1. The Petitioner who is the accused before the trial Court has challenged the order dated 16-3-1981 passed by the Chief Metropolitan Magistrate, Bangalore City, in P.C.R. No. 13/1981 directing the release of the property seized, in his favour but attaching certain conditions for such a release.
2. A private complaint under S. 200 Cr.P.C., was filed against the accused for offences under sections 380, 406 and 506 read with S. 34, I.P.C. by the complainant, who is respondent 1 herein. The case made out against the accused is that there was an agreement, dated 10-1-1981, that he should supply cotton for spinning yarn and that the accused has violated the terms of the agreement and on that account the complainant requested the accused not to proceed with the spinning of the cotton. But, however, the accused is trying to remove the said property and dispose of the same with ulterior motive and the value of the said cotton was about Rupees 1,20,000/-. On those allegations the complainant lodged a complaint stating that the accused has committed offence of not only misappropriation but also cheating. The Magistrate referred the matter to the police, for investigation and report, under S. 156(3) Cr.P.C., who after investigating the case said to have filed a 'B' report. It is at that stage that the complainant, the accused and one Himiji Hirjee Cheda a partner of M/s. J. K. Cotton Company, Cotton merchants. Bombay who is said to have supplied the cotton to the complainant, filed applications purporting to be one under section 457, Cr.P.C. for possession of the cotton seized in the case, It may, however, be mentioned at this stage that the police seized the cotton which is the subject matter of dispute during investigation and did not produce the same before Court. It is in respect of the said cotton that all the three aforesaid filed applications for being ordered to be delivered to their possession on the ground that each one of them are entitled to be in possession of the same. As could be seen from the impugned order that the claim of each of the applicants was supported by documents and the learned Magistrate after hearing the parties came to the conclusion that accused is entitled to be in possession of the same on the sole ground that the property was seized from him during, investigation. Under those circumstances the learned Magistrate proceeded to pass an order releasing the cotton in favour of accused on certain conditions. The accused aggrieved by the conditions so attached to the order, has challenged the same on the ground that those conditions cause great hardship to him and that they are not feasible under the present circumstances.
3. Sri Abdul Wajid Khan contended of among other grounds that the order attaching conditions to the release of the property in question cannot be sustained. Elaborating his contention what he submitted was that the condition asking the accused to furnish bank guarantee or to produce cash security to the Court is not feasible and he also submitted that such a condition cannot be attached as the same would work out very hardship on him. But, however, Srinivasa Iyer, the learned counsel for the complainant urged that the condition attached to the order of release in favour of the accused is justified taking into consideration that accused himself has committed the offences punishable under sections 406 and 420 IPC.
4. The sole point for consideration in this petition is whether the Magistrate could have passed the impugned order under the facts and circumstances of the case and further whether the said order could be sustained. In other words whether the impugned order is legal and in accordance with the provisions of S. 457, Cr.P.C.
5. The operative portion of the impugned order reads thus. 'For the above reasons it is ordered as follows :-
(i) The seized property shall be given to the custody of accused No. 1, on his depositing cash of Rs. 86,000/- into the Court or on giving bank guarantee from any of the scheduled banks, within three days from today or within such time as may be extended by the Court on the request of A-1.
(ii) If A-1 does not avail the opportunity given to him As above, then the said opportunity is given to the complainant at the first instance and on his failure to the rival complainant to take by a the property depositing cash of RS. 86,000/- or by giving bank guarantee for the said amount.
(iii) If none of parties avail the above opportunity to take the goods, then the seized goods shall be sold in public auction and the sale proceeds shall be credited to the Court and the amount will be paid to the successful party at the time of passing the final order.
(iv) The above order is passed without prejudice to the rival contentions of the parties.'
Section 457 Cr.P.C. enjoins upon the Magistrate to 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.
