Orissa HC Quashes Magistrate's Order Cancelling JCB Release Without Notice, Bars Review Under Section 362 CrPC

The Orissa High Court set aside a Magistrate's order that cancelled an interim JCB release without hearing the petitioner, holding it violated natural justice and Section 362 CrPC's bar on review.

The Orissa High Court at Cuttack has quashed an order passed by the Sub-Divisional Judicial Magistrate, Kamakhyanagar, that cancelled the interim custody of a JCB excavator granted to the petitioner, Batakrushna Dehury, without issuing any notice or affording him a hearing. Dr. Justice Sanjeeb K Panigrahi, sitting singly, found the order of 2 January 2025 to be fatally infirm on three independent grounds: breach of the audi alteram partem rule, violation of the statutory bar under Section 362 of the Code of Criminal Procedure, 1973, and internal inconsistency amounting to arbitrariness. The court restored the earlier release order dated 21 August 2023 and directed the Magistrate to hear the petitioner's pending protest petition afresh, uninfluenced by any observations in the impugned order.

The Dispute Over the JCB Excavator

The facts trace back to November 2018. Opposite Party No. 2 was the original owner of a JS81 Excavator of JCB make, bearing Serial No. 1799898, manufactured in 2014, which he had purchased with financial assistance from Magma Fincorp Ltd. Facing financial difficulties, he approached Batakrushna Dehury and offered to sell the machine for Rs. 13 lakhs. Dehury paid the full consideration, and possession was delivered on 13 November 2018 after the dues of Magma Finance Company were cleared.

Since Dehury had no experience operating the machine, it was agreed that Opposite Party No. 2 would manage it and pay a monthly rent of Rs. 50,000 to Dehury. An agreement dated 21 January 2019 was executed in the name of Opposite Party No. 2's daughter-in-law, Ranjita Jena, formalising this arrangement. However, neither the agreed rent was paid nor was possession returned to Dehury.

Dehury lodged an FIR at Tumusinga Police Station against Opposite Party No. 2, his son Jitu Jena, and Ranjita Jena. The case was registered as Tumusinga P.S. Case No. 222 of 2022 under Sections 420, 406, 506, 294, and 34 of the Indian Penal Code, corresponding to G.R. Case No. 696 of 2022. During investigation, the JCB was seized by the police.

Opposite Party No. 2 applied under Section 457 CrPC for release of the JCB in his favour. The Magistrate rejected that application on 19 December 2022. A criminal revision filed by Opposite Party No. 2 before the Additional Sessions Judge, Kamakhyanagar, was also dismissed. Dehury then applied for release of the vehicle, and the Magistrate, by order dated 21 August 2023 in Criminal Misc. Case No. 79 of 2023, released the JCB in his favour subject to conditions. Dehury complied, and the machine was handed over to him on 22 August 2023.

Opposite Party No. 2 had separately filed ICC Case No. 11 of 2023 before the SDJM, Kamakhyanagar, alleging that a sale deed produced by Dehury was fabricated. The Magistrate forwarded the complaint for investigation under Section 156(3) CrPC, leading to registration of Tumusinga P.S. Case No. 124 of 2023 against Dehury under Sections 406, 419, 420, 467, 468, and 471 IPC, corresponding to G.R. Case No. 504 of 2023. Dehury obtained anticipatory bail from the High Court on 30 January 2024 in ABLAPL No. 10221 of 2023, subject to conditions including full cooperation with investigation and not transferring ownership of the machine without leave of the trial court.

The Investigating Officer subsequently issued a notice dated 19 December 2024 under Section 91 CrPC directing Dehury to produce the original sale deed. Dehury replied by registered letter dated 22 December 2024 that he had never executed any such document and that the signature on the document produced by Opposite Party No. 2 was forged. Without notice to Dehury, the Investigating Officer then moved the Magistrate in G.R. Case No. 696 of 2022 seeking cancellation of the zimanama and permission to seize the JCB and release it to Opposite Party No. 2.

The Two Orders of 2 January 2025

On 2 January 2025, the Magistrate passed two separate orders on the Investigating Officer's application. By the first order, he rejected the prayer to seize the vehicle from Dehury and hand it over to Opposite Party No. 2. By the second order — the one impugned in the High Court — he cancelled the earlier release order of 21 August 2023 and directed Dehury to produce the JCB before the Investigating Officer within ten days, failing which the Investigating Officer was permitted to take appropriate legal steps to recover possession.

No notice was issued to Dehury before the second order was passed. The High Court noted that after Dehury produced the vehicle pursuant to the impugned order, the Investigating Officer handed it over to Opposite Party No. 2 — precisely the relief the Magistrate had refused by the first order on the same day.

