(BY SRI.ANOOP KUMAR M.V., HCGP FOR R1;
SRI.P.PRASANNA KUMAR, SR. COUNSEL FOR
SRI.CHETAN JADHAV, ADVOCATE FOR R2)
THIS CRL.P IS FILED UNDER SECTION 482 CR.PC,1973,
PRAYING TO I. CALL FOR THE RECORDS IN C.C.NO.11286/2024
PENDING BEFORE THE 45TH ADDITIONAL CHIEF JUDICIAL
MAGISTRATE. II. SET ASIDE THE IMPUGNED ORDER DATED
19.04.2025 PASSED BY THE HON'BLE 45TH ADDITIONAL CHIEF
JUDICIAL MAGISTRATE IN C.C.NO.11286/2024, WHEREIN THE TRAIL
COURT HAS REJECTED THE APPLICATION FILED BY THE PETITIONER
UNDER SECTION 451 R/W. 457 OF CR PC (ANNEXURE A). III.
DIRECT THE RESPONDENT POLICE TO RELEASE THE SEIZED
ARTICLES SUBJECTED TO PF NO.43/2023, PF NO.44/2023, PF
NO.45/2023, PF NO.46/2023 MENTIONED IN THE TABLE BELOW IN
FAVOUR OF THE PETITIONER.
SL. DATE PF NO. ARTICLE ITEM NO. QUANTITY
NO.
1. 04/09/2023 43/2023 GOLD 1,2,8,12,13,16,18,2 143 GRAMS
0,21,22,23,25,26,27
,28,29,30,31,32,33,
34,35,36,37,40,43
2. 04/09/2023 43/2023 SILVER 3,4,5,6,7,9,10,11,1 11,250 GRAMS
4,
15,17,19,24,38,39,4
1,42,44
3. 05/09/2023 44/2023 GOLD 22 100 GRAMS
4. 05/09/2023 44/2023 GOLD 21 30 GRAMS
5. 05/09/2023 45/2023 GOLD 2,3,4,5,6,7,8,9 3007.24 GRAMS
6. 06/09/2023 46/2023 GOLD 1,2,3,4,5,6,7,8,9 1997.10 GRAMS
7. 06/09/2023 46/2023 SILVER 10,11 16 KG
8. 05/09/2023 44/2023 CASH 19 RS.48,800/-
9. 05/09/2023 44/2023 CASH 18 RS.20,500/-
10. 05/09/2023 44/2023 CASH 20 RS.43,700/-
11 05/09/2023 45/2023 CASH 1 RS.10,00,000/-
...RESPONDENTS
(BY SRI.ANOOP KUMAR M.V., HCGP FOR R1;
SRI.GAURAV GANAPATHY C.G., FOR
SRI.ANAND MUTTALLI, ADVOCATE FOR R2)
THIS CRL.P IS FILED UNDER SECTION 482 OF CR.P.C,
PRAYING TO CALL FOR THE RELEVANT RECORDS AND TO SET
ASIDE THE ENTIRE ORDER DATED 19.04.2025 PASSED BY THE
LEARNED XLV ADDL CJM, BENGALURU IN C.C.NO.11286/2024
THEREBY REJECTING THE APPLICATION DATED 27.05.2024 FILED
BY THE PETITIONER UNDER SECTIONS 451,457 OF CR.P.C. FOR
RELEASE OF ARTICLES IN P.F.NOS.43, 45, 46/2023 WITH A
DIRECTION TO RELEASE THE ARTICLES OF THE PETITIONERS, IN
THE INTEREST OF JUSTICE AND EQUITY AND ETC.
THESE CRIMINAL PETITIONS HAVING BEEN HEARD AND
RESERVED ON 02.12.2025, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, COURT DELIVERED THE FOLLOWING:
3. The petitioners have invoked the inherent
jurisdiction of this Court under Section 482 of the
Cr.P.C (Section 528 of the BNSS, 2023) seeking to set
aside the impugned order and for consequential
release of the seized articles.
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4. The criminal proceedings arise out of Crime
No.1141/2023 registered by the South East CEN
Crime Police Station, Bengaluru, for the offences
punishable under Sections 419 and 420 of the Indian
Penal Code, 1860 and Sections 43, 66 and 66(C) of
the Information Technology Act, 2000, in respect of
alleged incidents stated to have occurred between
12.05.2023 and 24.06.2023.
5. The complaint came to be lodged on
24.06.2023 by Ms. Bedisha Karmakar against two
accused persons, namely Sri Bodhuluru Mohan
(Accused No.1) and Sri Bodhuluru Lakshmipathi
(Accused No.2).
6. Upon completion of investigation, the
jurisdictional police have laid the charge sheet for the
offences punishable under Sections 419 and 420 of
the IPC and Sections 43, 66, 66(C) and 66(D) of the
Information Technology Act, 2000, against Sri
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Bodhuluru Lakshmipathi alone, who is the petitioner in
Crl.P. No.9844/2025.
7. During the course of investigation, certain
articles were seized and produced before the
jurisdictional Court under Property Forms bearing
Nos.43/2023, 44/2023, 45/2023 and 46/2023.
