In the case of Sudesh Kedia vs Union of India, while granting bail to the accused under the unlawful(prevention ) act, the supreme court held that payment of extortion money does not amount to the terror fund.
In the present case, the high court rejected the bail of the accused Sudesh media stating that he had been paying extortion money and contributes towards the funding of the terrorist organization. the high court also states that there was a record that clearly shows he was in constant touch with members of terrorist organizations to run their business.
On the other hand accused contended that mere payment of an illegal levy to TPC for the proper functioning of the business and is not a member of TPC, does not amount that the accused was funding terrorists.
Contrary to this plea, the court said that there was no other way for conducting transportation coal without being meeting the requirements of terrorist organizations. the court also said that meeting with members of a terrorist organization can also be not ignored and it was uniquely with the end goal of his consenting to the interest made by the individuals from the association.
The court observed that, while considering the grant of bail under Section 43 (5) D, it is the bounden obligation of the Court to apply its psyche to analyze the whole material on record to fulfill itself, regardless of whether a by all appearances argument is made out against the accused or not.
A bench comprising Justices L. Nageswara Rao and S. Ravindra Bhat observed,
"Payment of extortion cash doesn't add up to terror funding. It is obvious from the supplementary charge-sheet and the other material on record that other accused who are members of the terrorist association have been efficiently gathering extortion amounts from a businessman in Amrapali and Magadh territories. The Appellant is continuing vehicle business in the space of operation of the association. It is asserted in the second supplementary chargesheet that the Appellant paid cash to the individuals from the TPC for the smooth running of his business. By all appearances, it can't be said that the Appellant inspired with different individuals from the TPC and raised assets to advance the association."
The court added that it isn't fulfilled that an instance of conspiracy has been made out at this stage just on the ground that the accused met the members of the association and that the payment seized from the charge is continues from a terrorist organization.
Concluding the above arguments, Bench kept aside the judgment of the high court and released the accused on the judgment of the supreme court.