Chhattisgarh HC sets bail for alleged payment of extortion money to banned outfit

Granting bail to two defendants under the Prevention of Unlawful Activities Act 1967, the Chhattisgarh High Court recently reiterated that mere association with a terrorist organization as a member or otherwise would not be sufficient to attract the offense under section 38 unless the association intends to continue its activities. .

A dividing bench of Judges Sanjay Agrawal and Rajani Dubey made this finding by examining the pleas of two people accused of extorting money from banned companies for undertaking road construction work.

However, referring to Sudesh Kedia v. Indian Union, the Chamber observed that payment of extortion money to a banned/terrorist organization does not amount to terrorist financing and even though the indictment is taken as a whole with other documents on file that the appellants were paying the amounts of extortion for letting them work smoothly in said area.

In Sudesh Kedia (supra), the payment of extortion money was held not to constitute terrorist financing.

Thus, the Court was of the view that the allegations against the accused were not sufficient to result in the barring of the granting of bail under section 43D(5) of the UAPA. In this context, he referred to the decision of the Supreme Court in the case Thwaha Fasal v. Indian Union and noted that the prohibition in Section 43D(5) of the UAPA did not run counter to the power of Constitutional Courts to uphold the fundamental rights guaranteed by Part III of the Constitution of India. He remarked,

“Section 43D(5) of the UAPA provides that an accused of an offense punishable under the provisions of the UAPA shall not be released on bail or bail if the court, on reading the newspaper of the matter or of the report made under section 173 of the Code is of the opinion that there are reasonable grounds to believe that the charge against such person is founded on a prima facie basis. ) are added restrictions under the Code or any other law now in effect regarding the granting of bail.”

Background to the case

A criminal appeal has been brought under section 21(4) of the National Investigation Agency Act 2008, against an order of the Special Judge (NIA Act), whereby the appellant’s claim under Section 439 of the CrPC seeking bail for offenses under Sections 149, 201 & 120B/34 of the ICC, Section 8(2)(3)(5) of the Chhattisgarh Vishesh Jan Suraksha Adhiniyam, 2005 and sections 10,13,17,38(1)(2), 40 and 22(A)(C) of the Prevention of Unlawful Activities Act 1967 was dismissed as lacking merit.

In the prosecution case, based on secret information, the respondent searched the vehicle to find 95 pairs of shoes, green-black printed fabrics for the uniform, two bundles of electrical wires of 100 meters each , an LED lens, a walkie-talkie and other items in the possession of the caller. The additional charge is that these items were to be provided by the appellant to the Naxalites to support their illegal and disruptive activities. It is alleged that the appellant worked with Rudransh Earth Movers Road Construction Company, a partnership company of Appellant No. 2 Komal Verma and a co-defendant Ajay Jain. It is also the prosecution’s case that the defendants provided funds to the Naxalites; although no money had been recovered by said date, the police arrested them all, including the appellants.

The claim filed by the appellant under section 439 of the CrPC was dismissed by the special judge (NIA Act). The appellants assert that they were implicated simply on the basis of confessional statements recorded during the investigation. No incriminating material such as money, clothing, wireless devices, etc., was found in the possession of the present appellants. Even if the indictment is taken at face value and other material available on the record that the appellants were paying extortion money to allow road construction to run smoothly in said area, no violation of Articles 38 and 40 would be established.

Findings of the Court

The Court referred to the case of Thwaha Fasal c. Indian Union, where it was held that mere association with a terrorist organization as a member or otherwise would not be sufficient to attract the offense under section 38 unless the association intended to continue its activities. It was noticed,

“Even if an accused allegedly supports a terrorist organization by committing acts referred to in sub-paragraphs (a) to (c) of subsection (1) of section 39, he cannot be convicted of the offense punishable under section 39. 39 if it is not established that the acts of support are done with the intention of furthering the activities of a terrorist organization.Thus, the intent to further the activities of a terrorist organization is an essential element offenses punishable under sections 38 and 39 of the 1967 Act.”

Apart from this, the High Court held that the proviso of Section 43D(5) of the UAPA would apply to a person charged with an offense punishable under Chapters V and VI of the UAPA. In this case, the appellants were charged with violations of sections 10, 13, 17, 38(1)(2) and 40 of the UAPA.

Since the Appellants were also charged under Sections 38(1)(2) and 40 of the UAPA, the case against the Appellants is that they paid royalties/extortion to the Naxalites for undertaking road construction works in Kanker district.

The Court also referred to the case of Sudesh Kedia v. Indian Union, where the Supreme Court observed that paying extortion money to a banned/terrorist organization did not constitute terrorist financing. It has been observed as under:

“While considering the grant of bail under s. 43D(5), it is the compelling duty of the Court to apply its spirit to consider all the material on the record with a view to satisfying itself , whether a prima facie case is established against the accused or not.”

It was also ruled that the payment of extortion money did not constitute financing of terrorism. It was further held that the activity must be related to terrorist acts as defined in section 15. Clause (b) of the proviso of subsection (1) of section 38 provides that if a person charged with the offense under subsection (1) of section 38 proves that he did not take part in the activities of the organization during the period for which the name of the organization is listed in the schedule I, the offense relating to membership in a terrorist organization referred to in paragraph (1) of Article 38 shall not be drawn. Clause (b) above may be a defense of the accused. However, while considering the request for the granting of bail, we are not concerned with the defense of the accused.

Case Title: Shailendra Bhadouriya & Anr v. Chhattisgarh State

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Andrew B. Reiter