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Madhya Pradesh High Court · body

2025 DIGILAW 341 (MP)

Shravan Kumar Pathak v. State of M. P.

2025-06-16

SANJAY DWIVEDI

body2025
ORDER 1. At the request of learned counsel for the parties, the revision is finally heard. 2. In this revision filed under section 397 read with section 401 of the Code of Criminal Procedure, the challenge is made to an order dated 8.4.2022 (Annexure-P/6) passed by the Court of Eighth Additional Sessions Judge, District Satna, whereby an application filed by him under section 457 of the CrPC has been rejected by the trial Court. 3. As per facts of the case, in pursuance of a complaint made by the applicant to the police saying that on 24.3.2021 at about 02:00 AM, a theft had been committed in his house wherein cash amounting to rupees three crores and four kgs. of gold got stolen, the police vide FIR/Crime No.412/2021 registered an offence against unknown persons. (3.1) After making investigation, the police arrested the accused and recovered the stolen articles (gold and cash) from their possession. (3.2) Subsequently, an application under section 457 of the CrPC was moved by the applicant before the trial Court for handing over the possession of articles seized by the police in his favour. (3.3) In the meantime, the Income Tax Department and prosecution raised an objection to the application moved by the applicant under section 457 of the CrPC saying that just to evade the tax liability, the applicant kept such a huge cash amount and gold in his house, which otherwise is a loss to the Government and as such, custody of the seized articles cannot be handed over to the applicant. In addition, by moving a letter before the trial Court, the Assistant Director, Income Tax, had also asked for the custody of the articles recovered from the thieves. (3.4) Ultimately, the trial Court by the impugned order dated 8.4.2022 (Annexure-P/6) has rejected the application preferred by the applicant saying that since the enquiry of Income Tax Department has not been concluded so far and the amount may be a subject matter of the confiscation, if it is found unaccounted, therefore, it would not be proper to handover the possession of seized articles in favour of the applicant. Being aggrieved and dissatisfied with the impugned order, this revision has been filed. 4. Being aggrieved and dissatisfied with the impugned order, this revision has been filed. 4. Shri Mishra, learned counsel for the applicant has submitted that rejection of application only on the ground that an objection has come from the Income Tax Department saying that against the seized articles since they have already issued a warrant of authorization under section 132A(1) of the Income Tax Act, 1961 (in short the ‘Act, 1961’) and, therefore, possession of those articles cannot be handed over to the applicant, is not proper on the part of the trial Court. He has submitted that the scope of supurdgimana under section 457 of the CrPC is to return the articles to the rightful owner, once the investigation is over. He has further submitted that the applicant, in the FIR, has demonstrated the fact about the seized articles and even produced the relevant documentary evidence in this regard before the trial Court. He has also submitted that the Income Tax Department has no locus to oppose the application preferred by the applicant. He has also submitted that while rejecting the application, even the trial Court has failed to appreciate the factual aspect of the matter that the applicant has a legal right over the seized articles. 5. On the other hand, Shri Gupta, learned counsel for the objector has opposed the submissions advanced by learned counsel for the applicant and submitted that there is nothing wrong in the impugned order and in fact, the same does not call for any interference. He has submitted that the Income Tax Department has already issued a warrant of authorization under section 132A(1) of the Act, 1961 against the seized articles to the applicant so as to ascertain as to whether he has earned the said property by following the legal track and for that required income tax has been paid or not. He has further submitted that when a warrant of authorization under section 132A(1) of the Act, 1961 is issued against any property, then the Judicial Magistrate First Class does not have any power to release the said property on supurdginama and under the existing circumstance, the trial Court has rightly rejected the application preferred by the applican. He has further submitted that when a warrant of authorization under section 132A(1) of the Act, 1961 is issued against any property, then the Judicial Magistrate First Class does not have any power to release the said property on supurdginama and under the existing circumstance, the trial Court has rightly rejected the application preferred by the applican. In support of his contention, learned counsel for the objector has placed reliance upon an order dated 24.11.2023 passed by the coordinate Bench of this Court in M.Cr.C. No. 46235 of 2020 [M/s Mectec v. The State of Madhya Pradesh and another]. On these grounds, it is prayed that the revision is without any substance and deserves to be dismissed. 6. I have heard the arguments advanced by learned counsel for the parties and perused the record. 