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ITC Limited, Through its authorized representative & Business Manager Prashant Mishra v/s The State of Karnataka, through the Sub-Inspector of Police, Represented by Addl. SPP, High Court of Karnataka, Bench at Kalaburagi & Others

    Criminal Petition No. 201410 of 2017

    Decided On, 09 February 2018

    At, High Court of Karnataka Circuit Bench OF Kalaburagi


    For the Petitioner: Ashok Harnahalli, Senior Counsel for Sanjay Kulakarni, Advocate. For the Respondents: R1, P.S. Patil, HCGP, R2, Shivanand V. Pattanshetty, R4, Deepak V. Barad, Advocates.

Judgment Text

(Prayer: This Criminal Petition is filed under Section 482 of Cr.P.C., 1973, praying to call the records in Criminal Revision Petition No.33/2017, pending on the file of Principal District and Sessions Judge at Bidar and to set aside the order dated 09.11.2017 (Annexure-'X') passed by the Principal District and Sessions Judge at Bidar, rejecting stay application of the petitioner and by confirming order passed by II Addl. Senior Civil Judge and JMFC, Bidar dated 25.09.2017 in Crime No.176/2017 and further be pleased stay the order dated 25.09.2017 (Annexure-'Q') passed by the II Addl. Senior Civil Judge and JMFC, at Bidar in Crime No.176/2017 till the final hearing and disposal of Crl.Rev.Pet.No.33/2017 pending before the Principal District and Sessions Judge at Bidar.)

1. Heard the learned Senior Counsel Sri Ashok Harnahalli appearing on behalf of the petitioner and the learned High Court Government Pleader for respondent No.1-State as well as the learned counsel for respondent Nos.2 and 4. Respondent No.3 though served is not represented.

2. The petitioner business entity is before this Court being aggrieved by the order passed by the Court of the II Addl. Senior Civil Judge and JMFC, Bidar in Crime 176/2017 dated 25.09.2017 on the application moved by respondent Nos.2 to 4.

3. The case of the petitioner is that, it is a company registered under the Companies Act carrying on various business activities in various fields of business and that one such activity is foodgrain business and in furtherance of the said business activity, they had entered into an agreement with the second respondent herein who is the accused in the aforesaid crime number.

4. That, the second respondent is the owner of a factory premises and that the petitioner under the arrangements concluded under the agreement dated 15.06.2015 produced as document 1(a) to the petition was required to transport raw Toor dall, which in turn the second respondent was required to process and deliver the finished product i.e., split Pulses and that, in terms of the agreement, the parties had arrived at certain rates to be paid for the services rendered by the second respondent which is not relevant for the purpose of the present petition.

5. The term of the agreement was for a period of one year commencing from 15.06.2016 and after completion of the agreement period, vide document 1(c), an another agreement was executed between the petitioner and the second respondent, whereby the period under the agreement dated 15.6.2016 was extended by a further period of two months i.e., till 14.08.2017. It is submitted that on the last date of the arrangement i.e., on 14.08.2017, the second respondent by a letter is said to have acknowledged the stocking of 976.102 MTS of unprocessed Toor dall belonging to the petitioner in the godowns of the second respondent.

6. It is the case of the petitioner that, on the intervening night of 15.08.2017, the directors of the second respondent company are alleged to have illegally removed the stock by overpowering and illegally confining the security guard on duty. That, they have tried to illegally appropriate the same contrary to the agreement and in this regard, the petitioner has lodged a complaint and the same came to be registered as Crime No.176/2017 by the New Town Police Station, Bidar.

7. Pursuant to the registration of the complaint, the respondent-police are said to have initiated action and seized about 329 MTS of Toor dall out of the total quantity alleged to have been illegally removed by the accused therein. That, the police have reported the seizure to the Magistrate, upon which the petitioner moved an application under the provisions of Section 451 read with Section and 457 of Cr.P.C, praying that it being the owner of the goods i.e., the stolen property seized and recovered by the police, be released to its custody. The application was moved on the premise that the goods are perishable commodities and require to be fumigated and managed, failing which the pulses would detoriate and would be rendered useless and inedible. In support of its application, the petitioner has also placed before the learned Magistrate the APMC receipts, stock books, copies of the invoices and the receipts issued by the accused, in aid of and for the better appreciation of the application for release of the goods to the custody of the petitioner. The petitioner also offered to furnish bank guaranty equivalent to the value of the seized stocks. The second respondent also preferred a similar application and under the said application, it has also offered to furnish bank guaranty, if the stock are released to its custody.

8. The third respondent - Bank has also made a similar application contending that it is the primary financier to the second respondent and that the seized stocks and other stocks are hypothecated and a right subsists in them till the discharge of the loan advanced to the second respondent and that the removal of the stock by the complainant i.e., petitioner herein and the second respondent accused is theft by themselves. At this juncture it is interesting to note the contents of the bankers certificate dated 19.07.2017 and issued by the 3rd respondent, which clearly states that they have no lien or charge over stocks stored at the factory of the second respondent and that there is no objection from their end to storing the stocks of the petitioner in the factory premises of the second respondent and it is stated that this, no lien certificate, is valid for a period of one year i.e., from 20.07.2017. It not known as to how despite this no lien certificate issued, it is now being sought to extend their claims over the stocks allegedly claimed by the petitioner. Another application is also preferred by the fourth respondent who claims to have delivered 1,500 bags of Toor dal to the second respondent and hence he sought for release of the case property in his favour.

