Court sets aside Magistrate's order denying interim custody, mandates safeguards for release of valuables
In a significant ruling, the Karnataka High Court has overturned an order by the XLV Additional Chief Judicial Magistrate, Bengaluru, and granted interim custody of seized assets to the accused, Sri Bodhuluru Lakshmipathi, in the high-profile Reward360 fraud case. The decision was delivered by Justice Mohammad Nawaz, emphasizing the principles laid down by the Supreme Court regarding the release of seized properties during criminal proceedings.
The case, which has drawn considerable attention, involves allegations of fraudulent manipulation of reward vouchers by the accused, leading to the acquisition of valuables including gold, silver, cash, and vehicles. The complaint was lodged by M/s Reward360 Global Services Pvt. Ltd., claiming significant financial losses due to the fraudulent activities purportedly conducted by Lakshmipathi and another accused.
During the investigation, several articles were seized, and both the de-facto complainant and the accused sought interim custody under Sections 451 and 457 of the Code of Criminal Procedure. However, their applications were initially rejected by the Magistrate, prompting the accused to file a petition in the High Court.
Justice Nawaz highlighted the Supreme Court's stance that valuable articles should not remain idle in police custody for extended periods. He noted that the Magistrate's refusal to grant interim custody was inconsistent, particularly when other movable properties had been released to the accused. The judgment stressed that the mere existence of rival claims does not justify indefinite retention of seized assets by the police.
The High Court directed the release of valuables to the accused with stringent conditions to ensure their safekeeping and availability during the trial. These include obtaining a valuation report, executing an indemnity bond, and maintaining a detailed inventory with photographs and videographs. The accused is prohibited from alienating or encumbering the assets without court permission and must produce them when required for trial proceedings.
The ruling marks a pivotal development in the case, underscoring the judiciary's commitment to balancing the rights of individuals and the interests of justice. It also reiterates the importance of adhering to established legal principles regarding interim custody of seized properties, ensuring that assets are not unnecessarily withheld by law enforcement agencies.
Bottom Line:
Interim custody of seized articles during criminal proceedings - Prima facie satisfaction required; detailed inquiry into ownership not necessary. Seized articles should not remain idle in police custody for an unduly long period.
Statutory provision(s): Sections 451, 457, 482 of the Code of Criminal Procedure, Sections 419, 420 of the Indian Penal Code, Sections 43, 66, 66(C), 66(D) of the Information Technology Act, 2000, Section 173(8) Cr.P.C., Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023
