BHARAT SANCHAR NIGAM LIMITED versus SURYANARAYANAN & ANR.
[2018] 13 S.C.R. 950, Supreme Court of India, 2018
Outcome: Disposed off
Segment: Ratio
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BHARAT SANCHAR NIGAM LIMITED
v.
SURYANARAYANAN & ANR.
(Criminal Appeal No. 170 of 2009)
DECEMBER 13, 2018
[DR. DHANANJAYA Y CHANDRACHUD AND
M. R. SHAH, JJ.]
Code of Criminal Procedure, 1973: ss.451, 452 – Disposal
of property – Theft of copper material from the godown of Telecom
Department – Accused allegedly sold the material to first respondent
– Seizure of copper lead alloy moulds from first respondent and
interim custody of same handed over by Magistrate to appellant
under s.451 – Criminal case registered under ss.457, 381, 461,
462, 411 r/w s.34 IPC – Acquittal of all the accused – First
respondent sought release of the alloy moulds under s.452 –
Application for release of material filed by first respondent was
kept at abeyance – Dismissal of State’s appeal against acquittal –
Magistrate  declined custody of seized material to first respondent,
rather relegated him to prove his title before civil court – Sessions
court affirmed the finding of Magistrate – High Court held that
appellant had not raised a claim over the seized material and that
since possession of seized material was taken over from first
respondent, it should be restored to first respondent and that though
interim custody was handed over to appellant it did not assert any
right over the property nor did it deny the right or title of first
respondent, therefore, there was no reason to relegate first
respondent to civil court – On appeal, held:
Where a claim is made
before the court that the property does not belong to the person
from whom it was seized, s.452 does not mandate that its custody
should be handed over to the person from whose possession it was
seized, overriding the claim of genuine title which is asserted on
behalf of a third party – Prima facie, at this stage, first respondent
could not indicate any basis for the claim of title in acquisition of
the goods or payment which was made for acquiring them –
Therefore, it was appropriate for him to agitate such a claim before
the competent civil forum – In the absence of such an adjudication,
the custody of the goods should remain with the appellant – High
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950
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Court was in error in directing return of the goods to the first
respondent – The goods were made over to the appellant as far
back as in 1992 – No justification to require the appellant to hold
these goods in its custody indefinitely thereby occupying valuable
space and leaving productive resources unutilised – The appellant
is directed to preserve a sample of the material in question in case it
is required for adjudication before the competent civil court – Subject
to this,  permission granted to the appellant to sell the goods by
auction and to maintain an account of the money which has been
realised from the sale.
Code of Criminal Procedure, 1973: s.452 – Relevant
consideration – A claim of title to the goods which have been seized
is a relevant consideration while passing an order under s.452 –
Where there are conflicting claims of entitlement to the property, the
Magistrate may deal with them or, where it is found that the rival
claims need to be resolved after an evidentiary trial, relegate the
conflicting claimants to prove their rights and entitlements before a
competent court.
Disposing of the appeal, the Court
HELD: 1. Section 451 of the CrPC which deals with the
disposal of property empowers the court before which the property
is produced during an inquiry or trial to make such order as it
thinks fit or for its proper custody pending the disposal of the
inquiry or trial.  Section 452 provides for the disposal of the
property at the conclusion
of the trial.  In terms of sub-section
(1) of Section 452, when an inquiry or trial before a criminal court
has been concluded, the court is empowered to pass an
appropriate order for its disposal by destruction, confiscation or
delivery to any person claiming to be entitled to the possession
thereof or otherwise. Entitlement postulates a right.  The function
which the Court exercises under Section 452 is of a judicial nature.
In making that order, the court must undoubtedly have due regard
to the entitlement claimed by the person who seeks the
possession of the property. Ordinarily the person from whom the
property was seized would be entitled to an order under Section
452, when there is no dispute or doubt that the property
belongs to him.  It is only when the property belongs to the person
BHARAT SANCHAR NIGAM LIMITED v. SURYANARAYANAN
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from whom it was seized that such an order can be passed.
