S.K. Roy, J.
1. This is a revision petition to set aside the order dated 23-11-1976 passed by the S. D. J. M., Cuttack in a proceeding Under Section 457, Cr. P. C., registered as Misc. Case No. 504 of 1976.
2. In course of investigation in connection with Manglabag P. S. Case No. 483 of 1976, the I. O. seized certain movable properties from the de facto possession of the opposite party and left the same in his zima. Before any final form was submitted in the aforesaid case, the opposite party filed an application Under Section 457, Cr. P. C. before the S. D. J. M. praying for an order directing the police not to remove those seized properties from his custody until the submission of the final form. This application of the opposite party was resisted by the petitioner claiming those properties to be his. His story is that those properties were the subject-matter of a 145 proceeding (Criminal Misc. Case No. 141 of 1975) in which the petitioner, the opposite party and one G. N. Mohanty were parties. Those properties were also the subject-matter of Title Suit No. 38 of 1975 which had been filed by the petitioner in which Shri G. N. Mohanty was appointed receiver on furnishing security. The receiver matter was carried to this Court in M. A. 133 of 1975 which was disposed of on compromise. The terms of compromise recited that the petitioner will take over charge of the restaurant with all movables contained therein and that the building with all the movables was handed over to. the petitioner. The opposite party was merely a landlord in respect of the building, entitled to rent from the petitioner and had no vestige of title to the movable properties which had been seized by the police in the aforesaid Manglataag P. S. Case No. 483 of 1976.
3. The S. D. J. M., however, passed the following direction in his impugned order :--.The investigation is still in progress and not completed in Manglabag P. S. Case No. 483 of 1976. It is yet to be determined as to who is entitled to such property. But prima facie when the properties were found in possession of S. C. Mohapatra and the size and quantity of the same being huge and not easily transportable, was left in zima of S. C. Mohapatra. Hence at present there is nothing to disturb the status quo until final determination of the ownership in the P. S. case and further the investigation is not complete and, therefore, the present status quo is required to be maintained at least till the final form is submitted in Mangla- bag P. S. Case No. 483 of 1976. The applicant S. C. Mohapatra is directed not to dispose of or transfer in any way or any part of the seized property or to change or alter in any form all the properties left in his zima....
4. The petitioner challenges the jurisdiction of the Magistrate to pass the impugned order as also its legality and propriety. He contends that the Magistrate can only pass orders under this section in respect of properties which have been seized in course of investigation of an offence and such seizure has been reported by the police as required by any provision of the Code, and in the enquiry or trial following investigation, the seized properties are not produced. Thus, where no charge-sheet has been submitted and the matter is still under investigation, the property seized by the police cannot be the subject-matter of Magistrate's order under this section. His next contention is that Under Section 457(2), Criminal P. C. where a person entitled to possession is known to the Magistrate, he is to direct delivery of such seized property to him, and if such person is not known, the Magistrate may make temporary arrangement for custody of such property and then issue a proclamation specifying the articles of which such property consists, and requiring any person who may have a claim thereto, to appear before him and establish Ms claim within six months from the date of such proclamation. As, in the instant case, the petitioner is entitled to such property under the compromise decree passed in M. A, 133 of 1975 and his title to such property has also been admitted by the opposite party in various other proceedings, the Magistrate should have directed delivery of the seized property to him. Incidentally, it is also contended that when Sub-section (1) of Section 457, Cr. P. C. confers jurisdiction on the Magistrate to make such order as he thinks fit respecting the disposal of seized property, he must not pass any order arbitrarily or as his whim dictates to him, but must pass the order according to rules of reason and justice, not according to private opinion or humour but according to law. In other words, such order must not be arbitrary and fanciful, but legal and lawful.
5. I will now take up the first comen tion of the petitioner, but before doing so, it will be proper to examine the general scope of Section 457, Cr. P. C. which will indicate the extent of jurisdiction of the Magistrate thereunder. This section, on the interpretation of which both the aforesaid contentions of the petitioner are grounded, reads as follows :--
457. Procedure by police upon seizure of property.--
(1) Whenever the seizure of property by any police officer is reported to a Magistrate under the provisions of this Code, and such property is not produced before a Criminal Court during an inquiry or trial, the Magistrate may make such order as he thinks fit respecting the disposal of such property or the delivery of such property to the person entitled to the possession thereof, or if such person cannot be ascertained, respecting the custody and production of such property.
