Orissa High Court
Asian Pacific Shipping vs Union Of India & Anr. ..... Opposite ... on 7 March, 2025
Author: A.K. Mohapatra
Bench: A.K. Mohapatra
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.441 of 2024
An application filed under Section 482 of the Criminal
Procedure Code, 1973.
Asian Pacific Shipping ..... Petitioner
Company Ltd. (Onwer)
Mr. Prateik Parija, Adv.
-versus-
Union of India & Anr. ..... Opposite Parties
Mr. P.K. Parhi, D.S.G.I.
along with
Mr. D.R. Bhokta, C.G.C.
CRLREV No.93 of 2024
An application filed under Section 401 of the Criminal
Procedure Code, 1973 read with Section 397 of the Criminal
Procedure Code, 1973.
Union of India ..... Petitioner
Mr. P.K. Parhi, D.S.G.I.
along with
Mr. D.R. Bhokta, C.G.C.
-versus-
Asian Pacific Shipping ..... Opposite Party
Company Ltd. (Onwer)
Mr. Prateik Parija, Adv.
Page 1 of 37
CORAM:
JUSTICE A.K. MOHAPATRA
_____________________________________________________
Date of Hearing : 20.12.2024 | Date of Judgment: 07.03.2025
______________________________________________________
A.K. Mohapatra, J. :
1. The first application bearing CRLMC No.441 of 2024
has been filed by the Petitioner, i.e. the owner of the Shipping
Company, by invoking the inherent jurisdiction of this Court
under Section 482 of Cr.P.C. In such application the Petitioner,
being aggrieved by a part of the order dated 12.02.2024 passed
by the learned Special Judge, Kujang in Misc. Case No.02 of
2024 arising out of Case No.Spl. G.R. (N) 65 of 2023, although
the Petitioner does not challenge the order dated 12.02.2024 in
toto on merits, the Petitioner has approached this Court seeking
partial modification of order dated 12.02.2024. However, the
entire endeavour of the learned counsel appearing for the
Petitioner is directed towards modification of order dated
12.02.2024 specifically, towards reducing the quantum of the
Bank Guarantee as well as Indemnity Bond as has been
directed by the learned Special Judge, Kujang.
2. Similarly, the Union of India has approached this Court
by filing CRLREV No.93 of 2024 by invoking the jurisdiction
of this Court under Section 401 Cr.P.C. read with Section 397
of Cr.P.C., 1973. The Union of India represented by the
Superintendent, Customs (Preventive) Commissionerate,
Bhubaneswar has prayed for quashing of very same order dated
12.02.2024 passed by the learned Additional District &
Sessions Judge, Kujang in Crl. Misc. Case No.02 of 2024.
3. Since both the matters self-same factual background
facts and in both the applications the order dated 12.02.2024
passed in Crl. Misc. Case No.02 of 2024 by the learned
Additional District & Sessions Judge, Kujang is under
challenge, this Court deems it proper to take up both the
matters together for hearing and the same is being disposed of
by the following common order.
4. Before discussing the factual aspects of the matter, this
Court would like to shed some light on the orders passed in the
present proceeding. Initially, the application was listed before
the Coordinate Bench on 22.02.2024. Since, Mr. P.K. Parhi,
learned D.S.G.I. accepted notice on behalf of the Opposite
Party-Union of India, the issuance of notice to the Opposite
Party was waived. The order sheet further reveals that the
matter was listed before the learned Coordinate Bench on
several occasions. A perusal of order sheet dated 14.03.2024
indicates that the learned Coordinate Bench upon coming to
know about the fact that the Opposite Party-Union of India has
filed a CRLREV No.93 of 2024 challenging order dated
12.02.2024, directed the Registry to list the said CRLREV
along with the present application of the Petitioner filed under
Section 482 of Cr.P.C. The order dated 20.03.2024 reveals that
notice was issued to the Opposite Parties which was accepted
by the learned D.S.G.I.
Order dated 10.04.2024 passed by the learned
Coordinate Bench reveals that a submission was made before
the learned Coordinate Bench to the extent that the Petitioner
seeks variation with regard to the second condition whereby the
Petitioner-Company was required to furnish a bank guarantee
of Rs.10,00,00,000/-. It further reveals that, the Petitioner was
ready and willing to furnish the indemnity bond commensurate
with the valuation of the vessel. On the contrary, learned
D.S.G.I. for the Customs Dept. contended that while
considering the application under Section 457 Cr.P.C, filed at
the instance of the present Petitioner, no appropriate
opportunity was granted to the Customs Dept. and that the
Customs Dept. vide objection dated 30.01.2024 had
specifically prayed for some time to place on record the
valuation report. Order No.9, dated 01.05.2024 of the
Coordinate Bench reveals that hearing was concluded and
judgment was reserved.
Order No.10, dated 15.05.2024 reveals that when the
matter was reserved for judgment, a mention was made before
the learned Coordinate Bench on 09.05.2024 requesting for
early pronouncement of the judgment. The same further reveals
that one Mr. Lue Manh Chang, purported to be an official of
the Petitioner company, has addressed a letter to this Court.