[Paras 13, 14, 16, 19, 20][955-F-G; 956-C, G-H; 957-H,
958-A-D]
2.1 Prima facie, at this stage, there is no reasonable basis
in the record for handing over custody of the seized goods to the
respondent.  The judgment of the trial court showed that the
claimant had produced certain invoices between 8 February and
20 February 1992, recovery having been effected on 21 February
1992.   The Magistrate noted that no cash receipts were produced
by the first respondent and though vouchers were produced by
CW-10, they did not prove that they were for the purchase
of the seized goods.  Nothing at all was shown in response.
[Para 23][959-B-D]
2.2 The claim which has been made by the first respondent
to the title to the goods is seriously in dispute. Hence it was but
appropriate and proper that such a claim be agitated before the
competent civil forum.  The view of the Magistrate was correct.
In the absence of such an adjudication, the custody of the goods,
which have been seized, should continue to be with the appellant.
The order of the Magistrate shows that the appellant had indicated
through its evidence that the goods were stolen from its godown
and were of a nature which were not capable of being acquired
from the open market.   The High Court was in error in directing
return of the goods to the first respondent.  The first respondent
must, be relegated to the
civil court for establishing its claim and
title to the goods as observed in the order passed by the
Magistrate, which was affirmed by the Sessions court.  The goods
were made over to the appellant as far back as in 1992. There is
no reason to require the appellant to hold these goods in its
custody indefinitely thereby occupying valuable space and leaving
productive resources unutilised.  The appellant shall preserve a
sample of the goods in question, should it be required for
adjudication before the competent civil court.  Subject to this,
permission was granted to the appellant to sell the goods by
auction and to maintain an account of the money which has been
realised from the sale. [Paras 24, 25, 26][959-E-H; 960-A-B]
N. Madhavan v. State of Kerala (1979) 4 SCC 1 : [1980]
1 SCR 228 ; Pushkar Singh v. State of Madhya Bharat
& Ors. AIR 1953 SC 508 – relied on.
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Case Law Reference
[1980] 1 SCR 228
relied on
Para 8
AIR 1953 SC 508
relied on
Para 12
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 170 of 2009.
From the Judgment and Order dated 21.02.2008 of the High Court
of  Kerala at Ernakulam in Criminal Revision Petition No. 1457 of 2007
R. D. Agarwal, Pavan Kumar, Advs. for the Appellant.
G. Prakash, Jishnu M. L., Mrs. Priyanka Prakash, Mrs. Beena
Prakash, Sreegesh M. K., K. R. Sasiprabhu, Advs. for the Respondents.
The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J.
1. A First Information Report was lodged on 4 February 1992
alleging that a theft of 10,285 kilograms of copper wires and 62 lead
sleeves of a value of Rs. 8,31,300/- had taken place from the godown of
the erstwhile Telecom Department at Gandhi Nagar in Ernakulam. The
accused had allegedly sold the material to the first respondent. The first
respondent is the proprietor of an entity by the name of Surya Metals.
2. On 21 February 1992, the Circle Inspector of Police, Ernakulam
Police Station seized 5,060 kgs of copper lead alloy moulds from the first
respondent.
3. By an order dated 21 February 1992, interim custody of the
seized alloy moulds was handed over by the Magistrate to the appellant
in pursuance of the provisions of Section 451 of the Code of Criminal
Procedure, 1973 (“CrPC”).
4. Pursuant to the investigation, Criminal case No. 433 of 1993
was registered on the file of the Judicial Magistrate First Class,
Ernakulam
for offences punishable under Sections 457, 381, 461, 462 and 411 read
with Section 34 of the Indian Penal Code, 1860.  The first respondent
was cited as a witness (CW-10).
5. By a judgment and order dated 30 April 1999, the Trial Court
acquitted all the four accused of the offences with which they were
charged.  After the acquittal, the first respondent filed an application,
being Criminal Miscellaneous Petition No.  5076 of 1999 (in C.C. No.
433/1999) on the file of the JMFC under Section 452 of the CrPC seeking
release of the alloy moulds.
