Shahid-Ul-Islam (A-3) on 03.06.2017.
D-11d The photocopy of the hand written letter written by Afzal Guru
to SAS Geelani seized from the premises of Mohd. Akbar
Khandey @ Ayaz Akbar (A-7) on 04.06.17.
D-19 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. RC-10/2017/NIA providing details pertaining to
G
case RC-10/2017 to CIO NIA.
D-20 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.

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1097
SHAH WATALI [A. M. KHANWILKAR, J.]

A
D-42 Letter dated 27.06.2017 from TV Today Network Ltd. India
Today Group Mediaplex, Fi lm City, Sector 16A, Noida to
CIO, NIA forwarding exact, true and correct copy of India
Television’s raw footage.
D-43 Letter no. RC-10/2017/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 B
damage to Govt. property as reported in Kashmir Valley since
July, 2016.
D-44 Letter no. 26/Kmr/Ops(B)W/BSF/17/18758 dated 2/3 August
2017 from Director General, BSF (Ops Directorate), New
Delhi t o CIO, NIA details of stone-pelting, burning of schools
& college buildings and damage to Govt. property as reported C
in Kashmir Valley since July, 2016.
D-63 Letter dated 28.08.2017 from Nodal Officer Vodafone, New
Delhi to CIO NIA forwarding certified copies of CDR, CAF
and 65B Cert ificate in respect of mobile Nos. 9796158864 &
9811813796.
D-65 Letter dated 01.12.2017 from Nodal Officer, Reliance Jio D
Infocomm. Ltd., Delhi to CIO, NIA forwarding certified copies
of CDR, CAF and 65B Certificate in respect of mobile nos.
7006046476, 7006208314 & 7889521803.
D-70 The transcripts of the audio-video of sting operation by the
reporters of India Today related to accused Mohd. Nayeem
Khan (A-5).
D-71 The transcripts of the audio-video of sting operation by the E
reporters of India Today related to accused Farooq Ahmad Dar
@ Bitta Karate (A-6).
D-75 Letter No. 22/NIA-III/CIV/CR/17/10275-76 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.
D-127 Letter No. I&O/IMS/T-ACT/3/2015 NIA/10011 dated F
03.08.2017 from Sh. Vishwas Kumar Singh, (W-196), ASP,
I&O, NIA New Delhi to CIO, NIA.
D-130 Seizure memo dated 16.08.2017 in respect of search and
seizure of articles/documents found from the premises of
Ghulam Mohd. Rat her@Gulla (W-29).
D-132 Seizure me mo dated 16.08.2017 in respect of search and G
seizure of articles/documents found from the premises of
Ghulam Mohd. Bhatt (W-29).
D-132a Various miscellaneous papers related financial transactions
seized from the premises of Ghulam Mohd. Bhatt (W-29) on
16.08.2017.

H
1098 SUPREME COURT REPORTS [2019] 5 S.C.R.

A
D-132b One small diary title Arun (11) Notes Pad seized from the
premises of Ghulam Mohd. Bhatt (W-29) on 16.08.2017.
D-132c One green colour diary of 2009 seized from the premises of
Ghulam Mohd. Bhatt (W-29) on 16.08.2017.
D-132e One brown colour diary of 2010 seized from the premises of
B Ghulam Mohd. Bhatt (W-29) on 16.08.2017.
D-132f One dark brown colour diary mark Frankford (A division of
Ultramark group) seized from the premises of Ghulam Mohd.
Bhatt (W-29) on 16.08.2017.
D-133 Seizure memo dated 16.08.2017 in respect of search and seizure
C of articles/documents found from the premises of Ghulam Mohd.
Bhatt@Mohd. Akbar (W-29).
D-135 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.
D-135a One transparent file folder of Trison International group of
D companies seized from the premises of Dr. Peerzada Kaiser
Habeeb Hakeem on 16.08.2017.
D-135b One orange colour file folder of account statement of M/s Three
Star Enterprises for the year of 2005-06 seized from the premises
of Dr. Peerzada Kaiser Habeeb Hakeem on 16.08.2017.
D-135c One Khaki colour folder of Johar Enterprises stamp paper file
E no.47/P seized from the premises of Dr. Peerzada Kaiser Habeeb
Hakeem on 16.08.2017.
D-137 Seizure memo dated 26.08.2017 in respect of search and seizure
of articles/documents found from the office of Zahoor Ahmad
Shah Watali (A-10) i.e. Trison Farms and Construction Pvt. Ltd.
D-137a One ledger and cash book of Trison Farms and construction Pvt.
F Ltd. Baba Dharam Das Complex, Khayam Srinagar for the year
2010-11 seized from the office of Trison farms and construction
private Limited on 26.08.2017.
D-137b One ledger and cash book of M/S Yasir Enterprises, Baghat
Barzullah, Sanat Nagar, Srinagar for the year of 2010-11 seized
G from the office of Trison farms and construction private Limited
on 26.08.2017.
D-137c One ledger and cash book of M/S Three Y, Sanat Nagar,
Srinagar for the year 2010-11 seized from the office of Trison
farms and construction private Limited on 26.08.2017.