8. Both the de-facto complainant and the
accused filed separate applications under Sections 451
and 457 of the Code of Criminal Procedure seeking
interim custody and release of the seized articles.
9. The learned XLV Additional Chief Judicial
Magistrate, by a common order dated 19.04.2025,
rejected both the applications. Being aggrieved by the
said order, the petitioners are before this Court in the
respective Criminal Petitions.
10. Heard the learned counsel for petitioners,
learned High Government Pleader for the
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State/respondent No.1, the learned counsel for
respondent No.2 and perused the material on record.
11. It is the case of prosecution that, the de-
facto complainant, M/s Reward360 Global Services
Private Limited, is engaged in providing promotional
rewards, incentives and gift vouchers to its clients,
enabling customers to redeem reward points for e-
commerce vouchers through its web portal, which
process is managed through an ERP software system.
It is averred that the company had entered into an
agreement with ICICI Bank, pursuant to which the
bank's account holders could redeem reward points
accrued through debit/credit card usage to obtain
various e-commerce gift vouchers issued by the
complainant company. The vouchers, being single-
use, were transmitted to customers through e-mail
along with redemption PINs. It is alleged that during
the relevant period, the accused, by gaining
unauthorised access to the e-mail ID
[email protected] through the assistance
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of a third party, accessed the complainant company's
web portal and, by using software tools, manipulated
URL payload data and altered order IDs, thereby
causing the delivery of unredeemed vouchers running
into several lakhs to the said e-mail ID and thereafter
redeemed the said vouchers through multiple e-mail
accounts into wallets of various e-commerce platforms
and utilised the proceeds to purchase gold, silver,
vehicles and other articles, thereby causing wrongful
loss to the complainant company and its customers
and wrongful gain to himself. It is alleged that during
investigation, gold weighing 5.26947 kg, silver
weighing 27.250 kg, cash of ₹11,13,000/- and eight
two-wheelers were seized from the possession of the
accused.
12. Learned counsel appearing for the
petitioner/de-facto complainant in Crl.P.No.9356/2025
would contend that a perusal of the charge-sheet
material would prima facie establish that the seized
articles were procured by the accused by fraudulent
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misuse of the reward vouchers generated and issued
by the petitioner company and, therefore, the
petitioner is the person entitled to interim custody of
the said articles. It is submitted that the charge-sheet
contains an incident report explaining the manner in
which the accused manipulated the system and
redeemed unre-deemed vouchers, which resulted in
the purchase of the seized articles. It is contended
that the accused, in his voluntary statement recorded
during investigation, has admitted the modus
operandi adopted by him in exploiting system
vulnerabilities and in misappropriating vouchers
belonging to the petitioner company. It is further
submitted that the accused has admitted to
redeeming the vouchers through multiple e-mail IDs
and utilising the same for placing orders on e-
commerce platforms to procure gold, silver, two-
wheelers and other articles, some of which were later
sold to third parties. The said admissions are
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corroborated by statements of other witnesses and
transaction records collected during investigation.
13. Learned counsel would further contend that
the seizure mahazars clearly disclose that certain
articles were intercepted and seized at the time of
delivery itself, pursuant to orders placed by the
accused using misused vouchers, even while the
accused was in police custody. It is contended that
the seized articles are directly traceable to the
petitioner's digital assets and form the subject matter
of the alleged fraud. It is further contended that the
investigating agency has collected extensive
documentary material, including transaction logs from
e-commerce platforms, internal audit reports of the
Petitioner Company and statements of third parties,
which collectively establish that thousands of vouchers
issued by the petitioner were fraudulently redeemed
by the accused, causing substantial financial loss to
the petitioner company. It is submitted that the
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extent of loss has been assessed at a significantly
higher figure after a detailed internal audit.
14. Learned counsel would also contend that the
Investigating Officer himself has indicated that the
seized articles may be released in favour of the
petitioner, subject to verification, and has opposed the
claim of the accused for custody. It is contended that
the accused has not produced any lawful proof of
purchase or evidence of payment from his own funds
in respect of the seized articles and that his claim of
ownership is wholly untenable. It is urged that the
learned Magistrate has failed to consider the material
collected during investigation and has rejected the
petitioner's application solely on the ground of a rival
claim raised by the accused. It is contended that the
applications filed under Sections 451 and 457 of the
Code of Criminal Procedure are for grant of interim
custody and not for final adjudication of title, and that
the learned Magistrate has misdirected himself by
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treating the proceedings as one for determination of
ownership.
15. Learned counsel would contend that continued
retention of the seized articles would result in financial
and reputational prejudice to the petitioner, whereas
release of the articles in favour of the petitioner,
subject to appropriate conditions, would not cause any
prejudice to the accused or the prosecution. It is
further submitted that the petitioner is willing to abide
by any conditions that may be imposed by this Court,
including preservation of the identity and nature of
the seized articles.
16. Learned Counsel has placed reliance on the
following judgments:-
i. Sunderbhai Ambalai Desai v. State of
Gujarat reported in (2002) 10 SCC 283
ii. Anisa Begum v. Masoom Ali and ors in
Crl.R.P.No.33/1985, DD. 08.11.1985.
iii. Muthoot Money limited v. The State of
Karnataka, passed by Co-ordinate bench
of this Honble Court in Writ Petition No.