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6. The judgment of acquittal was assailed by the State in Criminal
Appeal No. 730 of 1999.  The application for release of the property
filed by the first respondent was kept in abeyance. On 19 January 2006,
the appeal filed by the State against the order of acquittal was dismissed.
7. The application filed by the first respondent for release of the
seized material was disposed of by the Judicial Magistrate on 31 August
2006.  The Magistrate held that though interim custody was given to the
appellant (the de-facto complainant) on 22 February 1992, the first
respondent filed an application under Section 452 only on 21 June 1999.
While declining to grant custody of the seized material, the trial court
relegated the first respondent to prove its title before a competent civil
court.  By a judgment dated 13 March 2007 the Sessions Court affirmed
the finding of the learned Magistrate and held that the first respondent
had neither made a claim in respect of the seized goods until 1999, nor
was there any clinching evidence to indicate that the material belonged
to it.  Hence, the direction that it was for the first respondent to assert its
title and prove it before the civil court was confirmed. The first respondent
assailed the above order of the Sessions Court in a criminal revision
before the High Court.
8. By its judgment dated 21 February 2008, the High Court
reversed the decision of the Sessions Court and held that
the appellant
had not raised a claim over the seized articles.
The High Court held
that since possession of the goods was taken over from the first respondent
when they were seized, it should be restored to the first respondent in
view of the decision of this Court in N. Madhavan Vs. State of Kerala1.
The High Court held that though interim custody was handed over to the
appellant, it did not assert any right over the property, nor did it deny the
right or title of the first respondent and hence, there was no reason to
relegate the first respondent to a civil court.  The Judicial Magistrate
was directed to take steps to hand over the property to the first
respondent.
9. Leave was granted in these proceedings on 27 January 2009.
The order of the High Court was stayed during the pendency of these
proceedings.
10. Learned counsel appearing on behalf of the appellant submits
that the Magistrate had carefully evaluated the facts of the case and
had noticed that it was the consistent case of BSNL, through its witness
1[(1979) 4 SCC 1]
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PW-3, who was the Divisional Engineer (Telecom) that it had suffered a
theft of the material obtained from the General Manager (Stores),
Calcutta.  Moreover, the material was of a nature which could not be
purchased from the open market. The officers of the Telecom
Department, PWs 1, 2, 4 and 5 had identified the material as the stolen
goods.  Learned counsel submitted that until the disposal of the criminal
case, no steps were taken by the first respondent to assert its alleged
claim of title.  On the contrary, possession of the goods was handed over
to BSNL on 21 February 1992.
11. Insofar as the decision of this Court in Madhavan (supra) is
concerned, it has been submitted that the principle that the goods should
be restored to the person from whom they have been seized is a principle
which is ordinarily applied. However, the title of the original owner from
whose custody the theft occurred cannot be set at  naught by restoring
possession in a case where the person from whose custody the goods
have been seized does not have title. Learned counsel submitted that,
BSNL was not a party to any of the proceedings including those which
culminated in the impugned order of the High Court.
12. On the other hand, learned counsel appearing on behalf of the
respondent submitted that the principle of law which has been laid down
in the judgment in Madhavan (supra) is clearly indicative of the governing
position in law.  Learned counsel also relied upon the decision
of a three
Judge Bench of this Court in Pushkar Singh vs. State of Madhya
Bharat & Ors.2 in which it was held that upon the acquittal of the
accused, money seized from the accused and belonging to him must be
returned to the accused and not to the complainant. In the circumstances,
it was submitted that the view of the High Court is consistent with the
position in law and no interference is warranted in the appeal.
13. Section 451 of the CrPC forms part of Chapter XXXIV of
the CrPC, which deals with the disposal of property.   Section 451
provides as follows:-
“451. Order for custody and disposal of property pending trial in
certain cases. When any property is produced before any Criminal
Court during any inquiry or trial, the Court may make such order
as it thinks fit for the proper custody of such property pending the
conclusion of the inquiry or trial, and, if the property is subject to
speedy and natural decay, or if it is otherwise expedient so to do,
2AIR 1953 SC 508
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the Court may, after recording such evidence as it thinks necessary,
order it to be sold or otherwise disposed of.