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1099
SHAH WATALI [A. M. KHANWILKAR, J.]

A
D-137b One ledger and cash book of M/S Yasir Enterprises, Baghat
Barzullah, Sanat Nagar, Srinagar for the year of 2010-11 seized
from the office of Trison farms and construction private Limited on
26.08.2017.
D-137c One ledger and cash book of M/S Three Y, Sanat Nagar, Srinagar
for the year 2010-11 seized from the office of Trison farms and B
construction private Limited on 26.08.2017.
D-137d One ledger and cash book of M/S Tirson International for the year
2010-11 seized from the office of Trison farms and construction
private Limited on 26.08.2017.
D-137f A bunch of documents related to Enforcement Directorate seized
from the office of Trison farms and construction private Limited on C
26.08.2017.
D-154 Letter report no. CFSL-2017/D-993/3953 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.
D-167 Memoramdum for specimen voice sample in respect of accused D
Mohd. Nayeem Khan (A-5) dated 31.07.2017.
D-168 Memorandum for specimen voice smaple in respect of accused
Farooq Ahmed Dar @ Bitta Karate (A-6) dated 31.07.2017.
D-169 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. E
D-183 Technical analysis report in respect of accused Farooq Ahmad Dar
@ Bitta Karate (A-6) forwarded vide Inter office note No.RC-
10/2017/NIA/DLI/reports/1351 dated 10.12.2017.
D-184 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. F
D-197 Letter No.D.III.a/2017-Ops (NIA) dated 25.07.2017 from 2 I/C
(Ops/Int.), Office of Inspector General CRPF, Brein Nishat,
Srinagar, J&K to CIO NIA.
D-204 Original agreement documents between M/s Trison Farms and Mr.
Nawal Kishore Kapoor dated 07.11.2014.
D-205 Notice under section 43 (F) UA(P) Act dated 30.11.2017 to Nawal
Kishore Kapoor (W-28) for furnishing information/document from
G
Insp T TBhutia, NIa, New Delhi.
D-206 Reply dated 4.12.201of Notice under section 43(f) of UA(P) Act
dated 30.11.2017 from Nawal Kishore Kapoor (W-28).

H
1100 SUPREME COURT REPORTS [2019] 5 S.C.R.