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100245/2025 (GM-Police), DD-
02.06.2023.
iv. M/S Viswas Textile Processors v. State
of Karnataka, passed by Co-ordinate
bench of this Honble Court in Criminal
Petition No. 8041/2021, DD-
23.08.2023.
17. Learned counsel for the
petitioner/accused in Crl.P. No.9844/2025 contends
that the impugned order passed by the learned
Magistrate is contrary to the facts, materials on record
and the settled principles governing exercise of power
under Sections 451 and 457 of Cr.P.C., and has
resulted in a miscarriage of justice. It is submitted
that the seized articles were taken from the custody of
the petitioner, who claims to have purchased the
same from his lawful earnings, including income from
stock market trading, and that documentary material
was produced to substantiate such claim. The learned
Magistrate, however, rejected the application solely on
the ground of a rival claim by the complainant,
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without noticing that interim custody proceedings do
not require adjudication of title or a detailed trial. It is
further urged that no cogent material was placed by
the complainant to establish ownership of the seized
articles or to substantiate the alleged loss, and
therefore, the rejection of interim custody on such
grounds is unsustainable.
18. It is further contended that the learned
Magistrate, while relying upon the principles laid down
by the Hon'ble Supreme Court in Sunderbhai
Ambalal Desai v. State of Gujarat [(2002) 10
SCC 283], had released other movable properties
such as vehicles and documents in favour of the
petitioner, but adopted an inconsistent approach in
refusing release of the valuable articles in question. It
is urged that, the continued retention of such
valuables in police custody is neither safe nor
justified, particularly when the petitioner has
expressed willingness to abide by any conditions and
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furnish security as may be directed by the Court. It is
submitted that courts ordinarily grant interim custody
to the person from whose possession the articles were
seized, subject to safeguards, and the failure to do so
in the present case amounts to an erroneous exercise
of jurisdiction, warranting interference by this Court.
19. Learned High Court Government Pleader
appearing for the respondent-State opposes the
petitions and supports the impugned order passed by
the learned Magistrate. It is contended that the seized
articles form part of the subject-matter of the crime
and constitute material evidence in a case involving
serious allegations of cheating, impersonation and
offences under the Information Technology Act. The
seizure has been effected during the course of
investigation under proper mahazars and the articles
are required to be preserved for the purpose of trial.
It is submitted that release of the seized properties at
this stage may adversely affect the prosecution case
and may result in loss of crucial evidence. It is further
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contended that though a charge sheet has been filed,
further investigation is still pending under Section
173(8) of the Cr.P.C, particularly with regard to
tracing the proceeds of crime, verification of additional
transactions, and identification of other properties
allegedly acquired through the fraudulent activity. In
view of the pending further investigation and rival
claims over the seized articles, the learned Magistrate
was justified in declining to grant interim custody. The
learned HCGP therefore submits that no interference
is called for in exercise of the inherent jurisdiction of
this Court.
20. Since both petitions arise out of a
common order passed by the learned Magistrate and
relate to the very same seized properties, they are
considered together. However, having regard to the
nature of claims and the relief sought, the entitlement
of the petitioners is required to be examined
independently.
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21. Sections 451 and 457 of the Code of
Criminal Procedure confer discretionary power upon
the criminal court to pass appropriate orders
regarding custody, disposal or interim release of
property seized during investigation. The object
underlying these provisions is to ensure that the
seized property is not allowed to deteriorate or remain
idle in police custody, thereby causing avoidable loss
to the person entitled to possession.
22. The Hon'ble Supreme Court in
Sunderbhai Ambalal Desai's case (supra), has
authoritatively laid down the guiding principles
governing release of seized property. The Apex Court
held as follows:
" 7. In our view, the powers under Section 451 CrPC
should be exercised expeditiously and judiciously. It
would serve various purposes, namely:
1. owner of the article would not suffer because of
its remaining unused or by its
misappropriation;
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2. court or the police would not be required to
keep the article in safe custody;
3. if the proper panchnama before handing over
possession of the article is prepared, that can
be used in evidence instead of its production
before the court during the trial. If necessary,
evidence could also be recorded describing the
nature of the property in detail; and
4. this jurisdiction of the court to record evidence
should be exercised promptly so that there
may not be further chance of tampering with
the articles.
8. The question of proper custody of the seized
article is raised in a number of matters. In Basavva
Kom Dyamangouda Patil v. State of Mysore [(1977)
4 SCC 358 : 1977 SCC (Cri) 598] this Court dealt
with a case where the seized articles were not
available for being returned to the complainant. In
that case, the recovered ornaments were kept in a
trunk in the police station and later it was found
missing, the question was with regard to payment of
those articles. In that context, the Court observed as
under: (SCC p. 361, para 4)
"4. The object and scheme of the various
provisions of the Code appear to be that
where the property which has been the
subject-matter of an offence is seized by the
police it ought not to be retained in the
custody of the court or of the police for any
time longer than what is absolutely necessary.
