Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | Crl.A. No.-004129-004129 – 2025 |
| Diary Number | 9295/2025 |
| Judge Name | HON’BLE MR. JUSTICE SANJAY KAROL |
| Bench | HON’BLE MR. JUSTICE SANJAY KAROL; HON’BLE MR. JUSTICE PRASHANT KUMAR MISHRA |
| Precedent Value | Clarification of existing precedent |
| Overrules / Affirms | Restored trial courts’ orders; set aside High Court order |
| Type of Law | Criminal Procedure (Section 451 CrPC) |
| Questions of Law | Whether interim release of seized cash under Section 451 CrPC is permissible where ownership disputes exist and cash is alleged proceeds of crime |
| Ratio Decidendi | The court held that Section 451 CrPC’s discretionary power to release seized property cannot be exercised to return cash claimed to be proceeds of crime where ownership is disputed; entitlement must be conclusively established at trial by considering all claimants and evidence, and mere documentary proof matching the amount is insufficient at interim stage. |
| Judgments Relied Upon | Sunderbhai Ambalal Desai v. State of Gujarat (2002) 10 SCC 283 |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Interpretation of Section 451 CrPC and application of Sunderbhai Desai guidelines to require conclusive ownership evidence before interim release; emphasis on discretionary refusal to prevent prejudice to prosecution. |
| Facts as Summarised by the Court | Appellant’s firm allegedly cheated multiple traders; Rs 50 lakh seized as muddamal; respondent claimed entitlement with bills and ledgers; trial courts denied release; High Court allowed release under Section 451; Supreme Court set aside High Court. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts |
| Persuasive For | High Courts |
| Overrules | High Court of Gujarat judgment allowing interim release |
| Distinguishes | Permissive release guidelines in Sunderbhai Ambalal Desai for uncontroversial property |
| Follows | Sunderbhai Ambalal Desai v. State of Gujarat |
What’s New / What Lawyers Should Note
- Clarifies that release of seized cash under Section 451 CrPC is inappropriate where ownership is disputed and funds are alleged proceeds of crime.
- Emphasises that documentary evidence matching the seized sum does not conclusively establish entitlement at the interim stage.
- Stresses that rightful ownership must be determined at trial by weighing claims of all potential victims.
- Confirms the discretionary nature of Section 451 and limits its application to cases where release causes no prejudice to the prosecution.
Summary of Legal Reasoning
- Section 451 CrPC grants courts discretion to order custody or disposal of property pending trial, with safeguards against spoilage or prejudice.
- In Sunderbhai Desai, this Court permitted conditional release of uncontroversial seized items, subject to panchnama, bonds, security and photographs.
- The Court distinguished that precedent where ownership is uncontested from cases where seized cash is the very subject matter of the offence.
- Here, Rs 50 lakh was alleged proceeds of systematic cheating; multiple claimants existed and entitlement was contestable.
- At an interim stage, mere matching of documents to the seized amount cannot conclusively establish sole ownership.
- Release would risk prejudice to the prosecution; rightful ownership must await full trial evidence.
Arguments by the Parties
Petitioner (Appellant-Accused):
- High Court erred in allowing release of muddamal without conclusive proof of entitlement.
- Interim release would prejudice the prosecution’s case where the cash is alleged crime proceeds.
- Ownership disputes require resolution at trial with all claimants heard.
State (Respondent-State of Gujarat):
- Seized cash constitutes proceeds of crime; release undermines investigation.
- No prima facie evidence shows the seized sum belongs exclusively to one party.
Respondent No. 2 (Private Claimant):
- Produced bills, audit reports and ledgers showing Rs 50 lakh dues.
- Relied on Sunderbhai Desai to argue for conditional interim release of the seized cash.
Factual Background
A proprietary firm run by the appellant allegedly cheated multiple traders, including the respondent, by defaulting on payments for castor seed transactions. Police investigation in FIR No 11206078220159/2022 seized Rs 50 lakh muddamal as alleged proceeds of fraud. Respondent No 2 claimed the cash represented dues owed to his firm and moved the trial court under Section 451 CrPC for release. The trial court and sessions court refused; the High Court allowed release subject to bond and panchnama; the appellant appealed to the Supreme Court.
Statutory Analysis
- Section 451 CrPC empowers courts to order custody or disposal of property pending trial, including seizure of alleged offence-related assets.
- “Property” includes documents and any asset used in or derived from an offence.
- Sunderbhai Desai guidelines permit interim release of uncontroversial valuable articles and currency notes on conditions.
- The Supreme Court held that when ownership of seized cash is contested and integral to the offence, Section 451 discretion must be exercised to withhold release until trial.
Alert Indicators
- ✔ Precedent Followed
- 🔄 Conflicting Decisions