A D-207 Notice to witn ess under Sectio n Cr.P.C.& 43 (F) of UA (P) Act
dated 07.1 1.2017 t o C VO, SBI, Mumbai to provid e bank accoun t
details of account no.2 747240 19 of Nawal Kis ho re Kapoor (W-
28 ) from Sh J yotiraditya, DC .
D-208 Letter No. Gen/2017-18/46 dated 18.11.2017 from Asst. General
Manager, SB I NRI B ranch, Jalandhar, P unj ab forwarding certified
copi es of accou nt opening form and acco unt statem ent of account
B nu mber 20 074724 019 of Nawal Kish ore Kapoor (W-28).
D-211 Letter No. F.No . ITO/W-3(4) Antg/201 7-18 /3540 dated
20 .10.2017/11.12.2017 from Income Tax Officer, Anan tnag
cont aining income tax return details for last s ix years in respect of
accused Zahoor Ahmad S hah Watali (A-10).
D-212 Produ ction cum receipt memo dated 17.11.201 7 related to
do cu ments pro duced by Naval Ki sho re Kapoor (W-28) along with
do cu ments.
C
D-220 Produ ction cum R eceipt Memo dated 14.12.2017 relat ed to
production of copy of tex t au dit reports and audit financial
statements of Ms . Trison Farm s and C onstruction Pvt. Ltd. Etc.
al ong with received documents.
D-222 Inter office Note No.I&O/IMS/ DE/33/201 7/NIA/ 722 dated
17 .01.2017 from Inspector S.K. Tyagi, IMS to CIO NIA
forwarding 03 video clips Indenti fying the voice o f Hafiz Saeed
D al ong certificate 6 5 B of IEA.
D-224 Letter No.F . No. T-3/1/ FE/SR ZO/2013 dated 12 .12.17 from Sh .
Sharad Kumar, (W -1) Assis tant Directo r, Di rectorate of
Enfo rcem ent, Government of India, Durani Hou se R ajbagh,
Srinagar t o Sh. Ajeet Singh, SP NIA (W -229) forward ing
al ongwith enclosures therein proceedi ngs against accused Zahoor
Ahmed S hah W atali (A-1 0) under t he FEMA Act.
E D-248 Letter No. RC-10/2017/NIA/DLI/354 dat ed 11.01.2 018 from Sh.
Rajesh Kumar, Inspector NIA (W -209) to CIO forwarding of
report on internatio nal li nkage, In dia Hit repo rt and repo rt on
Pakistani b ased Hurriyat representative along with 65 -B
Certi ficate.
D-252 No. RC-10/2017/NIA/DLI/ 646 dated 15 .01.2018 received from SI
Sangram Singh, NIA (W-220) pertaining to trans cripts of
F do wnloaded videos .
D-256 Letter No. RC -1 0/201 7/NIA/DLI/57 06 dated 26.12 .2017 to GM
(C M), No dal Officer, B SNL, 4th Fl oor, Telephone Exchan ge,
Trikuta Nagar, Near RBI J ammu, J &K from CIO NIA to provide
CDRs, C AF and 65 C ertificate of mob ile nos. m entioned in the
letter.
D-257 Certi fied co pies of CDRs , C AF and Fo rm 65 B of m obile
nu mbers 9419011561, 9419504376, 9419075468, 941954799 9,
G 94 19006355, 94 19008421, 94 19001097 & 94 69037774 (BSNL
J&K) received from BSNL, J& K.
D-259 Letter of Nod al Officer B harti Airtel Ltd. Fo rwarding certified
copi es of CDR, CAF of mobil e numb ers 9596070530 ,
99 06519595, 84 94071470 & 84910015 61 alongwi th certificate
u/s 6 5B of Indian Evidence Act.”

H (emphasis supplied in italics and bold)
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1101
SHAH WATALI [A. M. KHANWILKAR, J.]

21. During the hearing, emphasis was placed by the learned A
Attorney General on documents D-132, D-132(a)/23, D-3/6, D-3g/20,
D-3h/28, D-3j to D-3j/5, D-9b, D-9c, D-154 and D-185/10. Besides these
documents, our attention was also invited to the statements of Ghulam
Mohammad Bhatt (W-29) dated 30th August, 2017, and 23rd November,
2017, as well as the redacted statements of protected witnesses (“Charlie”,
B
“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 11 th 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 C
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
D
allowed, consider the redacted statements, to form its opinion as to
whether there are 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, E
for recording its opinion. We could have relegated the parties before the
High Court but the counsel appearing for the respondent, on instruc-
tions, 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
F
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. G
22. Accordingly, we have analysed the matter not only in light of
the accusations in the FIR and the charge-sheet or the police report
made under Section 173, but also the documentary evidence and
statements of the prospective witnesses recorded under Sections 161
H
1102 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B 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 au-
thority, appended to the redacted statements would be a matter for trial
C and subject to the evidence in reference to Section 463 of Cr.P.C. and
cannot be overlooked 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.
D 24. After having analyzed the documents and the statements
forming part of the charge-sheet 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
E 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
F dilate on matters which may eventually prejudice the respondent
(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 A-3, A-4, A-5 and A-6 and, likewise, linkages
G between the respondent (Accused No.10) and A-3 to A-12, as revealed
from the CDR analysis. The Chart A showing the inter-linkages of the
named accused inter se and Chart B showing the inter-linkages of the
named accused with others and the frequency of their interaction on
phone during the relevant period are as under:
18
(1975) 1 SCC 559 = AIR 1975 SC 915
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1103
SHAH WATALI [A. M. KHANWILKAR, J.]

