Judicial Magistrate of First Class cannot release property or valuables on supurdginama: Madhya Pradesh High Court

The Madhya Pradesh High Court recently upheld a sessions court order which stayed a railway magistrate's order for release of cash and jewellery seized from a railway passenger to a Gujarat-based firm. [M/S Mectec A Proprietor Firm v. The State of Madhya Pradesh & Anr].Justice Vishal Dhagat held,"In case of Union of India Vs. Police Station Janakganj (supra), it has been held that Judicial Magistrate of First Class does not have any authority to release property or valuables on Supurdginama in respect of which warrant of authorization has been issued by Income Tax Department.".The petitioner firm had laid claim to the money and silver jewellery seized from a person travelling from Mumbai to Jabalpur in a train in 2020. The valuables were conditionally released to the company by the railway magistrate during the pendency of the case. After the sessions court took suo motu cognizance of the railway magistrate's order and stayed its operation, Mectec approached the High Court..The Court noted that the revisional court can exercise its jurisdiction in case of intermediate orders or such order which touches upon the rights of the parties. It found that the railway magistrate had considered the question of ownership of cash amount and valuables after examining the financial documents including income tax returns filed by the company to show that the cash and other valuables seized by the police belonged to it. “Said order touches upon the right of ownership over property, therefore, order is an intermediate order and not an interlocutory order, therefore, Revisional Court has jurisdiction to take suo motu cognizance of the order passed by Special Railway Magistrate and there is no jurisdictional error,” the Court said..To determine whether such order could be stayed, the Court referred to provisions of the Income Tax Act to note that even in absence of an income tax case, the IT authorities have the powers to conduct investigation regarding valuables seized by any law enforcement agency to satisfy that tax has been paid or not.On whether the railway magistrate could have released the valuables after authorization of the IT Department, the Court found the magistrate cannot exercise the power in such circumstances. Finding that the Railway Magistrate had passed the order much after IT Department’s warrant of authorization, the Court dismissed the petition against suo motu revision and stay order..Senior Advocate Ashish Shrivastava with Advocate Dayaram Vishwakarma represented the petitioner.Government Advocate YD Yadav represented the State of Madhya Pradesh.Advocate Siddharth Sharma represented the Income Tax Department..[Read Judgment]