Finally, taking serious note of the language used in such letter,
the learned Coordinate Bench recused itself from the present
case and the Registry was directed to place the matter before
the Hon'ble Chief Justice for necessary orders. Thereafter, the
matter was placed before this Bench with the consent and
permission of the Hon'ble Chief Justice of the Orissa High
Court on 26.11.2024.
5. With the regard to the preliminary objection raised by
learned D.S.G.I. representing the Union of India, that no
opportunity of hearing was provided to the Union of India
while passing order dated 12.02.2024 by the learned Additional
District & Sessions Judge, Kujang and considering the
seriousness of the allegation made by Mr. D.R. Bhokta, learned
C.G.C. which has been taken note of by this Court in para-7 of
order dated 29.11.2024, this Court called for a report from the
learned Additional District & Sessions Judge, Kujang through
the Registry of this Court specifically enquiring as to whether
the Custom Dept. was given an opportunity of hearing or not.
6. At the outset, this Court would like to discuss the reply
submitted by the learned Additional District & Sessions Judge,
Kujang to this Court vide letter No.620 dated 03.12.2024. A
copy of such report was placed before this Court by the
Registry. Considering the seriousness of the allegation made by
the learned C.G.C. it is imperative that this Court should first
take up the issue with regard to not providing an opportunity of
hearing to the Opposite Party-Union of India by the learned
Additional District & Sessions Judge, Kujang,. In his reply
dated 03.12.2024, learned court below has categorically stated
that the Customs Dept. was given opportunity of hearing in Crl.
Misc. Case No.02 of 2024 arising out of Case No.Spl. G.R. (N)
65 of 2023. Furthermore, advocate-Shri Malaya Ranjan Dash
who is appointed as the Special Public Prosecutor on behalf of
the Superintendent of Customs (Preventive) Commissionerate,
Bhubaneswar in both Spl. G.R.Case No.65 of 2023 and Crl.
Misc. Case No.02 of 2024 appeared before the Court on
06.01.2024 and took part in the hearing in the Court. He had
also submitted his written note of objection in the present
matter on 30.01.2024. A digitized copy of the TCR in Crl.
Misc. Case No.02 of 2024 was also forwarded to this Court
along with letter dated 03.12.2024. On a perusal of order dated
12.02.2024, this Court observed that in paragraphs-7, 8 and 9
of the order, the contentions raised by the learned counsel for
the Respondent has also been taken note of by the learned court
below. In the aforesaid factual backdrop, further, on a careful
examination of order dated 12.02.2024, this Court has no
hesitation in overruling the preliminary objection raised by the
learned D.S.G.I. with regard to the allegation that the Opposite
Parties were not provided any opportunity by the learned
Additional District & Sessions Judge, Kujang while passing
order dated 12.02.2024.
7. Before adjudicating the legality and validity of order
dated 12.02.2024, which is the subject matter of challenge in
both the above noted applications, this Court would like to
place on record the factual background of the present case in
short. The present matter involves a vessel, namely M.V.
DEBI, which was under charter agreement with charter DAVA
and was on a Voyage from Gresik Port, Indonesia to Paradeep
Port, India. The vessel reached at Paradeep on 29.11.2023 and
commenced loading of cargo on 30.11.2023 and was supposed
to discharge to Fredericia Port, Denmark. During the process of
loading of cargo, a malfunctioning of the vessel was detected
i.e. an oil leakage on crane no.3 of the vessel. As a result, the
master of the vessel sent the Chief Officer as well as the second
engineer to inspect it. During such inspection, it was found that
some strange packets were present. Further, similar packets
were also detected on crane no.2 of the vessel.
After detection of the suspicious packets on the crane of
the vessel, the master of the vessel immediately sent a mail to
the charter agent and also informed the Govt. authorities about
the incident through mail. Thereafter, the Paradeep police
station informed about the incident to the offices of Paradeep
Custom Division. Basing upon such information, the offices of
Paradeep Custom Division conducted a search and seizure in
the vessel. Accordingly, they have seized a total of 22.22 k.g.
of white/brown colour hard brittle substance with pungent
smell. Such seized material was suspected to be cocaine and the
same was kept in a total of 22 number of packets which were
recovered from on-board the vessel MV DEBI along with the
packing materials and magnet. Subsequently, on 22.12.2023,
the vessel MV DEBI was seized vide a seizure memo dated
22.12.2023 under Panchnama dated 22.12.2023. Accordingly, a
Special G.R. case was registered and the investigation started.
8. During the aforesaid investigation, the statement of the
master of the vessel, 9 nos. of Ship crane operators, the
Supervisor of PICT working on-board the vessel and others
were recorded. Thereafter, an application under Section 52A of
the NDPS Act, 1985 was filed in the court of learned
Additional District & Sessions Judge, Kujang with a prayer for
inventory of the vessel. This was followed by a petition bearing
Crl. Misc. Case No.2 of 2024, which arises out of Case No.Spl.
