Orissa High Court
Asian Pacific Shipping vs Union Of India & Anr. ..... Opposite ... on 7 March, 2025
Author: A.K. Mohapatra
Bench: A.K. Mohapatra
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.441 of 2024
An application filed under Section 482 of the Criminal
Procedure Code, 1973.
Asian Pacific Shipping ..... Petitioner
Company Ltd. (Onwer)
Mr. Prateik Parija, Adv.
-versus-
Union of India & Anr. ..... Opposite Parties
Mr. P.K. Parhi, D.S.G.I.
along with
Mr. D.R. Bhokta, C.G.C.
CRLREV No.93 of 2024
An application filed under Section 401 of the Criminal
Procedure Code, 1973 read with Section 397 of the Criminal
Procedure Code, 1973.
Union of India ..... Petitioner
Mr. P.K. Parhi, D.S.G.I.
along with
Mr. D.R. Bhokta, C.G.C.
-versus-
Asian Pacific Shipping ..... Opposite Party
Company Ltd. (Onwer)
Mr. Prateik Parija, Adv.
Page 1 of 37
CORAM:
JUSTICE A.K. MOHAPATRA
_____________________________________________________
Date of Hearing : 20.12.2024 | Date of Judgment: 07.03.2025
______________________________________________________
A.K. Mohapatra, J. :
1. The first application bearing CRLMC No.441 of 2024 has been filed by the Petitioner, i.e. the owner of the Shipping Company, by invoking the inherent jurisdiction of this Court under Section 482 of Cr.P.C. In such application the Petitioner, being aggrieved by a part of the order dated 12.02.2024 passed by the learned Special Judge, Kujang in Misc. Case No.02 of 2024 arising out of Case No.Spl. G.R. (N) 65 of 2023, although the Petitioner does not challenge the order dated 12.02.2024 in toto on merits, the Petitioner has approached this Court seeking partial modification of order dated 12.02.2024. However, the entire endeavour of the learned counsel appearing for the Petitioner is directed towards modification of order dated 12.02.2024 specifically, towards reducing the quantum of the Bank Guarantee as well as Indemnity Bond as has been directed by the learned Special Judge, Kujang. Page 2 of 37
2. Similarly, the Union of India has approached this Court by filing CRLREV No.93 of 2024 by invoking the jurisdiction of this Court under Section 401 Cr.P.C. read with Section 397 of Cr.P.C., 1973. The Union of India represented by the Superintendent, Customs (Preventive) Commissionerate, Bhubaneswar has prayed for quashing of very same order dated 12.02.2024 passed by the learned Additional District & Sessions Judge, Kujang in Crl. Misc. Case No.02 of 2024.
3. Since both the matters self-same factual background facts and in both the applications the order dated 12.02.2024 passed in Crl. Misc. Case No.02 of 2024 by the learned Additional District & Sessions Judge, Kujang is under challenge, this Court deems it proper to take up both the matters together for hearing and the same is being disposed of by the following common order.
4. Before discussing the factual aspects of the matter, this Court would like to shed some light on the orders passed in the present proceeding. Initially, the application was listed before the Coordinate Bench on 22.02.2024. Since, Mr. P.K. Parhi, learned D.S.G.I. accepted notice on behalf of the Opposite Party-Union of India, the issuance of notice to the Opposite Page 3 of 37 Party was waived. The order sheet further reveals that the matter was listed before the learned Coordinate Bench on several occasions. A perusal of order sheet dated 14.03.2024 indicates that the learned Coordinate Bench upon coming to know about the fact that the Opposite Party-Union of India has filed a CRLREV No.93 of 2024 challenging order dated 12.02.2024, directed the Registry to list the said CRLREV along with the present application of the Petitioner filed under Section 482 of Cr.P.C. The order dated 20.03.2024 reveals that notice was issued to the Opposite Parties which was accepted by the learned D.S.G.I. Order dated 10.04.2024 passed by the learned Coordinate Bench reveals that a submission was made before the learned Coordinate Bench to the extent that the Petitioner seeks variation with regard to the second condition whereby the Petitioner-Company was required to furnish a bank guarantee of Rs.10,00,00,000/-. It further reveals that, the Petitioner was ready and willing to furnish the indemnity bond commensurate with the valuation of the vessel. On the contrary, learned D.S.G.I. for the Customs Dept. contended that while considering the application under Section 457 Cr.P.C, filed at Page 4 of 37 the instance of the present Petitioner, no appropriate opportunity was granted to the Customs Dept. and that the Customs Dept. vide objection dated 30.01.2024 had specifically prayed for some time to place on record the valuation report. Order No.9, dated 01.05.2024 of the Coordinate Bench reveals that hearing was concluded and judgment was reserved.
