Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Ori) 3237

ORISSA HIGH COURT
Savitri Ratho, J
IIFL Finance Limited – Appellant
Versus
State of Odisha – Respondent
CRLMP No.32 of 2026

Advocates:
For the Appellants/Petitioners: Mr. Sidhant Das
For the Respondents: Mr. S.K. Rout

Police seizure of property under investigation does not necessitate physical transfer to a police facility. Courts may permit the entity in possession to retain custody as a custodian, provided there is thorough inventory, videography, and an indemnity bond, ensuring the property remains preserved and available for judicial proceedings.

Headnote:(A) Bharatiya Nagarik Suraksha Sanhita, 2023 - Sections 106 and 107 - Power of police to seize property - Scope of seizure in criminal investigations - Physical custody versus formal seizure - Balancing investigative necessity and property integrity. (Paras 8, 12, 13)

(B) Interim Custody (Zima) - Criteria for granting temporary custody of seized assets - Necessity of videography, detailed inventory, and indemnity - Protecting property from deterioration while ensuring availability for trial. (Paras 14, 15)

Facts of the case:
Certain valuable articles were pledged as security for loans by the accused, following the alleged misappropriation of said articles from another party. The investigating agency requested the production of these articles for seizure. The institution in possession of the articles challenged the mandated physical move to the police station for storage, offering instead to hold the items in trust while ensuring their production for investigation and trial, citing risks of damage or loss.

Findings of Court:
The court observed that while statutory provisions authorize police seizure of items suspected to be stolen or involved in an offense, the power to seize does not strictly mandate that such items remain in police storage facilities. Safeguarding the property using transparent protocols serves the dual interests of police investigation and asset preservation for original owners.

Issues: Whether the state can be compelled to leave seized property in the custody of a third party, and what conditions are required to be met to ensure the property is legally bound to the investigation without risking its integrity.

Ratio Decidendi: Formal seizure requires clear identification and official control rather than inevitable physical displacement. Where the temporary custodian furnishes an indemnity bond, performs meticulous videography and inventory, and provides an undertaking to produce the property upon court demand, the law permits the retention of the assets by said custodian to prevent degradation of the evidence until a final determination of ownership occurs.

Result: Petition allowed with specific directions ensuring secure custody and production of the property.

Table of Content
1. application of bnss seizure provisions and parties' competing custodial claims. (Para 1 , 4 , 5 , 6 , 8)
2. factual overview of fraudulent misappropriation and police seizure efforts. (Para 2 , 3 , 7)
3. necessity of identifying, recording, and preserving disputed property. (Para 9 , 10 , 11)
4. order for conditional zima custody of seized articles. (Para 12 , 13 , 14 , 15 , 16 , 17)

Savitri Ratho, J.

The CRLMP has been filed praying for a direction to the Opposite Parties to take photographs and prepare proper and detailed panchnama of the gold articles, and not to seize the gold articles and to direct the Opposite Parties to take bond from the Petitioner-Company, specifying that the gold articles would be produced by the Company as and when required during the course of trial and/or investigation.

PROSECUTION CASE

2. Balugaon P.S. Case No.235 of 2025 has been registered on 05.08.2025 against one Jitendra Kumar Biswal for commission of offences punishable under Sections 319(2)/318(4)/314/316(5) of the Bharatiya Nyaya Sanhita (in short, “BNS”) on the information of the Chief Manager, State Bank of India, Balugaon Branch (in short, “SBI, Balugaon Branch”). The allegations in short are that Jitendra Kumar Biswal was working as Senior Associate (Cash-in-Charge), SBI, Balugaon Branch since 25.09.2023. He committed financial fraud and criminal breach of trust while discharging his duties as a joint custodian of cash and gold ornaments. On 28.07.2025, he sent a WhatsApp message to the Regional Manager, SBI, Khurda enclosing a letter dated 27.07.2025, addressed to the Chief General Manager, SBI, Bhubaneswar Circle, where he voluntarily confessed to have committed financial misconduct by (i) misappropriating ten packets of gold ornaments held in custody as part of secured gold loan assets of the bank and pledging them with NBFCs to raise funds to cover personal financial losses sustained by online share-market trading and (ii) he was using his monthly salary to repay the EMIs of said loans and (iii) contemplating suicide or readiness to face legal consequences. On 29.07.2025, he submitted another handwritten letter to the Chief Manager, SBI, Balugaon Branch admitting that (i) he took eleven packets of gold ornaments from the branch, kept as security against gold loans and pledged them with multiple NBFCs (ii) He illegally took away cash amounting to Rs.6,00,000/- from the on-site ATM of the branch. (iii) He further took away the cash hand balance of Rs.75,000/- kept in the branch.

Preliminary investigation by the bank revealed that a (i)total of twelve gold loans packets pledged by the customers were missing from the branch and (ii) there was a cash shortage of Rs.6,27,000/- in the on-site ATM of the branch on two separate occasions (Rs.5,00,000/- and Rs.1,27,000/- respectively) which was meant for ATM replenishment. (iii) Hand balance of Rs.75,000/- from the branch was also found missing (iv) The total amount misappropriated came to approximately Rs.76.98 lakhs.

3. As it was found during investigation that Jitendra Kumar Biswal had taken gold loan from IIFL Finance Limited, Balugaon Branch, using the gold ornaments pledged to SBI, Balugaon Branch by different loanees, the IIC, Balugaon P.S. directed the petitioner-Branch Manager IIFL Finance Limited to freeze the account of Jitendra Kumar Biswal. The petitioner kept his account on hold and intimated the I.O that no transaction from the said account will be carried out without the specific directions of the Court or the competent authority. On 15.10.2025, the IIC, Balugaon P.S. vide letter dated 15.12.2025 directed the Branch Manager IIFL, Balugaon Branch to produce the gold for the purpose of seizure of the gold articles.

SUBMISSIONS ON BEHALF OF PETITIONER

4. Mr. Sidhant Das, learned counsel for the Petitioner referring to Section 107 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (in short “the BNSS”), submits that the said provision is a new provision which has bee

Click Here to Read the rest of this document

2026 Supreme(Online)(Ori) 3237

ORISSA HIGH COURTSavitri Ratho, JIIFL Finance Limited – AppellantVersusState of Odisha – RespondentCRLMP No.32 of 2026

ORISSA HIGH COURT
Savitri Ratho, J
IIFL Finance Limited – Appellant
Versus
State of Odisha – Respondent
CRLMP No.32 of 2026