Case: State of Bihar &amp; Another Vs. Arvind Kumar &amp; Another

A. On 15.2.2011, a secret information was received by the department of the appellants in respect of illegal storage of subsidized food grains of Public Distribution Scheme by the respondents which led to the raid upon the premises of M/s Harsh Tejas Nutrition Pvt. Ltd., (Flour Mill of the respondents) situate at Patna, New Bypass Road near Petrol Pump. The Sub-Divisional Officer, Patna City and other officers from the local police raided the premises of the said flour mill and found off loading of wheat from Truck bearing registration No. BHI 1899. The driver and other workers fled away. It was found that the grains bags had the seal of Food Corporation of India, (hereinafter calledU.P. Government Food Department, Food and Supply Department, Haryana; and Government of Punjab. The seized material made it apparent that there had been diversion of FCI grains for the purpose of black marketing. Appellants seized 5923 bags filled with more than 2991 quintals wheat.B. None from the company where the raid was conducted came forward to claim the seized material or to justify the storage of same. Thus, the FIR bearing case No. 15/2011 dated 18.2.2011 was lodged under Sections 7 and 10 of the EC Act in addition to the appropriate Sections 421/424 of the Indian Penal Code, 1860 (hereinafter calledin respect of the said seizure.C. The respondents herein preferred Criminal Writ Petition No. 215/2011 for quashing confiscation proceedings and/or release of the confiscated goods.D. The High Court allowed the said writ petition within a very short span vide order dated 15.3.2011 and subject to certain procedural compliances observed that continuing seizure of the seized articles for a long time may not be justified and therefore the High Court issued direction for release of the said wheat.E. The respondent approached the Chief Judicial Magistrate, Patna, for releasing the wheat in pursuance of the order passed by the High Court on 15.3.2011 by moving an application. The learned CJM dismissed the application of the respondent on 7.4.2011 on the ground that he could not produce any document which may show their ownership to the said seized material.F. The respondent again approached the High Court by filing Criminal Miscellaneous No. 14692/2011 which had been allowed vide order dated

Court's reasoning:
11. In the subsequent order dealing with the ownership of the wheat the High Court has only taken note of the fact that as the respondents herein were prepared to furnish adequate/sufficient security to the satisfaction of the court below for release of the wheat in question, the wheat could have been released by the CJM. In case the learned CJM came to the conclusion after appreciating the evidence on record that the respondents/applicants were not in a position to show any document which may show their ownership to the wheat, there was no justification for the High Court to issue directions for release of such material merely because applicant could furnish theit is so, any stranger or third party may give sufficient security and get the seized goods release in his favour. Such a course is not permissible even while deciding the application under Section 451/457 of the Code of Criminal Procedure, 1973. A person having no title/ownership over the seized material may get the same released on furnishing security and sell it in black market and earn profit several times more than the amount of security furnished by him. We fail to understand as how such an order of release which defeat the very purpose for which the EC Act was enacted, could be passed.12. The High Court has totally ignored the fact that any order passed under Section 6-A is appealable under Section 6-C of the EC Act. Therefore, to consider such an application for release of the goods was totally unwarranted at least at that stage.Learned counsel for the parties are not in a position to reveal the status of the criminal proceedings initiated against the respondents. In such a fact-situation, as has been suggested by learned counsel for the parties we set aside the aforesaid judgments and orders dated 15.3.2011 and 29.4.2011 and remand the case back to the High Court to consider afresh after examining all factual and legal issues involved in the case. Till the disposal of the case afresh, interim order passed by this Court on 31.10.2011 shall remain operative.