Kudlu Service Co-operative Bank Limited v. State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ASHOK MENON** **FRIDAY, THE 16[TH] DAY OF JULY 2021 / 25TH ASHADHA, 1943 CRL.MC NO. 4665 OF 2020** **AGAINST THE ORDER/JUDGMENT IN SC 594/2017 OF ADDITIONAL DISTRICT COURT & SESSIONS COURT - I, KASARAGOD, KASARGOD** ## **PETITIONER/S:** KUDLU SERVICE CO-OPERATIVE BANK LIMITED ERIYAL, P.O.KUDULU, KASARAGOD DISTRICT-671124, REPRESENTED BY ITS SECRETARY IN CHARGE SACHIDANANDAN R. BY ADV C.G.PREETHA ## **RESPONDENT/S:** STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA ERNAKULAM-682031. ## **OTHER PRESENT:** SRI.C.S.HRITHWIK-SRPP THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 16.07.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: _CRL.MC NO. 4665 OF 2020_ 2 ## **O R D E R** Kudlu Service Co-operative Bank Ltd., represented by its Secretary, the petitioner herein, is before this Court, seeking the indulgence of this Court under Section 482 of the Cr.P.C. to pass an order lifting certain conditions imposed by the Additional Sessions Court-I, Kasaragod imposing certain conditions while releasing stolen property involved in the Crime to the petitioner. 2. In a Bank heist that took place in the year 2015, gold ornaments belonging to customers of the Bank, deposited in the locker and currency notes, worth a total value of 5.25 crores got robbed allegedly by the accused,₹ in consequence of which the Crime 649/2015 was registered at Kasaragod Police Station. During the investigation, 17.684 Kgs. of gold ornaments and ₹1,250,021/were recovered and produced before the Court as stolen property. The petitioner filed Crl.M.P.No.4551/2017 under Section 451 of the Cr.P.C. for interim custody of the stolen articles _CRL.MC NO. 4665 OF 2020_ 3 produced before the Court. None of the accused raised any claim over the ornaments or the cash, and the Public Prosecutor also agreed that the property could be released to the petitioner on conditions to produce it as and when required. Accordingly, the learned Sessions Judge, on 03- 05-2018 vide Annexure A4, ordered the release of the property on the following conditions: - "1. _The petitioner shall execute a bond for ₹1,99,99,290/-(Rupees one crore ninety nine lakhs ninety nine thousand two hundred and ninety only) with 2 solvent sureties each for the like. Some undertaking that the gold ornaments and cash would be produced as and when required._ _2. The petitioner shall deposit 2,00,000/-(Rupees₹ two lakhs only) as security before this Court. The security will stand fortified to the Government when the conditions, if any, mention in this order violated._ _3. The petitioner shall not sell or exchange or transfer or cause to be altered the shape of the gold ornaments, without the prior permission of this Court._ _4. The petitioner shall take photographs of gold ornaments of each item in the presence of the Senior Superintendent of this Court, at the cost of the petitioner herein and photographs, shall be attested by the Senior Superintendent, property clerk concerned, and the petitioner on its backside and thereafter, the office of the Court is directed to prepare a punchanama before_ _CRL.MC NO. 4665 OF 2020_ 4 _handing over the gold ornaments to the petitioner._ _5. The petitioner shall produce the gold ornaments and cash before this Court as and when directed by this Court._ _6. The petitioner shall take necessary steps to get the gold ornaments verified and certified by an appraiser as and when the gold ornaments are directed to be produced before this Court_ ." The case is presently pending as S.C.No.594/2017 for trial. This Court had, at the instance of the petitioner, in O.P. (Crl) No.312/2019, directed the trial Court to dispose of the case expeditiously within six months vide Judgment dated 24/07/2019 at Annexure A8. The trial has already commenced and the few witnesses examined. 3. It is submitted that the Secretary of the Bank was also examined and the gold ornaments identified and marked as material objects through him. Because of the pandemic situation, the trial is getting protracted. The petitioner-Bank is running at a loss. The gold ornaments belong to the customers, who are also anxious to get them back, so that they could be utilised when in need. The petitioner, therefore, approached the trial Court by filing _CRL.MC NO. 4665 OF 2020_ 5 Crl.M.P.No.1173/2020 requesting that the condition Nos.1, 3, 5 and 6 imposed by the Court vide Annexure A4 may be lifted. After considering the submissions made by the petitioner and the Public Prosecutor, the learned Sessions Judge held that when a final order has already been passed under Section 451 of the Cr.P.C., any alteration would amount to a review of an earlier Order, for which the Court has no power. The petition was dismissed vide Annexure A1 on 24-08-2020. Aggrieved by the same, the petitioner has approached this Court seeking interference for lifting condition