SC: Interim Custody of Seized Vehicles Not Just Registration

• The Supreme Court of India ruled that vehicle registration certificates alone are insufficient for granting interim custody of seized vehicles.
• Courts must now consider factors like actual possession, loan payments, circumstances of use, funding evidence, and existing agreements.
• The power to grant interim custody under CrPC Sections 451/457 (and BNSS 497/503) is judicial discretion aimed at preventing property deterioration.
• This interim power does not adjudicate final title or ownership, nor does it express a final opinion on the merits of rival claims.
• The ruling stemmed from an appeal in Krishnan Narayana v M/s Earth Stein Private Limited, involving disputed vehicles and allegations of misappropriation and forgery.

The Supreme Court of India has issued a significant directive, clarifying that courts must look beyond mere registration certificates when deciding on interim custody of seized vehicles.

The Supreme Court of India has issued a significant directive, clarifying that courts must look beyond mere registration certificates when deciding on interim custody of seized vehicles. This ruling establishes that a vehicle's registration document alone is insufficient to determine who is best entitled to its temporary possession. Instead, judicial authorities are now mandated to consider a broader range of material facts, including evidence of actual possession, the history of loan installment payments, the specific circumstances surrounding the vehicle's use, and any admitted course of dealings or existing undertakings between the involved parties.

Handed down by a bench comprising Justices Sanjay Karol and Augustine George Masih, the decision underscores that the power to grant interim custody, as outlined in Sections 451 and 457 of the Code of Criminal Procedure (CrPC) — or the corresponding Sections 497 and 503 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) — is a matter of judicial discretion. This power is intended to prevent the waste, misuse, or deterioration of property while a trial is pending. Crucially, the Court also clarified that exercising this interim power does not constitute a final adjudication of title or ownership, nor should it be interpreted as a definitive opinion on the merits of competing claims, particularly in cases involving allegations of misappropriation or forgery.

This pivotal ruling arose from an appeal filed by Krishnan Narayana against a common judgment and order issued by the High Court of Andhra Pradesh at Amaravati on September 18, 2025. The High Court had previously dismissed Narayana's petition while granting M/s Earth Stein Private Limited interim custody of several vehicles: one Bolero City Pick-up, three excavators, and one Ashok Leyland Tipper. These vehicles were central to ongoing criminal cases between the parties.

Krishnan Narayana, who served as a director for M/s Pure Minerals, a company engaged in granite quarrying, also held an 80% shareholding and a directorship in the respondent company, M/s Earth Stein Private Limited. The disputed vehicles had been acquired in the name of M/s Pure Minerals between 2014 and 2022. Narayana alleged that on May 31, 2023, during a visit to S R Kumar, owner of M/s Parakrish Mineral Enterprises Pvt Ltd (a company that owed him money for granite supply), he was intimidated by Kumar, T Arivudainambi, and G Thirgunanam. He claimed they coerced him into signing blank papers, which were subsequently used to forge his resignation from M/s Earth Stein Private Limited on June 16, 2023. Further, he accused the respondents of criminal trespass into M/s Pure Minerals' granite factory on August 31, 2023, where they forcibly removed the vehicles, leading to an FIR being registered based on his complaint on September 17, 2023.

Conversely, M/s Earth Stein Private Limited alleged that Narayana had misappropriated Rs 1,73,11,894 from their company, using these funds to purchase the subject vehicles in the name of M/s Pure Minerals, with himself listed as the authorized owner. A counter FIR was lodged by the respondents, and a charge sheet was subsequently filed, with the matter still pending before the trial court. The police eventually seized the vehicles from M/s Earth Stein Private Limited's granite factory on February 7, 2025. After the trial court rejected both parties' pleas for vehicle release, the case escalated to the High Court, which ultimately granted interim custody to M/s Earth Stein Private Limited, setting the stage for the Supreme Court's intervention.

This Supreme Court decision fundamentally alters the evidentiary landscape for obtaining interim custody of seized vehicles in India. By moving beyond the simplistic reliance on registration certificates, the Court has introduced a more comprehensive and equitable framework for assessing entitlement to possession. This means that parties seeking interim custody must now present a more robust case, providing detailed evidence of their actual control, financial contributions towards the vehicle's acquisition or maintenance, and any contractual or transactional agreements that clarify their relationship to the property.

The clarification that interim custody orders do not determine final ownership is equally significant. It ensures that such temporary arrangements do not prejudice the ultimate outcome of criminal proceedings or civil disputes over title. This distinction is crucial for lawyers advising clients, as it emphasizes that arguments for interim release should focus on the immediate need to prevent property degradation and establish a prima facie right to possession, rather than attempting to pre-empt a full adjudication of ownership. The ruling thus reinforces the interim nature of these orders while demanding a higher standard of proof for their issuance, particularly under CrPC Sections 451/457 and BNSS Sections 497/503.

This ruling significantly alters the evidentiary requirements for obtaining interim custody of seized vehicles in India. Lawyers advising clients on such matters must now present comprehensive evidence beyond mere registration certificates, focusing on actual possession, funding, and transactional dealings to demonstrate entitlement under CrPC Sections 451/457 (or BNSS 497/503). It also clarifies that such interim orders do not determine final ownership, impacting how these applications are argued and decided.

Source: Original reporting via Bar & Bench