In a significant ruling that clarifies the law governing interim release of seized vehicles, the Supreme Court of India has held that a registration certificate (RC) is not, by itself, conclusive proof of entitlement to interim custody under Sections 451 and 457 of the Code of Criminal Procedure, 1973 (CrPC). Delivering judgment in Krishnan Narayana v. State of Andhra Pradesh & Others, a Bench comprising Justice Sanjay Karol and Justice Augustine George Masih observed that while registration remains an important evidentiary circumstance, it is only one among several factors that a criminal court must evaluate while deciding who is “best entitled” to interim possession of seized property. Upholding the Andhra Pradesh High Court’s order granting interim custody of commercial vehicles to the respondent company rather than the registered owner, the Court reiterated that proceedings under Sections 451 and 457 CrPC are intended to preserve property during investigation or trial and are not proceedings for adjudicating title or ownership. The judgment provides important guidance to trial courts dealing with competing claims over seized property and reinforces that criminal procedure must prioritise practical justice over formal documentation.
The litigation arose out of a commercial dispute between two closely connected business entities engaged in the granite mining sector. The appellant, Krishnan Narayana, was a director of M/s Pure Minerals and had earlier held a substantial shareholding in M/s Earth Stein Private Limited, the respondent company. Between 2014 and 2022, several heavy commercial vehicles including excavators, a Bolero City Pick-up and an Ashok Leyland tipper—were purchased in the name of the appellant’s firm. Relations between the parties subsequently deteriorated, giving rise to allegations of financial impropriety and misappropriation. According to the appellant, the respondent company unlawfully entered his factory premises and forcibly removed the vehicles. The respondent company, however, lodged a counter-complaint alleging that the appellant had diverted more than ₹1.73 crore belonging to the company and utilised those funds to purchase the vehicles in the name of his own concern. During the course of investigation, the vehicles were seized by the police, leading both sides to seek interim custody before the criminal court.
When the competing applications reached the High Court, interim custody was ultimately granted to the respondent company. The High Court took note of several circumstances beyond the registration certificates, including the fact that the vehicles had been seized from the respondent company’s mining site where they were actively being used, that loan instalments for the vehicles had allegedly been paid from the respondent company’s accounts, and that an undertaking purportedly executed by the appellant permitted the respondent company to continue operating the vehicles until settlement of accounts. Challenging this decision, the appellant approached the Supreme Court primarily contending that since the vehicles stood registered in the name of his company, interim custody necessarily ought to follow the registration certificate. Relying upon the celebrated decision in Sunderbhai Ambalal Desai v. State of Gujarat, it was argued that criminal courts should ordinarily release seized vehicles to the registered owner pending conclusion of the proceedings.
The Supreme Court rejected this contention and clarified an important misconception surrounding the law relating to seized property. The Bench observed that Sunderbhai Ambalal Desai was never intended to establish an inflexible legal rule requiring custody to follow the registration certificate in every case. Rather, that judgment emphasised the need for courts to avoid unnecessary deterioration of seized property by passing timely and pragmatic orders for interim release. According to the present Bench, the earlier decision encouraged expeditious exercise of judicial discretion but did not reduce that discretion into a mechanical formula based solely upon documentary ownership. Courts must instead consider the entire factual matrix before determining who is presently best entitled to possess the property pending trial.
Justice Augustine George Masih, writing for the Bench, explained that the language employed in Sections 451 and 457 CrPC deliberately confers broad discretion upon criminal courts. These provisions authorise the court to deliver interim custody to the person “best entitled” to possession without finally determining legal ownership. The distinction is significant. Proceedings under these provisions are temporary, protective and procedural in nature. Their object is to ensure that valuable property does not remain idle in police custody where it may deteriorate, lose commercial value or become unusable. Questions relating to title, beneficial ownership or contractual rights ordinarily remain matters for adjudication before competent civil courts or during the final trial. Consequently, the criminal court’s enquiry is necessarily confined to making a prima facie assessment regarding who should retain possession until those larger disputes are resolved.
Applying these principles, the Supreme Court found that several cumulative circumstances favoured the respondent company. The vehicles had been seized while operating from the respondent’s mining site and were being used in its ongoing commercial operations. Loan instalments financing the vehicles had admittedly been serviced from the respondent company’s bank accounts. Additionally, an undertaking placed before the Court suggested that the appellant had previously permitted the respondent company to continue operating the vehicles pending settlement of mutual accounts. Although the appellant disputed the authenticity of that undertaking and alleged forgery, the Bench observed that such allegations would have to be determined in appropriate proceedings and could not govern the limited question of interim custody. Considered together, these circumstances substantially weakened the appellant’s claim that the registration certificates alone should determine interim possession.