7. Now, the only question remains to be adjudicated in this revision is as to whether under the existing circumstances, rejection of application preferred by the applicant that too on an objection raised by the Income Tax Department saying that as per the provision of section 132A(1) of the Act, 1961, they have issued a warrant of authorization against the seized articles to the applicant, is proper on the part of the trial Court or not. 8. So far as the case of M/s Mectec (supra), is concerned, the same has no application in the present facts and circumstances of the case for the reason that the facts of the said case are altogether different than that of present case. However, in the said case, the coordinate Bench has relied upon a case reported in (1990) JLJ 734 [Union of India v. Police Station Janakganj] in which on an inspection done by the Income Tax Department, the police seized some articles and thereafter, for releasing those articles, an application under section 457 of the CrPC was moved and, in turn, it has been held that the Judicial Magistrate of First Class does not have any authority to release property or valuables on supurdginama in respect of which warrant of authorization has been issued by the Income Tax Department. However, in the present case, admittedly, on a complaint of theft made by the applicant, the police registered a case and after making investigation, recovered the stolen articles from the accused and then only, the applicant moved an application under section 457 of the CrPC for releasing the recovered articles in his favour which has been objected by the Income Tax Department. However, if the stolen cash amount and gold are unaccounted and are required to be taxed, then the Income Tax Department is free to initiate proceeding against the applicant in a different provision of the Act, 1961, but in a proceeding initiated under section 457 of the CrPC, the Court has to see whether, the applicant, by moving an application, satisfies the Court and further, by fulfilling the requisite conditions, any order on the application can be passed or not. 9. In a case reported in (1985) 156 ITR 233 (ALL) [Vindhya Metal Corporation & others v. Commissioner Of Income-Tax & others], the Allahabad High Court has considered the issue with regard to the fact when the stolen property was recovered by the police and accused was charged under section 411 of the IPC read with sections 41 and 102 of the CrPC. Thereafter, the Station Officer-in-charge of Government Railway Police sent an intimation to the Income Tax Authorities about the seizure of money because the person from whom seizure was made, did not have any paper or document relating to the ownership or possession of the amount. Subsequently, the Commissioner, Income Tax had issued a requisition under section 132A(1) of the Act, 1961 to the Station Officerin-charge, Government Railway Police requiring him to handover the seized money to the Income Tax Officer, who had been authorized by a warrant of authorization for receiving the same. In addition to above the Income Tax Authority, Varanasi, had also authorized search of residential premises of Rajendra Kumar Pandey, a partner of M/s Vindhya Metal Corporation, Imamganj, Mirzapur. In the meantime, Rajendra Kumar Pandey had made an application before the Judicial Magistrate (Railways), Varanasi, praying that the amount which belonged to the petitioners and was being carried by Vinod Kumar, who is serving as a Munim in the Firm, be released in his favour. However, the Income Tax Officer opposing the said prayer had submitted their objection and asked for the custody of the amount from the Station Officer-in-charge. However, the Income Tax Officer opposing the said prayer had submitted their objection and asked for the custody of the amount from the Station Officer-in-charge. In turn, the Judicial Magistrate (Railways), rejecting the objection raised by the department had decided the matter by a detailed order and directed for return of the amount in favour of Rajendra Kumar Pandey. Subsequently, the said order was assailed in Criminal Revision No.177 of 1982 filed under section 378 of the CrPC, which got allowed by the Court permitting the Income Tax Department to take possession of the sum of Rs.4,63,000/- Before disposal of the said criminal revision, one petition was also filed before the High Court requesting therein that not only the orders of attachment of money; authorization of search warrant and issuance of notice to the petitioner by the Income Tax Department under the different provisions may be quashed but the proceeding initiated by the Department under sections 132 and 132A of the Act, 1961 may also be dropped. The said prayer was again opposed by the Income Tax Department claiming that section 132A of the Act, 1961 permits requisition of books of account, money etc. Ultimately, the Court had held that though the amount seized from Vinod Kumar was requisitioned by the Income Tax Department by issuing notice under section 132A of the Act, 1961, but under the existing circumstances, the said proceeding cannot be said to be proper and as such, the same was quashed. 10. Likewise, in a reference made to Kerala High Court in respect of an issue as to who is the best suited person to possess the seized property till conclusion of enquiry or trial in a proceeding initiated under sections 451 and 457 of the CrPC, the Kerala High Court in Crl. Mc No.1742 of 2024 [Kasinath Rangond Kanade v. State of Kerala], taking into account the cases reported in 2022 SCC OnLine Ker 11017 [Union of India v. State of Kerala] and (2023) SCC OnLine Kerala 8444 [R. Ravirajan v. Sate of Kerala] has observed as under :-- ‘10. We have perused meticulously the provisions contained in sections 132, 132A and 132B of the Act. We have perused meticulously the provisions contained in sections 132, 132A and 132B of the Act. A combined reading of the said provisions would indicate that the object of the said provisions is to enable the competent authorities under the Act to hold the assets seized under section 132 or requisitioned under section 132A for appropriation towards existing and future liabilities of the assessee, except in cases where the assessee is able to explain the nature and source of the acquisition of the assets seized or requisitioned, provided the competent authority has reason to believe that the assets represent either wholly or partly the income which has not been or would not be disclosed for the purpose of the Act. As provided for in section 132B, the scheme of the provisions is that in cases where the assessee is able to COURT explain the nature and source of acquisition of the asset, the asset shall be released to the assessee in a time framed manner. When the Act confers power on the competent authority under the Act to issue a requisition and obtain assets of assessees and adjust the same towards their liabilities, if the competent authority has reason to believe that the asset represents either wholly or partly income or property which has not been or would not be disclosed for the purposes of the Act, according to us, the best suited person to hold the currency notes which have been seized in cases of this nature until the culmination of the enquiry or trial, would be the competent authority under the Act provided it is alleged that the asset represents either wholly or partly income or property which has not been or would not be disclosed for the purposes of the Act. Even though this Court held in Abdul Khader that section 132A does not empower the competent authority to make a requisition to a Court for delivery of assets, it was made clear in the said case that the competent authority under the Act is entitled to seek interim custody of the seized assets. In the said COURT view of the matter, according to us, the view expressed in Union of India that the competent authority under the Act is entitled to seek interim custody of the currency notes in the facts of the said case, is in order. 