Registration Certificate Alone Cannot Determine Interim Custody of Seized Vehicles, Supreme Court Holds

A bench of Justices Sanjay Karol and Augustine George Masih held that possession, loan repayment history, and an undertaking together outweigh registration in interim custody disputes.

The Supreme Court on 27 July 2026 dismissed a criminal appeal by Krishnan Narayana, director of M/s Pure Minerals, who had sought interim custody of five seized vehicles — one Bolero City Pick-up, three Excavators, and one Ashok Leyland Tipper — on the basis of registration certificates in his company's name. A division bench of Justices Sanjay Karol and Augustine George Masih confirmed the Andhra Pradesh High Court's order granting interim custody to M/s Earth Stein Private Limited, the respondent company. The Court held that under Section 451 and Section 457 of the Code of Criminal Procedure, a registration certificate is a relevant but not conclusive factor; what governs the grant of interim custody is a cumulative assessment of possession, the circumstances of seizure, and the material on record. The decision draws a clear line between interim custody proceedings and adjudication of ownership.

The Dispute Between the Parties and How It Reached the Court

Krishnan Narayana was at once the director of M/s Pure Minerals and a director of M/s Earth Stein Private Limited, in which he held an 80% shareholding. The five subject vehicles were purchased in the name of M/s Pure Minerals between 2014 and 2022.

The appellant's case is that on 31 May 2023 he visited the house of S.R. Kumar, owner of M/s Parakrish Mineral Enterprises Pvt. Ltd., to recover amounts due towards granite supply. He alleged that S.R. Kumar, T. Arivudainambi, and G. Thirgunanam intimidated him into signing blank papers, which were later used to forge his resignation from M/s Earth Stein Private Limited dated 16 June 2023. He further alleged that on 31 August 2023 the respondents committed criminal trespass into the granite factory of M/s Pure Minerals and forcefully took away the vehicles. FIR Crime No. 353/2023 was registered on 17 September 2023 on his complaint.

The respondent company told a materially different story. It alleged that the appellant had misappropriated ₹1,73,11,894 from M/s Earth Stein Private Limited and used those funds to purchase the subject vehicles in the name of M/s Pure Minerals with himself as authorised owner. A counter-FIR No. 354/2023 was registered under Section 406 IPC, and a chargesheet was filed before the trial court.

FIR No. 353/2023 was initially referred as a “mistake of fact” and a closure report was filed on 14 August 2024. However, after re-investigation, a positive chargesheet was filed on 9 February 2025. Police seized the vehicles from the respondent company's operational site on 7 February 2025, during the course of this re-investigation.

A separate FIR, Crime No. 102/2024, concerning the intimidation and forgery allegations, was also closed as a mistake of fact. The protest petition against that closure was dismissed, with that dismissal upheld by the High Court; an SLP against it remained pending before a coordinate bench of the Supreme Court.

Following the seizure, the appellant applied for interim custody before the Trial Court on 11 February 2025. That application was dismissed on 26 March 2025 on the ground that a Writ Petition filed by the respondents regarding the legality of the re-investigation and the seizure was pending before the High Court. The respondent company separately filed Criminal Misc. Petition No. 384/2025 for return of the vehicles; that too was dismissed by the Trial Court on 16 May 2025.

Both parties then moved the Andhra Pradesh High Court at Amaravati. By a common order dated 18 September 2025, the High Court dismissed the appellant's Criminal Petition No. 3712/2025 and allowed the respondent company's Criminal Petition No. 7896/2025, granting interim custody of the vehicles to M/s Earth Stein Private Limited subject to an undertaking affidavit. The High Court found the earlier seizure to have been made without following due process and held that the order refusing custody to the respondent company was erroneous.

Aggrieved, Krishnan Narayana filed the present criminal appeals arising from SLP (Criminal) Nos. 19205-06 of 2025.

The Short Question: Section 451 and Section 457 CrPC

The Supreme Court framed the issue narrowly: as between the parties, who is best entitled to interim custody of the subject vehicles under Sections 451 and 457 of the CrPC?