Explanation.- For the purposes of this section,” property” includes-
(a) property of any kind or document which is produced before
the Court or which is in its custody,
(b) any property regarding which an offence appears to have
been committed or which appears to have been used for the
commission of any offence.”
14. Section 451 empowers the court before which the property is
produced during an inquiry or trial to make such order as it thinks fit or
for its proper custody pending the disposal of the inquiry or trial.  Section
452 provides for the disposal of the property at the conclusion of the
trial.
15. Sub-sections(1) and (2) of Section 452 provide as follows:-
“452. Order for disposal of property at conclusion of trial.
(1) When an inquiry or trial in any Criminal Court is concluded,
the Court may make such order as it thinks fit for the disposal, by
destruction, confiscation or delivery to any person claiming to be
entitle to possession thereof or otherwise, of any property or
document produced before it or in its custody, or regarding which
any offence appears to have been committed, or which has been
used for the commission of any offence.
(2) An order may be made under sub- section (1) for the delivery
of any property to any person claiming to be entitled to the
possession thereof, without any
condition or on condition that he
executes a bond, with or without sureties, to the satisfaction of
the Court, engaging to restore such property to the Court if the
order made under sub- section (1) is modified or set aside on
appeal or revision.”
16. In terms of sub-section (1) of Section 452, when an inquiry or
trial before a criminal court has been concluded, the court is empowered
to pass an appropriate order for its disposal by destruction, confiscation
or delivery to any person claiming to be entitled to the possession thereof
or otherwise. Entitlement postulates a right.  The function which the
Court exercises under Section 452 is of a judicial nature.  In making that
order, the court must undoubtedly have due regard to the entitlement
claimed by the person who seeks the possession of the property.
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17. We are unable to subscribe to the submission which has been
urged on behalf of the first respondent that when it makes an order
under Section 452, the court is merely required to determine the source
from which the property was seized.   Indeed, if this construction were
to be placed, it would mean that the right of a person who claims title to
the property would be subordinate to the claim of a person from whose
possession the property was seized.   A claim of title to the goods which
have been seized is a relevant consideration while passing an order under
Section 452. Where there are conflicting claims of entitlement to the
property, the Magistrate may deal with them or, where it is found that
the rival claims need to be resolved after an evidentiary trial, relegate
the conflicting claimants to prove their rights and entitlements before a
competent court.
18. Indeed this is the basis of the decision of this Court in Madhavan
(supra).   In that case, the accused was charged for an offence under
Section 302 IPC for shooting a person dead with a licensed gun.  He
was acquitted of the charge of having committed the offence on the
ground that he had exercised his right of self-defence.  Yet the trial court
had confiscated the weapon to the government. This Court set aside the
judgment of the High Court which had upheld the view taken by the
Sessions Court.   The principle which has been laid down by this Court
is as follows:-
“The words “may make such
order as it thinks fit” in the section,
vest the court with a discretion to dispose of the property in any
of the three modes specified in the section.   But the exercise of
such discretion is inherently judicial function.  The choice of the
mode or manner of disposal is not to be made arbitrarily, but
judicially in accordance with the sound principles founded on reason
and justice, keeping in view the class and nature of the property
and the material before it.   One of such well recognised principles
is that when after an inquiry or trial the accused is discharged or
acquitted, the court should normally restore the property of class
(a) or (b) to the person from whose custody it was taken.
Departure from this salutary rule of practice is not to be lightly
made, when there is no dispute or doubt – as in the instant case –
that the property in question was seized from the custody of such
accused and belonged to him.”
19. The above observations indicate that the authority which is
entrusted to the Court under Section 452 of the CrPC (equivalent to
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Section 517 of the Code of 1898) is judicial in nature.   As a judicial
power, it has to be exercised for valid reasons keeping in view the class
and nature of the property and the material before the Court.  Normally
the Court would, following the discharge or acquittal of the accused,
restore the property to the person from whose custody it was taken. A
departure from this rule of practice is not lightly made when there is no
dispute or doubt that the property which was seized from the custody of
the accused belongs to him.   These observations in the decision of this
Court in Madhavan (supra) clearly indicate that ordinarily the person
from whom the property was seized would be entitled to an order under
Section 452, when there is no dispute or doubt that the property belongs
to him.   It is only when the property belongs to the person from whom
it was seized that such an order can be passed.