Nos.1, 3, 5 and 6 imposed by the trial Court in Annexure A4. It is submitted that condition No.1 directing the bank to execute a bond for ₹ 1,99,99,290/-is not practical and is impossible as the Bank has assets worth only 28,23,621/-as is evident from Annexure A5 Certificate₹ issued by the Bank's Chartered Accountant on 10-08-2019. Likewise, condition No.3 restraints the petitioner from selling, exchanging or transferring or causing any alteration to the shape of the gold ornaments without prior _CRL.MC NO. 4665 OF 2020_ 6 permission of the Court. This is also impracticable because the gold belongs to the customers. Interim custody of the ornaments needs to be made to them, and it is not possible to ask them to keep the ornaments in the same shape until the trial gets over. Condition Nos.5 and 6 are not working as it requires the petitioner to produce the ornaments before the Court at intervals during the examination of the witnesses and in case, it is handed over to the customers, it would be difficult for the petitioner to comply with the said direction. It is also difficult to get the gold ornaments verified by an appraiser each time when it is produced before the Court. The Court is empowered to order dispose of the property after recording such evidence as it thinks necessary. More than five years have elapsed since the theft took place, and the currency as also the gold ornaments continued to remain in the possession of the Court with the Bank running at loss. It is also submitted that about 65% of the business done by the Bank is in the form of gold loans. All the loans _CRL.MC NO. 4665 OF 2020_ 7 advanced by the Bank on pledging of gold ornaments have practically become bad loans and irrecoverable. No action could be initiated against the customers, who had defaulted payment, because the gold ornaments collected by them, cannot be proceeded against, as it is not in the possession of the Bank. Considering the plight of the Bank, it is requested that conditions Nos.1, 3, 5 and 6 may be lifted so that, the petitioner Bank could deal with the gold ornaments and cash for its business. 4. Heard the learned counsel Smt. C.G.Preetha appearing for the petitioner and the Senior Public Prosecutor, Sri C.S.Hrithwik appearing for the State. Records perused. ## 5. In _**Sunderbhai Ambalal Desai v. State of Gujarat**_ ## _**Parallel, 2003 KHC 535: AIR 2003 SC 638**_ , the Apex Court while considering the powers of the Courts under Section 451 of the Cr.P.C., held thus: _“7. In our view, the powers under S.451, Cr.P.C. should be exercised expeditiously and judiciously. It would serve various purposes,_ _CRL.MC NO. 4665 OF 2020_ 8 _namely: -_ _1. Owner of the article would not suffer because of its remaining unused or by its misappropriation;_ _2. Court or the police would not be required to keep the article in safe custody;_ _3. If the proper panchnama before handing over possession of article is prepared, that can be used in evidence instead of its production before the Court during the trial. If necessary, evidence could also be recorded describing the nature of the property in detail; and_ _4. This jurisdiction of the Court to record evidence should be exercised promptly so that there may not be further chance of tampering with the articles.”_ ## 6. In another decision, _**Smt.Basavva Kom Dyamangouda**_ ## _**Patil v. State of Mysore and Another, (1977) 4 SCC 358**_ , the Apex Court considered a case where the seized articles were ornaments kept in a trunk in the police station was found missing and were not available to be returned to the complainant and the question was concerning payment of those articles. In that context, the Court observed : _“4. The object and scheme of the various provisions of the Code appear to be that where the property which has been the subject matter of an offence is seized by the police,_ _CRL.MC NO. 4665 OF 2020_ 9 _it ought not to be retained in the custody of the Court or of the police for any time longer than what is absolutely necessary. As the seizure of the property by the police amounts to a clear entrustment of the property to a Government servant, the idea is that the property should be restored to the original owner after the necessity to retain it ceases. It is manifest that there may be two stages when the property may be returned to the owner. In the first place, it may be returned during any inquiry or trial. This may particularly be necessary where the property concerned is subject to speedy or natural decay. It may be other compelling reasons also which may justify the disposal of the property to the owner or otherwise in the interest of justice. The High Court and the Sessions Judge proceeded on the footing that one of the essential requirements of the Code is that the articles concerned must be produced before the Court or should be in its custody. The object of the Code seems to be that any property which is in the control of the Court either directly or indirectly should be disposed of by the Court and a just and proper order should be passed by the Court regarding its disposal. In a criminal case, the police always acts under the direct control of the Court and has to take orders from it at every stage of an inquiry or trial. In this broad sense, therefore, the Court exercises an overall control on the actions of the Police Officers in every case where it has taken cognizance.”