Report No. 41
Disposal of Property
Regarding the disposal of property, Chapter 43 provides for the passing of interim orders for the custody and disposal of the property pending inquiry or trial and of final orders at the conclusion of the inquiry or trial.
The property in respect of which such orders can be passed may b.-(i) property regarding which an offence appears to have been committed, or (ii) property which appears to have been used for the commission of an offence, or (iii) any property or document produced before the court or in its custody.
There are detailed provisions in regard to property seized by the police. Such property, again, may be of various classes, such as1, articles found upon search of a person arrested,2 property alleged or suspected to be stolen, or3 property found under circumstance which create suspicion of the commission of an offence.
The modes of disposal of the property are, again, numerous, and the particular mode is, for obvious reasons, left to the discretion of the court. Thus "disposal" of the property may be by destruction, confiscation, delivery to any person claiming to be entitled to possession of the property, restoration to person dispossessed, or sale, etc.
1. See sections 51, 53 and 153(2).
2. See sections 51, 54(1), fourthly, 94(1), 98(1), 165(1) read with 103 and 550. The chronological order is sections 54, 51, 550 and 528. See discussion in Kasturi Lal, AIR 1965 SC 1039 (1043): (1965) 1 SCR 375. As to procedure, see section 103(2).
3. See sections 94(1) to 99A, 165 and 554. As to procedure see section 103.
43.2. Section 516A.-
Section 516A provides that when any property regarding which an offence appears to have been committed or which appears to have been used for the commission of any offence, is produced before any criminal court during any inquiry or trial, the court may make such order as it thinks fit for the propel custody of the property pending the conclusion of the inquiry or trial. The court is empowered to make such interim order because, in some cases, it becomes necessary to preserve the property either as evidence1 or in order to make a proper order after the case is over.
1. See Rajendra v. Sama, AIR 1931 Cal 455 (456) (Rankin C.J. and Costello J.).
43.3. Suggestion to bar attachment by civil court in certain cases.-
In a suggestion1 received by us, it is stated that sometimes property attached (i.e., property seized) in criminal cases of cheating, criminal breach of trust etc. is attached by civil courts also and appropriated in execution of decrees collusively obtained against the accused. It is suggested that it is necessary to protect such money from attachment by civil courts, and for this purpose provision should be made in section 516A, that pending the conclusion of the inquiry or trial, such property shall not be liableto attachment under orders of a civil court, and after the conclusion of the trial, it shall be subject to the orders of the criminal court.
We are not in favour of the suggestion. The correct procedure in such cases would be for the complainant or informant (or other person claiming to be the owner) to file a claim or objection under the Code of Civil Procedure,2 in the proceeding for attachment. There is no need to amend section 516A, for the purpose.
1. F. 4(2)/55-L.C., Pt. I, S. No. 59 (Suggestion of District Government Counsel, Moradabad).
2. See Order 21, rule 58, Code of Civil Procedure, 1908.
43.4. Documentary and material exhibits in the inquiry or trial.-
Section 516A does not cover all property that comes into possession of the Court for the purposes of an inquiry or trial. For instance, property which is produced merely as evidence of crime is not covered. In many States, express provision for the disposal of such property is not necessary since the High Court Rules provide for interim custody and final disposal of all documents and articles produced before any Court for the purpose of evidence. These are marked as documentary exhibits or material exhibits.
But it will be noticed that this class of property is expressly mentioned in section 517(1). There may be some States where the High Court Rules, do not provide for the custody and disposal of such property. We therefore suggest that section 516A should be made comprehensive so as to include material. and documentary exhibits in the case which may not have been used for the .commission of the offence or regarding which no offence may appear to have been committed.
43.5. Amendment of section 516A.-
The opening clause of section 516A may accordingly be amended to rea.-"When any property is produced before any criminal court during any inquiry or trial".
43.6. Section 517(1).-
Section 517 empowers the Court to make, at the conclusion of an inquiry or trial, orders for the disposal of any property or document (i) produced before it, or (ii) in its custody, or (iii) regarding which any offence appears to have been committed, or (iv) which has been used for the commission of any offence. The terms of the section are wider than those of section 516A. The four classes of property are listed disjunctively, so that, provided the inquiry or trial has come to an end, and the property falls within any one of the four categories, the Court has jurisdiction to pass orders under this section.1
1. See Bhimji v. Emp., AIR 1944 Nag 366 (367). The history of the section is traced in "Disposal of Property" (1903) 8 CWN (Journal) 43, which criticizes Surendra v. Rai Mohan, ILR 30 Cal 690 (692).