G.R. (N) 65 of 2023, filed by the Petitioner-Company under
Section 457 of the Cr.P.C for interim release of the vehicle in
their favour on the grounds mentioned in the said application.
The said application was heard by providing an opportunity of
hearing to both sides and finally, vide order dated 12.02.2024,
the learned Additional District & Sessions Judge, Kujang
disposed of the application thereby directing the interim release
of the vehicle in zima of the present Petitioner subject to the
conditions mentioned in order dated 12.02.2024. Being
aggrieved by the entire order dated 12.02.2024, the Union of
India has filed the above noted CRLREV, whereas the
Petitioner in CRLMC application i.e. the Shipping Company
has approached this Court being aggrieved by the conditions
imposed by the learned court below while directing for interim
release of the vehicle in favour of the Petitioner. This is the
essence of the factual matrix in which both the applications, i.e.
CRLMC No.441 of 2024 and CRLREV No.93 of 2024, have
been filed before this Court.
9. In CRLMC No.441 of 2024, the Petitioner, i.e. Asia
Pacific Shipping Co. Ltd., is a Vietnam based foreign entity
and they have approached this Court with a prayer for interim
release of their vessel, namely, MV DEBI which has been
seized by the Indian authorities for commission of a crime
punishable under the NDPS Act, 1985. Although the vessel was
detained following discovery of suspicious materials on-board
the ship, the Petitioner argued that the vessel owner and the
crew have no involvement in the recovery of alleged
contraband articles from the above named ship. Moreover, the
present application has been filed specifically challenging the
conditions imposed by the learned Additional District &
Sessions Judge, Kujang while directing the interim release of
the vehicle. On the contrary, the Union of India has challenged
the interim release of the vehicle by the learned court below
vide order dated 12.02.2024.
10. Heard Shri Prateik Parija, learned counsel appearing for
the Petitioner in CRLMC No.441 of 2024 and Shri P.K. Parhi,
learned D.S.G.I. along with Mr.D.R.Bhokta, learned C.G.C. for
the Union of India. Similarly, Shri P.K.Parhi, learned D.S.G.I.
along with Mr.D.R.Bhokta, learned C.G.C. advanced their
argument on behalf of the Petitioner in CRLREV No.93 of
2024 whereas Mr. Parija, learned counsel defended the
impugned order in the above noted CRLREV. Perused the
materials on record.
11. Mr. Parija, learned counsel for the Petitioner, raised the
following major grounds - recorded below in a concise form -
in course of his argument;
I. The master of the vessel had forthwith intimated the
charters and customs authority regarding the presence of
suspicious material inside crane no.3 and basing upon
such information the contraband articles were seized.
II. The vessel in question being used for transportation of
public goods can very well be considered as a public
vessel and that in the process of loading and unloading of
the goods and articles in the vessel several 3rd party
operators are involved. Furthermore, several stevedores
and charterers have not only loaded the vessel but also
operated the cranes and other machineries on the vessel.
III. The financial conditions imposed on the Petitioner,
vide the impugned order are excessive, disproportionate
and punitive in nature, especially considering the fact that
contraband articles could be discovered, and subsequently
seized, only because of the information provided by the
master of the vessel and the crew members.
IV. As a result of the seizure of the vehicle, the vessel has
been continuously berthed for more than one year at PICT
which has caused immense financial losses to the owner of
the vessel, approximately to the tune of Rs.40 crores.
Thus, a condition for release in the nature of Bank
Guarantee would cause severe financial hardship to the
Petitioner and that the same would not be just and proper
in the given facts of the case.
V. The vessel & the crew members having been
thoroughly investigated and none of the crew members
having been arraigned in the proceeding so far, suggests
that it is highly unlikely that the vessel would be required
to be produced during trial. An indemnity bond of a
reasonable value would be sufficient to ensure production
of the vessel or any of its crew members, suit such a
situation arise in course of the trial.
VI. In view of the treaty dated 08.10.2007 between two
sovereign nations, i.e. India and Vietnam, for mutual legal
assistance in criminal matters, any apprehension on the
part of the prosecution with regard to production/non-
production of evidence during trial stands dispelled.
Further, in view of letter dated 04.12.2019 of the Ministry
of Home Affairs, Govt. of India, laying down a
comprehensive guideline for investigation abroad
particularly in Vietnam, such arrangement thoroughly
ensures that the criminals cannot escape or that the
evidence cannot be destroyed.
VII. The Petitioner being a Vietnamese Company is
having no direct banking relations with India. Thus,
securing a Bank Guarantee in India through a Nationalized
Indian Bank would be highly inconvenient for the
Petitioner.
VIII. The Petitioner-Company is ready and willing to
furnish an undertaking to the extent that the status,
condition or ownership of the vehicle shall remain
unchanged by the Petitioner during the trial. Therefore, the
apprehension of the Opposite Parties with regard to
disposal of the vessel or change of ownership holds no
water.