A

B

C

D

E

F

G

H
1104 SUPREME COURT REPORTS [2019] 5 S.C.R.

A

B

C

D

E

F

G

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1105
SHAH WATALI [A. M. KHANWILKAR, J.]

25. The summing up of the outcome of the investigation done until A
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:-
B
1. The terrorist and Hurriyat leaders have a close nexus with the
active militants, OGWs and stone-pelters 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.
C
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
D
with Pakistan agencies and also with the Kashmir Cell of the
ISI, the United Jehad Council and the Jamaat-Ud-Dawah.
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 E
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. F
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. G
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.

H
1106 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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,
B eulogise them as ‘martyrs’, hail their anti-India 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.
C
11. To further this conspiracy, the Hurriyat leaders, the terrorists/
terror organizations and stone-pelters are working in tandem
and they are getting financial and logistic support from
Pakistan.”

D 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
E evidence that establishes beyond any reasonable doubt that the
accused persons i.e. the Hurriyat leaders, terrorists and
stone-pelters have been orchestrating violence and unrest in Jammu
& Kashmir as a part of well-planned conspiracy under the overall
patronage and financial support of Pakistani Establishment and
agencies and that all the accused persons were acting in
F
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.
18.2 The documentary evidences seized during various searches
such as letters of the banned terrorist organizations seeking
G
financial assistance from the Hurriyat leaders, blank letterheads
of terror organisations, conversations between Hafiz Saeed @
Burhan Wani, Hafiz Saeed and Asiya Andrabi, support extended

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1107
SHAH WATALI [A. M. KHANWILKAR, J.]

by Hafiz Saeed and Syed Salahuddin to the protest calendars A
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
B
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 C
to India from offshore locations through hawala and accused
A-10 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
D
cash-dealings in LoC barter trade. All this money is used to fund
stone-pelting, 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. E
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 F
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 accused
persons have been incessantly engaged in violence and carrying G
out subversive and secessionist activities in Jammu & Kashmir
by waging a war against the Government of India.

H
1108 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B
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 A-3 to
A-12 are a part of a gang who with the help of A-1 & A-2 and
C 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
D evidences clearly indicates an action plan to instigate general public
to observe strikes, hold anti-India protests through press releases,
social media and use of Immams and mosques. The recovery of
protest calendars from A-4 and the direct impact of such
orchestrated protests have led to enormous loss of life and prop-
erty which have been explained in detail.
E
18.7 The investigation have revealed linkage of A-1 and A-2
with A-3 to A-12 in a web of directions being passed through
e-mails, SMSs, WhatsApp, videos and other means of com-
munication to form a clear nexus between the above accused
and the leaders of Hurriyat Conference. The recovery of a
F 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
G war against Government of India, is clearly established.
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

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1109
SHAH WATALI [A. M. KHANWILKAR, J.]

secessionism and subversive activities prejudicial to the law of A
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
B
through a complex system of hawala transfers and cash
couriers using conduits such as A-10 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. C
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. D
18.9 During the investigation about the past conduct of the
accused, it is ascertained that as A-1 is a designated terrorist
being the head of proscribed terror organisation Lashker-e-Toiba,
A-2 is the head of proscribed organisation Hizb-Ul-Mujahideen.
A-3, A-4, A-5, A-6, A-8, A-9 are former militants with various E
cases of terrorism against them and have been detained under
the Public Safety Act on numerous occasions. A-10 is a known
hawala dealer and financer and has a number of cases
against him which are being investigated by sister
investigation agencies.
F
18.10 The CDR Linkages and technical analysis of social
media clearly establish that the accused A-3 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 A-1 and A-2 as well as other
secessionist leaders of the Hurriyat Conference and other G
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

H
1110 SUPREME COURT REPORTS [2019] 5 S.C.R.

A incidents. It is a terrorist act as defined under UA (P) Act-1967
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
B
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
C 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
D 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
E 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
F 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.
G
18.13 Hence, the accused persons are liable for prosecution
under the following sections of law:-

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1111
SHAH WATALI [A. M. KHANWILKAR, J.]