9. The trial Court while considering the applications has adopted as undesirable approach to say the least. The trial Court even without discussing the material placed before it, has concluded that the material placed does not speak as to who is the owner of the seized property and it has further reasoned that the petitioner has claimed only 184 metric tones but the police have seized 230 metric tone. These very figures, by themselves, are reflective of the non application of the mind by the trial Court. A bare perusal of the complaint and the application by the petitioner would suffice to demonstrate the non application of mind by the trial Court. In the complaint the instant petitioner herein has stated that nearly 700 metric tones have gone missing and in the application it is stated that 321 metric tones is the property that has been seized by the police pursuant to the crime registered on 16.08.2018. Hence, conclusion that the police have seized more than the claimed quantity is baseless. Thereafter, the trial Court has proceeded to hold that there are rival claims to the ownership of the property in question and hence it deemed it fit to direct the parties to approach the civil Court for the purpose of establishing their respective title over the seized property. The trial Court while holding so ought to have realized that the primarily relief that has been sought for is for interim custody of the seized goods. Apparently it failed to appreciate the fact that the complainant was one of the applicants. It is also seen that the trial Court has not to even deemed it necessary to examine the supporting material and documents placed by them and by a cryptic order by placing reliance on rulings and without examining their applicability to the present circumstances has proceeded to hold that as the goods are perishable goods the same may be disposed of in public auction. The trial Court in view of the serious claims by the parties could have given an option to the parties themselves and chosen the highest bidder and could have thereafter verified the market price from the APMC and could have asked the parties to deposit and directed the release of the goods to either of the parties who offered the highest amount.

10. During the course of hearing the learned Senior counsel would submit that in view of the long lapse of time the quality of the pulses has deteriorated and that the material if sold in the open market today would fetch less than Rs.1.00 crore but despite the said fact the petitioner is ready and willing to offer Rs.1.6 corers as bank guarantee in lieu of the release of the seized property.

11. This Court put posed a specific question to the counsel for the second respondent and the fourth respondent as to whether they are willing to better the offer or if whether a public auction would secure a higher value than the sum offered by the petitioner to which the counsel for the second respondent would submit that it is a huge sum and the party is not in a position to deposit such amounts or offer guarantee by way of bank guarantee to secure the interest of the successful party. Similarly also the counsel for the fourth respondent would submit that the quantity claimed by him is small and quite meager and the value is only about R.67.00 lakhs and hence the fourth respondent is not in a position to offer a bank guarantee to the said extent.

12. It is not in dispute that the seized goods are perishable food grains and they have remained in the custody of the Court since 31.07.2017 i.e., more than six months have passed since the police have taken custody of the goods and in fact an application was moved by the petitioner on an earlier occasion to permit it to fumigate the stock in the custody of the police in order to prevent deterioration and natural decay.

13. That apart none of the other respondents made any similar efforts nor exhibited any care and concerns for the seized property as has been exhibited by the petitioner. It is also to be noted that the property came to be seized on account of criminal complaint lodged by the petitioner. It is also not in dispute that the petitioner is basing his claim on documents/contracts executed by the second respondent and further more the other documents of relevance is the 'no lien certificate" issued by the bankers' which prima facie admits the storage of the pulses by the petitioner in the premises of the second respondent. The fact that the second respondent was handed over the possession of the pulses is evidenced by the agreement dated 15.06.2015 and the renewal of the trade agreement dated 14.08.2017. Further the quantum of stocks stored by the petitioner with the second respondent is also allegedly acknowledged by the second respondent under the letter dated 14.08.2017.

14. The petitioner has also placed the stock statement in support of his claim. It is relevant to see that though claims have been made by the other parties, no supporting material is placed. Further more, another point of note is the pleading of the second respondent at Para No.2 of their application which reads as follows :-

"That on 14.08.2017 the stock of complaint is available in the custody of FPPL was 976 MT. Out of 976 MT as sown in Trust receipt document dated 14.08.2017. 184 MT (Whole Tur) was in FPPL belonging to ITC. But the police seized 230 MT whole Tur. Thus on what basis the ITC is claiming seized 230 MT when it was having only 184 MT stock. The contention taken by the Court that 308 MT is also comes in whole Tur but it is not like that, as per the their own document. If PF and seizure Mahazar thee is no any seizure of under process Tur quantity. And 308 under process Tur on 14.08.2017 belonging to ITC cannot be termed in any manner as whole Tur. There is difference between Tur and under process Tur as the Tur means raw material yet not used in machinery and second under processed Tur means which were heated and cooled and kept in machinery for further processing. Therefore, the quantity of 184 MT whole Tur and 308 MT under process Tur cannot be termed as one and the same."


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The trial Court has omitted to look into any of these materials which were available before it and has proceeded to direct the auction of the seized goods in public without even making an attempt to ascertain if the parties were willing to guarantee the return of the perishable goods or guarantee the payment of the value. Admittedly, the first petitioner has been consistently asserting its rights over the commodities and it has also valued the stocks at Rs.2.3 crores. 16. Hence, this Court is of the considered opinion that the order under revision warrants interference. 17. The revision is set aside. The petition preferred by the petitioners under the provision of Sections 451 and 457 of Cr.P.C is allowed. 18. The seized stocks of red toor dal is directed to be released to the petitioner subject to the petitioner furnishing bank guarantee to the tune of Rs.2.3 corers. 19. The petitioner shall keep the bank guarantee alive until further orders by the Court of II Addl. Senior Civil Judge and JMFC, Bidar in Crime No.176/2017. 20. Petition stands disposed of in the above terms. 21. In view of the above order passed, the Cri.R.P.No.33/2017 on the file of Principal District and Sessions Judge at Bidar does not survive for consideration. Petition is ordered accordingly.