M/S Sk Trading Co. vs. The State Of Assam And 10 Ors

Facts

The petitioner, M/s SK Trading Co., a proprietor dealing in agricultural products including areca nuts, dispatched a consignment of 530 bags (42400 kgs) of Indian origin areca nuts worth Rs. 31,80,000/- to M/s Muskan Traders in West Bengal. The petitioner claims to have paid all necessary GST and other taxes. The consignment was booked via Indian Railways from Jiribam on 08.09.2021. However, the consignment was intercepted and seized by the Government Railway Police (GRPS) at Badarpur Railway Station, Karimganj district, Assam. Subsequently, an FIR was lodged (Badarpur GRPS Case No. 13/2021). The learned Additional Chief Judicial Magistrate, Karimganj, by an order dated 21.09.2021, directed the Deputy Commissioner to initiate the auction of the seized areca nuts, citing the inability to identify consignors and the perishable nature of the goods. The petitioner filed this writ petition challenging the FIR and the Magistrate's order, seeking the immediate release of the perishable goods.

Held

The Court held that the petitioner had successfully established ownership of the seized areca nuts, supported by documentary evidence such as the railway challan and GST payment voucher. The Court referred to the Supreme Court's judgment in Sunderbhai Ambala Desai Vs. State of Gujarat, emphasizing that powers under Section 451 Cr.P.C. should be exercised expeditiously and judiciously to prevent the owner from suffering due to the goods remaining unused or being misappropriated. The Court found that the Magistrate committed a serious error of law by not granting the 'zimma' (custody) of the areca nuts to the petitioner. The Court clarified that the nature of the goods (whether for industrial use or human consumption) cannot be a ground for rejecting the 'zimma'. The Court directed the release of the seized areca nuts to the petitioner with specific conditions: preparation of a proper panchnama, taking photographs, obtaining the petitioner's representative's signature, and the petitioner furnishing a bond of Rs. 32,00,000/-. The investigating authority was also permitted to retain samples for forensic examination.

Key Issues

1. Whether the learned Additional Chief Judicial Magistrate, Karimganj, erred in law by directing the auction of the seized areca nuts, despite the petitioner establishing ownership and having paid the requisite GST and taxes, thereby violating the principles of expeditious and judicious disposal of seized property under Section 451 of the Cr.P.C.? Petitioner's arguments: The petitioner contended that since the areca nuts are of Indian origin and all necessary GST and taxes were paid, there was no legal basis for their seizure. They argued that the goods are perishable and are deteriorating, causing loss. They relied on the Supreme Court's decision in Sunderbhai Ambala Desai Vs. State of Gujarat regarding the expeditious disposal of seized goods. Revenue/State's arguments: The respondents, through the investigating officer, filed an application for auction under Section 451 Cr.P.C. The Magistrate allowed the application, noting that no consignors could be identified despite preliminary investigation and examination of witnesses. The Magistrate also considered the difficulty in securing accommodation for the seized goods and their perishable nature, which could lead to loss of revenue and damage to the owner.