Srinagar, Jun 11 (IANS): The J&K police said on Thursday it has busted a Pakistan-sponsored narco-terror module in north Kashmir's Handwara and arrested three terror associates of proscribed outfit Lashkar-e-Taiba (LeT).

They have been identified as Abdul Moomin Peer, Islam Ul Haq Peer and Syed Iftikhar Indrabi.

Giving details of the operation, Superintendent of Police Handwara G.V. Sundeep said Rs 1.34 crore cash and 21 kg heroin with a market value of Rs 100 crore were recovered from their possession.

"The module was in close contact with Pakistan-based terror handlers and was involved in drug trade. It was assisting financially to active terrorists of proscribed terror outfit LeT," he said.

He said the recoveries also exposed the inter-connection between drug dealers and terrorists.

He said the police were getting inputs about this racket for the last two weeks, and that on the basis of technical information, the three were arrested.

"It is a very big 'hawala' racket where funds are transferred without money movement and financed for terror activities," he said.

A case has been registered at Handwara police station and further investigation is on.

A Special Investigation Team has been constituted to ascertain the details of suspects' ties with terrorist outfits, radicals, smugglers and other anti-national elements.