As the seizure of the property by the police
amounts to a clear entrustment of the
property to a government servant, the idea is
that the property should be restored to the
original owner after the necessity to retain it
ceases. It is manifest that there may be two
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stages when the property may be returned to
the owner. In the first place it may be
returned during any inquiry or trial. This may
particularly be necessary where the property
concerned is subject to speedy or natural
decay. There may be other compelling reasons
also which may justify the disposal of the
property to the owner or otherwise in the
interest of justice. The High Court and the
Sessions Judge proceeded on the footing that
one of the essential requirements of the Code
is that the articles concerned must be
produced before the court or should be in its
custody. The object of the Code seems to be
that any property which is in the control of the
court either directly or indirectly should be
disposed of by the court and a just and proper
order should be passed by the court regarding
its disposal. In a criminal case, the police
always acts under the direct control of the
court and has to take orders from it at every
stage of an inquiry or trial. In this broad
sense, therefore, the court exercises an
overall control on the actions of the police
officers in every case where it has taken
cognizance."
9. The Court further observed that where the
property is stolen, lost or destroyed and there is no
prima facie defence made out that the State or its
officers had taken due care and caution to protect
the property, the Magistrate may, in an appropriate
case, where the ends of justice so require, order
payment of the value of the property.
10. To avoid such a situation, in our view, powers
under Section 451 CrPC should be exercised
promptly and at the earliest.
Valuable articles and currency notes
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11. With regard to valuable articles, such as, golden
or silver ornaments or articles studded with
precious stones, it is submitted that it is of no use
to keep such articles in police custody for years till
the trial is over. In our view, this submission
requires to be accepted. In such cases, the
Magistrate should pass appropriate orders as
contemplated under Section 451 CrPC at the
earliest.
12. For this purpose, if material on record indicates
that such articles belong to the complainant at
whose house theft, robbery or dacoity has taken
place, then seized articles be handed over to the
complainant after:
(1) preparing detailed proper panchnama of
such articles;
(2) taking photographs of such articles and a
bond that such articles would be produced
if required at the time of trial; and
(3) after taking proper security.
13. For this purpose, the court may follow the
procedure of recording such evidence, as it thinks
necessary, as provided under Section 451 CrPC. The
bond and security should be taken so as to prevent
the evidence being lost, altered or destroyed. The
court should see that photographs of such articles
are attested or countersigned by the complainant,
accused as well as by the person to whom the
custody is handed over. Still however, it would be
the function of the court under Section 451 CrPC to
impose any other appropriate condition.
14. In case, where such articles are not handed
over either to the complainant or to the person from
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whom such articles are seized or to its claimant,
then the court may direct that such articles be kept
in bank lockers. Similarly, if articles are required to
be kept in police custody, it would be open to the
SHO after preparing proper panchnama to keep
such articles in a bank locker. In any case, such
articles should be produced before the Magistrate
within a week of their seizure. If required, the court
may direct that such articles be handed back to the
investigating officer for further investigation and
identification. However, in no set of circumstances,
the investigating officer should keep such articles in
custody for a longer period for the purposes of
investigation and identification. For currency notes,
similar procedure can be followed.
21. However, these powers are to be exercised by
the Magistrate concerned. We hope and trust that
the Magistrate concerned would take immediate
action for seeing that powers under Section 451
CrPC are properly and promptly exercised and
articles are not kept for a long time at the police
station, in any case, for not more than fifteen days
to one month. This object can also be achieved if
there is proper supervision by the Registry of the
High Court concerned in seeing that the rules
framed by the High Court with regard to such
articles are implemented properly."
23. The Supreme Court further clarified that at
the stage of considering an application under Sections
451 or 457 Cr.P.C., the court is not required to conduct
a detailed enquiry into title or ownership, and that a
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prima facie assessment of entitlement and safety of the
property would suffice.
24. In Muthoot Money limited v. The State of
Karnataka, passed by Co-ordinate bench of this
Honble Court in Writ Petition No. 100245/2025
(GM-Police), DD- 02.06.2023, relevant paragraphs
are extracted hereunder:
" This was following the judgment of the Apex
Court in the case of SUNDERBHAI AMBALAL DESAI. A
learned single Judge in a subsequent order passed in
CRIMINAL REVISION PETITION NO.210 OF 2024,
disposed on 04.10.2024, while dealing with an identical
circumstance has laid down certain guidelines. I deem it
appropriate to notice the same. They read as follows:
47. As such, the following directions are issued
which would cover in general the disposal of the
properties as is contemplated under Section 451 and
457 of Cr.P.C., and presently under the provisions of
Section 497 of 30 Bharatiya Nagarik Suraksha Sanhita,
2023 ('BNSS' for short).
Directions/Guidelines:
(1) Description of the seized property shall be
incorporated in the seizure mahazar so as to distinctly
identify the seized property at all stages in the criminal
trial.
(2) Mahazar shall include, serial numbers, make of
the seized property, manufacturers name, if any,
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distinctive marks, if any, hall mark, if any, on the gold
and silver articles with distinct numbers.
