Sundaram Finance Ltd. v. The State of Tamil Nadure

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 09.07.2010CORAM:THE HON'BLE MR.JUSTICE C.T. SELVAMCrl.O.P. Nos. 5278 of 2007 and 9744 of 2010 Crl.O.P. No. 5278 of 2007:Sundaram Finance Ltd. Rep by its Branch Manager (Legal)P. Vijayakumar.. Petitioner Vs.1.The State of Tamil Nadurep. by Inspector of Police Kaveripattinam Police Station Krishnagiri Taluk.2.K. Mani .. Respondents R2 impleaded as per order of court dated 14.3.2007 in MP 1/2007 PRAYER: This Petition is filed under Section 482 of the Code ofCriminal Procedure, praying to call for the records inCrl.M.P.No.2100 of 2006 on the file of the Judicial Magistrate,Krishnagiri with Cr.No.1135 of 2006 on the file of the KaveripattinamPolice Station, Krishnagiri and set aside the conditions 1 to 4imposed in the order dated 04.12.2006 made therein and modify thesame by granting permission to the petitioner to sell the vehicle'Swaraj Pickup LCV' having Chasis No.MHZGL4GM0086782 and fitted withengine No. SLCHM 79702 and having Registration No.TN 24- 7911 bypublic auction or on private treaty.For Petitioner : Mr. T. Srinivasaraghavan For Respondents :Mr. J.C. Durairaj, GA (Crl.side) for R1 Mr. V. Kasiviswanathan for R2 Mr. S. Ashok Kumar, Sr. Counsel –Amicus Curiae https://hcservices.ecourts.gov.in/hcservices/ Crl.O.P. No. 9744 of 2010:S. Nanda Gopi.. Petitioner/ Vehicle Owner Vs.State by Inspector of PoliceChitlapakkam Police Station Chennai – 600 064. .. Respondent/ ComplainantPRAYER: This Petition is filed under Section 482 of the Code ofCriminal Procedure, praying to call for the records connected withthe record passed by the Judicial Magistrate, Tambaram inCrl.M.P.No.737 of 2010 in C.C.No. 293 of 2010 dated 4.3.2010 and setaside the same and consequently modify the condition imposed in CMPNo. 287 of 2009 dated 27.1.2009 permitting the petitioner to sellaway the petitioner's vehicle white Chevrolet Tavera bearingRegistration No. TN 20 AP 0691 concerned in Crime No.36 of 2009 onthe file of the respondent police and pass further orders.For Petitioner : Mr. S. Sathia Chandran For Respondent :Mr. A. Saravanan, GA (Crl.side) O R D E R These petitions seek the right of sale of vehicles which havebeen placed in the custody of the petitioners, under orders of thelower courts. 2. In Crl. O.P. No. 5278 of 2007, the petitioner is a non-banking finance company, which had financed the purchase of a 'SwarajPickup Light Commercial Vehicle', under a hypothecated loanagreement. Upon the borrower making defaults in the repayment of theloan, the petitioner proceeded to seize the vehicle, at whichinstance the petitioner learnt that the hypothecated vehicle had beenseized by the police, in connection with the Crime No.1135 of 2006for offences u/s.4(1)(aa) & 4(1)(g) on the file of the firstrespondent in Crl. O.P. No. 5278 of 2007. The petitioner filedCrl.M.P. No.2100 of 2006 before the Judicial Magistrate, Krishnagiripraying for return of the vehicle and seeking an order of salethereof. The borrower/owner of the vehicle had, under an affidavitacknowledged his inability to repay the loan amount and consented tothe return of the vehicle to the petitioner. The learned JudicialMagistrate directed return of the vehicle to the petitioner interaliaon condition that, 'the petitioner execute a bond in a sum of https://hcservices.ecourts.gov.in/hcservices/ Rs.5,00,000/-, provide a surety for the likesum and stipulated thatthe vehicle be not sold, subjected to encumbrance, altered in anymanner and without destruction of any evidence'. This petition isfiled against such order. The owner of the vehicle has beenimpleaded as the second respondent under orders of this Court andthough notice through court has not been served upon him, proof ofservice of private notice has been filed before this Court. 