BHARAT SANCHAR NIGAM LIMITED versus SURYANARAYANAN & ANR. on 13 December 2018

SUPREME COURT REPORTS

[2018] 13 S.C.R.

ABHARAT SANCHAR NIGAM LIMITED

v.

SURYANARAYANAN & ANR.

(Criminal Appeal No. 170 of 2009)

DECEMBER 13, 2018

B[DR. DHANANJAYA Y CHANDRACHUD AND

M. R. SHAH, JJ.]

Code of Criminal Procedure, 1973: ss.451, 452 – Disposalof property – Theft of copper material from the godown of TelecomCDepartment – Accused allegedly sold the material to first respondent– Seizure of copper lead alloy moulds from first respondent andinterim custody of same handed over by Magistrate to appellantunder s.451 – Criminal case registered under ss.457, 381, 461,462, 411 r/w s.34 IPC – Acquittal of all the accused – Firstrespondent sought release of the alloy moulds under s.452 –DApplication for release of material filed by first respondent waskept 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 – Sessionscourt affirmed the finding of Magistrate – High Court held thatEappellant had not raised a claim over the seized material and thatsince possession of seized material was taken over from firstrespondent, it should be restored to first respondent and that thoughinterim custody was handed over to appellant it did not assert anyright over the property nor did it deny the right or title of firstrespondent, therefore, there was no reason to relegate firstFrespondent to civil court – On appeal, held: Where a claim is madebefore the court that the property does not belong to the personfrom whom it was seized, s.452 does not mandate that its custodyshould be handed over to the person from whose possession it wasseized, overriding the claim of genuine title which is asserted onGbehalf of a third party – Prima facie, at this stage, first respondentcould not indicate any basis for the claim of title in acquisition ofthe goods or payment which was made for acquiring them –Therefore, it was appropriate for him to agitate such a claim beforethe competent civil forum – In the absence of such an adjudication,the custody of the goods should remain with the appellant – High H

Court was in error in directing return of the goods to the firstrespondent – The goods were made over to the appellant as farback as in 1992 – No justification to require the appellant to holdthese goods in its custody indefinitely thereby occupying valuablespace and leaving productive resources unutilised – The appellantis directed to preserve a sample of the material in question in case itis required for adjudication before the competent civil court – Subjectto this, permission granted to the appellant to sell the goods byauction and to maintain an account of the money which has beenrealised from the sale.

Code of Criminal Procedure, 1973: s.452 – Relevantconsideration – A claim of title to the goods which have been seizedis a relevant consideration while passing an order under s.452 –Where there are conflicting claims of entitlement to the property, theMagistrate may deal with them or, where it is found that the rivalclaims need to be resolved after an evidentiary trial, relegate theconflicting claimants to prove their rights and entitlements before acompetent court.

Disposing of the appeal, the Court

Conclusion

Disposing of the appeal, the Court

HELD: 1. Section 451 of the CrPC which deals with thedisposal of property empowers the court before which the propertyis produced during an inquiry or trial to make such order as itthinks fit or for its proper custody pending the disposal of theinquiry or trial. Section 452 provides for the disposal of theproperty at the conclusion of the trial. In terms of sub-section(1) of Section 452, when an inquiry or trial before a criminal courthas been concluded, the court is empowered to pass anappropriate order for its disposal by destruction, confiscation ordelivery to any person claiming to be entitled to the possessionthereof or otherwise. Entitlement postulates a right. The functionwhich the Court exercises under Section 452 is of a judicial nature.In making that order, the court must undoubtedly have due regardto the entitlement claimed by the person who seeks thepossession of the property. Ordinarily the person from whom theproperty was seized would be entitled to an order under Section452, when there is no dispute or doubt that the propertybelongs to him. It is only when the property belongs to the person AB

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Afrom 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 basisin the record for handing over custody of the seized goods to theBrespondent. The judgment of the trial court showed that theclaimant had produced certain invoices between 8 February and20 February 1992, recovery having been effected on 21 February1992. The Magistrate noted that no cash receipts were producedby the first respondent and though vouchers were produced byCW-10, they did not prove that they were for the purchaseCof 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 respondentto the title to the goods is seriously in dispute. Hence it was butappropriate and proper that such a claim be agitated before theDcompetent 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 indicatedthrough its evidence that the goods were stolen from its godownand were of a nature which were not capable of being acquiredEfrom the open market. The High Court was in error in directingreturn of the goods to the first respondent. The first respondentmust, be relegated to the civil court for establishing its claim andtitle to the goods as observed in the order passed by theMagistrate, which was affirmed by the Sessions court. The goodsFwere made over to the appellant as far back as in 1992. There isno reason to require the appellant to hold these goods in itscustody indefinitely thereby occupying valuable space and leavingproductive resources unutilised. The appellant shall preserve asample of the goods in question, should it be required foradjudication before the competent civil court. Subject to this,Gpermission was granted to the appellant to sell the goods byauction and to maintain an account of the money which has beenrealised 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 BharatH& Ors. AIR 1953 SC 508 – relied on.

