Orissa High Court Issues Guidelines For Releasing Seized Currency Pending Trial, Says Circulation Will Aid Economy

In an important development, the Orissa High Court has opined that currency notes seized in connection with criminal cases, including economic crimes, can be released in the custody of the accused pending trial of the case after following certain safeguards.Justice Sibo Sankar Mishra reasoned that money, as a movable property, should not remain stagnant in judicial custody when it can be preserved through alternative means without prejudicing the prosecution's case and hence, observed –“Thus, allowing the release of the seized currency under appropriate conditions would not only comply with legal precedents but also serve the larger public interest by ensuring that money continues to contribute to the economy rather than remaining unutilized in the custody.”BackgroundThe petitioner is alleged to have been involved in an illegal money collusion fraud through M/s Infinity Realcon Ltd. by operating various investment schemes without securing the requisite statutory approval from the Reserve Bank of India (RBI). After his arrest on September 26, 2022, officials of the CBI conducted searches at multiple locations during the late hours of that night. During the search, an amount of ₹15.00 lakh cash was seized from the cupboard of his chamber/exclusive room at Anand Lok Building, Kolkata. Subsequently, the petitioner was granted bail by the Supreme Court. He filed an application under Section 451 read with Section 457 of the CrPC seeking interim custody of seized cash. However, Special Judge (CBI), Court No.1 -cum- the Additional Sessions Judge, Bhubaneswar rejected his application. Therefore, he challenged the rejection order through this criminal revision.Contentions of PartiesAdvocate Debashis Sinha appearing for the petitioner placed reliance on the statutory provisions for interim release of properties under Sections 451 and 457 of the CrPC. He also relied upon the judgment of the Supreme Court in Sunderbhai Ambalal Desai v. State of Gujarat (2002) and order of the Delhi High Court in Manjit Singh v. State (2014). While the former emphasized that property seized by the police should not be retained unnecessarily and must be released to the rightful owner at the earliest, the latter held that the seized currency notes may be released to the person who, in the opinion of the Court, is lawfully entitled to claim after preparing detailed panchnama of the currency notes with their numbers or denomination; taking photographs of the currency notes; and taking a security bond.On the other side, Sarthak Nayak, Special Public Prosecutor argued that the aforesaid judgements would only be applicable in the case when the person is lawfully entitled to such currency notes and relied upon the order of the trial Court which categorically recorded that the seized amount was properly not accounted for by the petitioner and the source of seized cash was not clear.FindingsThe Court took note of the fact that the petitioner is alleged to have targeted innocent citizens, exploited them economically and amassed huge wealth, sometimes resulting in cash currency hounding. When application for release of said cash/currency of economic offences of such magnitude, it said, the Courts "become circumspective to release the amount". “However, the release of money ensures that the seized currency remains in circulation, thereby aiding the national economy. If the money remains stagnant, it serves no practical purpose and fails to contribute to economic activity. Currency is meant to be in circulation to facilitate trade, commerce, and overall economic growth. Keeping large sums of money idle in custody neither benefits the State nor the affected individuals. Instead, it restricts liquidity in the financial system and prevents the owner from utilizing the funds for legitimate purposes,” it observed.Justice Mishra also referred to a previous order of the High Court in Santosh Kumar Tripathy v. State of Odisha, wherein emphasis was laid on the importance of preserving the evidentiary value of seized currency through colour photographs while ensuring that the currency itself remains available for economic use. “This principle aligns with broader economic considerations, where unnecessary stagnation of monetary resources can hinder financial fluidity. Releasing the seized cash with proper safeguards, such as the preparation of Panchnamas and photographic documentation, balances both the interests of justice and economic utility.”Therefore, in light of the judicial precedents, the Court was inclined to order the release of the seized amount of cash to the tune of ₹15.00 lakhs (Fifteen Lakhs) in favour of the petitioner, subject to certain conditions that ensure both the integrity of the investigation and the smooth conclusion of trial. The Court proposed following broad safeguards before releasing the currency notes in the custody of the accused/petitioner –Preparation of a Detailed Panchnama – A formal record (Panchnama) of the seized cash shall ...

Orissa High Court Issues Guidelines For Releasing Seized Currency Pending Trial, Says Circulation Will Aid Economy

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Orissa High Court Issues Guidelines For Releasing Seized Currency Pending Trial, Says Circulation Will Aid Economy

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