Section 451 CrPC | Ownership Of Seized Cash Must Be Determined After Considering Claims Of All Victims: Supreme Court
The Apex Court ruled that the appropriate ownership of the disputed sum can only be determined after evaluating all evidence and considering the claims of all parties.
Justice Sanjay Karol, Justice Prashant Kumar Mishra, Supreme Court
The Supreme Court set aside an order of the Gujarat High Court that had directed the release of ₹50 lakh seized during an investigation to a single complainant, holding that ownership of the money can only be determined after examining the claims of all alleged victims and upon appreciation of evidence during trial.
The Court was hearing an appeal filed by the accused challenging the High Court order, which had directed the release of the seized cash in favour of one of the complainants, holding him lawfully entitled to the amount.
A Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra, while deciding the matter, observed, “The appropriate ownership of the sum of money can only be determined after consideration of all evidence and having taken into account the claims and views of all the other persons that the appellant-accused has allegedly played foul with, in business.”
Advocate Somesh Chandra Jha represented the appellant, while Advocate Swati Ghildiyal appeared on behalf of the respondents.
Background
The case arose out of the registration of an FIR alleging that the appellant-accused, operating a proprietary firm, had defrauded several traders in various transactions. The complaint alleged that goods worth more than ₹3.49 crores were supplied, but cheques issued by the accused were dishonoured.
During the investigation, the police seized ₹50 lakh in cash from the accused as ‘muddamal’. The respondent, one of the complainants, filed an application under Section 451 of the Code of Criminal Procedure, 1973, before the Trial Court, seeking the money on the ground that it represented unpaid dues of his concern. To substantiate his claim, he relied on bills, audit reports, and ledger accounts.
The Trial Court, however, rejected the application, observing that multiple traders had raised claims against the accused and that the ownership of the seized amount was a matter of evidence. This order was upheld by the Additional District and Sessions Judge, who noted that the money was alleged to be proceeds of crime and that no exclusive entitlement could be established at that stage.
The Gujarat High Court overturned these orders and directed that the money be released to the respondent. Aggrieved, the accused-appellant challenged the order before the Supreme Court.
Court’s Observations
The Supreme Court disagreed with the approach of the High Court, holding that the High Court erred in releasing the money to a single claimant despite there being several aggrieved traders. The Court remarked that “... it is entirely possible that the said sum of money was part of some other transaction. Simply because the amount owed to him matches the amount recovered does not establish that he is the only claimant to the said amount.”
The Bench therefore upheld the observations made by the Sessions Court that direct ownership of the seized amount could not be conclusively established at this stage.
Emphasising that ownership must be adjudicated during trial after a full evaluation of the evidence and after considering the claims of all affected parties, the Apex Court held that “the evidence presented by respondent no. 2 to establish his claim over the said amount will have to be considered by the Court seized of trial in the matter, and then only can a proper decision be arrived at. At this stage, therefore, releasing the muddamal would be unjustified and premature.”
Consequently, the Bench directed that the amount already withdrawn pursuant to the High Court’s order be redeposited with the trial court, along with the original currency notes, for verification with the panchnama prepared at the time of seizure.
Conclusion
Allowing the appeal, the Supreme Court set aside the High Court’s order, restored the concurrent findings of the Magistrate and the Sessions Court, and disposed of pending applications.
Cause Title: Rajput Vijaysinh Natwarsinh Vs State Of Gujarat & Ors (Neutral Citation: 2025 INSC 1129)
Appearances
Petitioner: Advocate Somesh Chandra Jha, AOR with Advocates Saumya Dwivedi, Animesh Rajoriya, Akash Kishore, Kartik Bhatt
Respondents: Advocate Swati Ghildiyal, AOR with Advocate Rishi Yadav and Advocate Reetu Sharma, AOR