20. Where a claim is made before the court that the property
does not belong to the person from whom it was seized, Section 452
does not mandate that its custody should be handed over to the person
from whose possession it was seized, overriding the claim of genuine
title which is asserted on behalf of a third party.  It must be noted that in
Madhavan case (supra), there was no dispute that the weapon of offence
belonged to the accused from whom it had been seized.
21. The decision in Pushkar Singh (supra) involved
prosecution
for offences under Sections 449 and 372 of the Gwalior Penal Code.
The Magistrate held that no case was established against the accused
and the money which was recovered from his house belonged to him.
There was a specific finding that the money did not belong to the
complainant.  The Sessions Judge dismissed the revision by the
complainant.   The High Court was moved for the return of the amount
to the complainant and not to the accused, which application was allowed.
This Court held that in view of the clear finding of fact by the Magistrate
to the effect that no offence was committed in respect of the sum of
money and that it did not belong to the complainant, followed by the
acquittal of the accused, the amount recovered had to be delivered to
the accused.  Hence, the view of this Court was that following the
acquittal of the accused and since there was a specific finding that the
money belonged to him, an order for return of the money to the
complainant could not be countenanced .
22. Learned counsel appearing on behalf of the first respondent,
however, submits that in the present case, the appellant did not move an
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application under Section 452 and hence an order cannot be passed in
terms of that provision for the restoration of legal possession to the
appellant.   The issue before the Court, however, is somewhat different.
The basic issue is whether the first respondent who moved an application
for the release of the seized property to him under  Section 452 has
established a claim of entitlement.
23. Prima facie, at this stage, we are unable to find any reasonable
basis in the record for handing over custody of the seized goods to the
respondent.   During the course of the hearing, we requested learned
counsel appearing on behalf of the first respondent to indicate at least,
prima facie, some basis for the claim of title in the acquisition of the
goods or the payment which has been made for acquiring them.  As we
note from the judgment of the trial court, the claimant had produced
certain invoices between 8 February and 20 February 1992, recovery
having been effected on 21 February 1992.   The Magistrate noted that
no cash receipts were produced by the first respondent and though
vouchers were produced by CW-10, they did not prove that they were
for the purchase of the seized goods.  Nothing at all has been shown in
response to our query.
24. In our view, the claim which has been made by the first
respondent to the title to the goods is seriously in dispute. Hence it was
but appropriate and proper that such a claim be agitated before the
competent civil forum.
The view of the Magistrate was correct. I
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the absence of such an adjudication, the custody of the goods, which
have been seized, should continue to be with the appellant. In passing
this order, we are also guided by the fact that as noticed in the order of
the Magistrate, the appellant had indicated through its evidence that the
goods were stolen from its godown and were of a nature which were
not capable of being acquired from the open market.
25. The High Court was in error in directing return of the goods to
the first respondent.  The first respondent must, in our view, be relegated
to the civil court for establishing its claim and title to the goods as observed
in the order passed by the Magistrate, which was affirmed by the Sessions
court.
26. The goods were made over to the appellant as far back as on
21 February 1992. Nearly 26 years have elapsed since then.  We see no
reason or justification to require the appellant to hold these goods in its
custody indefinitely thereby occupying valuable space and leaving
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productive resources unutilised.  The appellant shall preserve a sample
of the goods in question, should it be required for adjudication before the
competent civil court.   Subject to this, we grant permission to the appellant
to sell the goods by auction and to maintain an account of the money
which has been realised from the sale.
27. The amount which is realised by the appellant, shall abide by
such directions as may be passed by the competent civil court in the suit
which may be instituted by the first respondent.
The criminal appeal is, accordingly, disposed of.
Devika Gujral
Appeal disposed of.