(3) Mahazar shall include, approximate value of the
seized property (estimation of valuation to be obtained
from the registered valuers wherever necessary). It shall
accompany the P.F. Memo when it is placed before the
learned Trial Magistrate.
(4) Trial Magistrate shall verify the contents of
mahazar with aforesaid details and personally examine
the seized properties and satisfy that the seized
properties are tallying with the description made in the
mahazar and P.F. Memo.
(5) Unless a specific grounds/reasons are
made out by the Investigating Agency, seized
property shall not be allowed to be retained by the
Investigating Agency.
(6) Even if the request for retention is allowed, the
learned Trial Magistrate instead of passing a mechanical
order by initialing on the readymade seal with words
'permitted to retain', pass a suitable speaking order in
the order sheet of the case, directing the Investigating
Agency that they would be retaining the property as a
'Bailee' and ensure that proper care is taken to preserve
the seized property.
(7) Learned Trial Magistrate shall ensure that
proper infrastructure is available with the police for
preservation of the seized material objects and must
report to the Court as to its status when the charge
sheet is filed.
(8) If the seized property is sent to the Forensic
Science Laboratory, Investigating Agency shall ensure
that the property is sent in a proper sealed condition
and seals are intact, at all levels.
(9) Whenever the property is ordered to be
retained by the Investigating Agency, and if an
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application seeking release is rejected, after the
investigation, and if the need of retaining property
is not imperative, the Court may pass suitable
orders with regard to the interim disposal of the
property.
(10) Learned Trial Magistrates/leaned Sessions
Judges are hereby directed to ensure the disposal of the
property in respect of Narcotic drugs and psychotropic
substances as per the directions of the Hon'ble Supreme
Court in the case of Union of India vs. Mohanlal and
another, reported in (2016) 3 Supreme Court Cases
379.
(11) In case of seizure of the vehicles, the standard
operating procedure and the amendment to the Rule
232G of Karnataka Motor Vehicles (Amendment) Rules,
2018 shall be borne in mind by the learned Trial
Magistrate while disposing the application filed under
Section 451 and 457 Cr.P.C., or under Section 497 of
BNSS.
(12) In respect of the electronic and digital
material objects, the learned Trial Magistrate shall
ensure that the same to be retained by the police under
retention order to ensure that the same are not exposed
to the atmospheric moisture, resulting in damage to the
seized electronic equipment or data stored therein.
(13) Necessary directions in this regard shall be
made in the order while P.F. Memo is filed into the Court
seeking retention of the seized electronic items,
Compact Disc, Pendrives and such other storage media
when produced and ordered to be retained shall be
properly preserved by taking necessary precautions so
as to avoid the damage to the data stored therein which
may have a direct bearing on the merits of the trial.
(14) Precious items like Gold, Silver shall not
be ordinarily to be retained with the Investigating
Agency unless the same is required for
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investigation purpose like identity, finger print
examination etc., and wherever it is necessary,
photographs/videographs of the seized material
objects can ordered to be returned to the applicant
after deciding the rival claim, if any.
(15) In respect of the explosives, inflammable
substances, like adulterated petroleum products, gas
cylinders etc, the learned Trial Magistrate shall ensure
the safety of the seized material objects, not only the
safety of seized material objects and possible accident in
the place where it is stored and pass suitable orders.
(16) In respect of perishable items, the learned
Trial Magistrate without loss of time, shall consider the
application and pass suitable orders like auctioning the
perishable items and directing the auction money to be
kept in 'escrow account' subject to the final result of the
criminal proceedings.
(17) In respect of the seized material objects under
the special enactments like Essential Commodities Act
etc., learned Trial Magistrate, shall strictly adhere to the
rules and regulations under the special enactment and
pass appropriate orders as early as possible.
(18) In respect of seized cash, photograph/
videograph of the currency notes to be taken and serial
numbers of the seized currency notes shall be written in
a mahazar. Immediate steps are to be taken to deposit
the currency notes to Reserve Bank of India and value of
the currency notes thereof shall be ordered to be
returned to the successful party at the end of the trial."
(Emphasis supplied)
At guideline No.14 supra, the coordinate bench
holds that precious items like gold and silver shall
not be ordinarily retained with the Investigating
Agency unless the same is required for
investigation purpose like identity, finger print
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examination etc., and whenever it is necessary
photographs/videographs of the seized material
objects can be ordered to be returned to the
applicant after deciding the rival claim, if any.
8. The High Court of Madras in MUTHOOT
FINCORP LIMITED v. INSPECTOR OF POLICE , has
held as follows:
".... .... .... 13. It is seen that the accused was
arrested by the 1 st respondent Police, the accused gave
confession. In his confession, he disclosed about the
pledging of jewels with the petitioners, which were
stolen by him from the house of the 2nd respondent.
The accused gave the bill particulars of the jewels, which
were pledged with the petitioners and the bill
particulars. Thereafter, the 1st respondent Police issued
summons on 11.08.2015 as per law. The petitioners are
duty bound to produce the book of account, records,
files and documents, which are necessary for
investigation. Once it is proved that the jewels are
stolen, the same are to be delivered to the police, if it is
required.