3. The petitioner in Crl. O.P. No. 9744 of 2010, who is theowner of a Chevrolet Tavera Car, bearing Regn. No. TN-20-AP-0691 andwas using the same as a contract carriage, informs that his vehiclewas seized by the respondent police on 20.01.2009 in connection withCr. No.36 of 2009, registered for offences u/s.341, 323, 363 and 506(i) IPC. The petitioner informs that he is in no way involved inthe commission of offences, was not arrayed as an accused in the caseand that he had approached the learned Judicial Magistrate, Tambaramin C.M.P. No.287 of 2009 seeking interim custody of the vehicle.Under orders dated 27.01.2009 such court had directed return of thevehicle to the petitioner interalia on condition that he shallexecute a bond of Rs.5 lakhs, shall not alter or change or sell thevehicle and shall produce the same, as and when required. Thepetitioner's vehicle was ill-fated in that on 03.11.2009, while inmotion the engine caught fire and the entire front portion of thevehicle was charred and damaged. A complaint was immediately filedin respect of such incident with the Pallikkaranai Police Station. Acertificate informing the position, was issued by the Sub Inspectorof Police attached to the police station and the same was sent to therespondent police along with a detailed representation dated26.11.2009. On finding that the cost of repairing the vehicle wasway beyond that owed to the financier of the vehicle and that eventhe reimbursement by the insurers would not cover the deficit, thepetitioner had approached this Court in Crl.O.P. No.27441 of 2009towards obtaining permission to sell the vehicle. This court haddismissed such petition as withdrawn on 06.01.2010 granting libertyto the petitioner to work out his remedy before the learnedMagistrate who had imposed the condition that the vehicle be notsold. The petitioner approached the trial court in Crl.M.P. No.737of 2010 towards obtaining permission to sell the vehicle, which wasdismissed on 04.03.2010, interalia on the reasoning that the maincase was pending trial for offences u/s. 341, 363, 323, 506 (ii) IPCand the vehicle had been used for abducting one of the witnesses inthe case, that the examination of the witnesses had not commenced,that the vehicle was necessary for the purpose of identification andhad to be marked as a material object in the case and that theconduct of the trial would be affected thereby. It is against suchan order that the petition has been filed before this Court.4. These petitions and several other petitions of similar natureraise a genuine concern on the general hesitancy displayed by thelower courts exercising criminal jurisdiction in permitting return of https://hcservices.ecourts.gov.in/hcservices/ vehicles and sale thereof. This, despite the clear and unambigousdirections of the Hon'ble Apex Court in the case of SunderbhaiAmbalal Desai v. State of Gujarat, 2003 (1) CTC 175. That severalvehicles are held at police stations and court campuses across theState, allowed to rust and go to seed hardly need be informed.Concerned by the issue, which is of general importance, this Courtwhile hearing Crl. O.P. No. 5278 of 2007, has sought the assistanceof learned senior counsel Sri Ashok Kumar, Amicus Curiae, who readilyhas obliged. 5. Learned senior counsel Sri. Ashok Kumar informed that Chapter34 of the CrPC comprising Sections 451 to 459 dealt with disposal ofproperty. He would state that we primarily are now concerned withsection 451 CrPC. -- Order for custody and disposal of propertypending trial in certain cases, which corresponds to Section 516-A ofthe Code of 1898, but it would be useful to refer to Section 452,which deals with the order for disposal of property at conclusion oftrial. A reading of sub section 5 thereof, would make clear that, ' the term 'property' includes, in the case of propertyregarding which an offence appears to have been committed,not only such property as has been originally in thepossession or under the control of any party, but also anyproperty into or for which the same may have been convertedor exchanged and, anything acquired by such conversion orexchange whether immediately or otherwise'. Thus, learned senior counsel would point to acceptance of evidence ofproperty in form other than that it originally stood. Learned seniorcounsel would stress the importance of the judgment of the Apex Courtin Sunderbhai Ambalal Desai v. State of Gujarat, (2003 (1) CTC 175)case to inform that it was not necessary for vehicles to be held atpolice stations and courts till trial in cases were completed.Indeed, such decision indicates otherwise. 