_ _CRL.MC NO. 4665 OF 2020_ 10 Taking note of such situations, the Apex Court had in _**Sunderbhai Ambalal Desai**_ ( _Supra_ ), further held thus: _“10. To avoid such a situation, in our view, powers under S.451, Cr.P.C. should be exercised promptly and at the earliest._ ## _Valuable Articles and Currency Notes_ _11. With regard to valuable articles, such as golden or silver ornaments or articles studded with precious stones, it is submitted that it is of no use to keep such articles in police custody for years till the trial is over. In our view, this submission requires to be accepted. In such cases, Magistrate should pass appropriate orders as contemplated under S.451, Cr.P.C. at the earliest._ _12. For this purpose, if material on record indicates that such articles belong to the complainant at whose house theft, robbery or dacoity has taken place, then seized articles be handed over to the complainant after: -_ _(1) preparing detailed proper panchnama of such articles;_ _(2) taking photographs of such articles and a bond that such articles would be produced if required at the time of trial; and_ _(3) after taking proper security._ _13. For this purpose, the Court may follow the procedure of recording such evidence, as it thinks necessary, as provided_ _CRL.MC NO. 4665 OF 2020_ 11 _under S.451, Cr.P.C. The bond and security should be taken so as to prevent the evidence being lost, altered or destroyed. The Court should see that photographs of such articles are attested or countersigned by the complainant, accused as well as by the person to whom the custody is handed over. Still, however, it would be the function of the Court under S.451, Cr.P.C. to impose any other appropriate condition._ _14. In case, where such articles are not handed over either to the complainant or to the person from whom such articles are seized or to its claimants, then the Court may direct that such articles be kept in Bank lockers. Similarly, if articles are required to be kept in police custody, it would be open to the S.H.O. after preparing proper panchnama to keep such articles in a Bank locker. In any case, such articles should be produced before the Magistrate within a week of their seizure. If required, the Court may direct that such articles be handed over back to the Investigating Officer for further investigation and identification. However, in no set of circumstances, the Investigating Officer should keep such articles in custody for longer period for the purpose of investigation and identification. For currency notes, similar procedure can be followed."_ 7. A Division Bench of this Court in _**Suresh Serve V.**_ _**v. State of Kerala 2020(3) KHC 41**_ on considering a similar _CRL.MC NO. 4665 OF 2020_ 12 situation while dealing with currency notes and gold ornaments produced before the Courts in answer to a reference, held thus: _“22. We are cognizant of the fact that it may be humanly impossible to visualise all probable situations under which the power vested in a Criminal Court under S.451, Cr.P.C. could be sought to be invoked. For the same reason, we think that there cannot be any enumeration of straight-jacket formulae suiting all the situations. We, therefore, respectfully following the guidelines in Sunderbhai Ambalal Desai's case frame additional points in respect of disposal of money and jewellery by invoking S.451 Cr.P.C. We explicitly clarify that the additional points shown below are intended to supplement the guidelines in Sunderbhai Ambalal Desai's case and not to supplant them._ _(i) Normally, currency notes can be returned to a claimant, if, after taking such evidence as the Court deems fit in the facts and circumstances in each case, he could establish a prima facie right to get the money released. The Court shall, in that event, take adequate measures to prevent the evidence being lost, altered or destroyed._ _(ii) If, in a given case, currency note/notes happen to be a material piece of evidence, for eg., a blood-stained currency note involved in a murder case, its release under S.451 Cr.P.C. may result in destruction of evidence. In such cases, Courts should be_ _CRL.MC NO. 4665 OF 2020_ 13 _cautious to see whether return of the currency note/notes would prejudicially affect trial of the case and it may decline the request if it is so._ _(iii) In the case of jewellery, apart from the preparation of a proper panchanama of the articles, taking photographs, etc., mandated in Sunderbhai