The Court set out both provisions in full. Section 451 empowers a criminal court, when property is produced before it during inquiry or trial, to make such order as it thinks fit for proper custody pending conclusion of the proceedings. Section 457 confers similar power on a Magistrate when seized property is reported to him but not yet produced before a criminal court.

The Court read the statutory language to vest a judicial discretion, not a ministerial duty. The words “may make such order as it thinks fit” do not mandate any particular outcome. The Court relied on its earlier ruling in N. Madhavan v. State of Kerala, (1979) 4 SCC 1, which held that the choice of mode or manner of disposal “is not to be made arbitrarily, but judicially in accordance with sound principles founded on reason and justice, keeping in view the class and nature of the property and the material before it.”

The Court also revisited Sunder Bhai Ambalal Desai v. State of Gujarat, 2002 (10) SCC 283, the very case cited by the appellant. The appellant had argued that Sunder Bhai Ambalal requires courts under Section 451 CrPC to release seized vehicles in favour of the owner as per the registration certificate. The Court rejected this reading. It held that Sunder Bhai Ambalal does not lay down an inflexible rule that custody must follow the registration certificate regardless of all other attending circumstances; instead, the judgment requires expeditious and judicious action having regard to the object of preventing misuse and deterioration of property.

Why the Registration Certificate Was Insufficient

Having clarified the legal framework, the Court proceeded to assess the facts cumulatively against both parties. The appellant's case rested almost entirely on the registration certificates standing in the name of M/s Pure Minerals. The Court found this insufficient for four reasons.

First, criminal proceedings alleging that the appellant had misappropriated ₹1,73,11,894 from the respondent company to purchase the very vehicles registered in M/s Pure Minerals' name remained pending. That live allegation considerably weakened the evidentiary value of the registration certificates at the interim stage.

Second, the vehicles were seized from the respondent company's operational site, where they had remained in continued use under a written undertaking executed by the appellant himself. The appellant did not dispute the existence of the undertaking; he alleged it was forged. The Court noted, however, that he offered no explanation for having encashed the cheque issued to him in connection with the transfer of his shareholding, a fact that sat uneasily with his claim of coercion.

Third, the hypothecation instalments payable to Shriram Finance Ltd. on the loan secured over the vehicles had admittedly been discharged from the account of M/s Earth Stein Private Limited, not by the appellant personally. The Court found this significant: if the vehicles were the personal property of the appellant, there was no explanation for why the respondent company bore the financial burden of servicing the loan.

Fourth, whether the resignation, the board resolution, and the share transfer were validly executed or were fabricated was a matter requiring evidence and trial. The Court expressly declined to resolve it at the interim stage, noting that independent proceedings on those questions were already pending.

The Court also set aside the question of whether the re-investigation and consequent seizure were lawful. It held that this was a matter for appropriate proceedings and could not by itself be determinative of the question of interim custody.

The Scope of Section 451 CrPC Proceedings

The Court was careful to delineate what Section 451 proceedings are and are not. The object is limited: to ensure that property seized in criminal proceedings does not suffer waste, misuse, or deterioration, and that it remains available for production before the Court when required. The exercise demands 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 the Court.

Interim custody proceedings do not adjudicate title. Ownership, the Court said, falls within the exclusive domain of a competent civil forum. This distinction insulates interim custody orders from being treated as precedents on the merits of the underlying civil or criminal dispute.

The Court directed that all observations in the judgment are confined to the question of interim custody and shall not be read as an expression of opinion on ownership, misappropriation, or the validity of the resignation and share transfer. Those questions remain open for determination in the pending appropriate proceedings.

Outcome

The Supreme Court dismissed both criminal appeals as devoid of merit. Interim custody of the one Bolero City Pick-up, three Excavators, and one Ashok Leyland Tipper remains with M/s Earth Stein Private Limited subject to the undertaking affidavit accepted by the High Court. Pending applications, if any, stand disposed of.