12. On the legal aspects of the matter the following points
were advanced by the learned counsel appearing for the
Petitioner:-
I. Neither the owners of the vessel nor its crew members
had any knowledge about the contraband articles on-board
the vessel or that they are in anyway involved in the
trafficking of such contraband articles. Even though such
contraband articles were detected while repairing crane
no.3 of the vessel, such fact was intimated to the
authorities by the master of the vessel. Moreover, the
packets containing the contraband articles were kept in a
concealed manner in an inaccessible area of the vessel
which was beyond the reach of any ordinary human being
and without the help of supporting machineries that part of
the vessel was inaccessible to every human being on-
board the said vessel.
II. The assumption by the custom authority of the crew's
negligence is not backed by any evidence on record. The
vessel being a public goods carrier, had access to 3rd
parties, like, stevedores, charterers, etc., who used to
manage the crane operation and as such had access to the
area where the packets were found. The section 457
Cr.P.C which provides for interim release of the vehicle/
vessel is always subject to reasonable condition. The
conditions imposed in the present case however are
excessive, arbitrary and unreasonable and would frustrate
the very purpose of enacting such a provision in Cr.P.C.
III. The Petitioner-company being a foreign entity, does
not have any banking accounts in India. Therefore,
imposing a condition in the shape of furnishing bank
guarantee would be unrealistic and the same would negate
the relief that has been granted in exercise of the power
conferred under Section 457 of Cr.P.C.
IV. The prolonged detention of the vessel at Paradeep has
resulted in the Petitioner-Company incurring huge
financial losses to the Petitioner-company and that the
same cannot be reimbursed even in the event it is found
that the Petitioner-company is not guilty of the offences as
has been alleged.
13. Mr. P.K. Parhi, learned D.S.G.I. representing the
customs authorities on the other hand contended that during
investigation it was found that the master of the vessel, MV
DEBI on 30.11.2023 informed the shipping agencies, through
e-mail, regarding the presence of strange packets on-board the
vessel with a request to further notify the same to Govt. and
concerned authority for quick action. Accordingly, the
aforesaid information was shared by M/s. Seaways Shipping &
Logistics to M/s. Paradeep International Cargo Terminal.
Thereafter, the security head of M/s. Paradeep International
Cargo Terminal informed the Paradeep Police Station, who in
turn informed the Superintendent, Paradeep Custom Division
under the Customs Commissionerate, Bhubaneswar. He further
contended that master of the vessel as well as the crew
members have denied their involvement during recording of
their statement in course of investigation. Although, some of
the crew members are still under suspicion as they had access
to the crime scene on-board the vessel during their routine
work and that some of the deleted data from their mobile
phones have not been recovered as of now. The note of
submission submitted by the learned D.S.G.I, which has been
submitted under the signature of Assistant Commissioner
Customs (Prev.) Commissionerate, Bhubaneswar, supports the
aforesaid contention of the learned D.S.G.I. Further, such note
of submissions reveals that no incriminating evidence, data,
messages, charts, e-mail etc. indicating involvement of the
crew members could be found as of now. However, they
apprehend that they might get something from the deleted data
from the mobile devices of the crew members which has been
sent to the Central Forensic Science Laboratory, Hyderabad for
examination.
14. The note of submission of the Opposite Party-Customs
authorities further reveals that the narcotic substances were
found to be affixed at a height of 57 feet to the ceiling beam of
the crane operator cabin inside the sheep crane nos.2 and 3
which is a highly restricted place on-board the vessel in
question. The vessel, MV DEBI is privately owned and used
for conveyance and commercial purpose by the Petitioner-
Shipping Company. Moreover, the entry and exist to the vessel
is highly restricted. The vehicle in question was acquired by the
Petitioner-company on 16.03.2023 at Panama and after
acquiring the vehicle, the same has passed through several
ports as has been indicated in the table appended to the note of
submission. Learned D.S.G.I, further referring to the
International Maritime Traffic prescribed under the Maritime
Security Convention vide Resolution adopted on 07.12.2006,
contended that the risk in the ports visited by the ships needs to
be reviewed regularly by the company and the master, with the
security measures being adjusted appropriately as required.
Thus, the Petitioner-company has failed to take appropriate
measures to prevent illicit drug trafficking. He further
contended that although the vehicle has been chartered to
different voyage charterers for business purpose, but still the
operational responsibility of the vessel lies with the Owner of
the vessel including the safety of the Crew members on-board.
As such the Petitioner-company is always responsible for
making sure that all necessary safety precautions have been
undertaken for the vessel.
