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2024 (3) TMI 1420 - HC - CustomsChallenge to interim release of the vehicle by the learned court - recovery of alleged contraband articles from the ship or not - legality in considering the application of the Petitioner-Shipping Company under Section 457 of Cr.P.C. for interim release of the vessel - validity of terms and conditions subject to which the vessel was directed to be released interimly in favor of the shipping company. Legality in considering the application of the Petitioner-Shipping Company under Section 457 of Cr.P.C. for interim release of the vessel - HELD THAT - The language employed in Section 457 of Cr.P.C. is self- explanatory. Therefore the same does not call for an in-depth analysis. Moreover Section 457 of Cr.P.C. has been elaborately discussed and analysed in various judgments delivered by the Hon ble Supreme Court as well as this Court. Undisputedly the provision contained in Section 457 of Cr.P.C. is a procedural provision to be followed by the police upon seizure of property. The first sub-Section provides whenever the seizure of the property is reported to a Magistrate and such property is not produced before a Criminal Court during an inquiry or trial the Magistrate may pass such order as he thinks fit respecting the disposal or delivery of such property to the person entitled to the possession thereof and if such person cannot be ascertained respecting the custody and production of such property. A duty is cast upon the Magistrate to pass necessary orders once the property is seized and reported to such Magistrate. Moreover discretion has been vested with the Magistrate for disposal of such property or delivery of such property to the person entitled to the possession thereof. If the owner of the property is known then the order shall be passed with regard to the disposal of such property and if the owner is unknown then such order shall be passed with regard to the custody and production of such property. In the instant case since the owner of the property is known the Magistrate is duty bound to pass an order with respect to the disposal of such property or delivery of such property to the person entitled to the possession thereof. This Court observes that when the shipping company filed an application for interim release of the vehicle before the learned Court in seisin over the matter at that time the learned court in seisin over the matter was well aware of the requirement of the seized vessel during investigation as well as trial. Moreover the ownership of such vessel remains undisputed. The question therefore which remains is as to whether the seized property is required during the inquiry or trial? In reply to the said question this Court would like to observe that none other than the court in seisin over the matter is in the best position to decide with regard to the use of the seized property during inquiry or trial. Thus by virtue of the impugned order dated 12.02.2024 the learned court in seisin over the matter has exercised its discretion in favour of the release of the seized property to its real owner subject to certain terms and conditions. To understand the scope and ambit of Section 457 of the Cr.P.C. this Court would like to refer to certain judgments of the Hon ble Supreme Court in this regard. In Basavva Kom Dyamanagouda Patil v. State of Mysore 1977 (4) TMI 170 - SUPREME COURT . The question arose as to whether the seized ornaments kept in the truck should be returned to the rightful owner while the criminal case is still pending. The Hon ble Supreme Court after analysing the provision contained under Section 457 of Cr.P.C. held that the power under Section 457 Cr.P.C. should be exercised promptly to prevent unnecessary hardship to the owner. Further it was emphasized that seized property should not be kept in police custody for an indefinite period unless it is essential for the investigation. In Sunderbhai Ambala Desai v. State of Gujarat 2002 (10) TMI 773 - SUPREME COURT the Hon ble Supreme Court was dealing with an issue with regard to disposal of seized property under Sections 451 and 457 of the Cr.P.C. While addressing the prolonged retention of seized property in the custody of police authorities the Hon ble Supreme Court observed that timely disposal of such property is very much essential. Ater a critical analysis of the judgments discussed this Court has no hesitation in coming to a conclusion that the provisions contained in Sections 451 and 457 of the Cr.P.C. would be applicable to the cases involving offence under the provisions of the NDPS Act. Therefore any property/ vehicle seized in connection with such cases can very well be dealt with by the trial court by resorting to the provisions contained under Sections 451 and 457 of the Cr.P.C. Conditions imposed by the learned trial court while releasing the vessel in question - HELD THAT - As to the value of the vessel it is no doubt a difficult proposition to accurately assess the exact value of the vessel involved in the present case. Keeping in view the law involved through various judgments of the Hon ble Supreme Court as well as this Court the learned trial court while directing interim release of the vehicle/ property is duty bound to ensure that while taking on Zima the person concerned secures the property/ vehicle/ vessel in question and further gives an undertaking that he shall not sell transfer alienate or part with possession of such property till conclusion of the trial and shall further give an undertaking to the effect that he shall produce such property/ vehicle/ vessel before the trial court as and when required by the trial court within a reasonable period of time. Furthermore the learned Division Bench of this Court in Rabindra Kumar Behera s case while answering the reference has laid down the conditions that are required to be fulfilled while directing interim release of the