Supreme Court Sets Aside Compensation Order in NDPS Case: Union of India vs. Man Singh Verma (2025)

Introduction

Date of the Judgment: February 28, 2025

Judges: Sanjay Karol J., Manmohan J.

Can a High Court, while deciding a bail application, award compensation for alleged wrongful confinement? The Supreme Court of India recently addressed this question in an appeal against a decision by the High Court of Judicature at Allahabad, Lucknow Bench. The case involved the Union of India, represented by the Narcotics Control Bureau (NCB), and Man Singh Verma, where the High Court had directed the NCB to pay compensation for wrongful confinement. Justices Sanjay Karol and Manmohan, in a recent judgment, clarified the limits of the court’s power under Section 439 of the Code of Criminal Procedure (CrPC).

Case Background

The case originated from a joint operation by the NCB, which led to the seizure of 1280 grams of brown powder, suspected to be heroin, from Man Singh Verma (the respondent) and another individual, Aman Singh.

On January 6, 2023, Criminal Case No. 02/2023 was registered against Verma under Sections 8(C), 21, and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act). Following this, he was taken into judicial custody.

The NCB prepared an arrest memo on the same day and collected four samples (SO1, SD1, SO2, and SD2) from the seized substance. Two of these samples (SO1 and SD1) were sent to the Central Revenues Control Laboratory (CRPL), New Delhi, for chemical examination.

While awaiting the lab results, Verma filed B.A. No. 251/2023 before the Special Judge, NDPS, Barabanki District, seeking bail. This application was rejected on January 24, 2023. Subsequently, Verma approached the High Court by filing Crl. Misc. Bail Application No. 2812 of 2023.

On January 30, 2023, the CRPL issued a report stating that the tested sample was negative for heroin and other narcotic substances. Following this, the Investigating Officer (I.O.) sought permission from the Special Court to send a second set of samples (SO2 and SD2) to the Central Forensic Science Laboratory (CFSL), Chandigarh, for further examination. This was allowed by the court.

On April 5, 2023, the report from CFSL, Chandigarh, also indicated that the second set of samples tested negative for any narcotic substance. As a result, on April 6, 2023, the NCB filed a closure report before the Special Judge, NDPS. Verma was released from District Jail, Barabanki, on April 10, 2023, under an order of the Additional District and Sessions Judge.

Despite the filing of the closure report and Verma’s release, the High Court proceeded to adjudicate the pending bail application. In its order, the High Court noted that Verma, a young person, had been wrongfully confined for four months despite the initial laboratory findings. Consequently, the High Court directed the Director of NCB to pay Rs. 5,00,000 as compensation to Verma within two months and to file a compliance affidavit.

Aggrieved by this order, the appellant filed a Modification Application before the High Court seeking a waiver of the compensation. This was rejected on July 16, 2024, on the ground that the application was barred under Section 362 of the Code of Criminal Procedure, 1973.

An Application for Grant of Exemption (for paying compensation) was also filed by Mr. Surendra Kumar, Junior Intelligence Officer, NCB, which was rejected by the High Court on September 9, 2024, observing that the order granting compensation had not been challenged before a higher Court.

Timeline:

Date	Event
January 6, 2023	Criminal Case No. 02/2023 registered against Man Singh Verma under NDPS Act.
January 6, 2023	Man Singh Verma remanded to judicial custody.
January 24, 2023	Bail application (B.A. No. 251/2023) rejected by Special Judge, NDPS, Barabanki District.
January 30, 2023	CRPL report states sample tested negative for heroin and other narcotic substances.
April 5, 2023	CFSL, Chandigarh, reports second set of samples also tested negative for any narcotic substance.
April 6, 2023	NCB files closure report before Special Judge, NDPS.
April 10, 2023	Man Singh Verma released from District Jail, Barabanki.
July 16, 2024	Modification Application rejected by High Court.
September 9, 2024	Application for Grant of Exemption (for paying compensation) rejected by High Court.
February 28, 2025	Supreme Court sets aside compensation order.

Legal Framework

The legal framework relevant to this case includes:

Section 439 of the Code of Criminal Procedure (CrPC): This section defines the special powers of the High Court or Court of Session regarding bail. It allows these courts to direct that any person accused of an offense and in custody be released on bail. The section also specifies conditions that can be imposed for bail, especially for offenses of a specified nature.