6. A reading of the section clearly indicates that the, Magistrate has been given three alternatives, namely, (1) he has discretion to pass any order he thinks fit for the disposal of the property, or (2) to deliver it to the Person entitled to it subject to such condition, if any, that he may impose; or (3) if there is no such person, pass an order for its custody and Production. But however, it is also made clear that the discretion conferred on the : Magistrate under this section is to select one of the two alternatives, namely, delivery, of the property to the person entitled thereto or disposal of the same. It is, therefore, clear that the Magistrate has first to consider in such circumstances as to the person who is entitled to the possession of the property in question. Without giving a finding in that behalf any order passed by the learned Magistrate under the provisions of S. 457, Cr.P.C. would be an illegal order.
7. In the instant case the Magistrate though adverted to the relevant provisions of S. 457, Cr.P.C., has opined that it is rather difficult for him to come to the conclusion as to who is entitled to the possession of the property as all the three claimants have produced documents in support of their claim petitions. Therefore, while adverting to this aspect of the matter, the Magistrate goes a step further and observes that as the property was seized from the possession of the accused, the accused is the person who is entitled to the possession and to make it safe for the other claimants he imposes certain conditions which have been enumerated supra. I am of the opinion that the finding with regard to the delivery of the property in favour of the accused solely on the ground that the same was seized from the possession of the accused without considering the other documents produced by the claimants in question, cannot be sustained. The learned Magistrate has to consider the documents produced by the other claimants and then only could come to the conclusion that a particular claimant is entitled to the possession of the property in question. It is by this time wellknown that the expression entitled to possession 'is sine qua non' for the delivery of the property under section 457, Cr.P.C. In the instant case the Magistrate has not given a finding in that behalf as it is made from his own order.
8. A perusal of para-8 of his order clearly indicates that he has not given a finding as to who is the person who is entitled to be in possession. In M/s Purshottam Das Banarsidas v. State : AIR1952All470 the Court while dealing with S. 523(1) of the old Code corresponding to S. 457 Cr.P.C. has observed thus :
The discretion conferred by the words 'such order as he thinks fit' is limited to the selection of one of the two alternatives, (1) delivery of the property to the person entitled to the possession thereof and (2) disposal of it. He has got the widest discretion in the matter of disposal; once he decides to dispose of it, he can dispose of it in any manner he likes. But if he decides to deliver it to a person, he must deliver it to the person entitled to its possession. He has got absolutely no discretion in the matter of finding out which person is entitled to its possession. The words, 'as he thinks fit' cannot go with the words 'respecting the delivery of such property to the person entitled to the possession thereof ......'
The Court has further observed thus :
'A Magistrate is not a civil court and has no power to decide disputes about title. There is nothing in Section 523 to authorise a Magistrate to decide which party is the rightful owner of the property. His enquiry is limited to finding which person is entitled to the possession. Once he ascertains the person from whose possession the property was seized he must hold him to be entitled to its possession unless his possession was unlawful ........'
Section 523 does not contemplate any enquiry by the Magistrate. Though he may have to find out which person is entitled to the possession .........' 'The person from whose possession the property was seized and who is not found to have committed any offence such as would render his possession unlawful, is the person entitled to its possession .......'
It is, therefore, clear that the Magistrate has not given a finding with regard to the person who is entitled to be in possession of the property in question, which he was expected to, under the circumstances, much more so, when three different claimants had approached him for possession of the property, The operative portion of the order also makes it clear that the Magistrate has passed an interim order in favour of the accused at the first instance and on his failure to comply with certain conditions in favour of the complainant and again on his failure to fulfill certain conditions in favour of the person who actually alleged to have sold it to the complainant. If that is so, the order passed by the learned Magistrate is in the nature of interim order which is not at all contemplated under the provisions of S. 457, Cr.P.C. In any view of the matter the impugned order cannot be sustained and the same is liable to be set aside.
9. In the result, for the reasons stated above, this petition is allowed and the impugned order dated 16-3-1981 is set aside and the matter is remitted to the trial Court with a direction to hear all the applicants and to pass an order in consonance with the provisions of S. 457, Cr.P.C. in the light of the observations made above. It is further directed that the Magistrate shall dispose of the petition as expeditiously, as possible.
10. Petition allowed.