Ambalal Desai's case, following aspects also may be considered depending on the facts in each case:_ _(a) If, in a case, the allegation is that one or two gold ornaments have been stolen or snatched away from the de facto complainant, a Criminal Court invoking S.451 Cr.P.C. after taking necessary evidence and following the directions in Sunderbhai Ambalal Desai's case, may release the article under S.451 Cr.P.C. with the safeguards mentioned in the above decision and also with a direction to produce the same in the same condition as and when directed, especially when there is a rival claimant for the ornaments. If there is no rival claimant and no dispute is raised by the accused regarding the nature, shape, weight, etc. of the ornaments in question, in appropriate cases, the Court may even return the same without a condition to produce them in the same condition on a later date._ _(b) In a case involving theft of huge quantity of gold ornaments from a jewellery store or from a jewellery manufacturing unit, the Court should take extra precautions to see whether the claimant has established, by cogent evidence, a strong prima facie case to show his entitlement for staking the claim. In such cases, there ought to be records to support his claim. If there are sufficient_ _CRL.MC NO. 4665 OF 2020_ 14 _documentary evidence showing his unquestionable entitlement to the articles, especially in a case where there is no rival claimant for the jewellery, we find no reason for imposing a condition that the entire jewellery shall be produced in the same condition, as and when directed. If it is established by evidence that the ornaments claimed by him are stock in trade in the jewellery store, no earthly purpose will be served by returning them to the claimant by imposing such restrictions. Hence, such a condition need not be imposed in all cases, disregarding the factual situation in each case. We answer the reference accordingly.”_ 8. Coming to the facts in this case, it is to be understood that the gold ornaments and cash seized by the Police following a Bank robbery, does not belong to the Bank, but to its customers. The Bank is answerable to its customers and they cannot be asked to wait endlessly for the trial to get over before claiming possession of the ornaments and money belonging to them. As already stated, the Bank is running at a loss, and it also does not have sufficient assets to even furnish security as directed by the Court. Because of the harsh conditions imposed by the Court, the petitioner-Bank has not been in a position to _CRL.MC NO. 4665 OF 2020_ 15 take back the ornaments or the cash. The customers would naturally pester the Bank for the return of their ornaments. Under such circumstances, keeping in view the above dictum of the Apex Court and the Division Bench of this Court, I find that the condition Nos.1, 3, 5 and 6 in Annexure A4 order are not necessary. The ornaments have already been identified by the secretary of the Bank. The accused have not raised any claim over the ornaments or the cash seized by the Police and produced before the Court. It was the Bank, which was in the custody of the stolen articles at the time of theft. Hence, they are rightfully entitled to remain in possession of those articles. Photographs of the ornaments were ordered to be taken. In case any further witnesses are to be examined, the photographs could be shown to them for identity. Hence, the Cri.M.C. is to be allowed. Resultantly, the Cri.M.C. is allowed and condition Nos.1, 3, 5 and 6 in Annexure A4 Order is hereby lifted. The property shall be released to the petitioner-Bank on _CRL.MC NO. 4665 OF 2020_ 16 execution of a bond based on the rest of the conditions. **Sd/-** **ASHOK MENON JUDGE** _dkr_ _CRL.MC NO. 4665 OF 2020_ 17 ## **APPENDIX OF CRL.MC 4665/2020** PETITIONER ANNEXURE |ANNEXURE A1|CERTIFIED COPY OF THE ORDER IN CRL.M.P.NO.1173| |---|---| ||OF 2020 IN S.C.NO.594 OF 2017 OF THE| ||ADDITIONAL SESSIONS JUDGE-I, KASARAGOD DATED| ||24.8.2020.| |ANNEXURE A2|THE TRUE COPY OF THE JUDGMENT IN O.P.| ||(CRL.)NO.77 OF 2017 PASSED BY THIS HON'BLE| ||COURT DATED 4.4.2017.| |ANNEXURE A3|THE TRUE COPY OF THE JUDGMENT IN O.P.| ||(CRL.)NO.152 OF 2018 PASSED BY THIS HON'BLE| ||COURT DATED 28.3.2018.| |ANNEXURE A4|CERTIFIED COPY OF THE ORDER IN CRL.M.P.NO.4551| ||OF 2017 IN CRIME NO.649 OF 2015 OF KASARAGOD| ||POLICE STATION PASSED BY THE HON'BLE| ||ADDITIONAL SESSION JUDGE-I, KASARAGOD DATED| ||3.5.2018.| |ANNEXURE A5|THE TRUE COPY OF THE CERTIFICATE ISSUED BY THE| ||CHARTERED ACCOUNTANT DATED 10.8.2019.| |ANNEXURE A6|THE TRUE COPY OF THE JUDGMENT IN O.P.| ||(CRL.)NO.292 OF 2018 PASSED BY THIS HON'BLE| ||COURT DATED 26.6.2018.| |ANNEXURE A7|THE TRUE COPY OF THE ORDER IN CRL.M.C.NO.1077| ||OF 2019 PASSED BY THIS HON'BLE COURT DATED| ||7.2.2019.| |ANNEXURE A8|THE TRUE COPY OF THE JUDGMENT IN O.P.| ||(CRL.)NO.312 OF 2019 PASSED BY THIS HON'BLE| ||COURT DATED 24.7.2019.|