Judgment :- 1. The controversy between the parties in this case centres round an Ambassador car K. L. V. 1303 which has been seized by the police on the complaint filed by one Abdul Salim alleging that an offence has been committed in respect of it by the accused, T. A. Kamaluddin, from whose possession it was seized. The learned District Magistrate, on a consideration of the claims of the complainant and the accused has under S.523 Cr. P. C. ordered the disbursement of the car to the complainant on security. The accused has come up in revision. The law on the point as thrashed out by the decisions of the various High Courts may be stated as follows;- "Under S.523 what the Magistrate has to consider, is who is entitled to the possession of property which has been seized by the police. Where it is proved that the person from whose possession the property was seized came by it dishonestly, the Magistrate may have to consider questions of title in order to determine the best right to possession. But where it appears that the police have seized property from a person who is not shown to have committed any offence in relation to that property, then the Magistrate can only hold that that person is entitled to possession of the property. If another claims the property, his remedy is in a civil court and the burden will be upon him to prove his title, "(vide Rajamal v. Balmukund AIR, 1936 Bom.171) More or less to the same effect is the pronouncement made by a Division Bench of the Allahabad High Court in Bux Singh v. State (AIR. 1956 All. 199). The learned judges observed: "The words of the section are very clear and they specifically mention that the property should be delivered to a person who is entitled to its possession and not to a person who owns it. Where property is recovered from the possession of a person, a court for the purpose of an order under S.523 must hold that he is entitled to its possession. Where property is recovered from the possession of a person, a court for the purpose of an order under S.523 must hold that he is entitled to its possession. It is only in certain circumstances that the property recovered from the possession of a person may be handed over to some other person, such as when the person from whose possession the property is recovered denies that it was recovered from his possession (such a situation might arise in those cases where some stolen property is recovered and the plea of the person from whose possession it is recovered is that it was planted) or where the property is recovered from the possession of a person, but this possession has been acquired either in a dishonest or unlawful manner, or where the person from whose possession the property is seized alleges that he is only in temporary custody of this property and it belongs to some one else." 2. The car in dispute was purchased by one Vasumathi under a hire purchase agreement with the Commercial Credit Corporation (P) Ltd. for Rs. 20,724-93, and it was taken delivery of by Vasumathi on 18-12-68. On the succeeding day Vasumathi, the registered owner sold the car to Ramla Beevi, authorising Ramla Beevi to pay the balance instalments due to the Commercial Credit Corporation and get the registry transferred in her name. Ramla Beevi, thereafter, sold the car to her brother, the complainant, for Rs, 15,000/- and asking him to pay the balance due to the Corporation and get the registration transferred within two years from 1912 68. The complainant's further case is that the car was put in the possession of the accused on 15 71969 for his use as he had to go to his office, (He is a post-graduate working in the Language Institute, Trivandrum), on the definite understanding that it would be returned whenever demanded. But the accused in violation of the agreement hypothecated the car with M/s Krishnalal Bandhari, a financier of Madras forging Vasumathi's signature with the dishonest intention of misappropriating the car. The complaint was, therefore, filed under S.506, 419, 420, 465, 468 and 471 IPC. The complaint was forwarded to the Police by the learned Magistrate under S.156(3) M.P.1425/71 praying for me release of the car to him, while the accused filed Cr. M. P. 1547/71 praying for the disbursement of the car to him. The complaint was, therefore, filed under S.506, 419, 420, 465, 468 and 471 IPC. The complaint was forwarded to the Police by the learned Magistrate under S.156(3) M.P.1425/71 praying for me release of the car to him, while the accused filed Cr. M. P. 1547/71 praying for the disbursement of the car to him. The court at first passed an order purporting to be one under S.516A directing the entrustment of the car on'Moonnamsthanam' but that order was vacated by this court in Cr. R P. 428/71 saying trial the proper section under which the Magistrate should have taken action was not S.516-A but S.523 of the Code and which that direction the matter was sent back. Now the learned District Magistrate after an enquiry has pissed order directing the release of the car to the complainant. 