Case Law Reference

[1980] 1 SCR 228relied onPara 8AIR 1953 SC 508relied onPara 12

CRIMINAL APPELLATE JURISDICTION : Criminal AppealNo. 170 of 2009.

From the Judgment and Order dated 21.02.2008 of the High Courtof 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. BeenaPrakash, 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 1992alleging that a theft of 10,285 kilograms of copper wires and 62 leadsleeves of a value of Rs. 8,31,300/- had taken place from the godown ofthe erstwhile Telecom Department at Gandhi Nagar in Ernakulam. Theaccused had allegedly sold the material to the first respondent. The firstrespondent is the proprietor of an entity by the name of Surya Metals.

2. On 21 February 1992, the Circle Inspector of Police, ErnakulamPolice Station seized 5,060 kgs of copper lead alloy moulds from the firstrespondent.

3. By an order dated 21 February 1992, interim custody of theseized alloy moulds was handed over by the Magistrate to the appellantin pursuance of the provisions of Section 451 of the Code of CriminalProcedure, 1973 (“CrPC”).

4. Pursuant to the investigation, Criminal case No. 433 of 1993was registered on the file of the Judicial Magistrate First Class, Ernakulamfor offences punishable under Sections 457, 381, 461, 462 and 411 readwith Section 34 of the Indian Penal Code, 1860. The first respondentwas cited as a witness (CW-10).

5. By a judgment and order dated 30 April 1999, the Trial Courtacquitted all the four accused of the offences with which they werecharged. 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 seekingrelease of the alloy moulds.

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A6. The judgment of acquittal was assailed by the State in CriminalAppeal No. 730 of 1999. The application for release of the propertyfiled 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 theBseized material was disposed of by the Judicial Magistrate on 31 August2006. The Magistrate held that though interim custody was given to theappellant (the de-facto complainant) on 22 February 1992, the firstrespondent filed an application under Section 452 only on 21 June 1999.While declining to grant custody of the seized material, the trial courtrelegated the first respondent to prove its title before a competent civilCcourt. By a judgment dated 13 March 2007 the Sessions Court affirmedthe finding of the learned Magistrate and held that the first respondenthad neither made a claim in respect of the seized goods until 1999, norwas there any clinching evidence to indicate that the material belongedto it. Hence, the direction that it was for the first respondent to assert itsDtitle and prove it before the civil court was confirmed. The first respondentassailed the above order of the Sessions Court in a criminal revisionbefore the High Court.

8. By its judgment dated 21 February 2008, the High Courtreversed the decision of the Sessions Court and held that the appellanthad not raised a claim over the seized articles.The High Court heldEthat since possession of the goods was taken over from the first respondentwhen they were seized, it should be restored to the first respondent in1view of the decision of this Court inN. MadhavanVs. State of Kerala.The High Court held that though interim custody was handed over to theappellant, it did not assert any right over the property, nor did it deny theFright or title of the first respondent and hence, there was no reason torelegate the first respondent to a civil court. The Judicial Magistratewas directed to take steps to hand over the property to the firstrespondent.

9. Leave was granted in these proceedings on 27 January 2009.GThe order of the High Court was stayed during the pendency of theseproceedings.

10. Learned counsel appearing on behalf of the appellant submitsthat the Magistrate had carefully evaluated the facts of the case andhad noticed that it was the consistent case of BSNL, through its witnessH1[(1979) 4 SCC 1]

BHARAT SANCHAR NIGAM LIMITED v. SURYANARAYANAN[DR. DHANANJAYA Y CHANDRACHUD, J.]

PW-3, who was the Divisional Engineer (Telecom) that it had suffered atheft of the material obtained from the General Manager (Stores),Calcutta. Moreover, the material was of a nature which could not bepurchased from the open market. The officers of the TelecomDepartment, PWs 1, 2, 4 and 5 had identified the material as the stolengoods. Learned counsel submitted that until the disposal of the criminalcase, no steps were taken by the first respondent to assert its allegedclaim of title. On the contrary, possession of the goods was handed overto BSNL on 21 February 1992.