The Legal Issues Before the High Court

Dehury challenged the order of 2 January 2025 by filing CRLMC No. 163 of 2025 under Section 482 CrPC / Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, invoking the inherent jurisdiction of the High Court. Three distinct legal infirmities were pressed:

First, the cancellation was made without notice and without any finding that Dehury had violated any of the conditions imposed at the time of release. The conditions required him not to use the vehicle in any other crime, to produce it before the court and the Investigating Officer as directed, to keep it insured, not to change its colour or body, not to sell or mortgage it without prior permission, and not to dispute its identity during trial. None of these conditions was alleged to have been breached.

Second, the Magistrate had re-examined the entire factual matrix concerning ownership — the alleged sale deed, tax invoice, No Objection Certificate, and repayment records — and concluded that Dehury's claim was improbable. This amounted to a review of a final order, which Section 362 CrPC expressly prohibits. Section 362 bars any court, after signing its final order disposing of a case, from altering or reviewing it except to correct a clerical or arithmetical error.

Third, the two orders of 2 January 2025 were internally contradictory: the Magistrate refused to hand the vehicle to Opposite Party No. 2 by one order, yet effectively achieved the same result by the other.

Opposite Party No. 2 countered that the sale deed dated 30 November 2018, which Dehury had produced before the Magistrate to obtain the release order, was a fabricated document with no witnesses and a mismatched signature. The Investigating Officer had submitted a charge sheet against Dehury on 30 January 2025 for offences under Sections 406, 420, 467, 468, and 471 IPC. Opposite Party No. 2 argued that a release order obtained on the basis of forged documents could not be allowed to stand, and that the Petitioner had suppressed material facts before the court.

How the High Court Reasoned

Dr. Justice Panigrahi identified the core question as whether the Magistrate was justified in cancelling the interim release without notice, without a finding of breach of conditions, and on grounds that amounted to a review of a final order.

On natural justice, the court held that the order of 21 August 2023 was a final judicial order disposing of Dehury's application under Section 457 CrPC. Once Dehury had complied with its terms and taken possession, any subsequent cancellation directly affected his rights. The Magistrate was required to issue notice and afford an opportunity of hearing before passing any adverse order. The court relied on the Supreme Court's decision in M/s Daffodills Pharmaceuticals Ltd. & Anr. v. State of U.P. & Anr. (2019 INSC 1366), where it was held that “no one can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing.” It also relied on Gurdev Singh and Ors. v. State of Bihar and Ors. (MANU/SC/0951/2000), where the Supreme Court set aside a cancellation order passed without notice to the affected party.

On Section 362 CrPC, the court found that the Magistrate had not purported to cancel the release on the ground of violation of any condition. Instead, he had re-appreciated the factual matrix on ownership and concluded that Dehury's claim was improbable. This was a review of a final order on the merits, expressly prohibited by the provision. The court observed that the mere labelling of the application as one for “cancellation of zimanama” could not circumvent the statutory bar. The power to cancel an interim release order exists only when conditions of release are breached or when the order was obtained by fraud practised upon the court. In the present case, no condition was alleged to have been violated, and the fraud allegation remained a contentious factual dispute involving examination of signatures and documents yet to be adjudicated at trial.

On the internal inconsistency, the court found that the Magistrate had rejected the prayer to seize the vehicle and hand it to Opposite Party No. 2 by one order, yet directed Dehury to produce the vehicle before the Investigating Officer by the other order on the same day. The Investigating Officer then handed the vehicle to Opposite Party No. 2, achieving the very result that had been refused. The court held this reflected non-application of mind and rendered the impugned order arbitrary and capricious.

The court also addressed the Investigating Officer's submission of a final report treating the FIR lodged by Opposite Party No. 2 as false and the filing of a charge sheet against Dehury. It held that a final report is merely the opinion of the police and not a conclusive adjudication of rights. The existence of a final report does not empower a criminal court to unilaterally cancel a prior judicial order without following due process. The proper course, if the Investigating Officer believed the release order was obtained by producing forged documents, was to bring the material to the court's notice and seek appropriate directions after giving notice to Dehury. Instead, the Magistrate had pre-judged the issue by relying solely on the Investigating Officer's assertions.

Order

The High Court allowed CRLMC No. 163 of 2025. The impugned order dated 2 January 2025 passed by the Sub-Divisional Judicial Magistrate, Kamakhyanagar, in G.R. Case No. 696 of 2022 was quashed and set aside. The order dated 21 August 2023 releasing the JCB excavator in favour of Dehury was restored.

The Sub-Divisional Judicial Magistrate, Kamakhyanagar, was directed to hear and dispose of the pending protest petition filed by Dehury in accordance with law, uninfluenced by any observations made in the impugned order, and after giving an opportunity of hearing to all parties.

Dehury was directed to continue to abide by all conditions imposed in the original release order, including producing the vehicle as and when directed by the trial court, pending final adjudication. Any interim order passed earlier in the CRLMC was vacated.