6. Learned senior counsel touches upon the decision of theHon'ble Apex Court in Bharath Mehta v. State by Inspector of Police,Chennai, (2008) 3 SCC (Cri.) 72, wherein the return of the vehicleto the financier thereof had been directed.7. Learned counsel for the petitioner in Crl.O.P.No.9744 of2010, drew the attention of this Court to a decision of the KarnatakaHigh Court reported in (2002) Crl.LJ 3867 [K.W.Ganapathy v. State ofKarnataka] wherein it had been observed, '6. Irrespective of the fact whether theproperties have evidentiary value or not, it is notnecessary that the original of the property has to be keptintact without alienation. As suggested above, thephotograph or photostat copy of the property can be takenand made part of the record duly certified by the Magistrateat the time when the interim custody of the property is https://hcservices.ecourts.gov.in/hcservices/ handed over to the claimant.'8. Learned counsel also brought to the notice of this Court, anearlier case, (Sundaram Finance Ltd. v. State of Tamil NaduCrl.M.P.No.9655 of 2003 in Crl. R.C No.968 of 2001), wherein thisCourt had permitted sale of the vehicle.9. I also heard the learned Government Advocate, in respect ofthe matter.10. This Court can do no better than reproduce the salientparagraphs in the judgement of the Hon'ble Apex Court in SunderbhaiAmbalal Desai v. State of Gujarat, (2003 (1) CTC 175):'3. At the time of the hearing of thesematters, learned counsel for the parties submitted thatvarious articles are kept at the police station for a longperiod by not adhering to the procedure prescribed underCrPC, which creates difficulties for keeping them in safecustody. Finally, the sufferers are — either the Stateexchequer or the citizens whose articles are kept in suchcustody. It is submitted that speedier procedure isrequired to be evolved either by the court or under therules for disposal of mudammal articles which are kept atvarious police stations as most of the police stations areflooded with seized articles. It is, therefore, submittedthat directions be given so that burden of the courts aswell as at the police stations can, to some extent, bereduced and that there may not be any scope formisappropriation or of replacement of valuable articles byspurious articles.4. Learned counsel further referred to therelevant Sections 451 and 457 of the Code of CriminalProcedure, which read thus:“451. Order for custody and disposal of property pendingtrial in certain cases.—When any property is producedbefore any criminal court during any inquiry or trial, thecourt may make such order as it thinks fit for the propercustody of such property pending the conclusion of theinquiry or trial, and, if the property is subject to speedyand natural decay, or if it is otherwise expedient so todo, the court may, after recording such evidence as itthinks necessary, order it to be sold or otherwise disposedof. https://hcservices.ecourts.gov.in/hcservices/ Explanation.— For the purposes of this section, ‘property’includes—(a) property of any kind or document which is producedbefore the court or which is in its custody.(b) any property regarding which an offence appears to havebeen committed or which appears to have been used for thecommission of any offence.457. Procedure by police upon seizure of property.—(1) Whenever the seizure of property by any police officeris reported to a Magistrate under the provisions of thisCode, and such property is not produced before a criminalcourt during an inquiry or trial, the Magistrate may makesuch order as he thinks fit respecting the disposal of suchproperty or the delivery of such property to the personentitled to the possession thereof, or if such personcannot be ascertained, respecting the custody andproduction of such property.(2) If the person so entitled is known, the Magistrate mayorder the property to be delivered to him on suchconditions (if any) as the Magistrate thinks fit and ifsuch person is unknown, the Magistrate may detain it andshall, in such case, issue a proclamation specifying thearticles of which such property consists, and requiring anyperson who may have a claim thereto, to appear before himand establish his claim within six months from the date ofsuch proclamation.”5. Section 451 clearly empowers the court topass appropriate orders with regard to such property, suchas:(1) for the proper custody pending conclusion of theinquiry or trial;(2) to order it to be sold or otherwise disposed of, afterrecording such evidence as it thinks necessary;(3) if the property is subject to speedy and natural decay,to dispose of the same.6. It is submitted that despite wide powers,proper orders are not passed by the courts. It is alsopointed out that in the State of Gujarat there is GujaratPolice Manual for disposal and custody of such articles. Asper the manual also, various circulars are issued formaintenance of proper registers for keeping the mudammalarticles in safe custody. https://hcservices.ecourts.gov.in/hcservices/

