The Orissa High Court has held that a Magistrate cannot indirectly review or recall a final order releasing a seized vehicle by re-examining questions of ownership based on subsequent materials collected by the Investigating Officer.

The Court further held that the cancellation of an interim custody order can ordinarily be justified only upon a violation of release conditions or other legally sustainable grounds, and not by undertaking a fresh adjudication of ownership disputes already considered when passing the original order.

The Court was hearing a petition challenging an order of the Sub-Divisional Judicial Magistrate, Kamakhyanagar, whereby an earlier order releasing a seized JCB machine in favour of the petitioner was recalled, and the petitioner was directed to produce the vehicle before the Investigating Officer.

A Single Judge Bench of Justice Sanjeeb K. Panigrahi observed: “... the impugned order falls afoul of the embargo contained in Section 362 of the Code of Criminal Procedure, 1973. The said provision unequivocally states that no Court, after it has signed its final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error. The order dated 21.08.2023 was a final order disposing of the Petitioner’s claim for interim custody. The learned Magistrate did not purport to cancel the release on the ground of violation of any condition. Instead, he proceeded to re-appreciate the entire factual matrix concerning ownership of the vehicle including the alleged sale deed, the tax invoice, the No Objection Certificate, and the repayment records and concluded that the Petitioner’s claim was improbable. This is nothing short of a review and revision of a previous final order on the merits, which is expressly prohibited by law".

The Bench further added: "The mere labelling of the application as one for “cancellation of zimanama” cannot circumvent the statutory bar. The power to cancel an interim release order exists only when the conditions of release are breached or when the order was obtained by fraud practised upon the Court. In the present case, no condition was alleged to have been violated, and the issue of fraud is a contentious factual dispute involving examination of signatures and documents, which is yet to be adjudicated. The Magistrate, by undertaking a mini-trial on the issue of title at the behest of the Investigating Officer, has clearly acted without jurisdiction. 

Advocates Anish Ankur Mishra and Prasanna Kumar Mishra appeared for the Petitioner. Additional Standing Counsel Tej Kumar appeared for the State. Senior Advocate Debi Prasad Dhal appeared for the Opposite Party.

Background

According to the petitioner, Opposite Party No. 2 had agreed to sell a JCB excavator machine to him and had delivered possession after receiving payment. Subsequently, disputes arose between the parties regarding possession and ownership of the vehicle, leading to the registration of criminal proceedings.

During the investigation into the case, the JCB machine was seized by the police. An application filed by Opposite Party No.2 seeking the release of the vehicle was rejected by the Magistrate. The said order was subsequently affirmed in revision.

Thereafter, the petitioner moved an application seeking interim custody of the seized vehicle. By order dated 21.08.2023, the Magistrate released the vehicle in favour of the petitioner, subject to several conditions, which were duly complied with.

Subsequently, the Investigating Officer filed an application seeking cancellation of the interim release order based on materials collected during the investigation relating to an alleged forged sale deed. Acting upon the said application, the Magistrate passed the impugned order dated 02.01.2025, recalling the earlier release order and directing production of the vehicle before the Investigating Officer.

Aggrieved thereby, the petitioner approached the High Court.

Court’s Observations

The High Court observed that the principal issue before it was whether the Magistrate was justified in cancelling the interim release of the seized JCB excavator in favour of the petitioner without issuing notice, without affording an opportunity of hearing and on grounds which effectively sought a review of an earlier final order.

The Court found that the impugned order suffered from multiple legal infirmities, foremost among them being a gross violation of the principles of natural justice. The Bench noted that the order dated 21.08.2023 releasing the vehicle in favour of the petitioner was a final judicial order passed under Section 457 Cr.P.C., pursuant to which the petitioner had complied with the conditions imposed and taken possession of the vehicle.

