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The Supreme Court today (02.09.2026) has set aside orders of the Trial Court, the Sessions Court, and the Gujarat High Court, declining interim custody of a truck seized while transporting a large consignment of Indian-Made Foreign Liquor (IMFL), and directed that the vehicle be released to its owner on furnishing security. While setting aside the orders, the Court held that Section 98(2) of the Gujarat Prohibition Act, 1949 does not operate as an absolute embargo against release of a seized vehicle to its owner pending trial, even where the quantity of liquor recovered exceeds the prescribed limit.

Section 98(2) of the Prohibition Act is not absolute embargo and the Trial Court must exercise its powers under Section 451 of the Code of Criminal Procedure, 1973 to pass appropriate order on the interim custody of the articles produced before the Court.

A bench of Justice Prashant Kumar Mishra and Justice Sree Chandrashekar ruled so while hearing a case relating to the seizure of an Ashok Leyland truck belonging to the appellant. The truck was seized while it was travelling from Modasa towards Vadodara via Lunawada. On interception, the driver could not produce any pass or permit for the goods being carried. On search, the vehicle was found to be carrying 8,064 bottles of IMFL, amounting to approximately 22,532.253 litres and valued Rs 17,02,656. It was concealed among consignments of edible goods worth around Rs 98.66 lakh.

Thereafter, a case was registered under Sections 65(a), 65(e), 98(2), 81, 116(b) and 83 of the Prohibition Act, and a chargesheet was filed against four accused, including the driver. Subsequently, the appellant filed an application under Section 497 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking interim custody of the truck. However, it was rejected by the Chief Judicial Magistrate, Lunawada which was subsequently upheld both by the Sessions Judge, Mahisagar and, by the Gujarat High Court.

The appellant, thus, approached the Supreme Court, where it was contended that the appellant was a transport company with no involvement in the offence, and that the trial was likely to take four to five years to conclude. It was also submitted that the truck, having remained parked at the police station for over a year, was steadily deteriorating. The appellant also expressed willingness to furnish adequate security to secure interim custody of the vehicle.

On the other hand, the Gujarat government opposed the release, contending that Section 98(2) of the Prohibition Act creates a statutory bar against release of the vehicle on bond on surety where the quantity of seized liquor exceeds the prescribed limit, and that the courts below had correctly applied this bar in declining interim custody.

Considering the contentions, the Supreme Court examined the structure of Section 98(2), which is split by the word “but” into two parts. The first part deals with confiscation of receptacles, packages and conveyances used to carry contraband, while the second (inserted in 2011) restricts release of such a conveyance on bond or surety where the seized quantity exceeds the prescribed limit. Relying on its earlier decision in Khengarbhai Lakhabhai Dambhala v State of Gujarat, the Court reiterated that the second part is “not very happily worded” and cannot be read as an absolute embargo in disregard of the broader statutory scheme, including Section 132 of the Prohibition Act and Section 451 of the Code of Criminal Procedure, 1973 (CrPC, now Section 497 of the Bharatiya Nagarik Suraksha Sanhita, 2023).

The Court also held that Sections 98 and 132 of the Prohibition Act operate in a different field from Section 451 CrPC. While Section 98 deals with confiscation once property is sent to the Collector, Section 451 governs the powers of the Court where seized property has been produced before it during inquiry or trial, and the Court is called upon to pass appropriate custody order.

On the broader principle governing seized vehicles, the bench relied upon Sunderbhai Ambalal Desai v State of Gujarat, noting that vehicles prevented from being released to their owners tend to languish and deteriorate at police stations or court premises pending final disposal of the case, a situation that “benefits no one and causes major losses to the owner”. The Court also relied on Basavva Kom Dyamangouda Patil v State of Mysore, which held that seized property ought not to be retained in police or court custody for any longer than absolutely necessary. It also referred to General Insurance Council v State of Andhra Pradesh, which recorded that even well-maintained vehicles lose roadworthiness within about a fortnight of being kept stationary at a police station, apart from being vulnerable to theft and cannibalisation of parts.

The Court further held that applications for interim custody under Section 451 CrPC must be disposed of expeditiously and judiciously, balancing the owner's interest against hardship from loss of use, the public interest in avoiding indefinite custody, the need to preserve evidence through panchnama, photography and videography, and the integrity of the trial.

The Court also held that the Trial Court, the Sessions Court and the High Court had all “seriously erred in taking a narrow view” of their powers under Sections 451, 457, 458, and 459 of the CrPC (now Sections 497, 503, 504, and 505 of the Bharatiya Nagarik Suraksha Sanhita, 2023 respectively), which are intended to confer broad discretion on courts to weigh the relevant factors before directing custody or disposal of seized property.

Noting the continued loss of livelihood to the appellant, the truck lying idle and deteriorating at the police station, the chargesheet having already been filed, and the fact that evidentiary value could be preserved through panchnama and videography, the Court held that the balance clearly favoured release of the vehicle.

The precedent relied on by the High Court in State of Madhya Pradesh v. Uday Singh was distinguished on the ground that it was related to Forest Act proceedings.

In the light of above, the appeal was allowed and the orders of the High Court and lower courts were set aside. It also directed to handover the interim custody of the truck to the appellant, subject to him furnishing of a personal bond with security of Rs 15,00,000 to the satisfaction of the Trial Court, an undertaking by him to produce the truck before the Investigating Officer or Trial Court as and when directed. Additionally, it restrained alienating or creating third-party interest over the vehicle during the pendency of trial. It was also directed to prepare a detailed panchnama, along with photographs and videography of the vehicle's condition, in the presence of the appellant's representative and two independent witnesses, before it was handed over.

Further, the Court clarified that its observations are to confine strictly to the question of interim custody of the vehicle and would have no bearing on the merits of the trial, which must proceed uninfluenced by the judgment.

Case Title: M/s ABC Express v State of Gujarat

Citation : 2026 LiveLaw (SC) 885

Appearance:

For Petitioner: Mr Pashupathi Nath Razdan, Adv

For Respondent: Ms Swati Ghildiyal, Adv

Click Here To Read/Download Order



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