The judgment is particularly important because it reinforces the distinction between paper ownership and beneficial possession. In commercial practice, especially among closely held companies, partnerships and family-controlled businesses, assets are often purchased in the name of one entity while being financed, operated or maintained by another. Registration certificates undoubtedly constitute important documentary evidence, but they do not always reflect the full commercial reality surrounding acquisition, possession or use of movable assets. The Supreme Court’s reasoning recognises that criminal courts dealing with interim custody cannot ignore these surrounding circumstances merely because a registration certificate exists in favour of one claimant. Practical control, financial contribution and continuous possession may, depending upon the facts, become equally relevant considerations.
From the perspective of criminal procedure, the ruling also clarifies the limited jurisdiction exercised by courts under Sections 451 and 457 CrPC. These provisions have occasionally been misunderstood as conferring a summary jurisdiction to determine ownership disputes. The Supreme Court decisively rejected such an approach. Interim custody proceedings neither adjudicate title nor finally determine proprietary rights. They merely preserve the property pending investigation or trial. Accordingly, observations made while granting interim custody cannot prejudice subsequent civil litigation, criminal prosecution or independent proceedings concerning ownership, forgery or financial misappropriation. This clarification is likely to reduce unnecessary attempts to convert interim custody applications into mini civil trials.
The judgment also has wider implications for commercial criminal litigation, where allegations of breach of trust, diversion of corporate assets, misappropriation of company funds and inter se disputes between directors increasingly result in seizure of movable property. Heavy commercial vehicles, machinery, mining equipment and industrial assets often constitute income-generating property. If such equipment remains parked indefinitely in police compounds, its economic value rapidly depreciates while business operations suffer irreparable disruption. The Supreme Court’s approach reflects commercial pragmatism by ensuring that productive assets continue to remain operational wherever appropriate safeguards can adequately protect competing claims.
Equally noteworthy is the Court’s emphasis upon the purpose underlying interim custody provisions. Criminal law seeks not merely to preserve evidence but also to prevent unnecessary destruction or deterioration of valuable property. Motor vehicles, unlike documentary evidence, rapidly lose value when left unused for prolonged periods. Mechanical deterioration, environmental exposure and commercial obsolescence can significantly reduce their worth even before criminal proceedings conclude. Earlier decisions, particularly Sunderbhai Ambalal Desai, had already recognised this practical difficulty. The present judgment builds upon that principle by explaining that timely release should be guided by sound judicial discretion rather than rigid documentary formalism.
The ruling also illustrates an important jurisprudential distinction between ownership and entitlement to interim possession. Ownership is a substantive legal right established through evidence and adjudication. Interim possession, by contrast, is a procedural arrangement designed to preserve property until those substantive rights are finally determined. Confusing the two would unnecessarily complicate criminal proceedings and undermine the legislative objective underlying Sections 451 and 457 CrPC. By preserving this distinction, the Supreme Court has ensured that criminal courts remain focused upon temporary preservation rather than final adjudication of proprietary disputes.
Another notable aspect of the judgment is its recognition that documentary evidence must be evaluated cumulatively rather than in isolation. Registration certificates continue to possess evidentiary significance and remain relevant while determining interim custody. However, they cannot eclipse other material circumstances such as actual possession, financial control, repayment of loan instalments, operational use and contractual understandings between the parties. This cumulative approach reflects broader evidentiary principles governing judicial fact-finding, where no single document ordinarily becomes determinative unless the governing statute expressly provides otherwise.
The decision is also likely to influence future disputes arising under the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which substantially carries forward the philosophy underlying Sections 451 and 457 CrPC through its corresponding provisions relating to custody and disposal of seized property. Although the procedural code has changed, the Supreme Court’s reasoning regarding judicial discretion, preservation of property and prima facie assessment of entitlement is expected to remain equally relevant under the new statutory framework. Courts applying the BNSS will likely continue to rely upon the principles articulated in this judgment while deciding competing claims for interim custody.
Ultimately, the Supreme Court’s ruling in Krishnan Narayana v. State of Andhra Pradesh & Others marks an important clarification of Indian criminal procedure. By holding that a vehicle’s registration certificate is evidentiary but not conclusive, the Court has reaffirmed that interim custody under Sections 451 and 457 CrPC depends upon a holistic evaluation of all surrounding circumstances rather than mechanical reliance upon documentary ownership alone. The judgment preserves the distinction between temporary custody and final adjudication of title, reinforces judicial discretion and promotes a practical approach aimed at preserving valuable property during criminal proceedings. In doing so, it strengthens an important procedural principle: criminal courts must administer interim justice not through rigid formalism but through careful, fact-sensitive judicial assessment that best serves the interests of fairness, preservation of property and the effective administration of justice.