11. Insofar as the decision of this Court in Madhavan(supra) isconcerned, it has been submitted that the principle that the goods shouldbe restored to the person from whom they have been seized is a principlewhich is ordinarily applied. However, the title of the original owner fromwhose custody the theft occurred cannot be set at naught by restoringpossession in a case where the person from whose custody the goodshave been seized does not have title. Learned counsel submitted that,BSNL was not a party to any of the proceedings including those whichculminated in the impugned order of the High Court.

12. On the other hand, learned counsel appearing on behalf of therespondent submitted that the principle of law which has been laid downin the judgment in Madhavan(supra) is clearly indicative of the governingposition in law. Learned counsel also relied upon the decision of a threeJudge Bench of this Court in Pushkar Singhvs. State of MadhyaBharat & Ors.2in which it was held that upon the acquittal of theaccused, money seized from the accused and belonging to him must bereturned to the accused and not to the complainant. In the circumstances,it was submitted that the view of the High Court is consistent with theposition in law and no interference is warranted in the appeal.

13. Section 451 of the CrPC forms part of Chapter XXXIV ofthe CrPC, which deals with the disposal of property. Section 451provides as follows:- “451. Order for custody and disposal of property pending trial incertain cases. When any property is produced before any CriminalCourt during any inquiry or trial, the Court may make such orderas it thinks fit for the proper custody of such property pending theconclusion of the inquiry or trial, and, if the property is subject tospeedy and natural decay, or if it is otherwise expedient so to do, 2AIR 1953 SC 508

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Athe 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 beforethe Court or which is in its custody, B(b) any property regarding which an offence appears to havebeen committed or which appears to have been used for thecommission of any offence.”

14. Section 451 empowers the court before which the property isproduced during an inquiry or trial to make such order as it thinks fit orCfor its proper custody pending the disposal of the inquiry or trial. Section452 provides for the disposal of the property at the conclusion of thetrial.

15. Sub-sections(1) and (2) of Section 452 provide as follows:- “452. Order for disposal of property at conclusion of trial.D

(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, bydestruction, confiscation or delivery to any person claiming to beentitle to possession thereof or otherwise, of any property ordocument produced before it or in its custody, or regarding whichEany offence appears to have been committed, or which has beenused for the commission of any offence.

(2) An order may be made under sub- section (1) for the deliveryof any property to any person claiming to be entitled to thepossession thereof, without any condition or on condition that heFexecutes a bond, with or without sureties, to the satisfaction ofthe Court, engaging to restore such property to the Court if theorder made under sub- section (1) is modified or set aside onappeal or revision.”

16. In terms of sub-section (1) of Section 452, when an inquiry orGtrial before a criminal court has been concluded, the court is empoweredto pass an appropriate order for its disposal by destruction, confiscationor delivery to any person claiming to be entitled to the possession thereofor otherwise. Entitlement postulates a right. The function which theCourt exercises under Section 452 is of a judicial nature. In making thatorder, the court must undoubtedly have due regard to the entitlementHclaimed by the person who seeks the possession of the property.

17. We are unable to subscribe to the submission which has beenurged on behalf of the first respondent that when it makes an orderunder Section 452, the court is merely required to determine the sourcefrom which the property was seized. Indeed, if this construction wereto be placed, it would mean that the right of a person who claims title tothe property would be subordinate to the claim of a person from whosepossession the property was seized. A claim of title to the goods whichhave been seized is a relevant consideration while passing an order underSection 452. Where there are conflicting claims of entitlement to theproperty, the Magistrate may deal with them or, where it is found thatthe rival claims need to be resolved after an evidentiary trial, relegatethe conflicting claimants to prove their rights and entitlements before acompetent 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 underSection 302 IPC for shooting a person dead with a licensed gun. Hewas acquitted of the charge of having committed the offence on theground that he had exercised his right of self-defence. Yet the trial courthad confiscated the weapon to the government. This Court set aside thejudgment of the High Court which had upheld the view taken by theSessions Court. The principle which has been laid down by this Courtis 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 anyof the three modes specified in the section. But the exercise ofsuch discretion is inherently judicial function. The choice of themode or manner of disposal is not to be made arbitrarily, butjudicially in accordance with the sound principles founded on reasonand justice, keeping in view the class and nature of the propertyand the material before it. One of such well recognised principlesis that when after an inquiry or trial the accused is discharged oracquitted, 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 lightlymade, when there is no dispute or doubt – as in the instant case –that the property in question was seized from the custody of suchaccused and belonged to him.”