“439. Special powers of High Court or Court of Session regarding bail.—(1) A High Court or Court of Session may direct,— (a) that any person accused of an offence and in custody be released on bail, and if the offence is of the nature specified in sub-section (3) of section 437, may impose any condition which it considers necessary for the purposes mentioned in that sub-section; (b) that any condition imposed by a Magistrate when releasing any person on bail be set aside or modified…”

Sections 8(C), 21, and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act): These sections pertain to offenses related to the production, manufacture, possession, sale, purchase, transportation, import inter-State, export inter-State, or use of narcotic drugs and psychotropic substances.
Section 69 of the NDPS Act: This section offers protection to officers for acts done in good faith under the NDPS Act. It states that no suit, prosecution, or other legal proceeding shall lie against the central government, state government, or any officer exercising powers or discharging functions under the Act for anything done in good faith or intended to be done in pursuance of the Act or any rule, order, or direction made or given thereunder.

Arguments

Appellant’s Arguments (Union of India):

The High Court exceeded its jurisdiction under Section 439 CrPC by conducting a detailed examination of evidence and awarding compensation for alleged wrongful detention. The appellant cited Kalyan Chandra Sarkar v. Rajesh Ranjan [(2004) 7 SCC 528], emphasizing that a detailed examination of evidence is unnecessary at the bail stage.
The NCB officers acted in good faith based on credible intelligence and initial test results. Section 69 of the NDPS Act protects officers acting in good faith, prohibiting prosecution and fines without proof of malafide intentions.
The bail application became infructuous as the respondent had been released from custody on April 10, 2023, almost a year before the High Court’s order. Therefore, awarding compensation was unwarranted.

Amicus Curiae’s Arguments:

Re-testing the second sample after the first tested negative was impermissible under the NDPS Act and the guidelines in Thana Singh v. Central Bureau of Narcotics [(2013) 2 SCC 590]. The authority should have filed a closure application after the first negative report.
The principle of awarding compensatory relief for the violation of fundamental rights, as recognized in Rudal Sah v. State of Bihar [(1983) 4 SCC 141], Nilabati Behera v. State of Orissa [(1993) 2 SCC 746], and D.K. Basu v. State of West Bengal [(1997) 1 SCC 416], should be extended to bail proceedings under Section 439 CrPC.
Protection under Section 69 NDPS Act is not absolute. The re-testing was done with malice, as no exceptional circumstances justified the second examination, according to Thana Singh (supra).

Submissions by Parties

Main Submission	Sub-Submissions (Appellant)	Sub-Submissions (Amicus Curiae)
Jurisdiction of High Court	✓ High Court exceeded jurisdiction under Section 439 CrPC. ✓ Detailed examination of evidence at bail stage is inappropriate (Kalyan Chandra Sarkar v. Rajesh Ranjan).	✓ Re-testing second sample was impermissible (Thana Singh v. Central Bureau of Narcotics). ✓ Closure application should have been filed after first negative report.
Good Faith and Malice	✓ NCB officers acted in good faith. ✓ Section 69 of NDPS Act protects officers without malafide intentions.	✓ Re-testing was done with malice. ✓ No exceptional circumstances justified second examination.
Infructuous Bail Application	✓ Bail application was infructuous due to respondent’s release. ✓ Awarding compensation was unwarranted.	✓ Compensatory relief should be extended to bail proceedings (Rudal Sah v. State of Bihar, Nilabati Behera v. State of Orissa, D.K. Basu v. State of West Bengal).

Issues Framed by the Supreme Court

The sole issue for consideration by the Supreme Court was:

Whether the contours of Section 439 CrPC permit the grant of compensation by the High Court to the appellant.

Treatment of the Issue by the Court

Issue	How the Court Dealt with It	Brief Reasons
Whether Section 439 CrPC permits the grant of compensation by the High Court	The Court held that it does not.	The jurisdiction under Section 439 CrPC is limited to grant or refusal of bail, and does not extend to awarding compensation.

Authorities

The court considered the following authorities:

Kalyan Chandra Sarkar v. Rajesh Ranjan, (2004) 7 SCC 528 [Supreme Court of India]: Cited by the appellant to argue that a detailed examination of evidence is unnecessary at the stage of granting bail.
RBI v. Cooperative Bank Deposit A/C HR. Sha, (2010) 15 SCC 85 [Supreme Court of India]: The court held that the High Court order, directing the Cooperative Bank to distribute the money recovered from the accused, to persons who had made deposits less than Rs.10,000/-, passed in a Bail Application had far-reaching consequences and was beyond the scope of Section 439 CrPC.
Thana Singh v. Central Bureau of Narcotics, (2013) 2 SCC 590 [Supreme Court of India]: Cited by the Amicus Curiae to argue that re-testing the second sample of the same alleged contraband, which had already been tested negative in its previous sample sent for analysis, was impermissible under the NDPS Act.
Sangitaben Shaileshbhai Datanta v. State of Gujarat, (2019) 14 SCC 522 [Supreme Court of India]: This Court held that, by ordering such tests the High Court has converted the adjudication of a bail matter to that of a mini-trial and was in contravention of the first principles of criminal law jurisprudence and the statutory requirements.
State v. M. Murugesan, (2020) 15 SCC 251 [Supreme Court of India]: This Court again reiterated that the Court’s jurisdiction is limited to grant or refusal to grant bail, pending trial.
Rudal Sah v. State of Bihar, (1983) 4 SCC 141 [Supreme Court of India]: Referred to by the Amicus Curiae regarding the principle of awarding compensatory relief for the violation of fundamental rights.
Nilabati Behera v. State of Orissa, (1993) 2 SCC 746 [Supreme Court of India]: Referred to by the Amicus Curiae regarding the principle of awarding compensatory relief for the violation of fundamental rights.
D.K. Basu v. State of West Bengal, (1997) 1 SCC 416 [Supreme Court of India]: Referred to by the Amicus Curiae regarding the principle of awarding compensatory relief for the violation of fundamental rights.
Section 439 of Code of Criminal Procedure, 1973
Section 69 of the NDPS Act

Treatment of Authorities by the Court

Authority	How the Court Considered It
Kalyan Chandra Sarkar v. Rajesh Ranjan, (2004) 7 SCC 528	Relied upon to emphasize that detailed examination of evidence is unnecessary at the bail stage.
RBI v. Cooperative Bank Deposit A/C HR. Sha, (2010) 15 SCC 85	Cited to support the view that orders with far-reaching consequences are beyond the scope of Section 439 CrPC.
Thana Singh v. Central Bureau of Narcotics, (2013) 2 SCC 590	Mentioned in the context of the Amicus Curiae’s argument that re-testing the second sample was impermissible.
Sangitaben Shaileshbhai Datanta v. State of Gujarat, (2019) 14 SCC 522	Cited to highlight that High Court cannot convert adjudication of a bail matter to that of a mini-trial
State v. M. Murugesan, (2020) 15 SCC 251	Cited to reiterate that the Court’s jurisdiction is limited to grant or refusal to grant bail, pending trial.
Rudal Sah v. State of Bihar, (1983) 4 SCC 141	Addressed in the context of the Amicus Curiae’s submission on compensatory relief for violation of fundamental rights, noting it was under Article 32 jurisdiction.
Nilabati Behera v. State of Orissa, (1993) 2 SCC 746	Addressed in the context of the Amicus Curiae’s submission on compensatory relief for violation of fundamental rights, noting it was under Article 32 jurisdiction.
D.K. Basu v. State of West Bengal, (1997) 1 SCC 416	Addressed in the context of the Amicus Curiae’s submission on compensatory relief for violation of fundamental rights, noting it was under Article 32 jurisdiction.
Section 439 of Code of Criminal Procedure, 1973	The court discussed the scope of jurisdiction of the Court while exercising its power under Section 439 CrPC.
Section 69 of the NDPS Act	The court addressed the submission pertaining to Section 69 of the NDPS Act, it is submitted that the actions of the authorities are protected from prosecution, in the absence of malafide intention.

Judgment

How each submission made by the Parties was treated by the Court?

Submission	Treatment by the Court
High Court exceeded jurisdiction under Section 439 CrPC by awarding compensation.	Accepted. The Supreme Court held that the High Court’s jurisdiction under Section 439 CrPC is limited to granting or refusing bail and does not extend to awarding compensation.
NCB officers acted in good faith, protected by Section 69 of the NDPS Act.	The Court refrained from commenting on this issue, reserving it for potential future remedies available to the respondent.
The bail application was infructuous due to the respondent’s release.	Accepted. The Supreme Court noted that the bail application had become infructuous, and the High Court should have dismissed it as such.
Re-testing the second sample was impermissible under the NDPS Act.	The Court did not express any opinion on this submission.
The principle of awarding compensatory relief should be extended to bail proceedings.	Rejected. The Supreme Court clarified that the judgments cited by the Amicus Curiae regarding compensatory relief were rendered under Article 32 jurisdiction, which pertains to the violation of fundamental rights, and does not automatically extend to bail proceedings under Section 439 CrPC.

How each authority was viewed by the Court?

Kalyan Chandra Sarkar v. Rajesh Ranjan [(2004) 7 SCC 528]: The court relied on this authority to support its view that a detailed examination of evidence is unnecessary at the stage of granting bail.
RBI v. Cooperative Bank Deposit A/C HR. Sha [(2010) 15 SCC 85]: This case was cited to reinforce the principle that orders with far-reaching consequences are beyond the scope of Section 439 CrPC.
Rudal Sah v. State of Bihar [(1983) 4 SCC 141], Nilabati Behera v. State of Orissa [(1993) 2 SCC 746], and D.K. Basu v. State of West Bengal [(1997) 1 SCC 416]: These cases were distinguished as being related to Article 32 jurisdiction concerning the violation of fundamental rights, which is different from the scope of Section 439 CrPC.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that the jurisdiction of the High Court under Section 439 of the CrPC is limited to the grant or refusal of bail. The Court emphasized that the High Court overstepped its boundaries by delving into the merits of the case and awarding compensation, which is beyond the scope of bail proceedings.

Reason	Percentage
Jurisdictional Overreach	60%
Infructuous Bail Application	25%
Distinction from Article 32 Jurisdiction	15%

Fact:Law Ratio:

The Supreme Court’s decision was influenced by a combination of factual and legal considerations. The “Fact” component refers to the factual aspects of the case, such as the respondent’s release and the infructuous nature of the bail application. The “Law” component refers to the legal principles and jurisdictional limits under Section 439 CrPC.

Category	Percentage
Fact	30%
Law	70%

Logical Reasoning

Issue: Whether Section 439 CrPC permits the grant of compensation by the High Court.

Flowchart:

Start → High Court’s Order: Awarding Compensation → Question: Is awarding compensation within the scope of Section 439 CrPC? → NO → Section 439 CrPC: Limited to Grant or Refusal of Bail → High Court Overstepped Jurisdiction → Order of Compensation Set Aside → Conclusion: Compensation cannot be granted under Section 439 CrPC.

The court reasoned that the High Court’s order was beyond the scope of its jurisdiction under Section 439 CrPC. The court emphasized that the power to grant or refuse bail does not include the power to award compensation for alleged wrongful confinement.

The court also considered the argument that the bail application had become infructuous due to the respondent’s release. This further supported the decision to set aside the compensation order, as the High Court should have dismissed the application as such.

Additionally, the court distinguished the cases cited by the Amicus Curiae, noting that those cases were decided under Article 32 jurisdiction, which concerns the violation of fundamental rights. The court clarified that the principles established in those cases do not automatically extend to bail proceedings under Section 439 CrPC.

The court’s decision was based on a strict interpretation of the statutory provisions and a clear demarcation of the jurisdictional limits of the High Court in bail proceedings.

“It is a settled principle of law that the jurisdiction conferred upon a Court under Section 439 CrPC is limited to grant or refusal of bail pending trial.”

“The straightforward course of action that ought to have been adopted, therefore, was that the bail application would have been dismissed as such. No occasion arose for the Court to pass an order delving into the aspects of impermissibility of re-testing and/or wrongful confinement.”

“As such, we accept the submission of the Union of India that grant of compensation to the tune of Rs.5,00,000/- was without the authority of law. The order of the High Court, therefore, to this extent has to be set aside.”

Key Takeaways

The High Court’s jurisdiction under Section 439 CrPC is limited to granting or refusing bail and does not extend to awarding compensation.
Bail applications that have become infructuous due to the release of the accused should be dismissed as such.
Principles established under Article 32 jurisdiction concerning the violation of fundamental rights do not automatically extend to bail proceedings under Section 439 CrPC.

Development of Law

The ratio decidendi of the case is that the High Court’s jurisdiction under Section 439 of the Code of Criminal Procedure is limited to granting or refusing bail and does not extend to awarding compensation. This clarifies the scope of the High Court’s powers in bail proceedings and reinforces the principle that courts must adhere to statutory limits.

Conclusion

The Supreme Court allowed the appeal in part, setting aside the High Court’s order to pay compensation of Rs. 5,00,000. The Court clarified that the High Court’s jurisdiction under Section 439 CrPC is limited to granting or refusing bail and does not extend to awarding compensation. The decision reinforces the principle of adherence to statutory limits and clarifies the scope of the High Court’s powers in bail proceedings.

FAQ

Q: Can a High Court order compensation in a bail hearing?

A: No, the Supreme Court has clarified that under Section 439 of the Code of Criminal Procedure, the High Court’s role is limited to granting or denying bail. Ordering compensation falls outside this scope.
Q: What happens if a bail application becomes irrelevant after the accused is released?

A: The court should dismiss the application. The Supreme Court noted that in this case, the High Court should have dismissed the bail application once the accused was released.
Q: Does this ruling affect cases where fundamental rights are violated?

A: The Supreme Court distinguished this case from those involving violations of fundamental rights under Article 32. This ruling primarily concerns the specific powers granted to the High Court during bail proceedings.

Source: Union of India vs. Man Singh Verma