The Allahabad High Court ruled that seized property must be returned to its rightful owner when it is no longer required by the prosecution to conclude the trial or legal proceedings.
An application was filed under Sections 457 and 451 of the Cr.P.C. for the release of ₹1.87 crore seized during an investigation under various IPC sections. The Income Tax Department objected, claiming the amount was unexplained and constituted undisclosed income, asserting the matter should be dealt with under Section 132 of the Income Tax Act, not Cr.P.C. The application and a subsequent revision were rejected.
The Single bench of Justice Sanjay Kumar Pachori observed, “It is settled position of law that no person shall be deprived of his or her property without the authority of law, as declared by Article 300A of the Constitution of India. Therefore, when the property, so seized by the investigating agency, need not physically remain with the prosecution to bring the trial or litigation, relating to or connected with the seized property, to its logical conclusion, then the seized property shall be released to the rightful owner, or the person who is entitled thereto. As to who is the rightful owner or the person entitled to the possession of the property shall be guided by the proof based on preponderance of the probabilities.”
The Court noted that a custodial order under Section 102(3) of the Cr.P.C. is temporary, and that a police officer who seizes property on suspicion of an offence must promptly report it to the jurisdictional Magistrate. Under Section 457 of the Cr.P.C., the Magistrate is then empowered to decide on the disposal or return of the seized property to the rightful possessor. If the rightful owner is not identifiable, the Magistrate may issue appropriate orders for the property's custody and production.
“However, it is made clear that the release of the property in favour of the owner or the person found to be entitled to the possession of the properties shall not operate as the declaration of title of that person to the property which shall always be subject to the litigation, if any pending or to be instituted before the Civil Court.” the Court added.
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