11. In the said COURT view of the matter, according to us, the view expressed in Union of India that the competent authority under the Act is entitled to seek interim custody of the currency notes in the facts of the said case, is in order. 11. It appears that the learned Single Judge who dealt with R.Ravirajan is persuaded by the judgment of the Apex Court in J.R. Malhotra. A close reading of the judgment in J.R. Malhotra would indicate that the case dealt with therein relates to a seizure effected prior to the introduction of sections 132A and 132B of the Act. What the learned Judge omitted to take note of, is the power conferred on the competent authorities to hold any assets if it has reason to believe that the same represents either wholly or partly income or property which has not been, or would not be disclosed for the purposes of the Act. Of course, the said power is subject to the exception provided for in the first proviso to clause (i) of sub-section (1) of section 1328. If the competent authority has reason to believe that the amount seized represents wholly or partly income or property which has not been or would not be disclosed for the COURT purposes of the Act and is unable to issue a requisition in terms of section 132A of the Act for the reason that asset has been produced by the officer or authority who seized the same before the Jurisdictional Magistrate, as clarified by this Court in Abdul Khader, the competent authority shall be held to be authorised to prefer an application seeking interim custody of the currency notes under section 451 of the Code, for otherwise, sections 132A and 132B, would become futile. Needless to say, the view expressed in R.Ravirajan that the provisions contained in sections 132A and 132B are not relevant in the context, does not appear to us to be correct. 12. Needless to say, the view expressed in R.Ravirajan that the provisions contained in sections 132A and 132B are not relevant in the context, does not appear to us to be correct. 12. As we propose to uphold the view expressed in Union of India, it is necessary to clarify that the direction in Union of India that the competent authority under the Act, on receipt of the seized currency notes, shall complete the proceedings contemplated against the person concerned within a period of six months and if not, the amount shall be redeposited and shall be released to the person from whom the amount has been seized. is not in accordance with law. Such a direction is unwarranted inasmuch as the scope of the proceedings is only to decide the person who is best suited to have custody of the currency notes until the conclusion of enquiry or trial. According to us, direction for disbursement/appropriation of the amounts after completing the proceedings contemplated under the Act can be issued only when the Court exercises the power under section 452 of the Code for disposal of the property at the conclusion of the enquiry or trial. In the result, the reference is answered upholding the view taken in Union of India subject to the observations made in the preceding paragraph as regards the directions issued therein for completion of assessment proceedings in respect of the assets, appropriation of tax, disbursement of balance etc. Registry shall place these matters for disposal on merits before the regular bench as per roster.’ [Emphasis Supplied] 11. From the aforesaid enunciation of law, it is clear that in a criminal case, if any stolen property is seized by the police from the accused, then the Income Tax Department cannot claim possession over the said seized property by issuing notice under section 132A of the Act, 1961 for the reason that the same is a separate proceeding and can be initiated only after decision of the Court. 12. 12. In the present case, after making a complaint by the applicant in respect of an event of theft committed in his house, the police made investigation and seized the stolen articles from the accused and thereafter, the applicant moved an application for handing over the possession of said seized articles in his favour annexing therewith documents of his ownership over those articles, but the trial Court, on an objection raised by the Income Tax Department, has rejected the application. However, the trial Court on a mere objection raised by the Income Tax Department cannot reject the application preferred by the applicant for the reason that it is the duty of the Court to see whether the person claiming possession over the seized articles, satisfies the Court by producing cogent evidence of his/her ownership or not. From the record of the trial Court, it reveals that while claiming title over the seized articles, the applicant has not only filed a certificate issued by the Tahsildar but also filed other relevant documents of his title over the same and as such, after considering the same, an order in this regard ought to have been passed, but the Court has failed to do so. Under such circumstances, the impugned order dated 8.4.2022 (Annexure-P/6) passed by the trial Court is not sustainable in the eyes of law and as such, it is hereby set aside. 13. The trial Court is directed to allow the application filed by the applicant subject to satisfaction of relevant documents showing his ownership over the seized articles filed along with the application. 14. With the aforesaid, the revision is allowed and disposed of.