Name of Liable for prosecution under sections
A
Accused Accused of law
A-1 Hafiz secti on 120B, 121, 121A &124A of IPC,
Muhammad secti on 13, 16, 17, 18, 20, 38, 39 & 40 of
Saeed Unlawful Activities (Preventi on) Act,
1967.
A-2 Mohd. Yusuf secti on 120B, 121, 121A & 124A of IPC,
B
Shah @ Syed secti on 13, 16, 17, 18, 20, 38, 39 & 40 of
Salahuddin Unlawful Activities (Preventi on) Act,
1967.
A-3 Aftab Ahmad secti on 120B, 121, 121A & 124A of IPC,
Shah @ Aftab secti on 13, 16, 17, 18, 20, 39 & 40 of
Hilali Shah @ Unlawful Activities (Preventi on) Act,
Shahid-ul-Islam 1967. C
A-4 Altaf Ahmad secti on 120B, 121, 121A & 124A of IPC,
Shah @ Fantoosh secti on 13, 16, 17, 18, 20, 39 & 40 of
Unlawful Activities (Preventi on) Act,
1967.
A-5 Nayeem Ahmad secti on 120B, 121, 121A & 124A of IPC,
Khan secti on 13, 16, 17, 18, 20, 39 & 40 of
Unlawful Activities (Preventi on) Act, D
1967.
A-6 Farooq Ahmad secti on 120B, 121, 121A & 124A of IPC,
Dar @ Bitta secti on 13, 16, 17, 18, 20, 39 & 40 of
Karate Unlawful Activities (Preventi on) Act,
1967.
A-7 Md. Akbar secti on 120B, 121, 121A & 124A of IPC,
Khanday secti on 13, 16, 17, 18, 20, 39 & 40 of E
Unlawful Activities (Preventi on) Act,
1967.
A-8 Raja secti on 120B, 121, 121A & 124A of IPC,
Mehrajuddin secti on 13, 16, 17, 18, 20, 39 & 40 of
Kalwal Unlawful Activities (Preventi on) Act,
1967.
A-9 Bashir Ahmad secti on 120B, 121, 121A & 124A of IPC, F
Bhat @ P eer secti on 13, 16, 17, 18, 20, 39 & 40 of
Saifullah Unlawful Activities (Preventi on) Act,
1967.
A-10 Zahoor Ahmad secti on 120B, 121, 121A & 124A of IPC,
Shah Watali secti on 13, 16, 17, 18, 20, 39 & 40 of
Unlawful Activities(Prevention)
Act,1967. G
A-11 Kamran Yusuf secti on 120B, 121 & 121A of IP C,
secti on 13, 16, 18 & 20 of Unlawful
Activities (Prevention) Act, 1967.
A-12 Javed Ahmad secti on 120B, 121 & 121A of IP C,
Bhat secti on 13, 16, 18 & 20 of Unlawful
Activities (Prevention) Act, 1967.
H
1112 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B
No.11011/26/2017/IS-IV 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/IS-IV dated
16th January, 2018 for the offences committed outside of India.
18.15 It is therefore, prayed that, the Hon’ble Court may please
C 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 A-1 to A-12 (As per the mentioned in para 18.13), issue
process to the accused persons and try the aforesaid accused
D 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
E 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 part of Chapter IV to
F 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 D-132 is the Seizure Memo of properties seized from
G the premises of Ghulam Mohammad Bhatt (W-29), the then Munshi/
Accountant of the respondent (Accused No.10). Document D-132(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
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1113
SHAH WATALI [A. M. KHANWILKAR, J.]

be a matter for trial. Be that as it may, besides the said document, the A
statement of Ghulam Mohammad Bhatt (W-29) 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 recovered from his
residence showing transfer of substantial cash amounts to different
B
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 C
(Accused No.10) is that accused A-3 to A-10 are part of the All Parties
Hurriyat Conference which calls itself a political front, whereas their
agenda is to create an atmosphere conducive to the goal of cessation of
J & K from the Union of India. The role attributed to the respondent
(Accused No.10) is that of being part of the larger conspiracy and to act
D
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 the funding of terrorist
activities in J & K and, in particular, the involvement of the respondent
(Accused No.10), the charge-sheet mentions as under: E
“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 life-blood. Terror financing provides funds for
recruitment, operationalization of training and training camps, F
procurement of arms and ammunition, operational cost of
planning and resources for terrorist acts, running of underground
networks, well-planned stone pelting, school burnings, targeted
attacks, provision of legal support for terrorists and over-ground
workers facing judicial process, ex-gratia payment for militants G
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
H
1114 SUPREME COURT REPORTS [2019] 5 S.C.R.