43.7. Disposal of money.-
Difficulties arise in practice when a Criminal Court has occasion to pass orders under section 517 for the disposal of money, e.g., bank notes or currency notes. Where there is doubt as to who is really entitled to possession, and the criminal court makes an order to the best of its judgment leaving the doubtful question of title to be decided by the civil court, the property may disappear before an effective decision of the civil court is obtained. To quote from a judgment1 of the Andhra Pradesh High Court.-
"In cases like the present, where it is extremely doubtful whether the petitioner and his co-accused are really entitled to possession of the currency notes, if they should be, in pursuance of the normal rule, allowed to take back these notes, the persons who might really be entitled thereto may, even if they succeed in the Civil Court, be unable to recover the property from the petitioner. The property may, in the meanwhile, vanish into thin air. It is doubtful even if the Civil Court could direct the disposal of these moneys with it, pending adjudication of the right to them.
I think it is desirable that the Criminal Procedure Code should make a provision applying to cases like this one, for instance, enabling a Magistrate to keep the property with him for a definite period of time, pending the filing of a civil suit relating to it, and directing him to deliver the property to the civil court on being asked by that Court, after the institution of the suit. There may alternatively be a provision placing it at the disposal of the Government, pending a suit. If very valuable movable property is, under the general rule, returned to persons who may not be really entitled to it, serious loss may result to the true owners, because it can disappear very easily."
In that case, the High Court rejected the argument that such a power already existed, and dissented from the cases2 cited in support of that argument.
1. Tenali Sitiah v. State, AIR 1957 AP 1024 (1026), para. 11 (Bhimasankaran J.).
2. Muttiah v. Vairaperumal, AIR 1954 Mad 214; Kedar Nath v. Mohamed Siddiq, AIR 1924 Cal 455 (456).
43.8. Suggestion by a Bar Council.-
A Bar Council has suggested that sections 517 to 520 should be simplified on the following lines. In cases of conviction of the accused, the property should be directed to be handed over to the owner. If there is a dispute as to ownership, the court should hold a summary inquiry and, if unable to come to a decision, refer the matter to a civil court whose decision will be followed. If the trial ends in acquittal, the property should be handed over to the person from whose possession it was taken. But if such person was an accused and he disclaims any ownership of property, the property should be handed over to the owner.
In such a case security should be taken from the party to whom it is given. The appellate or revisional court may be statutorily required to pass an order either of confirmation or reversal of the order passed by the trial court when such court disposed of the main criminal case. A right of appeal may be given to the party aggrieved by the order, in case no appeal or revision petition is filed against the conviction or acquittal of the accused.
43.9. Principles regarding disposal.-
The principles to be deduced from reported decisions regarding the Court's power under this section may be summarised as follows.-
(i) The ordinary rule is, that if the accused is acquitted of an offence regarding property, the court must restore the property to him if it was recovered from his possession.1 The criminal court should not enter into questions of title in respect of property.
(ii) The rule is the same as regards cash and currency notes.2
(iii) Ordinarily, the court would not be justified in detaining the property till the decision of the Civil Courts.3
(iv) An order for indefinite detention in court custody or in the custody of one of the parties conditional on a civil suit, would not be desirable.4 The various possible courses to be adopted were analysed in a Madras case.5
(v) Even a conditional order of restoration does not seem to be contemplated in ordinary cases. The contrary view was, however, taken in one case :6
1. Sattar Ali v. Afzal Mohammed, 1927 ILR 54 Cal 283 (285): AIR 1927 Cal 532; Srinivasamoorthi v. Narasimhulu Naidu, 1927 ILR 50 Mad 916 (919): AIR 1927 Mad 797 (798).
2. Pushkar Sin&h v. State, AIR 1953 SC 508; Pandhariah (in re:), ILR 40 Born 186: AIR 1915 Born 265, distinguished in Akshoy Kumar v. Naya Kumar, AIR 1940 Cal 346.
3. Kasiram v. Makhanji Dwarka Prasad, AIR 1937 Pat 591 (592); Kantha Mal v. Himachal Pradesh Administration, AIR 1963 HP 45 (Reviews case-law).
4. Cf. Observations in Mohd. Yusuf v. Krishna Mohan, AIR 1938 Cal 17 (20).
5. Muthiah v. Vairuperumal, AIR 1954 Mad 214 (215) (Reviews case-law).
6. Chenga Reddi v. Ramaswamy, AIR 1915 Mad 588.
43.10. Commission's views.-
In our opinion, it is not advisable to insert a provision as suggested in the Andhra Pradesh case. Such a provision would go against the scheme of the Code, which contemplates final orders as to disposal by the criminal court either under section 517 or under section 518 read with section 523. It may be left to the discretion of the aggrieved party to move the civil court and obtain interim protection of the property, till final adjudication about its title. For the same reason we are not in favour of the radical revision of the existing section suggested by the Bar Council.