15. Learned D.S.G.I, further contended that on the basis of
the complaint received and on the basis of the investigation
carried pursuant thereto, the complaint has been registered
against unknown accused persons for commission of crime
punishable under the NDPS Act, 1985 and, as such, the vessel
is liable to be confiscated under Section 60 of the Act, read
with Section 63 of the said Act. In view of Section 35 of NDPS
Act, the burden of proof lies with the Crew members of the
vessel in question and the Owner thereof to prove their
innocence. Moreover, during investigation none of the crew
members including the master of the vessel were able to answer
the question about how the contraband articles in such huge
quantity came on-board the Vessel in question. He further
contended that the previous crew members who had joined on-
board the vessel at Panama had signed off at UAE. Although an
assurance has been given by the Director of the Petitioner-
Company that the necessary arrangement shall be made to
bring the previous crew members and they shall be produced
before the Investigating Agency, however, no concrete
arrangement in this regard has been made as of now. On such
ground, learned counsel for the Union of India as well as the
custom authorities contended that the interim release of the
vehicle at this stage of the investigation would have an adverse
impact not only on the investigation but also on the entire trial.
Therefore, the order dated 12.02.2024 passed by the learned
Additional District and Sessions Judge, Kujang, thereby
directing the interim release of the vehicle under Section 457
Cr.P.C, is highly illegal and the same is liable to be set aside.
16. In view of the aforesaid analysis of the factual
background of the present case, further keeping in view the order
dated 12.02.2024 passed by the learned Additional District &
Sessions Judge, Kujang, the question that false for determination
in the above noted two cases, involving identical facts, i.e. 1) as to
whether the learned Additional District & Sessions Judge, Kujang
has committed any illegality in considering the application of the
Petitioner-Shipping Company under Section 457 of Cr.P.C. for
interim release of the vessel and accordingly, has passed an order
thereby directing interim release of the vehicle in favour of the
shipping company? 2) whether the terms and conditions subject to
which the vessel was directed to be released interimly in favour of
the shipping company are excessive, unreasonable and cause
serious prejudice to the Petitioner-Shipping Company?
17. Before making an attempt to answer the above noted two
legal issues involved in the present applications, this Court thinks
it imperative to first examine the Section 457 of the Cr.P.C. for
better understanding of the scope and ambit of the Section, the
entire section has been quoted hereinbelow:-
"457. Procedure by police upon seizure of property.-
(1) Whenever the seizure of property by any police
officer is reported to a Magistrate under the provisions of
this Code, and such property is not produced before a
Criminal Court during an inquiry or trial, the Magistrate
may make such order as he thinks fit respecting the
disposal of such property or the delivery of such property
to the person entitled to the possession thereof, or if such
person cannot be ascertained, respecting the custody and
production of such property.
(2) If the person so entitled is known, the Magistrate
may order the property to be delivered to him on such
conditions (if any) as the Magistrate thinks fit and if such
person is unknown, the Magistrate may detain it and shall,
in such case, issue a proclamation specifying the articles
of which such property consists, and requiring any person
who may have a claim thereto, to appear before him and
establish his claim within six months from the date of such
proclamation."
The language employed in Section 457 of Cr.P.C. is self-
explanatory. Therefore, the same does not call for an in-depth
analysis. Moreover, Section 457 of Cr.P.C. has been elaborately
discussed and analysed in various judgments delivered by the
Hon'ble Supreme Court as well as this Court. Undisputedly, the
provision contained in Section 457 of Cr.P.C. is a procedural
provision to be followed by the police upon seizure of property.
The first sub-Section provides whenever the seizure of the
property is reported to a Magistrate and such property is not
produced before a Criminal Court during an inquiry or trial, the
Magistrate may pass such order as he thinks fit respecting the
disposal or delivery of such property to the person entitled to the
possession thereof, and if such person cannot be ascertained,
respecting the custody and production of such property.
Therefore, a duty is cast upon the Magistrate to pass necessary
orders once the property is seized and reported to such
Magistrate. Moreover, discretion has been vested with the
Magistrate for disposal of such property or delivery of such
property to the person entitled to the possession thereof. If the
owner of the property is known, then the order shall be passed
with regard to the disposal of such property and if the owner is
unknown, then such order shall be passed with regard to the
custody and production of such property. In the instant case, since
the owner of the property is known, the Magistrate is duty bound
to pass an order with respect to the disposal of such property or
delivery of such property to the person entitled to the possession
thereof.
18. So far the sub-Section of Section 457 of Cr.P.C. is
concerned, the same provides that if the person so entitled to the
property is known, the Magistrate may order the property to be
delivered to him on such conditions (if any) as the Magistrate
thinks fit. Similarly, if the person is unknown, it is within the
discretion of the Magistrate to detain such property and issue a
proclamation specifying the articles which the property consists
of and require any person who may have a claim thereto to appear
before him and establish his claim within six months. On a critical
analysis of the provisions contained in Section 457 of Cr.P.C.,
this Court observes that the law makers, while enacting such a
provision, have conferred a vast discretionary power on the
Magistrate to take a decision with regard to the release of the
property. It is needless to mention here that it is well within the
jurisdiction of the Magistrate to pass an order rejecting the
application thereby refusing to release the seized property in the
event the learned Magistrate is of the opinion that the property is
required at the time of inquiry or trial.