14. In view of the same, the petitioners cannot
raise any objection for issuance of summons and
production of books and jewels. If the petitioners are
aggrieved and feel that they have right over the
properties, they can approach the concerned Court, to
safeguard and secure their rights by filing appropriate
petition. If the petitioners or any other person filed a
petition seeking interim custody of the jewels, the
concerned Court to issue notice to them and after
enquiry to pass appropriate orders.
15. With the above observation, this Criminal
Original Petition is disposed of. In view of the long
pendency of FIR, the 1st respondent Police is to file a
charge sheet within two months from the date of receipt
of a copy of this order, before the concerned Court. The
concerned Court is to conclude the trial within a period
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of three months from the date of filing of charge sheet.
Consequently, the connected Criminal Miscellaneous
Petition is closed."
(Emphasis supplied)
9. Another coordinate bench in the case of
MUTHOOT FINANCE LIMIED v. STATE OF KARNATAKA ,
has held as follows:
".... .... .... 7. During investigation, the Investigating
Officer would be required to ascertain various aspects
including the ownership of the said gold and it is for the
Court seized of the matter to decide as to in whose
favour the gold has to be returned, if an application
under Section 454 of the earlier Code of Criminal
Procedure and now Section 500 of the BNSS were to be
filed. Of course, at that time the petitioner can always
place its rights and claims before the said Court for
being decided. The true owner of the gold cannot be
deprived of the use of the gold, merely because the
same is pledged with a gold finance company after being
stolen from such true owner. The Gold Finance Company
is vested with a duty to carry out proper due diligence
before accepting the gold as a pledge for a loan
disbursed.
8. There are innumerable matters coming up before
this court where stolen gold is pledged with a gold
finance company. I'am of the considered opinion that
this aspect would have to be examined by the concerned
authorities and proper guidelines have to be formulated
in relation to such pledging of gold, ascertainment of
ownership, identity of the person pledging the gold,
implication of pledging stolen gold, manner of dealing
with such gold when criminal proceedings are taken up
etc.,. Therefore, I request the Law Commission,
Karnataka to look into this matter and formulate
necessary guidelines/rules or the like as deemed fit.
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9. In that view of the matter, directing the
petitioner to co-operate with the Investigating Officer
and make available all the details relating to the pledge
as also permit the inspection of the gold, which if
required the Investigation Officer can take receipt of and
deposit with the Court seized of the matter, on coming
to the conclusion that the said gold is stolen, it is made
clear that the police officer cannot retain the gold in his
possession, but would have to deposit the same with the
court seized of the matter. The court seized of the
matter while considering any application for release of
the gold or at the time when the court were to pass an
order of release for any reason whatsoever, would have
to issue notice to the Petitioner and afford an
opportunity of hearing to the petitioner before ordering
the release. With the above observations, the writ
petition stands disposed of."
(Emphasis supplied)
The coordinate bench holds that the true owner of
the gold cannot be deprived of the use of gold, merely
because it is pledged with the finance company. The
petitioner can approach the concerned trial Court seized
of the matter and file an application under Sections 451
and 457 of the Cr.P.C. and place its rights and claims
before the said Court.
10. The learned counsel for the petitioner submits
that this Court must permit gold to be in the hands of
the pledgee i.e., Muthoot Finance as is ordered in every
case. The said submission is not acceptable. The
coordinate benches of this Court have laid down
guidelines as quoted supra and have directed that the
finance company should approach the concerned Court
under Sections 451 and 457 of the Cr.P.C. by filing
application. A division bench of the High Court of
Bombay again in the case of MANAPPURAM FINANCE
LIMITED v. STATE PUBLIC PROSECUTOR , has held
as follows:
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".... ..... .... 2. The petitioner claims that some gold,
which is the subject matter of criminal breach of trust
has been pledged with the petitioner. Based in this the
petitioner seeks a writ of mandamus commanding
respondent No.2 i.e., the Police Inspector, Ponda Police
Station not to take possession of the gold ornaments
which the petitioner claims are legally pledged with the
petitioner. This petition has been instituted in respect to
an order dated 3-12-2022 issued by the IO to the
petitioner requiring the petitioner to produce the gold
ornaments and all the documents in terms of Section 91
and 102 of the Criminal Procedure Code (Cr.P.C.). The
notice refers to the FIR dated 2-12-2022 alleging an
offence under Section 406 of the IPC.
3. In our opinion, this petition is misconceived. The
issues as to whether the gold ornaments which are the
subject matter of the criminal breach of trust are indeed
pledged with the petitioner or not, terms of such pledge,
etc., cannot be gone into by us in the exercise of our
extraordinary jurisdiction. This would involve disputed
questions which cannot be adequately resolved in the
absence of such alleged pledgors who have not even
been impleaded as parties to this petition. In any case,
we are satisfied that the petitioner has alternate and
efficacious remedies available to it under the provisions
of the CrPC where, all such issues can be considered
threadbare. For instance, under Section 451 of the CrPC
the Criminal Court during an inquiry or trial can make
necessary orders for proper custody of the property
produced before. Similarly, the provisions of Section 457
deal with the procedure of the Police upon seizure of
property.