(2) If the person so entitled is known, the Magistrate may order the property to be delivered to him on such conditions (if any) as the Magistrate thinks fit and if such person is unknown, the Magistrate may detain it and shall, in such case, issue a proclamation specifying the articles of which such property consists, and requiring any person who may have a claim thereto, to appear before him and establish his claim within six months from the date of such proclamation.
On an analysis of the language of Sub-section (1), it is clear that this section empowers the Magistrate to pass orders for disposal of property which is seized by the police and has not been produced in court during enquiry or trial, provided that the seizure of such property by the police has been reported to the Magistrate under the provisions of the Code. In cases, where none of the provisions of the Code casts any obligation or imposes any duty on the police to report any seizure to the Magistrate, and report of such seizure does not come to the knowledge of the Magistrate otherwise, the jurisdiction of the Magistrate under this section cannot be invoked in respect of such seizure. If any other provision of the Code casts an obligation to report on the police, but the latter inadvertently or wilfully defaults to report, such default would not oust the initial jurisdiction of the Magistrate in respect of such seized property. Section 523 of the old Cr. P. C. which, by and large, corresponds to Section 457 of the new Code, casts a clear duty on the police to make report to the Magistrate in respect of property seized Under Section 51 or alleged or suspected to be stolen or found under circumstances which create suspicion of the commission of an offence (Section 550), By some judicial decisions, Section 523 of the old Code was interpreted so as to bring within its purview property also seized by the police during investigation Under Sections 165 and 166(old), but not sent to the Magistrate with a charge-sheet. It is also clear from the language of Section 457 that property produced before a Criminal Court during an enquiry or trial is excluded from its scope as the same has been dealt with Under Section 451. The first part of Section 523(old) imposing an obligation on the police to make forthwith report to the Magistrate in respect of property seized by them, in the circumstances enumerated in that section, has been omitted from Section 457(new). The unfortunate consequence, therefore, is that in cases where the police have seized property but are under no obligation under any provisions of the Code to report to a Magistrate, and such seizure is not reported either by the police or by any other person interested, the police can dispose of such property in any manner they like, if they do not send the same to any court with a charge-sheet. On a joint reading of Sections 457 and 452, Cr. P. C., it is also clear that once a seized property Is sent to a Magistrate with a charge-sheet, it is removed from the provisions of Section 457 and Section 452 is applicable. The expression, 'and such property is not produced before a Criminal Court during an inquiry or trial' in Section 457(1), merely refers to a stage of investigation and provides a condition precedent for exercise of jurisdiction of the Magistrate under this section. If property seized is produced before a Criminal Court during enquiry or trial, the jurisdiction of the Magistrate under this section ceases. This view finds support in the case of Ambika Roy v. State of West Bengal 78 Cal WN 753 : 1974 Cri LJ 1002, Even though there be no provision in the Code obligating the police to report its seizure, never the less, if the factum of seizure is reported to the Magistrate by sources other than the police or the fact of seizure otherwise comes to the knowledge of the Magistrate, he acquires jurisdiction under this section to pass appropriate orders in respect of the seized property. As in this case the factum of seizure was reported to him by the opposite party filing an application Under Section 457, the Magistrate acquired jurisdiction to pass appropriate orders as he thought fit respecting the disposal of the seized property.