19. Applying the aforesaid provision to the facts of the
present case, this Court observes that when the shipping company
filed an application for interim release of the vehicle before the
learned Court in seisin over the matter, at that time the learned
court in seisin over the matter was well aware of the requirement
of the seized vessel during investigation as well as trial.
Moreover, the ownership of such vessel remains undisputed. The
question, therefore, which remains is as to whether the seized
property is required during the inquiry or trial? In reply to the said
question, this Court would like to observe that none other than the
court in seisin over the matter is in the best position to decide
with regard to the use of the seized property during inquiry or
trial. Thus, by virtue of the impugned order dated 12.02.2024, the
learned court in seisin over the matter has exercised its discretion
in favour of the release of the seized property to its real owner,
subject to certain terms and conditions.
20. To understand the scope and ambit of Section 457 of the
Cr.P.C., this Court would like to refer to certain judgments of the
Hon'ble Supreme Court in this regard. In Basavva Kom
Dyamanagouda Patil v. State of Mysore reported in (1977) 4
SCC 358. The question arose as to whether the seized ornaments
kept in the truck should be returned to the rightful owner while
the criminal case is still pending. The Hon'ble Supreme Court
after analysing the provision contained under Section 457 of
Cr.P.C. held that the power under Section 457 Cr.P.C. should be
exercised promptly to prevent unnecessary hardship to the owner.
Further, it was emphasized that seized property should not be kept
in police custody for an indefinite period unless it is essential for
the investigation. If the property is not required as evidence, it
should be returned to the rightful claimant upon furnishing
appropriate security or bond. The Hon'ble Supreme Court
stressed the importance of safeguarding the interests of the owner
while ensuring that the property remains available for trial if
needed.
21. In Sunderbhai Ambala Desai v. State of Gujarat reported
in (2002) 10 SCC 283, the Hon'ble Supreme Court was dealing
with an issue with regard to disposal of seized property under
Sections 451 and 457 of the Cr.P.C. While addressing the
prolonged retention of seized property in the custody of police
authorities, the Hon'ble Supreme Court observed that timely
disposal of such property is very much essential. Further,
emphasis was given to the fact that the seized property should not
be kept indefinitely in police custody, as the same leads to
unnecessary deterioration and loss of value. In the context of the
vehicle it was observed that the same should be released quickly
and that the seized vehicle should be returned to the rightful
owner upon furnishing security and ensuring their availability if
required during trial. The Hon'ble Supreme Court also laid
emphasis on the fact that the courts dealing with such application
should be pragmatic and every endeavour should be made to
prevent seized articles from turning into junk.
22. Similarly, in General Insurance Counsel v. State of
Andhra Pradesh reported in (2010) 6 SCC 768, the Hon'ble
Supreme Court was once again required to decide an issue
relating to release of seized vehicles. The Hon'ble Supreme Court
was addressing the larger issue of abandoned and unclaimed
vehicles lying in police stations for prolonged periods. After a
detailed analysis, the Hon'ble Supreme Court emphasized that the
vehicle seized in criminal cases should not be left unused in
police custody, as it leads to their depreciation. Further, it was
held that in case of insured vehicles, the rightful claimants-such
as insurance companies-should be allowed to take custody to
prevent further loss. In para-14 of the aforesaid judgment, the
Hon'ble Supreme Court has given several directions to facilitate
quick disposal of vehicles through proper legal mechanisms,
including returning them to the owners or auctioning them when
appropriate.
23. In Manjit Singh v. State (CRLMC No.4458 of 2013)
decided vide judgment dated 10.09.2014 by the Hon'ble Delhi
High Court, the issue before the court was that the Petitioner's
lost vehicle was recovered by the Police and was then released to
the Petitioner-Owner. Thereafter, an application was moved by
the Petitioner-owner for sale of the vehicle, which was allowed by
the impugned order but subject to the condition that the purchaser
shall also execute the superdari bond to produce the vehicle as
and when required. The Hon'ble Delhi High Court in para-68 to
73 has also laid down a detailed guideline to tackle such a
scenario. Additionally, certain general directions have been laid
down in para-86 to 90 of the said judgment was also issued.
24. Additionally, a Division Bench of this Court has also laid
down detailed guideline/ procedure for release of the seized
vehicles in Ashish Ranjan Mohanty v. State of Odisha reported
in 2022 SCC OnLine Ori 520. While deciding the aforesaid issue,
the Hon'ble Division Bench has taken note of certain practical
difficulties like the seized vehicles being dumped in the police
stations unattended. Such dumping causes encroachment on
public road adjoining the police station. The vehicles lying
exposed in an open area, and turning to junk, as a result the value
of the property decreases rapidly. The Hon'ble Division Bench
has also taken note of the seized articles lying in the malkhanas of
the police stations. Accordingly, the directives were issued by the
Hon'ble Division Bench for disposal of such seized property.