4. Mr. Gaonkar also places on record a decision of
the Hon'ble Supreme Court in Sunderbhai Ambalal Desai
v. State of Gujarat - (2002) 10 SCC 283 which is
concerned with the disposal of muddemal articles, kept
in policy custody, pending trial. In this decision the
Hon'ble Supreme Court has held that the object and
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scheme of the various provisions of the Code appear to
be that where the property which has been the subject
matter of an offence is seized by the police it ought not
to be retained in the custody of the court or of the police
for any time longer than what is absolutely necessary.
The procedure for disposal of valuable articles is also
laid down.
5. Sunderbhai Ambalal Desai (supra) was delivered
in the context of provisions of Sections 451 and 457 of
the Criminal Procedure Code. Therefore, it is for the
petitioner to invoke the said provisions before the
appropriate J.M.F.C. in case such occasion arises.
Invoking our extraordinary jurisdiction or seeking a writ
of mandamus that would have tendency to interfere with
the investigation, will not be appropriate remedy.
6. For all the above reasons, we decline to
entertain this petition. However, we clarify that it will be
open to the petitioner to take out such proceedings as
are available under the law for securing its interest.
Nothing in this order is intended to prejudice the rights,
if any of the petitioner or other parties, in this regard."
The division bench holds that the judgment in the
case of SUNDERBHAI AMBALAL DESAI was delivered by
the Apex Court in the context of provisions of Sections
451 and 457 of the Cr.P.C. Therefore, it was for the
petitioner to invoke the said provisions before the JMFC
Court.
11. In the light of the law laid down by the
coordinate benches and the division bench of other High
Court, the unmistakable inference is non-entertainment
of petition qua the prayer that is sought. It is for the
petitioner at every instance to knock at the doors of the
concerned Court by filing applications for release of gold.
In the event of such an application is filed, the
concerned Court in consonance with the principles of
natural justice, shall pass necessary orders in
accordance with law. Except the aforesaid observation,
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no other prayer of the petitioner would merit
consideration."
24. In General Insurance Council v. State of
Andhra Pradesh, reported in (2010) 6 SCC 768, the
Apex Court reiterated that continued retention of
valuable articles by the police serves no purpose and
that interim custody should ordinarily be granted
subject to appropriate conditions.
25. This Court has consistently followed the
above principles and held that mere existence of rival
claims or pendency of investigation is not, by itself, a
ground to reject an application under Sections 451 or
457 Cr.P.C., particularly when the property is
identifiable and traceable.
26. In the present case, it is not in dispute that
the seized articles, including gold, silver, cash and
other movable properties, were recovered pursuant to
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investigation and are presently in the custody of the
police.
27. The learned Magistrate, while rejecting the
applications filed under Sections 451 and 457 of
Cr.P.C., has observed that the power of the Court
under the said provisions is limited and that, while
exercising such power, the Magistrate cannot go into
questions of title or decide serious rival claims which
would require detailed analysis and appreciation of
evidence. The learned Magistrate has further observed
that, at this stage, neither the accused nor the de-facto
complainant has produced bills or authentic documents
to substantiate their respective claims over the seized
articles and that, since there exists a serious dispute as
to entitlement, such rival claims cannot be adjudicated
under Sections 451 and 457 Cr.P.C. Consequently,
both the applications came to be rejected, leaving the
parties to approach the civil court.
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28. At the outset, there can be no quarrel with
the legal proposition that, while exercising jurisdiction
under Sections 451 and 457 Cr.P.C., the Magistrate is
not expected to conduct a roving enquiry into title or
adjudicate complicated civil disputes. However, the
error committed by the learned Magistrate lies in the
manner in which the said principle has been applied to
the facts of the present case.
29. The Hon'ble Supreme Court in Sunderbhai
Ambalal Desai (supra), has categorically held that
the object of Sections 451 and 457 Cr.P.C. is to ensure
that seized property is not allowed to remain idle in
police custody for an unduly long period. The Apex
Court has further held that, at the stage of granting
interim custody, the Court is only required to form a
prima facie opinion as to who would be the proper
person to hold custody, subject to appropriate
safeguards, and that a detailed enquiry into ownership
is neither contemplated nor desirable.
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30. In the present case, the learned Magistrate
has noticed that there are rival claims and that neither
party has, at this stage, produced conclusive
documentary proof of ownership. However, the very
existence of rival claims or absence of conclusive proof
cannot, by itself, be a ground to reject an application
for interim custody, particularly when the seized
articles are identifiable and can be produced as and
when required during trial.
31. The reasoning that "serious rival claims
cannot be decided under Sections 451 and 457
Cr.P.C.", though legally sound, has been misapplied to
deny interim custody altogether, which is contrary to
the ratio laid down by the Hon'ble Supreme Court. The
law does not mandate that interim custody must be
refused whenever rival claims exist; rather, it
mandates that such custody be granted subject to
conditions, without deciding title.
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32. It is also significant to note that the learned
Magistrate has, in the very same proceedings, released
other movable properties such as vehicles, passport
and other articles in favour of the petitioner-accused
by placing reliance on the judgment in Sunderbhai
Ambalal Desai (SUPRA). Having done so, the refusal
to release the remaining seized articles, on the very
same legal principles, without any distinguishing
reasons, renders the impugned order internally
inconsistent.
