M/S Swastik Trading Company vs. The State Of Madhya Pradesh

Held

The High Court dismissed the petition. The Court noted that during the investigation, a large quantity of betel nuts and crushed betel nuts were seized from the accused persons' factory. However, at the current stage of the investigation, there was no clear evidence on record to conclusively establish from which specific firms, and in what respective quantities, the seized betel nuts were purchased. The Court found that no panchnama or seizure proceedings had been conducted to clarify these facts. Furthermore, the application for release was filed only by 8 complainant firms, whereas the investigation revealed that the accused had purchased betel nuts from 41 firms with outstanding payments. In the absence of conclusive evidence linking the seized betel nuts to the applicant firms, and considering the broader scope of the investigation involving multiple suppliers, the Court held that it was not possible to definitively conclude that only the applicant firms were entitled to interim custody of the seized betel nuts. Therefore, the Court found no grounds to interfere with the impugned orders of the CJM and Sessions Judge.

Facts

The petitioners, M/s Swastik Trading Company and others, are traders who supplied betel nuts to accused persons, Manoj Jaiswal and Atindra Jaiswal, between 2022 and 2024. The accused allegedly failed to make full payment and misappropriated the goods. An FIR was registered for criminal conspiracy, fraudulent procurement, partial payment, misappropriation, and tax evasion. During the investigation, the authorities seized approximately 6,04,940 kg of betel nuts and 87,900 kg of crushed betel nuts. The petitioners applied for the release of the seized betel nuts, arguing they were perishable and they had a financial interest. Their application was rejected by the Chief Judicial Magistrate (CJM) and subsequently by the Sessions Court, which affirmed the CJM's order. The petitioners then filed a petition before the High Court challenging these orders, citing financial loss due to the perishable nature of the goods and the prolonged seizure.

Key Issues

1. Whether the learned CJM and Sessions Court erred in refusing to release the seized betel nuts, which are perishable commodities, to the petitioners, despite their demonstrable financial interest and the availability of documentary evidence establishing their ownership and the proportionate distribution schedule agreed upon by the suppliers? Petitioner's arguments: The lower courts failed to exercise their jurisdiction under Section 503 of the Bharatiya Nagarik Suraksha Sanhita, 2023, by refusing to release the perishable seized property. They mechanically affirmed the CJM's order without appreciating the EOW's chart, the petitioners' bonafide supplier status, and the fact that they had not received payment. The continued retention of goods caused substantial financial loss. The impugned orders wrongly assumed the property was contested, whereas all suppliers agreed to proportionate distribution. The release would not affect the investigation. Reliance was placed on the Supreme Court's decision in Sunderbhai Ambalal Desai v. State of Gujarat regarding expeditious disposal of perishable seized property. Respondent's arguments: The orders passed by the lower courts are in accordance with law and do not suffer from any illegality, infirmity, or impropriety warranting interference by this Court.