A possible sources to fuel unrest and support the on-going
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
B was substantiated by an incriminating document seized from
the house of Ghulam Mohd. Bhatt druing search. Ghulam
Mohd. Bhatt worked as the cashier-cum-accountant with
accused A-10 Zahoor Ahmad Shah Watali, a known Hawala
conduit. The document clearly shows that accused A-10
C Zahoor Ahmad Shah Watali was receiving money from
Accused A-1 Hafiz Saeed (Head of Jamaat-ud-Dawa), from
the ISI, from the Pakistan High Commission at New Delhi
and also from a source based in Dubai. Accused A-10 was
remitting the same to the Hurriyat leaders, separatists and
stone-pelters of Jammu & Kashmir. The said document has
D been 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 A-10 Zahoor Watali.
E The signature of Accused A-10 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
F also surfaced in the scrutiny of the un-edited version of the
audio/video furnished by the office of India Today T.V. News
Channel wherein accused A-5 Nayeem Khan admits that the
secessionists and terrorists of the Valley are receiving financial
support from Pakistan and would have received approximately
G Rs.200 crores to organise anti-India protests and agitations after
the killing of Burhan Wani, the Commander of the proscribed
terror organisation Hizb-ul-Mujahiddin. 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, APHC-G), Mirwaiz Umar Farooq
H (APHC-M) and Yasin Malik (JKLF) are receiving funds from
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1115
SHAH WATALI [A. M. KHANWILKAR, J.]

Pakistan. He further admits the pivotal role played by the A
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,
APHC-G by paying at least 10-12 crores during anti-India
agitation after killing of Burhan Wani. Accused Nayeem Khan
B
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 A-6 Farooq Ahmad Dar Bitta
Karate admitted that the funds are being sent by Pakistan
to the secessionists and terrorists in the Kashmir Valley C
including him for organizing forcible closures, anti-India protests
and processions and stone-pelting on the security forces. He
further claimed that he has 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 D
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. E
iv) Further, the investigation has revealed that the senior-most
officials of the High Commission of Pakistan were in regular con-
tact 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 F
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 A-10 Zahoor Ahmed Shah Watali would act
as a courier to deliver the funds to the Hurriyat leadership. G
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 A-6
Farooq Ahmad Dar @ Bitta Karate:- H
1116 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B
on Friday, 22 March 2013 from 1930 to 2100 hrs.
Venue: R.S.V.P.
2/50-G, Shantipath, Tel. 011-24121819
Chanakyapuri, New Delhi Fax 011-26872339
Dress:National/Lounge Suit/Uniform E-mail:pakhcnd@gmail.com
C

(Please bring this card with you)
Investigation has also established that the accused A-4 was in
direct contact with the High Commissioner of Pakistan in New
D 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
E 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 cashier-cum-accountant with accused A-10 Zahoor
F Watali shows that Zahoor Watali received money from
accused A-1 Hafiz Saeed, Head of JuD and Chief of
proscribed terror organisation Lashkar-e-Toiba and remit-
ted it to the Hurriyat leaders espousing the cause of seces-
sion of Jammu & Kashmir from the Union of India.

G 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
H religious festivals and month of Ramzan. In a well-established
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1117
SHAH WATALI [A. M. KHANWILKAR, J.]

system, the receipt books are printed and funds are collected from A
shopkeepers, businessmen and residents of Kashmir. The money
is also collected to become a member of the Tehreek-e-Hurriyat.
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
B
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 apple-growers and businessmen who are compelled
to donate to Hurriyat central office. This money is used for C
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 A-4 Altaf Ahmad Shah Fantoosh
also shows that money is being raised by way of donations. D
Similarly, records pertaining to the collection of funds were also
seized from the house of accused A-8 Mehrajuddin Kalwal, who
was also the District President of Tehreek-e-Hurriyat for Srinagar
and Ganderbal.
Further, during the course of investigation, it is also established E
that the Hurriyat leadership appeals to the public to contribute
money generously by way of donations for their so-called
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 F
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 G
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
H
1118 SUPREME COURT REPORTS [2019] 5 S.C.R.

