The disposal and interim custody of property seized during criminal investigations is a recurring concern in Indian criminal jurisprudence. Section 451 of the Code of Criminal Procedure empowers courts to decide how such property should be preserved pending trial. In a recent ruling, the Supreme Court of Rajput Vijaysinh Vs State of Gujarat & Others clarified that when the seized property is the very subject matter of alleged fraudulent transactions, its release to one claimant before trial is concluded may prejudice other victims.
Background of the Dispute:
The dispute emanated from a criminal complaint filed in Mahesana, Gujarat, where the accused allegedly defrauded a number of traders in deals involving castor seeds to the tune of over Rs. 3.49 crore. The cheques drawn by the accused were dishonoured, and charges under Sections 406, 420, and 120-B of the IPC were framed. On investigation, the police recovered Rs. 50 lakhs in cash, treating it as suspected proceeds of crime.
Respondent No. 2, who is one of the complainants, asserted ownership of this confiscated money, stating that it was directly related to his business transactions with the accused. He presented bills, audit reports, and ledger entries to substantiate his request for release of the cash.
Proceedings Before the Lower Courts:
The Magistrate and later the Sessions Court both refused to release the confiscated money. They held that several traders were purportedly defrauded, the property in the confiscated cash was in dispute, and determination of entitlement prior to trial would be premature. They upheld that the money had to be maintained as possible evidence and as crime proceeds.
Not satisfied with the dismissal, the respondent petitioned the Gujarat High Court. The High Court, drawing on precedent in Sunderbhai Ambalal Desai v. State of Gujarat, believed that keeping huge amounts of money in police custody for years was pointless. It ordered release of the amount to the respondent with conditions like preparation of a detailed panchnama and provision of a bond.
Supreme Court's Analysis:
On appeal, the Supreme Court recognized the validity of the principle in Sunderbhai Desai to advance early release of confiscated property to prevent wastage or abuse. But it emphasized that such orders should be exercised judiciously based on the character of the dispute.
Here, the Court noted:
- Cash seized was not a passive article such as pilfered jewellery, but squarely connected with contentious financial transactions that are the subject matter of cheating charges.
- Several complainants alleged being victims of frauds on similar terms, rendering it impossible at the pre-trial stage to come to a definite conclusion about whether the Rs. 50 lakhs specifically belonged to Respondent No. 2.
- Possession of the amount could be decided only after consideration of evidence at trial.
Consequently, the Court revoked the High Court's order and upheld the Magistrate's and Sessions Court's ruling to keep the muddamal pending trial.
Directions on Deposit of Money:
As the respondent had already withdrawn the amount as per the direction of the High Court, the Supreme Court directed the amount to be re-deposited with the trial court, along with the interest earned on it. Additionally, the Court ordered cross-verification with the elaborate panchnama so that the very same currency notes or equivalent money was put back into judicial custody.
Conclusion:
This judgment reaffirms that while Section 451 CrPC allows for interim release of property to avoid deterioration or misuse, courts must exercise cautious consideration of the character of the property and conflicting claims. In cases of money seized on allegations of being proceeds of fraud with multiple victims, hasty release to one claimant might lead to injustice. The judgement brings into balance the principle of preserving evidence with the competing consideration of not keeping property in police custody unnecessarily.