vehicle/ property/ vessel. Reverting back to the financial condition imposed in condition Nos.1 and 2 this Court finds that the condition No.1 with regard to furnishing a Bank Guarantee would be a harsh condition so far the Petitioner-Shipping Company is concerned since they are not having any bank account in India. Therefore the condition No.1 requires reconsideration by this Court. Accordingly the condition No.1 is hereby waived. So far the condition No.2 is concerned the value of the vessel has been assessed on a hypothetical basis. In other words the real value of the vessel has not yet been assessed by any certified valuer in the present case. Basing upon the insurance declaration the value of the vessel has been arrived at Rs.100 crores. Therefore this Court is of the view that the same may not be the actual cost of the vessel which is stranded at the Paradeep port at the moment. Since no valuation report by a certified valuer could be produced in course of the hearing of the present application by the customs authorities this Court is required to take a reasonable approach in the matter particularly keeping in view the factual background of the present case and the progress made in the investigation so far. Accordingly the condition No.2 is modified to the extent that instead of Rs.100 crores the Petitioner-Shipping Company shall now furnish an indemnity bond to the tune of Rs.75 crores and instead of one solvent surety for the like amount they shall furnish two solvent sureties for the like amount. Further it is directed that the other conditions of order dated 12.02.2024 shall remain intact. Conclusion - i) Section 457 of Cr.P.C. applies to cases involving the NDPS Act allowing for interim release of seized property. ii) The legality of the interim release order upheld but the conditions are modified to be more reasonable waiving the bank guarantee requirement and reducing the indemnity bond. The Criminal Revision Petition is dismissed.
ISSUES PRESENTED and CONSIDERED
The Court considered two primary issues: 1. Whether the learned Additional District & Sessions Judge, Kujang committed any illegality in considering the application of the Petitioner-Shipping Company under Section 457 of Cr.P.C. for interim release of the vessel and accordingly, passed an order directing interim release of the vehicle in favor of the shipping company. 2. Whether the terms and conditions subject to which the vessel was directed to be released interimly in favor of the shipping company are excessive, unreasonable, and cause serious prejudice to the Petitioner-Shipping Company. ISSUE-WISE DETAILED ANALYSIS 1. Legality of Interim Release under Section 457 of Cr.P.C. Relevant legal framework and precedents: Section 457 of Cr.P.C. provides the Magistrate with discretion to dispose of or deliver seized property to the person entitled to its possession, provided the property is not required during an inquiry or trial. The Court referred to several judgments, including Basavva Kom Dyamanagouda Patil v. State of Mysore and Sunderbhai Ambala Desai v. State of Gujarat, which emphasize the prompt exercise of this power to prevent unnecessary hardship. Court's interpretation and reasoning: The Court observed that the learned trial court was aware of the requirement of the seized vessel during the investigation and trial. It noted that the ownership of the vessel was undisputed, and the court in seisin over the matter was best positioned to decide the necessity of the vessel during the inquiry or trial. Application of law to facts: The Court found that the learned trial court exercised its discretion appropriately under Section 457 of Cr.P.C. by directing the interim release of the vessel to its real owner, subject to certain conditions. Conclusions: The Court concluded that the learned Additional District & Sessions Judge, Kujang did not commit any illegality in passing the order for interim release of the vessel. 2. Reasonableness of Conditions Imposed for Interim Release Relevant legal framework and precedents: The Court referred to precedents emphasizing that conditions for interim release should not be excessive or arbitrary. It highlighted the importance of safeguarding the interests of the owner while ensuring the property remains available for trial if needed. Court's interpretation and reasoning: The Court found that the condition requiring a bank guarantee was harsh, given the Petitioner-Shipping Company's lack of banking relations in India. It also noted that the valuation of the vessel was hypothetical and not based on a certified valuer's assessment. Key evidence and findings: The Court acknowledged the financial hardship imposed by the conditions, particularly the requirement of a Rs.10 crore bank guarantee and an indemnity bond of Rs.100 crores. Application of law to facts: The Court modified the conditions, waiving the bank guarantee requirement and reducing the indemnity bond to Rs.75 crores with two solvent sureties, considering the lack of a certified valuation and the factual background. Conclusions: The Court concluded that the conditions imposed were excessive and modified them to be more reasonable and proportionate. SIGNIFICANT HOLDINGS Core principles established: The Court reaffirmed that Section 457 of Cr.P.C. applies to cases involving the NDPS Act, allowing for interim release of seized property. It emphasized the need for conditions to be reasonable and not punitive, ensuring the owner's rights are not arbitrarily denied. Final determinations on each issue: The Court upheld the legality of the interim release order but modified the conditions to be more reasonable, waiving the bank guarantee requirement and reducing the indemnity bond. The Court dismissed the Criminal Revision Petition filed by the Union of India and the customs authorities, finding no merit in their challenge to the interim release order.
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