S.457 CrPC | Registration Certificate Alone Not Sole Factor For Interim Release Of Seized Vehicles: Supreme Court

The Supreme Court on Monday (July 27) held that registration certificate alone are not determinative of entitlement to interim custody of vehicles under Sections 451 and 457 of the CrPC.

“Registration is a relevant factor, but it is evidentiary and not conclusive of entitlement to interim possession.”, observed a bench of Justice Sanjay Karol and Justice Augustine George Masih, while dismissing an appeal of a company's director who challenged the interim release of vehicles in favour of the Respondents.

The appellant was a director of M/s Pure Minerals and also an 80% shareholder of the respondent company, M/s Earth Stein Private Limited. The subject vehicles one Bolero City Pick-up, three Excavators, and one Ashok Leyland Tipper were purchased in the name of M/s Pure Minerals between 2014 and 2022.

The dispute arose when the appellant alleged that on August 31, 2023, the respondents committed criminal trespass into his factory and forcefully took away the vehicles. A counter-FIR was lodged by the respondent company alleging that the appellant had misappropriated ₹1,73,11,894 from the company and utilized the amounts to purchase the vehicles in the name of his own company.

Both the Appellant and the Respondents filed separate applications before the trial court seeking return of vehicles; however, aggrieved by the dismissal of their application, they approached the Andhra Pradesh High Court. By way of a common order, the High Court granted interim custody of the vehicles to the Respondents. The High Court cited the pending criminal proceedings against the Appellant in an alleged misappropriation of funds case, and the continued use of the seized vehicles by the Respondents for their mining business operations when the vehicles were seized.

Aggrieved by the High Court's order, the appellant moved to the Supreme Court. He relied on Sunder Bhai Ambalal Desai Vs. State of Gujarat, 2002 (10) SCC 283 to contend that the seized vehicles should be released temporarily in favor of the ostensible owner as per the registration certificate until final disposal is decided.

Affirming the impugned findings, the judgment authored by Justice Masih rejected the appellant's reliance on Sunder Bhai Ambalal Desai (supra), clarifying that the judgment does not lay down an inflexible rule that custody must invariably follow the registration certificate.

“The said judgment, as discussed above, does not lay down an inflexible rule that custody must invariably follow the registration certificate irrespective of all other attending circumstances; it requires the Court to act expeditiously and judiciously, having regard to the object of preventing misuse and deterioration of property.”, the Court said, stressing that several circumstances, taken cumulatively, weigh against the appellant's claim to interim custody.

Explaining the scope of Sections 451 and 457 of the Code of Criminal Procedure, the Court said these provisions empower courts to determine who is best entitled to interim possession of seized property without deciding questions of title or ownership.

"The language used in these provisions makes it clear that the Court is vested with the power to grant custody to whomsoever it deems fit i.e. the Court has the discretion to determine who is best entitled to possession of the property. The use of the words 'possession' and 'custody' emphasize that the Court does not adjudicate title but merely undertakes the exercise of granting interim possession, with the object of preventing decay and diminution in the value of the subject property."

"The exercise of this power requires the Court to make only a prima facie assessment of who is best entitled to possession, having regard to the nature of the property, the circumstances of seizure and the material placed before it. It does not comprise an adjudication of ownership, which falls generally within the exclusive domain of a competent civil forum."

Applying these principles, the Court found that several circumstances weighed in favour of the respondent company. It noted that the vehicles had been seized from the respondent's operational site, where they had remained in continuous use, that the appellant had executed an undertaking permitting the company to use them until settlement of accounts, and that the loan instalments for the vehicles had been paid from the respondent company's account. Although the appellant alleged that the undertaking had been forged, the Court held that such disputes would have to be decided in separate proceedings.

The Court noted the circumstances such as seizure of the vehicles from the Respondents sites, while they were in use by them, along with the fact that the loan instalments were discharged from the account of the respondent company, and an undertaking by the Appellant permitting the respondent company to retain and operate the vehicles until settlement of accounts, “considerably weakens the appellant's claim of exclusive individual entitlement and lends credence to the respondents' case of continued beneficial use and control.”

“The appellant's case rests almost entirely on the registration certificates standing in the name of his company. We are unable to accept that this circumstance, by itself, is determinative…we find that the circumstances favouring the respondent company, namely, the continued possession, the undisputed factum of the payment of the EMI instalments, and the undertaking on record, outweigh the circumstances in favour of the appellant, namely the registration certificates.”, the Court said.

In terms of the aforesaid, the appeal was dismissed.

Cause Title: KRISHNAN NARAYANA VERSUS THE STATE OF ANDHRA PRADESH & ORS.

Citation : 2026 LiveLaw (SC) 724

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For Petitioner(s) :Mr. S. Nagamuthu, Sr. Adv. Mr. M.P. Parthiban, AOR Ms. Priyaranjani Nagamuthu, Adv. Mr. Bilal Mansoor, Adv. Mr. Shreyas Kaushal, Adv. Mr. Balram Nayak, Adv. Mr. S. Geyolin Selvam, Adv. Mr. Alagiri K, Adv. Mr. Shivansh Sharma, Adv. Mr. Abhishek S, Adv.

For Respondent(s) :Ms. Prerna Singh, Adv. Mr. Guntur Pramod Kumar, AOR Mr. Shreeyash Uday Lalit, Adv. Ms. Vanshika Singh, Adv. Mr. Aniruddha Purushotham, AOR Mr. Honey Singh, Adv. Mr. Pratyaksh Kumar, Adv. Mr. Laxman Tapashi, Adv. Mr. Virendra Mohan, Adv. Mr. Ankit Kumar, Adv. Mr. Dwibendu Shekhar Barik, Adv. Mr. Ratan Singh, Adv. 1 Mr. Sarvajeet Singh, Adv. Mr. Lalit Belwal, Adv. Mr. Ashish Belwal, Adv. Mr. Bogisam Srinivasa Kumar, Adv. Ms. Reena Pandey, AOR Ms. Manisha, Adv. Mr. Siddharath Luthra, Sr. Adv. Mr. Anand Sanjay M Nuli, Sr. Adv. Mr. Mahesh Kumar, Adv. Mr. Aniruddha Purshottam, Adv. Mr. Goda Raja Babu, Adv. Mr. Sanjay Sharma, Adv. Mr. Binod Kumar Singh, Adv. Ms. Manisha, Adv. Mr. Bogisam Srinivasa Kumar, Adv. Mr. Yogender Kumar, Adv. Mr. Kamal Pundir, Adv. Mr. Ranbir Singh, Adv. Mr. Anil Chugh, Adv. Ms. Abhilasha Belwal, Adv. Mr. Yashica Rawal, Adv. Ms. Devika Khanna, Adv. Mr. VMz Chambers, AOR