The court must consider conflicting claims of entitlement to seized property and may relegate conflicting claimants to prove their rights before a competent court.

JUDGMENT :

Dr. Dhananjaya Y. Chandrachud, J.

1. A First Information Report was lodged on 4 February 1992 alleging that a theft of 10,285 kilograms of copper wires and 62 lead sleeves of a value of Rs. 8,31,300/- had taken place from the godown of the erstwhile Telecom Department at Gandhi Nagar in Ernakulam. The accused had allegedly sold the material to the first respondent. The first respondent is the proprietor of an entity by the name of Surya Metals.

2. On 21 February 1992, the Circle Inspector of Police, Ernakulam Police Station seized 5,060 kgs of copper lead alloy moulds from the first respondent.

3. By an order dated 21 February 1992, interim custody of the seized alloy moulds was handed over by the Magistrate to the appellant in pursuance of the provisions of Section 451 of the Code of Criminal Procedure, 1973 (“CrPC”).

4. Pursuant to the investigation, Criminal case No. 433 of 1993 was registered on the file of the Judicial Magistrate First Class, Ernakulam for offences punishable under Sections 457, 381, 461, 462 and 411 read with Section 34 of the Indian Penal Code, 1860. The first respondent was cited as a witness (CW-10).

5. By a judgment and order dated 30 April 1999, the Trial Court acquitted all the four accused of the offences with which they were charged. After the acquittal, the first respondent filed an application, being Criminal Miscellaneous Petition No. 5076 of 1999 (in C.C. No. 433/1999) on the file of the JMFC under Section 452 of the CrPC seeking release of the alloy moulds.

6. The judgment of acquittal was assailed by the State in Criminal Appeal No. 730 of 1999. The application for release of the property filed by the first respondent was kept in abeyance. On 19 January 2006, the appeal filed by the State against the order of acquittal was dismissed.

7. The application filed by the first respondent for release of the seized material was disposed of by the Judicial Magistrate on 31 August 2006. The Magistrate held that though interim custody was given to the appellant (the de-facto complainant) on 22 February 1992, the first respondent filed an application under Section 452 only on 21 June 1999. While declining to grant custody of the seized material, the trial court relegated the first respondent to prove its title before a competent civil court. By a judgment dated 13 March 2007 the Sessions Court affirmed the finding of the learned Magistrate and held that the first respondent had neither made a claim in respect of the seized goods until 1999, nor was there any clinching evidence to indicate that the material belonged to it. Hence, the direction that it was for the first respondent to assert its title and prove it before the civil court was confirmed. The first respondent assailed the above order of the Sessions Court in a criminal revision before the High Court.

8. By its judgment dated 21 February 2008, the High Court reversed the decision of the Sessions Court and held that the appellant had not raised a claim over the seized articles. The High Court held that since possession of the goods was taken over from the first respondent when they were seized, it should be restored to the first respondent in view of the decision of this Court in N. Madhavan Vs. State of Kerala, (1979) 4 SCC 1. The High Court held that though interim custody was handed over to the appellant, it did not assert any right over the property, nor did it deny the right or title of the first respondent and hence, there was no reason to relegate the first respondent to a civil court. The Judicial Magistrate was directed to take steps to hand over the property to the first respondent.

9. Leave was granted in these proceedings on 27 January 2009. The order of the High Court was stayed during the pendency of these proceedings.

10. Learned counsel appearing on behalf of the appellant submits that the Magistrate had carefully evaluated the facts of the case and had noticed that it was the consistent case of BSNL, through its witness PW-3, w