Order No.10, dated 15.05.2024 reveals that when the matter was reserved for judgment, a mention was made before the learned Coordinate Bench on 09.05.2024 requesting for early pronouncement of the judgment. The same further reveals that one Mr. Lue Manh Chang, purported to be an official of the Petitioner company, has addressed a letter to this Court. Finally, taking serious note of the language used in such letter, the learned Coordinate Bench recused itself from the present case and the Registry was directed to place the matter before the Hon'ble Chief Justice for necessary orders. Thereafter, the matter was placed before this Bench with the consent and permission of the Hon'ble Chief Justice of the Orissa High Court on 26.11.2024.
Page 5 of 37
5. With the regard to the preliminary objection raised by learned D.S.G.I. representing the Union of India, that no opportunity of hearing was provided to the Union of India while passing order dated 12.02.2024 by the learned Additional District & Sessions Judge, Kujang and considering the seriousness of the allegation made by Mr. D.R. Bhokta, learned C.G.C. which has been taken note of by this Court in para-7 of order dated 29.11.2024, this Court called for a report from the learned Additional District & Sessions Judge, Kujang through the Registry of this Court specifically enquiring as to whether the Custom Dept. was given an opportunity of hearing or not.
6. At the outset, this Court would like to discuss the reply submitted by the learned Additional District & Sessions Judge, Kujang to this Court vide letter No.620 dated 03.12.2024. A copy of such report was placed before this Court by the Registry. Considering the seriousness of the allegation made by the learned C.G.C. it is imperative that this Court should first take up the issue with regard to not providing an opportunity of hearing to the Opposite Party-Union of India by the learned Additional District & Sessions Judge, Kujang,. In his reply dated 03.12.2024, learned court below has categorically stated Page 6 of 37 that the Customs Dept. was given opportunity of hearing in Crl. Misc. Case No.02 of 2024 arising out of Case No.Spl. G.R. (N) 65 of 2023. Furthermore, advocate-Shri Malaya Ranjan Dash who is appointed as the Special Public Prosecutor on behalf of the Superintendent of Customs (Preventive) Commissionerate, Bhubaneswar in both Spl. G.R.Case No.65 of 2023 and Crl. Misc. Case No.02 of 2024 appeared before the Court on 06.01.2024 and took part in the hearing in the Court. He had also submitted his written note of objection in the present matter on 30.01.2024. A digitized copy of the TCR in Crl. Misc. Case No.02 of 2024 was also forwarded to this Court along with letter dated 03.12.2024. On a perusal of order dated 12.02.2024, this Court observed that in paragraphs-7, 8 and 9 of the order, the contentions raised by the learned counsel for the Respondent has also been taken note of by the learned court below. In the aforesaid factual backdrop, further, on a careful examination of order dated 12.02.2024, this Court has no hesitation in overruling the preliminary objection raised by the learned D.S.G.I. with regard to the allegation that the Opposite Parties were not provided any opportunity by the learned Page 7 of 37 Additional District & Sessions Judge, Kujang while passing order dated 12.02.2024.
7. Before adjudicating the legality and validity of order dated 12.02.2024, which is the subject matter of challenge in both the above noted applications, this Court would like to place on record the factual background of the present case in short. The present matter involves a vessel, namely M.V. DEBI, which was under charter agreement with charter DAVA and was on a Voyage from Gresik Port, Indonesia to Paradeep Port, India. The vessel reached at Paradeep on 29.11.2023 and commenced loading of cargo on 30.11.2023 and was supposed to discharge to Fredericia Port, Denmark. During the process of loading of cargo, a malfunctioning of the vessel was detected i.e. an oil leakage on crane no.3 of the vessel. As a result, the master of the vessel sent the Chief Officer as well as the second engineer to inspect it. During such inspection, it was found that some strange packets were present. Further, similar packets were also detected on crane no.2 of the vessel.
After detection of the suspicious packets on the crane of the vessel, the master of the vessel immediately sent a mail to the charter agent and also informed the Govt. authorities about Page 8 of 37 the incident through mail. Thereafter, the Paradeep police station informed about the incident to the offices of Paradeep Custom Division. Basing upon such information, the offices of Paradeep Custom Division conducted a search and seizure in the vessel. Accordingly, they have seized a total of 22.22 k.g. of white/brown colour hard brittle substance with pungent smell. Such seized material was suspected to be cocaine and the same was kept in a total of 22 number of packets which were recovered from on-board the vessel MV DEBI along with the packing materials and magnet. Subsequently, on 22.12.2023, the vessel MV DEBI was seized vide a seizure memo dated 22.12.2023 under Panchnama dated 22.12.2023. Accordingly, a Special G.R. case was registered and the investigation started.