The words 'may make such order as he thinks fit' in Sub-section (1) of Section 457 does not confer arbitrary and uncontrolled power on the Magistrate as to the disposal of the property. This power is limited to selection of one of the two alternatives indicated in that section, viz., (a) delivery of property to the person entitled to the possession thereof and (b) disposal of it. He has, of course, a wide discretion in the matter of disposal of the property where he elects the second of the aforesaid two alternatives. His choice of the alternative is, however, further restricted. If the person entitled to possession of the seized property is known, then the Magistrate has the only choice of delivery of the property to him. If the person entitled to possession is not known, then he may proceed to dispose of such property in respect of which he has a wide discretion. But before he proceeds so to do, he must under Sub-section (2) issue a proclamation specifying the articles of which such property consists, and requiring any person who may have a claim thereto, to appear before him and establish his claim. The person entitled to possession would be one from whose possession the property was seized and such person is found not to have committed any offence so as to render his possession unlawful. The power to ascertain as to who is the person entitled to possession vests in the Magistrate Under Section 457 as was held by the Supreme Court in the case of Kasturi Lal Ralia Ram Jain v. State of U. P. AIR 1965 SC 1039 : 1965-2 Cri LJ 144, dealing with its corresponding old Section 523. If a person from whom the property was seized is charged with an offence or is suspected of having committed an offence and the police launch an investigation, he cannot be a person entitled to possession until after the final report is submitted. Until he has cleared up the suspicion of having committed a crime, his possession cannot be deemed to be lawful and, as such, even though the property was last seized from him, such possession would not be construed to be lawful until the crime is wiped off either by submission of a final report or by discharge or acquittal. To treat such a person who is suspected of having committed a crime, and against whom the police investigation is still pending, as a person entitled to possession is against the rules of justice, equity and good conscience.
6. From the aforesaid discussion, the following conclusions arise :--
(1) Whenever the seizure of the property by the police is reported to a Magistrate, his jurisdiction to act further Under Section 457 accrues. Such report may be made either by a police officer or by any other person interested.
(2) The expression 'and such property is not produced before a Criminal Court during an inquiry or trial' in Sub-section (1) refers merely to a stage of investigation and not the stage of inquiry or trial. It is a condition precedent to the exercise of jurisdiction by the Magistrate Under Section 457.
(3) The expression 'may make such order as he thinks fit' limits the jurisdiction of the Magistrate to two alternatives viz., either to deliver the seized property to the person entitled to possession thereof, or to make such disposal, as he thinks proper, of the seized property, in which case he has a discretion as to manner of disposal.
(4) If the person entitled to possession is known, the Magistrate may deliver the property to him. Here again, he has a discretion in the matter. If the person so entitled is not known, then the Magistrate shall issue a proclamation requiring any person who may have a claim to the seized property to appear before him and establish his claim.
7. Applying the aforesaid principles to the present case, the factum of seizure of property by the police having been brought to the cognizance of the Magistrate by a petition of the opposite party, tine Magistrate acquired lawful jurisdiction to proceed Under Section 457. When the petitioner appeared before him and filed a claim to the seized property, the Magistrate was bound to give him full scope to establish his claim. From the rival stand of the petitioner and the opposite party, the only controversy is as to which one of them is the person who is entitled to possession and, therefore, this is not a case where it may be said that the person entitled to possession is not known. In such a case, the Magistrate is to ascertain as to who among these two is the person entitled to possession. If the petitioner fails to establish his claim or the Magistrate considers his claim untenable for any lawful reason, he cannot treat the opposite party as a person entitled to possession so long as the investigation is pending and he is under suspicion of having committed a crime, because his possession of the seized property at the time of seizure would be unlawful. To (order?) all the property to go back to him would amount to wipe off a crime against him so long as investigation is proceeding. Such an action on the part of the Magistrate would be against all rules of justice, equity and good conscience. Therefore, I am satisfied that the Magistrate had jurisdiction to proceed Under Section 457, Cr. P. C., but his final direction in the impugned order extracted above appears to me to be erroneous. I would, therefore, set aside the order under revision and direct the Magistrate to give opportunity to the petitioner to establish his claim to the seized property and if he is satisfied about the claim, he may deliver such property to him after taking proper security for their production in court, in case a criminal proceeding is ultimately instituted against the opposite party and production of these articles is required in course of enquiry or trial. If he is not satisfied about the claim of the petitioner, he is to give such other direction as to the proper custody of the seized articles, but he should not give back custody of the property to the opposite party against whom investigation is proceeding, and may issue appropriate instruction to the police for their proper care and custody.
8. This Criminal Revision, accordingly, succeeds and is allowed.