The Orissa High Court has ordered the release of Rs. 15 lakhs seized by Central Bureau of Investigation (CBI) and held that keeping large sums of money idle in custody neither benefits the State nor the affected individuals. Instead, it restricts liquidity in the financial system and prevents the owner from utilizing the funds for legitimate purposes.
The bench of Justice Sibo Sankar Mishra has culled out following principles regarding disposal of the seized article in form of broader guidelines, which may not be exhaustive but to some extent inclusive:
General Principles
Courts and investigating authorities must ensure that seized property is not retained indefinitely without valid legal justification. It is imperative to take steps for its prompt release or disposal unless required for an ongoing investigation or trial.
The disposal process should adhere to the provisions of Sections 451, 452, and 457 of the Criminal Procedure Code (Cr.P.C.) and be guided by established judicial precedents.
The primary objective should be to prevent unnecessary storage, avoid wastage of resources, and ensure that valuable assets retain their utility keeping in mind the investigation and trial process is not compromised.
Handling of Seized Cash
In cases involving seized currency, courts may consider its release upon fulfilment of the following conditions:
High-resolution colour photographs should be taken for permanent record-keeping.
A detailed panchnama should be prepared and signed by the investigating officer, the claimant, and other relevant parties and/or witnesses.
Appropriate conditions or security bonds should be imposed to ensure compliance.
If immediate release is not feasible, the cash must be deposited in a nationalized bank to prevent stagnation and contribute to the economy. Keeping cash in judicial or police custody for extended periods serves no practical purpose.
Releasing of Bank Deposits/ Fixed Deposits
Bank deposits and/or fixed deposits may be released against similar or varied amount of property securities or bank guarantee made by the accused petitioner, as per the direction of the competent authorities or court.
Such bank deposits/fixed deposits, shall not be released, in case when attachment and/or confiscation proceeding regarding the same assets have already been initiated. In such cases the release shall be decided by the competent court.
Disposal of Seized Vehicles
Vehicles that remain impounded in police stations deteriorate in value and become unfit for use. To prevent such depreciation, courts and authorities must ensure their early release by:
Verifying ownership and allowing release to the rightful owner upon submission of a security bond and valid proof of ownership.
Ensuring that any legal dispute concerning ownership are resolved efficiently through judicial orders.
If a vehicle cannot be immediately returned, it should be stored in a secure facility instead of being left exposed to damage.
If the rightful owner is untraceable or the vehicle is linked to a serious crime, the court may order its auction or disposal through appropriate channels after preserving appropriate records and photographs for the process of trial(in case linked to a crime) subjecting the provisions of law.
Management of Precious Articles (Gold, Jewellery, and Valuables)
Precious items such as gold, silver, and gemstones should not be kept in police custody for extended periods. Instead, they should be stored in proper lockers or bank lockers under court supervision.
If ownership is clear, the magistrate may order their release after verification, ensuring that:
Photographic or video graphic evidence is recorded for reference.
The claimant provides a bond ensuring return if required for trial.
If ownership is contested or the valuables are crucial evidence, they should be preserved under strict security protocols until the matter is resolved.
Disposal of Seized Liquor and Narcotic Substances
Alcoholic beverages and narcotic drugs must not be stockpiled unnecessarily. Authorities must ensure that:
Necessary samples are collected and properly sealed for forensic analysis and trial purposes.
The remaining quantity is destroyed promptly after obtaining court approval in accordance with law.
Large consignments of seized liquor should not be stored indefinitely in police stations, as this poses logistical and security challenges. Once samples are preserved for legal proceedings, the rest should be disposed of under proper supervision and in accordance with law.
In narcotics cases, forensic examination of samples should be conducted without delay, and the remaining substances should be disposed of as per the provisions of the Narcotic Drugs and Psychotropic Substances (NDPS) Act.
Perishable Goods and Agricultural Products
Perishable goods such as food and agricultural produce must be handled on a priority basis to prevent spoilage. Courts may consider:
Immediate release to the rightful owner, if legally permissible.
Auctioning or distribution through government agencies, in cases where the goods have no direct claimant.
If required for legal proceedings, only small representative samples should be retained, and the rest should be disposed of efficiently.
Firearms, Explosives, and Dangerous Weapons
Firearms, ammunition, and explosives should be stored in designated armories instead of police stations to ensure safety and security.
If the weapons are lawfully owned, they may be returned to the rightful owner after proper verification. However, if the arms are linked to criminal activities or pose a public threat, courts may order destruction or forfeiture to the State.
Any delay in processing these items may pose safety hazards; therefore, courts should prioritize their disposal.
Electronic Devices and Digital Evidence
Seized electronic devices, including mobile phones, laptops, hard drives, other storage devices, surveillance footage and other such digital evidences, must be handled with care to prevent tampering. Authorities should:
Create forensic copies or digital images of the data using proper digital forensic tools so that the integrity of the digital evidences is not lost, before returning the device. A proper chain of custody must be maintained on record to ensure authenticity.
If the device is not crucial to the case, it should be released to the owner without unnecessary delay. However, if it at all is a key piece of evidence and authenticity of the digital evidence can be challenged at a later stage then strict storage protocols must be followed for storing the evidence.
Disposal of Miscellaneous Seized Property
Items that do not fall under specific categories should be assessed based on their legal relevance and economic value.
10.2 If an item is no longer required for investigation or trial, it should be:
Returned to its rightful owner, if identifiable.
Auctioned or disposed of, if no claimant comes forward within a reasonable time.
Courts should introduce a time-bound review mechanism to prevent unnecessary accumulation of seized goods.
Role of the Courts and Investigating Authorities
Magistrates should take proactive measures to ensure that seized property is not retained for an extended period without justification.
Court directives for the return or disposal of property should be issued without undue delay.
Investigating officers must regularly report on seized property and seek judicial orders for its appropriate handling.
A system of periodic review and compliance checks should be established to prevent excessive backlog and mismanagement of seized assets.
By implementing aforementioned structured guidelines, courts and law enforcement agencies can ensure that seized property is managed in a manner that is efficient, legally sound, and beneficial to both the justice system and society at large.
Case Details
Case Title: Lakshman Srinivasan Versus Republic of India (CBI)
Case No.: CRLREV No.660 of 2024
Date: 10.04.2025
Counsel For Petitioner: Debashis Sinha
Counsel For Respondent: Sarthak Nayak
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