8. During the aforesaid investigation, the statement of the master of the vessel, 9 nos. of Ship crane operators, the Supervisor of PICT working on-board the vessel and others were recorded. Thereafter, an application under Section 52A of the NDPS Act, 1985 was filed in the court of learned Additional District & Sessions Judge, Kujang with a prayer for inventory of the vessel. This was followed by a petition bearing Crl. Misc. Case No.2 of 2024, which arises out of Case No.Spl. Page 9 of 37 G.R. (N) 65 of 2023, filed by the Petitioner-Company under Section 457 of the Cr.P.C for interim release of the vehicle in their favour on the grounds mentioned in the said application. The said application was heard by providing an opportunity of hearing to both sides and finally, vide order dated 12.02.2024, the learned Additional District & Sessions Judge, Kujang disposed of the application thereby directing the interim release of the vehicle in zima of the present Petitioner subject to the conditions mentioned in order dated 12.02.2024. Being aggrieved by the entire order dated 12.02.2024, the Union of India has filed the above noted CRLREV, whereas the Petitioner in CRLMC application i.e. the Shipping Company has approached this Court being aggrieved by the conditions imposed by the learned court below while directing for interim release of the vehicle in favour of the Petitioner. This is the essence of the factual matrix in which both the applications, i.e. CRLMC No.441 of 2024 and CRLREV No.93 of 2024, have been filed before this Court.
9. In CRLMC No.441 of 2024, the Petitioner, i.e. Asia Pacific Shipping Co. Ltd., is a Vietnam based foreign entity and they have approached this Court with a prayer for interim Page 10 of 37 release of their vessel, namely, MV DEBI which has been seized by the Indian authorities for commission of a crime punishable under the NDPS Act, 1985. Although the vessel was detained following discovery of suspicious materials on-board the ship, the Petitioner argued that the vessel owner and the crew have no involvement in the recovery of alleged contraband articles from the above named ship. Moreover, the present application has been filed specifically challenging the conditions imposed by the learned Additional District & Sessions Judge, Kujang while directing the interim release of the vehicle. On the contrary, the Union of India has challenged the interim release of the vehicle by the learned court below vide order dated 12.02.2024.
10. Heard Shri Prateik Parija, learned counsel appearing for the Petitioner in CRLMC No.441 of 2024 and Shri P.K. Parhi, learned D.S.G.I. along with Mr.D.R.Bhokta, learned C.G.C. for the Union of India. Similarly, Shri P.K.Parhi, learned D.S.G.I. along with Mr.D.R.Bhokta, learned C.G.C. advanced their argument on behalf of the Petitioner in CRLREV No.93 of 2024 whereas Mr. Parija, learned counsel defended the Page 11 of 37 impugned order in the above noted CRLREV. Perused the materials on record.
11. Mr. Parija, learned counsel for the Petitioner, raised the following major grounds - recorded below in a concise form - in course of his argument;
I. The master of the vessel had forthwith intimated the charters and customs authority regarding the presence of suspicious material inside crane no.3 and basing upon such information the contraband articles were seized. II. The vessel in question being used for transportation of public goods can very well be considered as a public vessel and that in the process of loading and unloading of the goods and articles in the vessel several 3rd party operators are involved. Furthermore, several stevedores and charterers have not only loaded the vessel but also operated the cranes and other machineries on the vessel. III. The financial conditions imposed on the Petitioner, vide the impugned order are excessive, disproportionate and punitive in nature, especially considering the fact that contraband articles could be discovered, and subsequently Page 12 of 37 seized, only because of the information provided by the master of the vessel and the crew members.
IV. As a result of the seizure of the vehicle, the vessel has been continuously berthed for more than one year at PICT which has caused immense financial losses to the owner of the vessel, approximately to the tune of Rs.40 crores. Thus, a condition for release in the nature of Bank Guarantee would cause severe financial hardship to the Petitioner and that the same would not be just and proper in the given facts of the case.
V. The vessel & the crew members having been thoroughly investigated and none of the crew members having been arraigned in the proceeding so far, suggests that it is highly unlikely that the vessel would be required to be produced during trial. An indemnity bond of a reasonable value would be sufficient to ensure production of the vessel or any of its crew members, suit such a situation arise in course of the trial.
VI. In view of the treaty dated 08.10.2007 between two sovereign nations, i.e. India and Vietnam, for mutual legal assistance in criminal matters, any apprehension on the Page 13 of 37 part of the prosecution with regard to production/non- production of evidence during trial stands dispelled. Further, in view of letter dated 04.12.2019 of the Ministry of Home Affairs, Govt. of India, laying down a comprehensive guideline for investigation abroad particularly in Vietnam, such arrangement thoroughly ensures that the criminals cannot escape or that the evidence cannot be destroyed.
VII. The Petitioner being a Vietnamese Company is having no direct banking relations with India. Thus, securing a Bank Guarantee in India through a Nationalized Indian Bank would be highly inconvenient for the Petitioner.
VIII. The Petitioner-Company is ready and willing to furnish an undertaking to the extent that the status, condition or ownership of the vehicle shall remain unchanged by the Petitioner during the trial. Therefore, the apprehension of the Opposite Parties with regard to disposal of the vessel or change of ownership holds no water.