A trade by way of directing the Kashmiri traders to do
under-invoicing 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 anti-India propaganda,
for mobilizing the public to organise protests and stone-pelting
B
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 third-party goods,
C under-weighing, under-invoicing, large-scale dealings in cash and
committing irregularities in maintenance of records. This
modus-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 &
D
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 Hizb-Ul-Mujahideen. Investigation has also revealed
E that certain ex-militants 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.
F 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 off-shore locations to India to fuel-anti-India
activities in Jammu & Kashmir.
G
i)During the course of investigation, it was ascertained that
accused A-10 Zahoor Ahmad Shah Watali is one such
conduit. The seizure of the incriminating document from the
house of his cashier-cum-accountant viz. Ghulam Mohd. Bhatt
regarding the foreign contributions received by Zahoor Ahmad
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1119
SHAH WATALI [A. M. KHANWILKAR, J.]

Shah Watali from Paskistani establishment and terror A
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.
B
ii) During the course of investigation, it is revealed that
accused A-10 Zahoor Ahmad Shah Watali was bringing
money from off-shore 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 Bank and he C
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 D
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 E
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.NRE-0252040200000505 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 F
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 & G
Constructions Pvt. Ltd. A/c OTN-10162. 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 H
1120 SUPREME COURT REPORTS [2019] 5 S.C.R.

A Prakash Kapoor, resident of P.O. Box-8669, 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
B
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 declared to be the absolute owner of the piece of
land in question. Mr. Naval Kishore Kapoor remitted a total
C 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
D company. (AY 2011-12 to 2016-17). 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
E 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
F that the Chartered Accountant, who signed the audited
balance sheets of the firms belonging to the accused A-10
Zahoor Ahmad Shah Watali viz. M/s Trison International
(2013-14 and 2015-16), Trison Farms & Constructions Pvt.
Ltd. (2013-14 and 2015-16), M/s 3Y (2012-13, 2013-14 and
G 2015-16) and M/s Yasir Enterprises (2013-14 and 2015-16)
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.
H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1121
SHAH WATALI [A. M. KHANWILKAR, J.]

This clearly shows that Zahoor Watali was remitting money A
received from unknown sources to India.
vii) The investigation has also revealed that in the FY
2010-11, a firm belonging to accused A-10 Zahoor Ahmad
Shah Watali and his family members viz., Trison Farms and
Constructions Pvt. Ltd. raised unsecured loan of B
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 C
money with the Directors could not be explained
satisfactorily by the accused Zahoor Ahmad Shah Watali.
viii) The seizure from the house of accused A-10 Zahoor
Ahmad Shah Watali, of a list of ISI officials and a letter from
Tariq Shafi, proprietor of AI Shafi group addressed to D
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 cashier-cum- E
accountant viz., Ghulam Mohd. Bhatt.”
(emphasis supplied in italics and bold)
29. In reference to these accusations, the entry in the diaries and
the green-colour document, recovered from the residence of Ghulam
Mohammad Bhatt, is significant. Further, the seizure memo described F
as document D-3/6, in respect of search and seizure of articles/
documents seized from the premises of the respondent (Accused No.10)
dated 3rd June, 2017, would unravel the activities of the respondent,
including regarding his financial deals. Another crucial document
described as D-3g/20 is a contact diary seized from the respondent vide
Memo D-3, which contains the Pakistan National name and contact G
“Tariq Shafi 0092425765022…26A” whose name figures in document
D-132(a)/23. The Code “0092” pertains to Pakistan. Another contact
diary was seized from the respondent vide Memo D-3, which, at page

H
1122 SUPREME COURT REPORTS [2019] 5 S.C.R.