25. In a similar fashion, in Basudev Singh v. State of Odisha,
reported in 2022 (I) ILR-CUT-887, initially the Petitioner had
filed an application under section 457 of the Cr.P.C before the
learned trial court which was rejected without assigning any
reason for the rejection. Aggrieved, the petitioner preferred a
criminal revision wherein a coordinate bench of this Court set-
aside the impugned order of the lower court with a direction to
consider the matter afresh. After the matter was remanded back,
the learned Court below again rejected the application of the
Petitioner under section 457 of Cr.P.C. Finally, the Petitioner
approached this Court seeking relief in the matter. This Court,
while adjudicating the matter, had the occasion to deal with the
following three issues; vis-a-vis, Whether the petitioner, being the
registered owner, is entitled to the interim release of his vehicle?
Whether the provisions of the NDPS Act, particularly Section
60(3), bar the release of the vehicle before the trial concludes?
And whether the provisions (specifically Sections 451, 457) of
Cr.P.C apply to trials under the NDPS Act? Consequently, this
court analyzed various provisions of the NDPS Act (specifically
sections 51, 60 (3) and 63) along with section 457 of the Cr.P.C
and a catena of decisions by the Hon'ble Apex Court and this
Court, had ultimately set aside the impugned rejection order and
directed the interim release of the vehicle while reaffirming the
position that interim release of vehicles under the NDPS Act is
permissible under the provisions of the Cr.P.C, and, although it is
essential to protect state interests and prevent recurrence of crime,
it is also imperative that courts ensure that property rights of an
owner are not arbitrarily denied, especially when the guilt of the
accused is yet to be established. It was observed that Interim
release of the vehicle should be granted with safeguards instead of
a blanket rejection. Finally, this court held that the provisions of
the Cr.P.C (specifically sections 451 and 452) do indeed apply to
the NDPS Act and there is no explicit bar under the NDPS Act for
interim release of the vehicle.
26. In Bishwajit Dey v. The State of Assam (Criminal
Appeal No.87 of 2025) decided on 07.01.2025, the Hon'ble
Supreme Court was testing the validity of judgment dated
23.01.2024 passed by the Guwahati High Court. The issue
involved in the said case related the release of the vehicle (a
truck) under Section 457 of the Cr.P.C. The aforesaid vehicle was
seized by the police as it was detected that the same was
transporting contraband heroine in the vehicle. Since, the vehicle
was lying unattended at the police station and was lying exposed
to the sun and rain thereby exposing it to natural wear-and-tear
and deterioration, an application was moved by the owner of the
vehicle under Section 457 of the Cr.P.C seeking release of the
vehicle. The Hon'ble Supreme Court, on a threadbare analysis of
the fact as well as the various judgments on the issue, directed the
trial court to release the vehicle in question in the interim on
superdari after preparing a video and still photographs of the
vehicle and after obtaining all information-documents necessary
for identification of the vehicle. With a further condition that the
appellant shall not sell or part with the ownership of the vehicle
till conclusion of the trial and shall furnish an undertaking to the
trial court that he shall surrender the vehicle within one week of
such direction or pay the value of the vehicle if so ultimately
directed by the court.
27. A Division Bench of this Court in Criminal Revision
No.503 of 2022 (in the matter of Rabindra Kumar Behera vs.
State of Odisha) & a batch of similar other applications were
required to consider the reference by the learned Single Judge
Bench of this Court. The reference to the Division Bench by the
learned Single Judge Bench has been quoted hereinbelow:-
"To examine the question as to whether the provision
under Section 457 of the Cr.P.C. will have no application in
a case of release of such vehicle seized under the NDPS Act
during investigation or trial of the case."
28. The Hon'ble Division Bench, while answering the
aforesaid question, has taken note of several judgments of the
Hon'ble Supreme Court including Bishwajit Dey's case (supra).
Further, analyzing the provisions contained in Section 451 as well
as 457 of the Cr.P.C. and further taking note of Section 36 (C) of
the NDPS Act and the provisions contained in Section 51, 52 (A)
(1), Section 60, Section 63 answered the reference in the
following manner:-
(I) There is no specific bar/ restriction under the provisions
of the NDPS act for return of any seized vehicle used for
transporting narcotic drug or psychotropic substance in the
interim, pending disposal of the criminal case.
(II) In the absence of any specific bar under the NDPS Act
and in view of Section 51 of the NDPS Act, the Court can
invoke the general power under Sections 451 and 457 of the
Cr.P.C. for release of the seized vehicle pending final decision
in the criminal case.
(III) The Court has the discretion to release the seized
vehicle in the interim but the power has to be exercised in
accordance with law and in the facts and circumstances in
each case.
(IV) If the Court decides to exercise its discretion to
release a vehicle in the during pendency of the criminal case,
suitable conditions have to be imposed to ensure its
identification and production during trial with an embargo on
its sale and / or transfer till conclusion of the trial and for
submission of a specific undertaking for production of such
vehicle.