7. In our view, the powers under Section 451 CrPCshould be exercised expeditiously and judiciously. It wouldserve various purposes, namely:1. owner of the article would not suffer because of itsremaining unused or by its misappropriation;2. court or the police would not be required to keep thearticle in safe custody;3. if the proper panchnama before handing over possessionof the article is prepared, that can be used in evidenceinstead of its production before the court during thetrial. If necessary, evidence could also be recordeddescribing the nature of the property in detail; and4. this jurisdiction of the court to record evidence shouldbe exercised promptly so that there may not be furtherchance of tampering with the articles.8. The question of proper custody of theseized article is raised in a number of matters. In BasavvaKom Dyamangouda Patil v. State of Mysore 1 this Court dealtwith a case where the seized articles were not availablefor being returned to the complainant. In that case, therecovered ornaments were kept in a trunk in the policestation and later it was found missing, the question waswith regard to payment of those articles. In that context,the Court observed as under: “4. The object and scheme of the various provisions ofthe Code appear to be that where the property which hasbeen the subject-matter of an offence is seized by thepolice it ought not to be retained in the custody of thecourt or of the police for any time longer than what isabsolutely necessary. As the seizure of the property by thepolice amounts to a clear entrustment of the property to agovernment servant, the idea is that the property should berestored to the original owner after the necessity toretain it ceases. It is manifest that there may be twostages when the property may be returned to the owner. Inthe first place it may be returned during any inquiry ortrial. This may particularly be necessary where theproperty concerned is subject to speedy or natural decay.There may be other compelling reasons also which mayjustify the disposal of the property to the owner orotherwise in the interest of justice. The High Court andthe Sessions Judge proceeded on the footing that one of theessential requirements of the Code is that the articlesconcerned must be produced before the court or should be inits custody. The object of the Code seems to be that any https://hcservices.ecourts.gov.in/hcservices/ property which is in the control of the court eitherdirectly or indirectly should be disposed of by the courtand a just and proper order should be passed by the courtregarding its disposal. In a criminal case, the policealways acts under the direct control of the court and hasto take orders from it at every stage of an inquiry ortrial. In this broad sense, therefore, the court exercisesan overall control on the actions of the police officers inevery case where it has taken cognizance.”9. The Court further observed that where theproperty is stolen, lost or destroyed and there is no primafacie defence made out that the State or its officers hadtaken due care and caution to protect the property, theMagistrate may, in an appropriate case, where the ends ofjustice so require, order payment of the value of theproperty.10. To avoid such a situation, in our view,powers under Section 451 CrPC should be exercised promptlyand at the earliest.15. Learned Senior Counsel Mr Dholakia,appearing for the State of Gujarat further submitted that atpresent in the police station premises, a number of vehiclesare kept unattended and vehicles become junk day by day. Itis his contention that appropriate directions should begiven to the Magistrates who are dealing with such questionsto hand over such vehicles to their owners or to the personfrom whom the said vehicles are seized by taking appropriatebond and guarantee for the return of the said vehicles ifrequired by the court at any point of time.16. However, the learned counsel appearingfor the petitioners submitted that this question of handingover the vehicle to the person from whom it is seized or toits true owner is always a matter of litigation and a lot ofarguments are advanced by the persons concerned.17. In our view, whatever be the situation,it is of no use to keep such seized vehicles at the policestations for a long period. It is for the Magistrate to passappropriate orders immediately by taking appropriate bondand guarantee as well as security for return of the saidvehicles, if required at any point of time. This can be donepending hearing of applications for return of such vehicles. https://hcservices.ecourts.gov.in/hcservices/

