Judgment: 1. The appellant is aggrieved by the order of the Chief Judicial Magistrate Manjeri as per which 375 bags of dried cashewnuts involved in a criminal case were ordered to be given to the Kerala State Cashew Development Corporation (for short ‘the Corporation’). Hence this appeal. 2. During investigation of a crime case, the Dy. S.P. Crime Detachment (Malappuram District) seized 375 bags of dried cashewnuts from Vinod Cashew Factory. Quilon on 25th June, 1980. The case was charge sheeted against eight persons. The trial court convicted the first accused for the offence under S.409 of the Indian Penal Code. The appellant was neither an accused nor a witness in the said case. The trial Magistrate found that Al in that case was entrusted with dominion over the cashewnuts for the purpose of transportation from Edavanna (Malappuram District) to one of the factories of the Corporation at Quilon. It was further found that the first accused, in violation of the terms of the contract, supplied the cashewnuts to the appellant and appropriated the value thereof. In the judgment, the lower court passed orders for disposal of the property. It was directed that the cashewnuts be returned to the Corporation. That order of disposal is now challenged in this appeal. Criminal M.C.390 of 1987 has been filed by the Corporation to quash the appeal filed by the appellant. 3. The learned counsel for the appellant raised the following contentions: (1) The criminal court should have adopted the normal rule in this case by directing the property to be returned to the person from whose possession it was taken into custody. (2) In the absence of a finding that it was the first accused who supplied the consignment of cashewnuts to the appellant, there remains no basis for ordering the property to someone else. (3) There is no evidence that the cashewnuts (375 bags) seized by the police belonged to the Corporation. (4) At any rate, the order of disposal of property passed without notice to the appellant and without affording an opportunity of being heard is unsustainable. 4. The learned counsel for the Corporation, in reply, argued that the appellant's right, if at all any, has been waived by him as the appellant had knowledge of the criminal proceedings pending before the trial court.
4. The learned counsel for the Corporation, in reply, argued that the appellant's right, if at all any, has been waived by him as the appellant had knowledge of the criminal proceedings pending before the trial court. He has also contended alternatively that the materials in this case are quite adequate to return the property to the Corporation. 5. Conviction and sentence passed against the first accused were challenged in appeal before the Session Court, Manjeri. The acquittal of the remaining accused was also challenged by filing an appeal in this court. Consequendy, the appeal filed before the Sessions Court was withdrawn by this Court to be heard along with the appeal filed by the State against the acquittal. Those appeals were disposed of by this Court and the conviction and sentence passed against the accused were set aside. However, it was found by this Court that (1) 375 bags of cashewnuts were entrusted to the first accused for transportation to the Corporation's factory at Quilon; (2) the three lorries in which the bags were transported reached Vinod Factory, Quilon, where the consignment was unloaded; (3) 375 bags seized by the police from Vinod Factory, Quilon were those entrusted to the first accused. Inspite of the aforesaid findings the first accused had to be acquitted on certain other grounds. 6. In view of the finding of this Court in the criminal case that 375 bags of cashewnuts seized from Vinod Factory were unloaded from three lorries (KLM 2487, KLK 1541 and TNW 1541), the appellant cannot claim that as a matter of normal rule the criminal court should order return of the property to the person from whose possession it was taken. It is true that when no offence has been committed in respect of any property which is in the custody of court, ordinarily it should be restored to the person from whose possession it was seized. But this ordinary rule is subject to exceptions. When there are circumstances which would render the returning of the property to the person from whose possession it was taken into custody unjustifiable, the court shall not return it to such person.
But this ordinary rule is subject to exceptions. When there are circumstances which would render the returning of the property to the person from whose possession it was taken into custody unjustifiable, the court shall not return it to such person. When acquittal or discharge is based upon inadequacy or doubtfulness of the proof offered, the court has certainly a discretion not to return it to the person from whose possession it was taken, if he is not the person entitled to the possession thereof. It cannot be laid down as a general rule that when no offence is found to have been committed in respect of the property, the court should restore it to the person from whose possession it was taken. (Vide State v. Thiraviyam Panicker State v. Thiraviyam Panicker 1972 K.L.T. 1051; Sivasankara Pillai v. Parukutty Amma. Sivasankara Pillai v. Parukutty Amma. 1963 K.L.T.381, Sivasankara Pillai v. State of Kerala Sivasankara Pillai v. State of Kerala 1972 K.L.T. 61, Kamaluddin v. Abdul Salim Kamaluddin v. Abdul Salim 1972 K.L.T. 1058). The enquiry envisaged in S.452 of the Code of Criminal Procedure is to be confined to questions as to who is entitled to possession. The point to be considered in such an enquiry is regarding the possession. The point to be considered in such an enquiry is regarding the nature of possession, whether the possession was lawful or unlawful. Though the language in S.452 that “the court may make such order as it thinks, fit for the disposal” may indicate a very wide discretion for the court, delivery of the property can be made only to a person “claiming to be entitled to possession thereof”. Title to the property or right to possession of the property are not matters very relevant in such an enquiry, though sometimes such aspects may have bearing on the relevant question. The expression “delivery to any person claiming to be entitled to possession thereof cannot be equated with delivery to the person from whom the property is seized or taken. Of course, if the person from whom the property has been seized is found to have been in lawful possession at the time of seizure, such possession can be equated with the expression” entitled to possession thereof. 7.