29. Thus, after a critical analysis of the judgments discussed
hereinabove, and keeping in view the specific reference answered
by the Division Bench in Rabindra Kumar Behera's case (supra),
this Court has no hesitation in coming to a conclusion that the
provisions contained in Sections 451 and 457 of the Cr.P.C.
would be applicable to the cases involving offence under the
provisions of the NDPS Act. Therefore, any property/ vehicle
seized in connection with such cases can very well be dealt with
by the trial court by resorting to the provisions contained under
Sections 451 and 457 of the Cr.P.C. The next question that falls
for consideration before this Court is with regard to the conditions
imposed by the learned trial court while releasing the vessel in
question. In the aforesaid context, learned counsel for the
Petitioner-Shipping Company, by referring to the impugned order
dated 12.02.2024, contended that the conditions imposed while
directing the release of the vehicle are too harsh, unreasonable
and the same are beyond the financial capabilities of the Shipping
Company. He further contended that in the ordering portion of the
impugned order dated 12.02.2024, the learned trial court has
directed the Petitioner to furnish Bank Guarantee to the tune of
Rs.10 crores to be executed in any Nationalized Bank within the
jurisdiction of that Court. Further, he has also assailed the
condition with regard to furnishing an indemnity bond to the tune
of valuation of the vessel of Rs.100 crores with one solvent surety
for the like amount. So far the condition Nos.3 to 7 are concerned,
learned counsel for the Petitioner submitted that the Petitioner-
Shipping Company has no objection to such conditions. In
summary, the arguments of learned counsel for the Petitioner are
entirely directed against the condition Nos.1 and 2 in the ordering
portion of the order dated 12.02.2024.
30. As to the value of the vessel, it is no doubt a difficult
proposition to accurately assess the exact value of the vessel
involved in the present case. Keeping in view the law involved
through various judgments of the Hon'ble Supreme Court as well
as this Court, the learned trial court while directing interim
release of the vehicle/ property is duty bound to ensure that while
taking on Zima, the person concerned secures the property/
vehicle/ vessel in question and further gives an undertaking that
he shall not sell, transfer, alienate or part with possession of such
property till conclusion of the trial and shall further give an
undertaking to the effect that he shall produce such property/
vehicle/ vessel before the trial court as and when required by the
trial court within a reasonable period of time. Furthermore, the
learned Division Bench of this Court in Rabindra Kumar
Behera's case, while answering the reference, has laid down the
conditions that are required to be fulfilled while directing interim
release of the vehicle/ property/ vessel. Another learned Division
Bench of this Court in Ashish Ranjan Mohanty's case has also
laid down a detailed guideline for such release under Sections 451
and 457 of the Cr.P.C and on the basis of such direction of the
Division Bench in Ashish Ranjan Mohanty's case, an SOP has
been prepared by this Court and circulated among the trial court
for dealing with such type of matters.
31. Reverting back to the financial condition imposed in
condition Nos.1 and 2, this Court finds that the condition No.1
with regard to furnishing a Bank Guarantee would be a harsh
condition so far the Petitioner-Shipping Company is concerned
since they are not having any bank account in India. Therefore,
the condition No.1 requires reconsideration by this Court.
Accordingly, the condition No.1 is hereby waived. So far the
condition No.2 is concerned, the value of the vessel has been
assessed on a hypothetical basis. In other words, the real value of
the vessel has not yet been assessed by any certified valuer in the
present case. Basing upon the insurance declaration, the value of
the vessel has been arrived at Rs.100 crores. Therefore, this Court
is of the view that the same may not be the actual cost of the
vessel which is stranded at the Paradeep port at the moment.
Since no valuation report by a certified valuer could be produced
in course of the hearing of the present application by the customs
authorities, this Court is required to take a reasonable approach in
the matter, particularly, keeping in view the factual background of
the present case and the progress made in the investigation so far.
Accordingly, the condition No.2 is modified to the extent that
instead of Rs.100 crores, the Petitioner-Shipping Company shall
now furnish an indemnity bond to the tune of Rs.75 crores and
instead of one solvent surety for the like amount, they shall
furnish two solvent sureties for the like amount. Further, it is
directed that the other conditions of order dated 12.02.2024 shall
remain intact.
32. Accordingly, CRLMC No.441 of 2024 is disposed of and
the impugned order dated 12.02.2024 passed by the learned
Special Judge, Kujang in Misc. Case No.02 of 2024 arising out of
Case No.Spl. G.R. (N) 65 of 2023stands modified to the aforesaid
extent.
33. In view of the aforesaid analysis of fact and law and the
finding of this Court that the learned trial court has not committed
any illegality in passing order dtd.12.02.2024, the Crl. Rev.
Petition preferred by the Union of India and the customs
authorities is bound to fail. Accordingly, the above noted
Criminal Revision Petition bearing CRLREV No.93 of 2024
stands dismissed being devoid of merit.
(A.K. Mohapatra)
Judge
Orissa High Court, Cuttack
The 07th March, 2025/ Anil/ Jr. Steno
Location: High Court of Orissa, Cuttack
Date: 07-Mar-2025 19:13:51