33. The contention of the learned High Court
Government Pleader that further investigation is
pending under Section 173(8) Cr.P.C. cannot be
accepted as an absolute bar to grant interim custody.
The pendency of further investigation does not justify
indefinite retention of valuables in police custody.
34. The approach adopted by the learned
Magistrate, in effect, results in the seized articles
remaining in police custody till conclusion of trial, which
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is precisely what the Hon'ble Supreme Court has
repeatedly deprecated. Such an approach defeats the
very object of Sections 451 and 457 Cr.P.C. and results
in avoidable hardship.
35. This approach, in the considered view of this
Court, is contrary to the settled principles of law laid
down by the Hon'ble Supreme Court. At the stage of
granting interim custody, the court is not expected to
conclusively determine ownership. What is required is a
prima facie satisfaction as to who would be the proper
person to hold custody, coupled with adequate
safeguards to secure production of the property during
trial.
36. Continued retention of valuable articles such
as gold and silver in police custody serves no useful
purpose and may, in fact, result in misuse or loss,
which the law seeks to prevent.
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37. Insofar as the petition filed by the de-facto
complainant seeking interim custody of the very same
seized articles is concerned, this Court finds no merit to
interfere with the impugned order. As rightly noticed by
the learned Magistrate, at this stage, the de-facto
complainant has not produced any prima facie material
such as bank statements, transaction records or
documentary evidence to demonstrate loss of funds or
to establish a direct nexus between the seized articles
and the alleged offence. The claim of the de-facto
complainant is founded predominantly on allegations
which are yet to be tested during trial and further
investigation under Section 173(8) of Cr.P.C. is
admittedly pending. In the absence of prima facie
material and in view of the serious dispute regarding
entitlement, this Court is of the considered opinion that
no case is made out to grant interim custody in favour
of the de-facto complainant at this stage. On the other
hand, admittedly the articles are seized from the
custody of the accused. The learned magistrate has
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released certain articles like vehicles etc,. In his favour,
which order has not been challenged by the
complainant.
38. Having regard to the totality of
circumstances, prima facie this court is satisfied that
accused would be entitled to the custody of the articles
seized in this case and also that the rejection of the
application filed by the petitioner/accused suffers from
non-application of mind and erroneous exercise of
jurisdiction, warranting interference under Section 482
Cr.P.C.
39. Therefore, this Court is of the considered
opinion that the impugned order, insofar as it relates to
the petitioner/accused in Crl.P. No.9844/2025, suffers
from erroneous exercise of jurisdiction and non-
application of the settled principles of law, warranting
interference by this Court.
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40. Accordingly, Criminal Petition No.9356/2025
filed by the de-facto complainant stands dismissed,
reserving liberty to the said party to seek appropriate
relief before the competent Court at a later stage, in
accordance with law.
44. Consequently, Crl.P. No.9844/2025 is
allowed. The impugned order dated 19.04.2025
passed by the learned XLV Additional Chief Judicial
Magistrate, insofar as it relates to rejection of the
application filed by the petitioner/accused under
Sections 451 and 457 of the Code of Criminal
Procedure, stands set aside.
45. The respondent-Police are hereby directed to
release the seized articles covered under P.F.
Nos.43/2023, 45/2023 and 46/2023,(as per prayer) in
favour of the petitioner/accused, subject to the
following conditions:
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i. The Investigating Officer shall, prior to
release, obtain a valuation report from a
Government-approved/registered valuer
in respect of the seized gold and silver
articles and place the same on record
before the learned Magistrate.
ii. The petitioner shall execute an indemnity
bond for the total assessed value of the
seized articles, including cash, with one
solvent surety for the like sum, to the
satisfaction of the learned Magistrate.
iii. A detailed inventory/panchanama shall be
drawn, photographs and videographs of
each article shall be taken from multiple
angles, particulars such as weight,
quantity, identification marks and
denomination (in case of cash) shall be
clearly recorded. The same shall be
countersigned by the petitioner and
preserved as part of the record, in lieu of
physical production during trial, as
contemplated in Sunderbhai Ambalal
Desai (SUPRA).
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iv. The petitioner shall not alienate, transfer,
pledge, mortgage or otherwise encumber
the seized articles or cash amount till
conclusion of the trial, except with prior
permission of the Trial Court.
v. The petitioner shall produce the seized
articles before the Trial Court or
Investigating Officer as and when
directed, for purposes of identification,
evidence or further investigation.
vi. The petitioner shall file a written
undertaking before the Trial Court
agreeing to abide by all the conditions
imposed herein and acknowledging that
breach of any condition would entail
cancellation of interim custody.
vii. The release of the seized articles is purely
interim in nature and shall not amount to
adjudication of title, ownership or
entitlement, which shall be decided
independently during trial or in
appropriate proceedings.
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viii. Observations made herein are only for the
purpose of disposal of the petitions and
shall not influence the trial or further
investigation of the case in any manner.
SD/-
(MOHAMMAD NAWAZ)
JUDGE
kmv
CT:PA