Page 14 of 37
12. On the legal aspects of the matter the following points were advanced by the learned counsel appearing for the Petitioner:-
I. Neither the owners of the vessel nor its crew members had any knowledge about the contraband articles on-board the vessel or that they are in anyway involved in the trafficking of such contraband articles. Even though such contraband articles were detected while repairing crane no.3 of the vessel, such fact was intimated to the authorities by the master of the vessel. Moreover, the packets containing the contraband articles were kept in a concealed manner in an inaccessible area of the vessel which was beyond the reach of any ordinary human being and without the help of supporting machineries that part of the vessel was inaccessible to every human being on- board the said vessel.
II. The assumption by the custom authority of the crew's negligence is not backed by any evidence on record. The vessel being a public goods carrier, had access to 3rd parties, like, stevedores, charterers, etc., who used to manage the crane operation and as such had access to the area where the packets were found. The section 457 Page 15 of 37 Cr.P.C which provides for interim release of the vehicle/ vessel is always subject to reasonable condition. The conditions imposed in the present case however are excessive, arbitrary and unreasonable and would frustrate the very purpose of enacting such a provision in Cr.P.C. III. The Petitioner-company being a foreign entity, does not have any banking accounts in India. Therefore, imposing a condition in the shape of furnishing bank guarantee would be unrealistic and the same would negate the relief that has been granted in exercise of the power conferred under Section 457 of Cr.P.C.
IV. The prolonged detention of the vessel at Paradeep has resulted in the Petitioner-Company incurring huge financial losses to the Petitioner-company and that the same cannot be reimbursed even in the event it is found that the Petitioner-company is not guilty of the offences as has been alleged.
13. Mr. P.K. Parhi, learned D.S.G.I. representing the customs authorities on the other hand contended that during investigation it was found that the master of the vessel, MV DEBI on 30.11.2023 informed the shipping agencies, through Page 16 of 37 e-mail, regarding the presence of strange packets on-board the vessel with a request to further notify the same to Govt. and concerned authority for quick action. Accordingly, the aforesaid information was shared by M/s. Seaways Shipping & Logistics to M/s. Paradeep International Cargo Terminal. Thereafter, the security head of M/s. Paradeep International Cargo Terminal informed the Paradeep Police Station, who in turn informed the Superintendent, Paradeep Custom Division under the Customs Commissionerate, Bhubaneswar. He further contended that master of the vessel as well as the crew members have denied their involvement during recording of their statement in course of investigation. Although, some of the crew members are still under suspicion as they had access to the crime scene on-board the vessel during their routine work and that some of the deleted data from their mobile phones have not been recovered as of now. The note of submission submitted by the learned D.S.G.I, which has been submitted under the signature of Assistant Commissioner Customs (Prev.) Commissionerate, Bhubaneswar, supports the aforesaid contention of the learned D.S.G.I. Further, such note of submissions reveals that no incriminating evidence, data, Page 17 of 37 messages, charts, e-mail etc. indicating involvement of the crew members could be found as of now. However, they apprehend that they might get something from the deleted data from the mobile devices of the crew members which has been sent to the Central Forensic Science Laboratory, Hyderabad for examination.
14. The note of submission of the Opposite Party-Customs authorities further reveals that the narcotic substances were found to be affixed at a height of 57 feet to the ceiling beam of the crane operator cabin inside the sheep crane nos.2 and 3 which is a highly restricted place on-board the vessel in question. The vessel, MV DEBI is privately owned and used for conveyance and commercial purpose by the Petitioner- Shipping Company. Moreover, the entry and exist to the vessel is highly restricted. The vehicle in question was acquired by the Petitioner-company on 16.03.2023 at Panama and after acquiring the vehicle, the same has passed through several ports as has been indicated in the table appended to the note of submission. Learned D.S.G.I, further referring to the International Maritime Traffic prescribed under the Maritime Security Convention vide Resolution adopted on 07.12.2006, Page 18 of 37 contended that the risk in the ports visited by the ships needs to be reviewed regularly by the company and the master, with the security measures being adjusted appropriately as required. Thus, the Petitioner-company has failed to take appropriate measures to prevent illicit drug trafficking. He further contended that although the vehicle has been chartered to different voyage charterers for business purpose, but still the operational responsibility of the vessel lies with the Owner of the vessel including the safety of the Crew members on-board. As such the Petitioner-company is always responsible for making sure that all necessary safety precautions have been undertaken for the vessel.
