The Supreme Court has clarified that the mere existence of a vehicle’s registration certificate in a person’s name does not automatically entitle them to interim custody of a seized vehicle under Sections 451 and 457 of the Code of Criminal Procedure (CrPC). Instead, courts must evaluate the surrounding facts to determine who is prima facie entitled to possession until the dispute is finally resolved.
A Bench comprising Justices Sanjay Karol and Augustine George Masih upheld an Andhra Pradesh High Court order granting interim custody of a group of seized vehicles to a respondent company, dismissing the appeal filed by a director of another company who had relied primarily on the registration documents.
Dispute Over Mining Vehicles
The litigation stemmed from a commercial dispute involving M/s Pure Minerals and M/s Earth Stein Private Limited. The appellant, a director of Pure Minerals and an 80% shareholder in Earth Stein, claimed ownership of a Bolero City Pick-up, three excavators and an Ashok Leyland tipper, all purchased in the name of Pure Minerals between 2014 and 2022.
According to the appellant, the respondent company unlawfully entered his factory premises on August 31, 2023, and forcibly removed the vehicles. The respondent company, however, lodged a counter-complaint alleging that the appellant had diverted ₹1,73,11,894 from company funds to acquire the vehicles in the name of his own firm.
Both sides approached the trial court seeking interim release of the vehicles. After their applications were rejected, they moved the Andhra Pradesh High Court, which ultimately handed over interim custody to the respondent company. The High Court noted that criminal proceedings concerning the alleged financial misappropriation were pending against the appellant and that the vehicles had been operating in the respondent company’s mining business when they were seized.
Registration Certificate Is Only One Piece of Evidence
Before the Supreme Court, the appellant argued that the registered owner should ordinarily receive interim custody, relying on the ruling in Sunder Bhai Ambalal Desai v. State of Gujarat.
The Supreme Court rejected this interpretation, observing that the earlier judgment does not establish an absolute rule requiring courts to hand over seized vehicles solely on the basis of registration records.
The Bench observed that registration is undoubtedly a relevant circumstance, but it serves only as evidence and cannot conclusively determine who should receive interim possession. Courts are expected to act promptly while weighing all relevant facts so that seized property is neither misused nor allowed to deteriorate.
Scope of Sections 451 and 457 CrPC
The Court explained that Sections 451 and 457 empower criminal courts to grant temporary custody of seized property without deciding questions of legal ownership. Their purpose is limited to identifying, on a prima facie assessment, the person best entitled to possess the property during the pendency of proceedings.
The judges emphasized that these provisions concern possession rather than title. Any final determination regarding ownership must be left to the appropriate civil forum.
Facts Favoured the Respondent Company
Applying these principles, the Court found several factors supporting the respondent company’s claim.
The seized vehicles had been recovered from the respondent’s operational mining site while they were actively being used there. The Court also noted that loan installments for the vehicles had been paid from the respondent company’s accounts. In addition, an undertaking executed by the appellant permitted the respondent company to retain and operate the vehicles until accounts between the parties were settled.
Although the appellant disputed the authenticity of that undertaking and alleged it had been forged, the Court held that such allegations require separate adjudication and could not be conclusively examined at the interim stage.
Taken together, these circumstances indicated that the respondent company had continued beneficial possession and operational control over the vehicles.
Appeal Dismissed
The Supreme Court concluded that the appellant’s case rested almost entirely on the registration certificates issued in the name of his company. While those documents remained relevant, they did not outweigh the respondent company’s continued possession, payment of vehicle loan installments and other material placed before the Court.
Finding no error in the High Court’s approach, the Bench dismissed the appeal and affirmed the order granting interim custody of the seized vehicles to the respondent company.