19. The above observations indicate that the authority which isentrusted to the Court under Section 452 of the CrPC (equivalent to A

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ASection 517 of the Code of 1898) is judicial in nature. As a judicialpower, it has to be exercised for valid reasons keeping in view the classand nature of the property and the material before the Court. Normallythe Court would, following the discharge or acquittal of the accused,restore the property to the person from whose custody it was taken. Adeparture from this rule of practice is not lightly made when there is noBdispute or doubtthat the property which was seized from the custody ofthe accused belongs to him. These observations in the decision of thisCourt in Madhavan(supra) clearly indicate that ordinarily the personfrom whom the property was seized would be entitled to an order underSection 452, when there is no dispute or doubt that the property belongsCto him. It is only when the property belongs to the person from whomit was seized that such an order can be passed.

20. Where a claim is made before the court that the propertydoes not belong to the person from whom it was seized, Section 452does not mandate that its custody should be handed over to the person Dfrom whose possession it was seized, overriding the claim of genuinetitle which is asserted on behalf of a third party. It must be noted that inMadhavancase (supra), there was no dispute that the weapon of offencebelonged to the accused from whom it had been seized.

21. The decision in Pushkar Singh(supra) involved prosecutionfor offences under Sections 449 and 372 of the Gwalior Penal Code.EThe Magistrate held that no case was established against the accusedand the money which was recovered from his house belonged to him.There was a specific finding that the money did not belong to thecomplainant. The Sessions Judge dismissed the revision by thecomplainant. The High Court was moved for the return of the amountFto 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 Magistrateto the effect that no offence was committed in respect of the sum ofmoney and that it did not belong to the complainant, followed by theacquittal of the accused, the amount recovered had to be delivered tothe accused. Hence, the view of this Court was that following theGacquittal of the accused and since there was a specific finding that themoney belonged to him, an order for return of the money to thecomplainant 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 anH

application under Section 452 and hence an order cannot be passed interms of that provision for the restoration of legal possession to theappellant. The issue before the Court, however, is somewhat different.The basic issue is whether the first respondent who moved an applicationfor the release of the seized property to him under Section 452 hasestablished a claim of entitlement.

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23. Prima facie, at this stage, we are unable to find any reasonablebasis in the record for handing over custody of the seized goods to therespondent. During the course of the hearing, we requested learnedcounsel appearing on behalf of the first respondent to indicate at least,prima facie, some basis for the claim of title in the acquisition of thegoods or the payment which has been made for acquiring them. As wenote from the judgment of the trial court, the claimant had producedcertain invoices between 8 February and 20 February 1992, recoveryhaving been effected on 21 February 1992. The Magistrate noted thatno cash receipts were produced by the first respondent and thoughvouchers were produced by CW-10, they did not prove that they werefor the purchase of the seized goods. Nothing at all has been shown inresponse to our query.

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24. In our view, the claim which has been made by the firstrespondent to the title to the goods is seriously in dispute. Hence it wasbut appropriate and proper that such a claim be agitated before theEcompetent civil forum. The view of the Magistrate was correct. Inthe absence of such an adjudication, the custody of the goods, whichhave been seized, should continue to be with the appellant. In passingthis order, we are also guided by the fact that as noticed in the order ofthe Magistrate, the appellant had indicated through its evidence that thegoods were stolen from its godown and were of a nature which wereFnot capable of being acquired from the open market.

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25. The High Court was in error in directing return of the goods tothe first respondent. The first respondent must, in our view, be relegatedto the civil court for establishing its claim and title to the goods as observedin the order passed by the Magistrate, which was affirmed by the Sessionscourt.

26. The goods were made over to the appellant as far back as on21 February 1992. Nearly 26 years have elapsed since then. We see noreason or justification to require the appellant to hold these goods in itscustody indefinitely thereby occupying valuable space and leaving H

Aproductive resources unutilised. The appellant shall preserve a sampleof the goods in question, should it be required for adjudication before thecompetent civil court. Subject to this, we grant permission to the appellantto sell the goods by auction and to maintain an account of the moneywhich has been realised from the sale.

B27. The amount which is realised by the appellant, shall abide bysuch directions as may be passed by the competent civil court in the suitwhich may be instituted by the first respondent.

The criminal appeal is, accordingly, disposed of.

CDevika Gujral

Appeal disposed of.

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