15. Learned D.S.G.I, further contended that on the basis of the complaint received and on the basis of the investigation carried pursuant thereto, the complaint has been registered against unknown accused persons for commission of crime punishable under the NDPS Act, 1985 and, as such, the vessel is liable to be confiscated under Section 60 of the Act, read with Section 63 of the said Act. In view of Section 35 of NDPS Act, the burden of proof lies with the Crew members of the vessel in question and the Owner thereof to prove their Page 19 of 37 innocence. Moreover, during investigation none of the crew members including the master of the vessel were able to answer the question about how the contraband articles in such huge quantity came on-board the Vessel in question. He further contended that the previous crew members who had joined on- board the vessel at Panama had signed off at UAE. Although an assurance has been given by the Director of the Petitioner- Company that the necessary arrangement shall be made to bring the previous crew members and they shall be produced before the Investigating Agency, however, no concrete arrangement in this regard has been made as of now. On such ground, learned counsel for the Union of India as well as the custom authorities contended that the interim release of the vehicle at this stage of the investigation would have an adverse impact not only on the investigation but also on the entire trial. Therefore, the order dated 12.02.2024 passed by the learned Additional District and Sessions Judge, Kujang, thereby directing the interim release of the vehicle under Section 457 Cr.P.C, is highly illegal and the same is liable to be set aside.
16. In view of the aforesaid analysis of the factual background of the present case, further keeping in view the order Page 20 of 37 dated 12.02.2024 passed by the learned Additional District & Sessions Judge, Kujang, the question that false for determination in the above noted two cases, involving identical facts, i.e. 1) as to whether the learned Additional District & Sessions Judge, Kujang has committed any illegality in considering the application of the Petitioner-Shipping Company under Section 457 of Cr.P.C. for interim release of the vessel and accordingly, has passed an order thereby directing interim release of the vehicle in favour of the shipping company? 2) whether the terms and conditions subject to which the vessel was directed to be released interimly in favour of the shipping company are excessive, unreasonable and cause serious prejudice to the Petitioner-Shipping Company?
17. Before making an attempt to answer the above noted two legal issues involved in the present applications, this Court thinks it imperative to first examine the Section 457 of the Cr.P.C. for better understanding of the scope and ambit of the Section, the entire section has been quoted hereinbelow:-
"457. Procedure by police upon seizure of property.-
(1) Whenever the seizure of property by any police officer is reported to a Magistrate under the provisions of this Code, and such property is not produced before a Criminal Court during an inquiry or trial, the Magistrate may make such order as he thinks fit respecting the disposal of such property or the delivery of such property Page 21 of 37 to the person entitled to the possession thereof, or if such person cannot be ascertained, respecting the custody and production of such property.
(2) If the person so entitled is known, the Magistrate may order the property to be delivered to him on such conditions (if any) as the Magistrate thinks fit and if such person is unknown, the Magistrate may detain it and shall, in such case, issue a proclamation specifying the articles of which such property consists, and requiring any person who may have a claim thereto, to appear before him and establish his claim within six months from the date of such proclamation."
The language employed in Section 457 of Cr.P.C. is self- explanatory. Therefore, the same does not call for an in-depth analysis. Moreover, Section 457 of Cr.P.C. has been elaborately discussed and analysed in various judgments delivered by the Hon'ble Supreme Court as well as this Court. Undisputedly, the provision contained in Section 457 of Cr.P.C. is a procedural provision to be followed by the police upon seizure of property. The first sub-Section provides whenever the seizure of the property is reported to a Magistrate and such property is not produced before a Criminal Court during an inquiry or trial, the Magistrate may pass such order as he thinks fit respecting the disposal or delivery of such property to the person entitled to the possession thereof, and if such person cannot be ascertained, respecting the custody and production of such property. Page 22 of 37 Therefore, a duty is cast upon the Magistrate to pass necessary orders once the property is seized and reported to such Magistrate. Moreover, discretion has been vested with the Magistrate for disposal of such property or delivery of such property to the person entitled to the possession thereof. If the owner of the property is known, then the order shall be passed with regard to the disposal of such property and if the owner is unknown, then such order shall be passed with regard to the custody and production of such property. In the instant case, since the owner of the property is known, the Magistrate is duty bound to pass an order with respect to the disposal of such property or delivery of such property to the person entitled to the possession thereof.
18. So far the sub-Section of Section 457 of Cr.P.C. is concerned, the same provides that if the person so entitled to the property is known, the Magistrate may order the property to be delivered to him on such conditions (if any) as the Magistrate thinks fit. Similarly, if the person is unknown, it is within the discretion of the Magistrate to detain such property and issue a proclamation specifying the articles which the property consists of and require any person who may have a claim thereto to appear Page 23 of 37 before him and establish his claim within six months. On a critical analysis of the provisions contained in Section 457 of Cr.P.C., this Court observes that the law makers, while enacting such a provision, have conferred a vast discretionary power on the Magistrate to take a decision with regard to the release of the property. It is needless to mention here that it is well within the jurisdiction of the Magistrate to pass an order rejecting the application thereby refusing to release the seized property in the event the learned Magistrate is of the opinion that the property is required at the time of inquiry or trial.
19. Applying the aforesaid provision to the facts of the present case, this Court observes that when the shipping company filed an application for interim release of the vehicle before the learned Court in seisin over the matter, at that time the learned court in seisin over the matter was well aware of the requirement of the seized vessel during investigation as well as trial. Moreover, the ownership of such vessel remains undisputed. The question, therefore, which remains is as to whether the seized property is required during the inquiry or trial? In reply to the said question, this Court would like to observe that none other than the court in seisin over the matter is in the best position to decide Page 24 of 37 with regard to the use of the seized property during inquiry or trial. Thus, by virtue of the impugned order dated 12.02.2024, the learned court in seisin over the matter has exercised its discretion in favour of the release of the seized property to its real owner, subject to certain terms and conditions.
20. To understand the scope and ambit of Section 457 of the Cr.P.C., this Court would like to refer to certain judgments of the Hon'ble Supreme Court in this regard. In Basavva Kom Dyamanagouda Patil v. State of Mysore reported in (1977) 4 SCC 358. The question arose as to whether the seized ornaments kept in the truck should be returned to the rightful owner while the criminal case is still pending. The Hon'ble Supreme Court after analysing the provision contained under Section 457 of Cr.P.C. held that the power under Section 457 Cr.P.C. should be exercised promptly to prevent unnecessary hardship to the owner. Further, it was emphasized that seized property should not be kept in police custody for an indefinite period unless it is essential for the investigation. If the property is not required as evidence, it should be returned to the rightful claimant upon furnishing appropriate security or bond. The Hon'ble Supreme Court stressed the importance of safeguarding the interests of the owner Page 25 of 37 while ensuring that the property remains available for trial if needed.
21. In Sunderbhai Ambala Desai v. State of Gujarat reported in (2002) 10 SCC 283, the Hon'ble Supreme Court was dealing with an issue with regard to disposal of seized property under Sections 451 and 457 of the Cr.P.C. While addressing the prolonged retention of seized property in the custody of police authorities, the Hon'ble Supreme Court observed that timely disposal of such property is very much essential. Further, emphasis was given to the fact that the seized property should not be kept indefinitely in police custody, as the same leads to unnecessary deterioration and loss of value. In the context of the vehicle it was observed that the same should be released quickly and that the seized vehicle should be returned to the rightful owner upon furnishing security and ensuring their availability if required during trial. The Hon'ble Supreme Court also laid emphasis on the fact that the courts dealing with such application should be pragmatic and every endeavour should be made to prevent seized articles from turning into junk.
22. Similarly, in General Insurance Counsel v. State of Andhra Pradesh reported in (2010) 6 SCC 768, the Hon'ble Page 26 of 37 Supreme Court was once again required to decide an issue relating to release of seized vehicles. The Hon'ble Supreme Court was addressing the larger issue of abandoned and unclaimed vehicles lying in police stations for prolonged periods. After a detailed analysis, the Hon'ble Supreme Court emphasized that the vehicle seized in criminal cases should not be left unused in police custody, as it leads to their depreciation. Further, it was held that in case of insured vehicles, the rightful claimants-such as insurance companies-should be allowed to take custody to prevent further loss. In para-14 of the aforesaid judgment, the Hon'ble Supreme Court has given several directions to facilitate quick disposal of vehicles through proper legal mechanisms, including returning them to the owners or auctioning them when appropriate.
23. In Manjit Singh v. State (CRLMC No.4458 of 2013) decided vide judgment dated 10.09.2014 by the Hon'ble Delhi High Court, the issue before the court was that the Petitioner's lost vehicle was recovered by the Police and was then released to the Petitioner-Owner. Thereafter, an application was moved by the Petitioner-owner for sale of the vehicle, which was allowed by the impugned order but subject to the condition that the purchaser Page 27 of 37 shall also execute the superdari bond to produce the vehicle as and when required. The Hon'ble Delhi High Court in para-68 to 73 has also laid down a detailed guideline to tackle such a scenario. Additionally, certain general directions have been laid down in para-86 to 90 of the said judgment was also issued.
24. Additionally, a Division Bench of this Court has also laid down detailed guideline/ procedure for release of the seized vehicles in Ashish Ranjan Mohanty v. State of Odisha reported in 2022 SCC OnLine Ori 520. While deciding the aforesaid issue, the Hon'ble Division Bench has taken note of certain practical difficulties like the seized vehicles being dumped in the police stations unattended. Such dumping causes encroachment on public road adjoining the police station. The vehicles lying exposed in an open area, and turning to junk, as a result the value of the property decreases rapidly. The Hon'ble Division Bench has also taken note of the seized articles lying in the malkhanas of the police stations. Accordingly, the directives were issued by the Hon'ble Division Bench for disposal of such seized property.
25. In a similar fashion, in Basudev Singh v. State of Odisha, reported in 2022 (I) ILR-CUT-887, initially the Petitioner had filed an application under section 457 of the Cr.P.C before the Page 28 of 37 learned trial court which was rejected without assigning any reason for the rejection. Aggrieved, the petitioner preferred a criminal revision wherein a coordinate bench of this Court set- aside the impugned order of the lower court with a direction to consider the matter afresh. After the matter was remanded back, the learned Court below again rejected the application of the Petitioner under section 457 of Cr.P.C. Finally, the Petitioner approached this Court seeking relief in the matter. This Court, while adjudicating the matter, had the occasion to deal with the following three issues; vis-a-vis, Whether the petitioner, being the registered owner, is entitled to the interim release of his vehicle? Whether the provisions of the NDPS Act, particularly Section 60(3), bar the release of the vehicle before the trial concludes? And whether the provisions (specifically Sections 451, 457) of Cr.P.C apply to trials under the NDPS Act? Consequently, this court analyzed various provisions of the NDPS Act (specifically sections 51, 60 (3) and 63) along with section 457 of the Cr.P.C and a catena of decisions by the Hon'ble Apex Court and this Court, had ultimately set aside the impugned rejection order and directed the interim release of the vehicle while reaffirming the position that interim release of vehicles under the NDPS Act is Page 29 of 37 permissible under the provisions of the Cr.P.C, and, although it is essential to protect state interests and prevent recurrence of crime, it is also imperative that courts ensure that property rights of an owner are not arbitrarily denied, especially when the guilt of the accused is yet to be established. It was observed that Interim release of the vehicle should be granted with safeguards instead of a blanket rejection. Finally, this court held that the provisions of the Cr.P.C (specifically sections 451 and 452) do indeed apply to the NDPS Act and there is no explicit bar under the NDPS Act for interim release of the vehicle.
26. In Bishwajit Dey v. The State of Assam (Criminal Appeal No.87 of 2025) decided on 07.01.2025, the Hon'ble Supreme Court was testing the validity of judgment dated 23.01.2024 passed by the Guwahati High Court. The issue involved in the said case related the release of the vehicle (a truck) under Section 457 of the Cr.P.C. The aforesaid vehicle was seized by the police as it was detected that the same was transporting contraband heroine in the vehicle. Since, the vehicle was lying unattended at the police station and was lying exposed to the sun and rain thereby exposing it to natural wear-and-tear and deterioration, an application was moved by the owner of the Page 30 of 37 vehicle under Section 457 of the Cr.P.C seeking release of the vehicle. The Hon'ble Supreme Court, on a threadbare analysis of the fact as well as the various judgments on the issue, directed the trial court to release the vehicle in question in the interim on superdari after preparing a video and still photographs of the vehicle and after obtaining all information-documents necessary for identification of the vehicle. With a further condition that the appellant shall not sell or part with the ownership of the vehicle till conclusion of the trial and shall furnish an undertaking to the trial court that he shall surrender the vehicle within one week of such direction or pay the value of the vehicle if so ultimately directed by the court.
27. A Division Bench of this Court in Criminal Revision No.503 of 2022 (in the matter of Rabindra Kumar Behera vs. State of Odisha) & a batch of similar other applications were required to consider the reference by the learned Single Judge Bench of this Court. The reference to the Division Bench by the learned Single Judge Bench has been quoted hereinbelow:-
"To examine the question as to whether the provision under Section 457 of the Cr.P.C. will have no application in Page 31 of 37 a case of release of such vehicle seized under the NDPS Act during investigation or trial of the case."
28. The Hon'ble Division Bench, while answering the aforesaid question, has taken note of several judgments of the Hon'ble Supreme Court including Bishwajit Dey's case (supra). Further, analyzing the provisions contained in Section 451 as well as 457 of the Cr.P.C. and further taking note of Section 36 (C) of the NDPS Act and the provisions contained in Section 51, 52 (A) (1), Section 60, Section 63 answered the reference in the following manner:-
(I) There is no specific bar/ restriction under the provisions of the NDPS act for return of any seized vehicle used for transporting narcotic drug or psychotropic substance in the interim, pending disposal of the criminal case. (II) In the absence of any specific bar under the NDPS Act and in view of Section 51 of the NDPS Act, the Court can invoke the general power under Sections 451 and 457 of the Cr.P.C. for release of the seized vehicle pending final decision in the criminal case.
(III) The Court has the discretion to release the seized vehicle in the interim but the power has to be exercised in accordance with law and in the facts and circumstances in each case.
Page 32 of 37 (IV) If the Court decides to exercise its discretion to release a vehicle in the during pendency of the criminal case, suitable conditions have to be imposed to ensure its identification and production during trial with an embargo on its sale and / or transfer till conclusion of the trial and for submission of a specific undertaking for production of such vehicle.
29. Thus, after a critical analysis of the judgments discussed hereinabove, and keeping in view the specific reference answered by the Division Bench in Rabindra Kumar Behera's case (supra), this Court has no hesitation in coming to a conclusion that the provisions contained in Sections 451 and 457 of the Cr.P.C. would be applicable to the cases involving offence under the provisions of the NDPS Act. Therefore, any property/ vehicle seized in connection with such cases can very well be dealt with by the trial court by resorting to the provisions contained under Sections 451 and 457 of the Cr.P.C. The next question that falls for consideration before this Court is with regard to the conditions imposed by the learned trial court while releasing the vessel in question. In the aforesaid context, learned counsel for the Petitioner-Shipping Company, by referring to the impugned order dated 12.02.2024, contended that the conditions imposed while Page 33 of 37 directing the release of the vehicle are too harsh, unreasonable and the same are beyond the financial capabilities of the Shipping Company. He further contended that in the ordering portion of the impugned order dated 12.02.2024, the learned trial court has directed the Petitioner to furnish Bank Guarantee to the tune of Rs.10 crores to be executed in any Nationalized Bank within the jurisdiction of that Court. Further, he has also assailed the condition with regard to furnishing an indemnity bond to the tune of valuation of the vessel of Rs.100 crores with one solvent surety for the like amount. So far the condition Nos.3 to 7 are concerned, learned counsel for the Petitioner submitted that the Petitioner- Shipping Company has no objection to such conditions. In summary, the arguments of learned counsel for the Petitioner are entirely directed against the condition Nos.1 and 2 in the ordering portion of the order dated 12.02.2024.
30. As to the value of the vessel, it is no doubt a difficult proposition to accurately assess the exact value of the vessel involved in the present case. Keeping in view the law involved through various judgments of the Hon'ble Supreme Court as well as this Court, the learned trial court while directing interim release of the vehicle/ property is duty bound to ensure that while Page 34 of 37 taking on Zima, the person concerned secures the property/ vehicle/ vessel in question and further gives an undertaking that he shall not sell, transfer, alienate or part with possession of such property till conclusion of the trial and shall further give an undertaking to the effect that he shall produce such property/ vehicle/ vessel before the trial court as and when required by the trial court within a reasonable period of time. Furthermore, the learned Division Bench of this Court in Rabindra Kumar Behera's case, while answering the reference, has laid down the conditions that are required to be fulfilled while directing interim release of the vehicle/ property/ vessel. Another learned Division Bench of this Court in Ashish Ranjan Mohanty's case has also laid down a detailed guideline for such release under Sections 451 and 457 of the Cr.P.C and on the basis of such direction of the Division Bench in Ashish Ranjan Mohanty's case, an SOP has been prepared by this Court and circulated among the trial court for dealing with such type of matters.
31. Reverting back to the financial condition imposed in condition Nos.1 and 2, this Court finds that the condition No.1 with regard to furnishing a Bank Guarantee would be a harsh condition so far the Petitioner-Shipping Company is concerned Page 35 of 37 since they are not having any bank account in India. Therefore, the condition No.1 requires reconsideration by this Court. Accordingly, the condition No.1 is hereby waived. So far the condition No.2 is concerned, the value of the vessel has been assessed on a hypothetical basis. In other words, the real value of the vessel has not yet been assessed by any certified valuer in the present case. Basing upon the insurance declaration, the value of the vessel has been arrived at Rs.100 crores. Therefore, this Court is of the view that the same may not be the actual cost of the vessel which is stranded at the Paradeep port at the moment. Since no valuation report by a certified valuer could be produced in course of the hearing of the present application by the customs authorities, this Court is required to take a reasonable approach in the matter, particularly, keeping in view the factual background of the present case and the progress made in the investigation so far. Accordingly, the condition No.2 is modified to the extent that instead of Rs.100 crores, the Petitioner-Shipping Company shall now furnish an indemnity bond to the tune of Rs.75 crores and instead of one solvent surety for the like amount, they shall furnish two solvent sureties for the like amount. Further, it is Page 36 of 37 directed that the other conditions of order dated 12.02.2024 shall remain intact.
32. Accordingly, CRLMC No.441 of 2024 is disposed of and the impugned order dated 12.02.2024 passed by the learned Special Judge, Kujang in Misc. Case No.02 of 2024 arising out of Case No.Spl. G.R. (N) 65 of 2023stands modified to the aforesaid extent.
33. In view of the aforesaid analysis of fact and law and the finding of this Court that the learned trial court has not committed any illegality in passing order dtd.12.02.2024, the Crl. Rev. Petition preferred by the Union of India and the customs authorities is bound to fail. Accordingly, the above noted Criminal Revision Petition bearing CRLREV No.93 of 2024 stands dismissed being devoid of merit.
(A.K. Mohapatra) Judge Orissa High Court, Cuttack The 07th March, 2025/ Anil/ Jr. Steno Signature Not Verified Digitally Signed Signed by: ANIL KUMAR SAHOO Page 37 of 37 Reason: Authentication Location: High Court of Orissa, Cuttack Date: 07-Mar-2025 19:13:51