18. In case where the vehicle is not claimedby the accused, owner, or the insurance company or by athird person, then such vehicle may be ordered to beauctioned by the court. If the said vehicle is insured withthe insurance company then the insurance company be informedby the court to take possession of the vehicle which is notclaimed by the owner or a third person. If the insurancecompany fails to take possession, the vehicles may be soldas per the direction of the court. The court would pass suchorder within a period of six months from the date ofproduction of the said vehicle before the court. In anycase, before handing over possession of such vehicles,appropriate photographs of the said vehicle should be takenand detailed panchnama should be prepared.24. In our view, no further directions arerequired to be given in these matters. However, it is madeclear that in case where accused disputes that he is notinvolved in the alleged incident and no article was foundfrom him then such endorsement be taken on the photograph.Further with regard to the vehicle also, it is made clearthat there may not be any necessity of producing the vehiclebefore the Court and the Seizure Report may be sufficient.The Special Leave Petitions are disposed of accordingly.'11. This Court is of the firm opinion that return of vehicles andpermission for sale thereof should be the general norm rather thanthe exception it is today. The clear dictate of the Hon'ble ApexCourt in this regard is followed more in the breach than inobservance. Given the facilities of the modern day, there hardly isany scope to think that evidence relating to vehicles cannot be heldin altered form. Causing of photographs and resort to videography,together with recording such evidence as befits a particular casewould well serve the purpose. In cases where return of vehicles issought and the claim therefor is highly contested, resort to sale ofvehicle and credit of the proceeds in fixed deposits pending disposalof the case would be to the common good. None gain when the mereshell or the remnants of the vehicle are returned to the personentitled thereto, after completion of the trial. It would be nosurprise to find that several vehicles have not been so much asclaimed after completion of trial, because of the worthless statethey have been reduced to. It is but natural to expect that a personeventually entitled would rather have the sale proceeds together withinterest, than nothing at all. https://hcservices.ecourts.gov.in/hcservices/

12. This court expresses a sincere hope that atleast hereinafterthe criminal courts would follow the decision of the Apex Court inSunderbhai Ambalal Desai v. State of Gujarat, in true letter andspirit. 13. These Criminal Original Petitions are allowed. Theconcerned Lower Court shall, upon production of the certified copy ofthis order, fix a date for production of the vehicle before it. Uponproduction, the lower court shall cause photographs of the vehicle tobe taken and record Panchnama thereof. The petitioner shall then beat liberty to effect sale of the vehicle. The photographs andPanchnama prepared shall be read as evidence in lieu of marking ofthe vehicles. 14. The Registry is directed to circulate a copy of this orderto all Sessions / Metropolitan/ Judicial Magistrate Courts. ThisCourt places on record its deep appreciation for the kind assistanceof the learned senior counsel Mr. Ashok Kumar, Amicus Curiae. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar.avrTo1. The Inspector of Police, Kaveripattinam Police Station Krishnagiri Taluk.2. Inspector of Police, Chitlapakkam Police Station Chennai – 600 064.3. The Public Prosecutor, Madras High Court.4. The Judicial Magistrate, Krishnagiri5. -Do- Through The Chief Judicial Magistrate, Krishnagiri6. The Judicial Magistrate, Tambaram7. -do- Through The Chief Judicial Magistrate, Kancheepuram https://hcservices.ecourts.gov.in/hcservices/

8. The Section Officer, F Section, High Court, Madras9. The Registrar General, High Court, Madras.1 cc To Mr.T.Srinivasa Raghavan, Advocate, SR.492511 cc To M/S.Sathia Chandran, Advocate, SR.49391 Crl.O.P. Nos. 5278 of 2007 and 9744 of 2010BVN (CO)RH (19.7.10)