Of course, if the person from whom the property has been seized is found to have been in lawful possession at the time of seizure, such possession can be equated with the expression” entitled to possession thereof. 7. Even if the criminal court finds that there is no evidence to show that it was the first accused who supplied the cashewnuts to Vinod Factory, that does not debar the court from locking into all relevant materials for the purpose of ascertaining whether the Corporauon is entitled to possession of the property seized. The learned counsel for the Corporation has heavily relied on two items of evidence. The case diary statement recorded by the police under S.161 (3) of the Code after questioning the Manager of Vinod Factory, is one of the items. (Portions of that statement have been marked as Exts. P.21 to 25 in the criminal case). The other is a statement recorded under the same Section, but during the interrogation of the second accused. (A portion of that statement is incorporated in Ext.P.18 mahazar dated 25-6-1980 for seizure of the cashewnuts from Vinod Factory). According to the counsel for the Corporauon, such statements can be used for the purpose of the summary enquiry for disposal of the property as envisaged in S.452 of the Code. It is further contended that those statements would prove to the hilt that the three lorries above mentioned were unloaded in Vinod Factory and that the seizure evidenced by Ext.P.18 mahazar was from that stock. 8. S.162 of the Code imposes a ban on the use of statements recorded under S.161 (3) of the Code “at any inquiry or trial in respect of any offence under investigation”, except for the limited purpose mentioned in the Section. But the said ban is not applicable in the summary enquiry held for ordering disposal of the property. The commencing words in S.452 are “when an inquiry or trial in any criminal court is concluded”. The stage begins only when the trial stage is over. So the interdict contained in S.162 cannot be stretched to the sphere where the disposal of property-is involved. 9.
The commencing words in S.452 are “when an inquiry or trial in any criminal court is concluded”. The stage begins only when the trial stage is over. So the interdict contained in S.162 cannot be stretched to the sphere where the disposal of property-is involved. 9. As early as in 1943 the aforesaid principle gained acceptance by court in Pohlu v. Emperor Pohlu v. Emperor A.I.R. 1943 Lahore 312 when it was held that “there is not bar in S.25 , Evidence Act, or in S.162 , Criminal P.C., to a confessional statement of an accused made to a police officer during investigation being used for the purpose of S.517 to determine firstly, whether the property is property regarding which an offence appears to have been committed, and, secondly, for determining the person to whose custody it should be delivered”. The aforesaid view was followed by different High Courts. Eg: Mst. Bhuti v. Bhanwarlal Mst. Bhuti v. Bhanwarlal (1965) 2 Cri.L.J. 702; State of Kerala 1985Cri.L.J. 1158. It can therefore be taken as well settled that during enquiry for disposal of properties courts are well within the power to use case diary statements of witnesses as well as confessional statements of the accused. 10. However, the appellant's contention that no order should have been passed without giving notice to the appellant cannot easily be brushed aside. The learned counsel submitted that if the appellant was given notice, it would have been possible for the appellant to place materials for showing that he is entitled to possession of the cashewnuts seized in this face. What are those documents, and whether those documents, if any, are sufficient to show the entitlement of the appellant need not be gone into now, as the appellant should be given an opportunity to participate in the summary enquiry. The decision in State Bank of India v. Rajendra Kumar State Bank of India v. Rajendra Kumar A.I.R. 1969 S.C. 401 is authority for the position that the party adversely affected by any order of disposal of property must have notice of the enquiry, if he is not a party to the criminal case. Appellant was never given any notice before passing the final order. There is not merit in the contention that appellant waived his right to be heard before passing the impugned order.
Appellant was never given any notice before passing the final order. There is not merit in the contention that appellant waived his right to be heard before passing the impugned order. There was no opportunity for the appellant to get into the criminal court without being intimated to do so for the purpose of claiming the property. 11. In the result, I set aside the order concerning disposal of 375 bags of cashewnuts seized as per Ext.P.18 mahazar. I direct the court to which this case is remanded to conduct a summary inquiry in accordance with law and in the light of the observations made above. 12. The seizure of the cashewnuts was made more than seven years ago and hence all possible efforts should be made to avoid further delay. The Presiding Officer who dealt with the case in the trial stage is now Chief Judicial Magistrate of Trichur. As the evidence in this case is voluminous with a large number of documents, a remit to the Court of Chief Judicial Magistrate, Trichur will help expeditious disposal of the matter. Therefore I remand the case to that court with a direction to pass final orders on or before 31-8-1987. This case will be called in that court on 3-8-1987. The appellant and the Corporation are directed to make appearance in that court on the said day, since no further notice will be given to them. Office will despatch the records as early as possible to the Chief Judicial Magistrate's Court, Trichur. Appeal allowed.