Interim custody of vehicle seized in criminal case cannot be decided based on registration certificate alone: Supreme Court

The Supreme Court recently held that a registration certificate alone does not determine who is entitled to interim custody of a vehicle seized during a criminal investigation [Krishnan Narayana v. State of Andhra Pradesh & Ors.].

A Bench of Justices Sanjay Karol and Augustine George Masih said courts must look at the overall circumstances instead of relying only on the vehicle's registration certificate while deciding interim custody applications.

“Registration is a relevant factor, but it is evidentiary and not conclusive of entitlement to interim possession..The exercise of this power requires the Court to make only a prima facie assessment of who is best entitled to possession, having regard to the nature of the property, the circumstances of seizure and the material placed before it. It does not comprise an adjudication of ownership,” the Bench said.

It made the observation while deciding a dispute over interim custody of a pick-up truck, three excavators and a tipper seized during a police investigation.

The dispute arose after one Krishnan Narayana, a granite businessman, alleged that officials of a company named Earth Stein illegally took away the vehicles from the premises of his company, M/s Pure Minerals.

Earth Stein disputed this. It claimed the vehicles had been purchased using company funds that Narayana had allegedly misappropriated the same while he was one of its directors. Rival criminal cases were later registered by both sides.

After the police seized the vehicles, both Narayana and Earth Stein sought interim custody. The trial court rejected both applications. The Andhra Pradesh High Court later granted interim custody to Earth Stein. Narayana then approached the Supreme Court.

He argued that since the vehicles were registered in the name of his company, he was entitled to interim custody.

The Supreme Court said courts must look at the overall circumstances of the case instead of relying only on the registration certificate.

Applying that principle, the Court noted that the vehicles had been seized from Earth Stein’s operational site. They had continued to remain there under a written undertaking executed by Narayana. The Court also noted that the loan instalments for the vehicles had been paid from Earth Stein’s account, not by Narayana.

Taken together, the Bench said these circumstances carried greater weight than the registration certificates relied upon by Narayana. Therefore, it upheld the High Court’s decision granting interim custody of the vehicles to Earth Stein and dismissed the appeal.

The Court clarified that its findings were confined to interim custody and would not affect the pending proceedings on ownership of the vehicles, the alleged misappropriation of funds, or the validity of Narayana’s resignation and share transfer.

Narayana was represented by Senior Advocate S Nagamuthu along with advocates MP Parthiban, Priyaranjani Nagamuthu, Bilal Mansoor, Shreyas Kaushal, S Geyolin Selvam, Alagiri K, Shivansh Sharma and Abhishek S.

The State and other respondents were represented by Senior Advocate Anand M Sanjay Nuli along with advocates Guntur Pramod Kumar, Prerna Singh, Vanshika Singh, Aniruddha Purushotham, Honey Singh, Pratyaksh Kumar, Laxman Tapashi, Virendra Mohan, Ankit Kumar, Dwibendu Shekhar Barik, Ratan Singh, Reena Pandey, Mahesh Kumar, Sanjay Sharma, Yogendra Kumar, Kamal Pundir, Binod Kumar Singh, Ranbir Singh, Manisha, Abhilasha Belwal, Yashica Rawal, and Devika Khanna.

[Read Judgment]