'Balance Of Convenience' To Be Considered While Deciding Interim Custody Of Seized Articles U/S 451 CrPC: Kerala High Court

Ruling that balance of convenience should be considered while deciding interim custody of seized articles under Section 451 of Code of Criminal Procedure (CrPC), the Kerala High Court on Monday released unaccounted cash amounting to Rs. 50 lakhs to the Income Tax Department.Allowing a petition filed by the Department, Justice Ziyad Rahman A. A observed that the balance of convenience was in favour of the IT department rather than Abdul Razak, the person found possessing the cash:"if the amount is released to the petitioner herein (IT Department), there is a specific procedure contemplated for getting the amount released in favour of the 2nd respondent (Razak), from whose custody the amounts were seized...On the other hand, if the amount is released to the 2nd respondent herein, it is likely to cause difficulties in initiating proceedings under Section 32-A and the further proceedings thereon. Therefore, the balance of convenience is in favour of the petitioner herein." The Court also clarified why it had brought in the concept of balance of convenience while dealing with a case under Section 451: "The question of balance of convenience arises because, as far as the proceedings under Section 451 of the Cr.PC is concerned, it is relating to the interim custody of the asset alone and it is not intended for taking a decision on the question of the title/right of the parties over the articles. Therefore, the relevant consideration is as to who is the proper person with whom the amount can be entrusted."The Judge noted that since the Income Tax Department was a statutory authority armed with various powers under Sections 132-A, 132-B and 153A of the Income Tax Act, preference should be given to the Department in the facts and circumstances of the case.The Court further clarified why it deemed fit to release the hefty amount to the Department rather than Razak: "(Razak) was having in his possession, huge amount of cash, which by itself is a violation of the provisions of Income Tax Act. Apart from the above, so far, he failed to explain the source of the said income to the satisfaction of the competent authorities.. In such circumstances, the proper course which should have been adopted by the learned Magistrate is to order the release the said amount to the petitioner herein (Department) so as to enable the parties to undergo the procedure contemplated under Sections 132-A, 132-B or 153A of the Income Tax Act."During a routine vehicle inspection in 2017, Excise Officials found Razak carrying Rs.50 lakhs in cash without supporting documents. Consequently, he was produced before the Sub Inspector of Police and an FIR was registered. The amount was also seized and produced before the Judicial First Class Magistrate Court.After an inquiry, the income tax authorities found that Razak had failed to explain the source of the cash. Therefore, proceedings were initiated against him and a notice of requisition was issued to the Sub Inspector of Police, directing him to deliver the same to the Requisitioning Officer.However, it was informed by the Sub Inspector of Police that the amount had been already deposited before the Judicial First Class Magistrate Court.In such circumstances, the Department preferred a petition before the Magistrate under Section 451. Simultaneously, Razak submitted a petition seeking the very same relief. Although the petition filed by the Department was dismissed, Razak's plea was allowed in part. The Magistrate ordered for the release of 70% of the amount in favour of Razak upon furnishing a bank guarantee or security of immovable property for the said amount. The Magistrate also ordered Razak to retain 30% of the amount for securing the interest of the Income Tax Department. Aggrieved by this decision, the Income Tax Department moved the High Court. Senior Counsel P.K.R Menon and Standing Counsel for Income Tax Department Navaneeth N Nath argued that Section 132-A(i)(c) of the Income Tax Act enables the authorized officer of the Department to make a requisition before any authority who is in possession and control of any assets of any person, which has not been disclosed to the Income Tax authorities.Invoking these powers, the Department had initially sent a notice to the Sub Inspector of Police. However, by the time the notice was served, the amount had been already deposited before the Magistrate Court. A petition under Section 451 of the Cr.PC was presented in this circumstance. Public Prosecutor Aravind V. Mathew and Advocate Vijayakumari appeared for the respondents in the matter. The Court observed that the scope of Section 451 was regarding the interim custody of an article/asset produced before the Magistrate during the course of investigation in a crime. "It is a well-settled position of law that while deciding the question of releasing the said article, proper course open to the Magistrate is to ensure that it is entrusted to a person who can preserve the same and title of the party...

'Balance Of Convenience' To Be Considered While Deciding Interim Custody Of Seized Articles U/S 451 CrPC: Kerala High Court

Hannah M Varghese

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