3. The view taken by the learned District Magistrate cannot be said to be correct in the circumstances of the case. The scope and ambit of the expression "person entitled to the possession" appearing in S.523; I am afraid, has not been correctly understood by the learned Magistrate. According to the learned Magistrate as I am able to gather, from his discussion of the question, the expression would relate to the person ultimately entitled to the possession, viz., the owner. Ownership of the property is not a matter for the Magistrate to enquire into. There is nothing in S.523 authorising the Magistrate to decide which party is the rightful owner of the property. His enquiry is to be confined to the question as to who is entitled to the possession. Once he ascertains the person from whose possession the property was seized, be must hold him, to be entitled to its possession, unless his possession was unlawful. The learned Magistrate seems to have placed reliance on Ahmed Sahib v. Commissioner of Police, Madras (AIR. 1970 Mad. 220). But on a careful reading of the said decision I do not think the learned judge had laid down the law differently. Once the property is seized under the circumstances, mentioned in the said provision irrespective of the fact whether the investigation by the police disclosed an offence or not the court has to dispose the property. While doing so, it has got absolute discretion to pass as order as it thinks fit respecting the disposal of such property. Once the property is seized under the circumstances, mentioned in the said provision irrespective of the fact whether the investigation by the police disclosed an offence or not the court has to dispose the property. While doing so, it has got absolute discretion to pass as order as it thinks fit respecting the disposal of such property. But if it orders delivery of the property then it has to deliver it to the person entitled to the possession thereof ....Normally, in cases where the offence is not made out the property should be delivered to the person from whom it is seized or taken. But it will depend upon the circumstances of each case. In such cases, the actual possession, of the property at the time it was seized may be a relevant factor but not conclusive to determine the entitlement of such possession. The words used in S.523(1) Criminal P.C. are'the person entitled to the possession of the property' These words cannot be equated with actual possession'. Not can they be equated with the expression'the person from whom the property is seized or taken. A person may, be in unlawful possession at the time it was seized though he has not committed the offence, and in that circumstance, it cannot be said that he is entitled to possession. It must be a lawful possession." Therefore, the nature of the possession is the point to be considered; whether the possession is lawful or unlawful. Of course the expression'person entitled to the possession of the property' cannot be equated with 'the person from whom the property is seized or taken.' But if the person from whom the property is seized was found at the time in lawful possession, I think such possession can be equated with the expression 'person entitled to the possession. In the present case, the complainant himself has stated in his written complaint that the car was entrusted to the accused for temporary use until he purchases a car for himself. Thus the accused came by the possession of the car lawfully and not by committing any criminal offence. The further case of the complainant is that in violation of the agreement the accused made arrangements with a third party to hypothecate the car to him. Thus the accused came by the possession of the car lawfully and not by committing any criminal offence. The further case of the complainant is that in violation of the agreement the accused made arrangements with a third party to hypothecate the car to him. I do not propose to examine the merits or demerits of the complaint, but the question is whether such fraudulent conduct on the part of the accused, even if true, would render his possession unlawful for purpose of S.523 of the Code, or whether it could be said in the background of the above allegation that the accused has committed an offence in respect of the car. All that we are concerned with for the purpose of the present enquiry is the manner in which the accused came into possession of the car and how he has been conducting himself all this time in relation to the car. The admitted case is that the car was entrusted to him on 15-7-69 and until it was recovered from his possession on 21st October, 1971 he was in possession of it. The instalments due to the Commercial Credit Corporation were being paid by him (Rs. 555/- for each instalments) and the receipts, all stand in his name. After the final payment the original agreement with the Commercial Credit Corporation was got back by him together with the duplicate switch key of the car. Even though at the time the car was sold to the complainant by Ramla Beevi he was directed to get the registration transferred to him on the expiry of two years from 19-12-68, no steps taken by him in that direction. 4. The learned Magistrate from certain circumstances arising between the parties would say that the case of the accused that the car was purchased by his mother-in-law as a present for him is baseless. But in my view that is an irrelevant consideration in the present enquiry. The disagreement, if there is any, between the mother-in-law and the son-in-law is to be settled by them in other appropriate proceedings. Here we are concerned mainly with the nature of the possession and from the circumstances adverted to above, it has to be held that the origin of the possession is lawful and so far no circumstance has been made out to render that possession unlawful. Here we are concerned mainly with the nature of the possession and from the circumstances adverted to above, it has to be held that the origin of the possession is lawful and so far no circumstance has been made out to render that possession unlawful. The charge of criminal misappropriation, cheating or forgery, of course, will have to be considered on its merits at the trial and that need not weigh with the court at this stage, when we are concerned only with, the lawful or unlawful nature, as the case may be, of the possession of the property. In respect of the instalments paid to the Commercial Credit Corporation, the complainant's case is that the money was entrusted by him and before him by Ramla Beevi and the physical act of remitting the same was alone done by the accused; the receipts happened to be issued in his name as he is the guarantor in the agreement with the Commercial Credit Corporation. Ramla Beevi's further statement is that as she is a Pardanashin lady it was not possible for her to enter into such agreements and so the agreement was allowed to be entered into by her son-in-law on her behalf and payments also had to be entrusted to him as her agent. But it is un-understandable why even after the assignment of the car by her to the complainant the same arrangement was made to continue. There is no material before me from which it could be inferred that the money for the instalments was paid by Ramla Beevi or after her by the complainant. Of course, on one occasion he had written to his mother-in-law to make payment; but from that it cannot be inferred that the other payments were all made by her or the complainant through him. Everything necessary for the car was being done by the accused and he has been in possession and enjoyment of it for about 21/2 years now. It is difficult in the circumstances to call him a trespasser or one who has come into possession of the property by foul or unlawful methods. Everything necessary for the car was being done by the accused and he has been in possession and enjoyment of it for about 21/2 years now. It is difficult in the circumstances to call him a trespasser or one who has come into possession of the property by foul or unlawful methods. "The proposition of law that the property must be returned to the person, from whom it had been seized, unless his possession was unlawful, is a well established one The person, from whose possession the property was seized and when be is not found to have committed any offence such as would render his possession unlawful, is the proper person entitled to possession. The Magistrate is not a civil court and has no power to decide any dispute about the title to the property. S.523 Cr. P. C. does not authorise a Magistrate to decide which party is the rightful owner of the property. His enquiry is limited to finding which party is entitled to the possession of the property. So, it follows that when once the Magistrate ascertains the person from whose possession the property was seized and whose possession was not unlawful, then the Magistrate must hold him to be entitled to the possession of the same, (vide Jugeswar Singh v. Tomu Devi AIR. 1968 Manipur 29)" On a strict view of the position it will have to be held that Vasumathi is still the owner, because the registration certificate stands in her name. In case of any transfer of ownership in respect of the motor vehicle, the procedure is contemplated in S.31 of the Motor Vehicles Act and till any such transfer of ownership is entered in the certificate of registration, one has to take it that the person in whose favour such certificate of registration is issued by the Motor Transport Authority is the owner. On the basis of the alleged purchase, the complainant has not taken any steps to get the registration transferred even though the period of the hire purchase agreement has expired as early as on 19 21970. In this state of things I should hold that during the pendency of the trial the car will continue to be in the possession of the accused and to ensure the safety of the car he may be put to terms as the learned Magistrate has done as regards the complainant. In this state of things I should hold that during the pendency of the trial the car will continue to be in the possession of the accused and to ensure the safety of the car he may be put to terms as the learned Magistrate has done as regards the complainant. I was told at the bar that Vasumathi has washed her hands clean at the affair by stating that she has already parted with the car to Ramla Beevi. Even in that case, the financial commitments made by the accused with reference to the car, as is seen from the documents produced, will have to be settled before he is dispossessed of the car. 5. The order of the learned Magistrate is hence set aside, and the car is directed to be released to the petitioner accused on his entering into a bond for Rs. 20,000/-with two solvent sureties each for a like sum to the satisfaction of the learned Magistrate and will also undertake to take proper care of the car and produce it in court whenever required.