A D-3h/28 contains the same name and contact, namely, “Tariq Shafi
00923008459775/ 0092425765022”. The documents D-3j to D-3j/5 also
indicate the involvement of the respondent in terrorist activities,
including that three cases of TADA have been registered against him in
the past and investigated and one case of J & K PSA, 1978. The High
Court erroneously proceeded on the premise that the charge-sheet makes
B
no reference to any other criminal case against the respondent.
Additionally, the charge-sheet is accompanied with documents D-9b and
D-9c, which are photographs of ex-militant Aftab Hilali Shah @
Shahid-ul-Islam (A-3) holding AK-47, seen with other terrorists. These
photographs were seized from the residence of the said ex-militant on
C 3rd June, 2017. The prosecution case is that the respondent (Accused
No.10) was in constant touch with the said ex-militant Aftab Hilali Shah
@ Shahid-ul-Islam (A-3), as noticed from the inter-linkage chart
depicted above. That fact is backed by the CDR analysis report, also
part of the charge-sheet. The charge-sheet also contains document
D-185/10, which is a contact list of accused Nayeem Khan (A-5)
D
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 D-132(a)/23. The Designated Court,
besides adverting to the aforementioned documents, also adverted to
E other documents and the statements of the prospective witnesses
(Ws-1, 28, 29, 38, 39, 43, 44, 48 and 52). The High Court has not
appreciated the said material which found favour with the Designated
Court to record its opinion that there are reasonable grounds for
believing that the accusation against the respondent is prima facie true.
The view so expressed by the Designated Court commends to us.
F
Suffice it to observe that the High Court adopted a tenuous approach -
by first discarding the document D-132(a) and then discarding the
statement of witnesses recorded under Section 161 and also the
statements recorded under Section 164, presented by the Investigating
Agency in a sealed cover. As aforesaid, the High Court ought to have
G 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 of-
fence under Section 17 for raising funds for terrorist activities.

H
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1123
SHAH WATALI [A. M. KHANWILKAR, J.]

30. In the case of Niranjan Singh Karam Singh Punjabi A
(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
B
purport of the proviso to Section 43D(5) of the 1967 Act which
mandates that the accused person involved in the commission of of-
fence 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 C
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
D
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 E
(supra), to the effect that the charge-sheet need not contain detailed
analysis of the evidence. It is for the Court considering the application
for bail to assess the material/evidence presented by the Investigating
Agency along with the report under Section 173 of Cr.P.C. in its
entirety, to form its opinion as to whether there are reasonable grounds F
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.: G
“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
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1124 SUPREME COURT REPORTS [2019] 5 S.C.R.

A (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
B
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
C 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”
The focus essentially was on matters relevant for consideration
D of application for bail on the ground of default in filing the charge-sheet
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:
E “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
F 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
G 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
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NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1125
SHAH WATALI [A. M. KHANWILKAR, J.]

Section 2(c) of the CrPC. The Act vests jurisdiction in the A
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
B
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 in Section 260(1)
or 262 CrPC by applying the provisions of Sections 263-265 of
the Act is a marked departure. The right of appeal straight to the C
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
D
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 E
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 charge-sheet an accused under any of
F
the provisions of TADA, merely on the statement of the investi-
gating 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 G
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
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A 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 charge-sheet 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 charge-sheet
B
against an accused for offences covered by TADA. Even after
an accused has been charge-sheeted 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
C apply or not. The Designated Court is, therefore, 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.”
D
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
E 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
F 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
G (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.

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NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1127
SHAH WATALI [A. M. KHANWILKAR, J.]

(9) The limitations on granting of bail specified in sub-section A
(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 sub-section (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 B
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
C
the accused is not guilty of such an offence and that he is not
likely to commit any offence while on bail. Sub-section (9)
qualifies sub-section (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 D
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
E
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 F
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 G
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

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1128 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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
B
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)
C ‘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 Section 20(4) of the
TADA Act in relation to a case under the provisions of TADA.’
D 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.”

E 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.

F 34. With reference to the document D-132(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
G account regularly kept in the course of business. In any case, that
document by itself would not be sufficient in the absence of any inde-
pendent 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,
H 21
(1995) 1 SCC 574 (para 60)
NATIONAL INVESTIGATION AGENCY v. ZAHOOR AHMAD 1129
SHAH WATALI [A. M. KHANWILKAR, J.]

as such, Section 34 of the Evidence Act will have no application. He A
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
B
Officer would be a matter for trial. Furthermore, indubitably, the
prosecution is not solely relying on the document D-132(a) recovered
from the residence of Ghulam Mohammad Bhatt (W-29). 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. C
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 D
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 E
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 F
broad probabilities. The Court is expected 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 G
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 re-stated the

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1130 SUPREME COURT REPORTS [2019] 5 S.C.R.

A 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.
B
37. A fortiori, we deem it proper to reverse the order passed by
the High Court granting bail to the respondent. Instead, we 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
C 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.
D
39. All pending applications are also disposed of.

Divya Pandey Appeal allowed.

E

F

G

H