The main legal point established is that the disposal of seized property must involve notice to the adversely affected party and be conducted in accordance with the law, including the use of case diary statements during summary inquiries.

1. The appellant is aggrieved by the order of the Chief Judicial Magistrate Manjeri as per which 375 bags of dried cashewnuts involved in a criminal case were ordered to be given to the Kerala State Cashew Development Corporation (for short'the Corporation'). Hence this appeal.

2. During investigation of a crime case, the Dy. S.P. Crime Detachment (Malappuram District) seized 375 bags of dried cashewnuts from Vinod Cashew Factory, Quilon on 25-6-1980. The case was charge sheeted against eight persons. The trial court convicted the first accused for the offence under S.409 of the Indian Penal Code. The appellant was neither an accused nor a witness in the said case. The trial Magistrate found that Al in that case was entrusted with dominion over the cashewnuts for the purpose of transportation from Edavanna (Malappuram District) to one of the factories of the Corporation at Quilon. It was further found that the first accused, in violation of the terms of the contract, supplied the cashewnuts to the appellant and appropriated the value thereof. In the judgment, the lower court passed orders for disposal of the property. It was directed that the cashewnuts be returned to the Corporation. That order of disposal is now challenged in this appeal. Criminal M.C. 390/87 has been filed by the Corporation to quash the appeal filed by the appellant.

3. The learned counsel for the appellant raised the following contentions: (1) The criminal court should have adopted the normal rule in this case by directing the property to be returned to the person from whose possession it was taken into custody. (2) In the absence of a finding that it was the first accused who supplied the consignment of cashewnuts to the appellant, there remains no basis for ordering the property to someone else. (3) There is no evidence that the cashewnuts (375 bags) seized by the police belonged to the Corporation. (4) At any rate, the order of disposal of property passed without notice to the appellant and without affording an opportunity of being heard is unsustainable.

4. The learned counsel for the Corporation, in reply, argued that the appellant's right, if at all any, has been waived by him as the appellant had knowledge of the criminal proceedings pending before the trial court. He has also contended alternatively that the materials in this case are quite adequate to return the property to the Corporation.

5. Conviction and sentence passed against the first accused were challenged in appeal before the Sessions Court, Manjeri. The acquittal of the remaining accused was also challenged by filing an appeal in this court. Consequently, the appeal filed before the Sessions Court was withdrawn by this Court to be heard along with the appeal filed by the State against the acquittal. Those appeals were disposed of by this Court and the conviction and sentence passed against the accused were set aside. However, it was found by this Court that (I) 375 bags of cashewnuts were entrusted to the first accused for transportation to the Corporation's factory at Quilon; (2) the three lorries in which the bags were transported reached Vinod Factory, Quilon, where the consignment was unloaded; (3) 375 bags seized by the police from Vinod Factory, Quilon were those entrusted to the first accused. Inspite of the aforesaid findings the first accused had to be acquitted on certain other grounds.

6. In view of the finding of this Court in the criminal case that 375 bags of cashewnuts seized from Vinod Factory were unloaded from three lorries (KLM 2487, KLM 1541 and TNW 1541), the appellant cannot claim that as a matter of normal rule the criminal court should order return of the property to the person from whose possession it was taken. It is true that when no offence has been committed in respect of any property which is in the custody of court, ordinarily it should be restored to the person from whose possession it was seized. But this ordinary rule is subject to exceptions. W