The Court observed that when the Investigating Officer subsequently sought cancellation of the zimanama, the Magistrate proceeded to cancel the release order “without issuing any notice, without calling for a response from the Petitioner, and without any finding that the Petitioner had violated any of the conditions imposed at the time of release.” The Court held that “This is a clear breach of the audi alteram partem rule.”

Referring to the principles laid down by the Supreme Court in M/s Daffodills Pharmaceuticals Ltd. v. State of U.P. and Gurdev Singh v. State of Bihar, the Court reiterated that no person can be subjected to an adverse order affecting his rights without being afforded a reasonable opportunity of hearing. The Bench accordingly held that the impugned order could not be sustained on this ground alone.

The Court further held that the impugned order was hit by the embargo contained in Section 362 Cr.P.C. The Bench observed that “The said provision unequivocally states that no Court, after it has signed its final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error.” It noted that the order dated 21.08.2023 constituted a final order disposing of the petitioner's claim for interim custody.

The High Court found that the Magistrate had not cancelled the release on the ground of any violation of the conditions imposed while granting custody. Instead, the Magistrate re-examined the entire factual matrix relating to ownership of the vehicle, including the alleged sale deed, tax invoice, No Objection Certificate and repayment records, ultimately concluding that the petitioner's claim was improbable.

The Court held that “This is nothing short of a review and revision of a previous final order on the merits, which is expressly prohibited by law.” The Bench further observed: “The mere labelling of the application as one for ‘cancellation of zimanama’ cannot circumvent the statutory bar.”

The Court emphasised that the power to cancel an interim release order can be exercised only where the conditions of release have been breached or where the order was obtained by fraud practised upon the Court. However, in the present case, no violation of any condition had been alleged.

The Bench noted that the allegation of fraud involved disputed questions concerning signatures and documents which remained to be adjudicated during trial. In that context, the Court observed: “The Magistrate, by undertaking a mini-trial on the issue of title at the behest of the Investigating Officer, has clearly acted without jurisdiction.”

The High Court also found the Magistrate's approach to be internally inconsistent and arbitrary. The Court noted that the Investigating Officer had made two separate prayers: first, for seizure of the vehicle from the petitioner and its release in favour of Opposite Party No.2; and second, for cancellation of the interim release order.

While the Magistrate rejected the first prayer by a separate order passed on the same day, he simultaneously allowed the second prayer and directed the petitioner to produce the vehicle before the Investigating Officer, thereby achieving the very result that had been refused earlier. The Bench observed: “This contradictory approach reflects a non-application of mind and renders the impugned order arbitrary and capricious.”

The Court further noted that it was subsequently admitted that after obtaining possession of the vehicle from the petitioner, the Investigating Officer handed it over to Opposite Party No.2, despite the Magistrate having earlier declined that very relief. The Bench held that such conduct on the part of the investigating agency, coupled with the prejudice caused to the petitioner, further vitiated the proceedings.

Addressing the submission that a final report had been filed in the connected criminal case, the Court observed that such a report was merely an opinion of the police and not a conclusive adjudication of rights.

The Bench held that the existence of a final report did not empower a criminal court to unilaterally cancel a prior judicial order without following due process. It observed that if the Investigating Officer genuinely believed that the release order had been procured through forged documents, the proper course was to place the material before the Court and seek appropriate directions after giving notice to the petitioner. Instead, the Magistrate relied exclusively upon the Investigating Officer's assertions and proceeded without hearing the petitioner.

The Court concluded: “This is a classic case of procedural impropriety that strikes at the root of the fairness of the judicial process.”

Conclusion

Accordingly, the High Court set aside the order dated 02.01.2025 passed by the Sub-Divisional Judicial Magistrate, Kamakhyanagar, holding that the order amounted to an impermissible review of a final order releasing the seized vehicle, violated principles of natural justice and suffered from arbitrariness and lack of jurisdiction.

Cause Title: Batakrushna Dehury v. State of Odisha & Anr

Click here to read/download Judgment

Tags: