Bank Guarantee Allowed In Lieu Of Cash Deposit For Vehicle Release In Abkari Act Cases: Kerala High Court

The High Court of Kerala has provided significant relief to vehicle owners entangled in litigation under the Kerala Abkari Act . In a ruling by Justice C.S. Dias, the Court clarified that when a vehicle has been seized by authorities, owners may be permitted to furnish a bank guarantee instead of a compulsory cash deposit for its interim release.

Case Background

The petitioner, Rafeek AS, is the registered owner of a vehicle (KL 12P 3911) that was seized by the Mannarkkad Excise Range Office. The seizure followed allegations of offenses punishable under Sections 55D , 58, and 67 of the Kerala Abkari Act . Seeking the interim return of the vehicle, the petitioner approached the Court of the Judicial First Class Magistrate in Mannarkkad under Section 503 of the Bharatiya Nagarik Suraksha Sanhita , 2023 .

While the Magistrate granted the petition for interim custody, the order contained a condition requiring the petitioner to deposit Rs. 2,10,000 in cash as security for the market value of the vehicle. Contending that such a condition was "onerous and unjustifiable," the petitioner moved the High Court to challenge the order.

Arguments Presented

The Public Prosecutor, representing the State, strongly opposed the move. Citing Rule 4(2)(a) of the Kerala Abkari (Disposal of Confiscated Articles) Rules , 1996 , and relying on precedents like Karthikeyan v. Deputy Commissioner of Excise and Nikhil T.M v. Deputy Excise Commissioner , the prosecution argued that the legal position is well-settled: vehicles involved in Abkari offenses cannot be released without a concrete cash deposit.

Conversely, the petitioner’s counsel argued that the requirement for an upfront cash payment places an undue financial burden on the owner. The petitioner expressed willingness to provide a bank guarantee for the full market value of the vehicle, asserting that this would adequately safeguard the State’s interests during the pendency of the legal proceedings.

Legal Analysis

The Court acknowledged the established stance regarding the necessity of security for the release of seized vehicles in Abkari matters. Justice C.S. Dias noted that while the requirement for security is mandatory, the nature of that security—whether cash or bank guarantee—can be balanced to suit the realities of the situation, provided the interests of the State are protected.

By permitting the use of a bank guarantee, the Court has effectively reconciled the statutory requirement for security with the practical need to avoid creating an unreasonable financial hardship for the vehicle owner.

Key Observations

The judgment underscores the shift toward more flexible security arrangements:

> "The learned counsel for the petitioner submits that, the petitioner is willing to furnish a bank guarantee for the like sum. The said submission is reasonable and justifiable."

> "I modify condition No.2 in Annexure 2 order by permitting the petitioner to furnish a bank guarantee for Rs.2,10,000/- in favour of the Trial Court, which shall be kept valid till the final determination of the above crime."

Decision and Implications

The High Court disposed of the Crl.MC by modifying the trial court’s order. The petitioner is no longer required to deposit cash but must instead furnish a bank guarantee for Rs. 2,10,000. This guarantee must remain valid until the final adjudication of the criminal case.

For future cases, this order serves as a precedent affirming that judicial discretion can be exercised to allow bank guarantees in lieu of cash deposits in Abkari cases, provided the amount matches the vehicle's market value. This ensures the State remains protected while affording vehicle owners a more manageable path to recovering their property during ongoing litigation.