This Appeal is filed by the State of Maharashtra against the Respondents who are the original accused in Criminal Case No. 1710/P/2000 in C.R. No.75/1992 filed in the Court of the learned Additional Chief Metropolitan Magistrate, 19th Court, Esplanade, Mumbai. That case came to be filed by the State upon the complaint of Citibank, Fort, Bombay, against the accused in that case. The case came to be investigated and the accused came to be charged for having fraudulently induced the said Bank to sanction and allow withdrawal of the amount of Rs.57,33,796/- under an overdraft facility, upon the forged and fraudulent share certificates and share transfer forms obtained by accused No.2 and made use by accused No.1 by tendering the same as security against the overdraft facility. The accused were also charged with entering into a criminal conspiracy with common intention of accused No.1 to open three accounts in the Bank. The accused were further charged with having fraudulently obtained shares of Hindustan Ciba Geigy and Hindustan Lever Limited from illegal sources and handing over the said shares to the Bank as and by way of security and accordingly, of having committed forgery in respect of those shares which were previously cancelled. The accused were further charged with having opened an account in the name of bogus Firm to cause wrongful loss to the Bank.

Consequently, the accused in the case came to be charged with offences punishable under Sections 465, 467, 468, 471. 411, 414 and 420 read with Section 120-B of the Indian Penal Code (IPC).

2. The complainant Bank having compounded these offences, though not compoundable, the pm1ies filed Consent Teams. After recording the evidence on behalf of the State, the accused came to be acquitted of the aforesaid charges. Their bail bonds were cancelled. The document pertaining to the flat of accused No.1 was handed over to the owners of the flat being wife and mother of accused No.1. The cash amount, which was seized by the Police, was returned to the Bank as agreed between the parties. The rest of properties seized by the Police were directed to be returned to accused No.1, as agreed between them.

3. Pending the investigation by two Police Officers, certain movable properties of the accused came to be seized under panchanama and kept with the relevant Police Station by the Police Officers who caused the panchanama to be made and the properties seized to be deposited/kept in the Police Station pending the trial. This was certain cash amount, certain ornaments and certain other moveables being a car, YCP, Deck, etc.,

4. Upon the acquittal, accused No.1 applied for return of the properties. He made an Application before the relevant Police officers. The property was not traced. It was consequently not returned. Hence he made an Application before the learned Magistrate, being Application under No.120/N/01 in CC No.1710/P/2000 in CR No.75/1992 under Section 452 of the Criminal Procedure Code.

5. The Application with regard to the return of the ornaments being gold ornaments, weighing 823 Grams as per the panchanama, was essentially pressed, as it was the case of the Appellant/accused No.1 that the gold was not traceable. It was argued on behalf of the State that a case was registered against the concerned Investigating Officer (10) for offence of misappropriation of the said gold. The learned Magistrate considering the judgment in the case of B.K.D. Path Vs. State of Mysore, 1977(4) SCC 358 issued a notice to the State as to why the compensation should not be paid and distress warrant should not be issued against the State.

6. The Joint Commissioner of Police (Crimes), Greater Mumbai, submitted that the gold, which was seized, was not deposited by the concerned I.O. with the Police Department as per the provisions of Section 102 of the Criminal Procedure Code and hence for the illegal act of the officer, the State could not be held responsible. The reply sets out that the Police Inspe