Summary and Analysis of Rajput Vijaysinh Natwarsinh vs State of Gujarat & Ors 2025 INSC 1129

1. Heading of the Judgment

Case Name: Rajput Vijaysinh Natwarsinh vs State of Gujarat & Ors.
Citation:  Rajput Vijaysinh Natwarsinh vs State of Gujarat & Ors., 2025 INSC 1129
Court: Supreme Court of India
Bench: Hon'ble Mr. Justice Sanjay Karol and Hon'ble Mr. Justice Prashant Kumar Mishra
Nature of Case: Criminal Appeal arising out of Special Leave Petition (Criminal) No. 3179 of 2025

2. Related Laws and Sections

The judgment primarily interprets and applies the following legal provision:

• Section 451 of the Code of Criminal Procedure, 1973 (CrPC): This section, under Chapter XXXIV titled "Disposal of Property", empowers a Criminal Court to make orders for the proper custody of any property produced before it during an inquiry or trial, pending the conclusion of the proceedings.

The judgment also relies on a key precedent:

• Sunderbhai Ambalal Desai vs State of Gujarat (2002) 10 SCC 283: This landmark ruling laid down detailed guidelines for courts on how to handle the interim custody of case property (muddamal), including valuable articles and currency notes, to prevent them from lying in police custody for years during a trial.

3. Basic Judgment Details

• Appellant: Rajput Vijaysinh Natwarsinh (the accused)

• Respondents: State of Gujarat & Ors. (including Respondent No. 2, Bhargav Patel, a witness and claimant to the money)

• Subject Matter: The appeal challenged an order of the Gujarat High Court that directed the release of seized cash (muddamal) of ₹50,00,000 (Fifty Lakh Rupees) to Respondent No. 2 during the pendency of the criminal trial.

• Core Legal Issue: Whether it was appropriate for the High Court to order the release of seized cash to one claimant before the trial could determine the rightful ownership of the money, which was alleged to be the proceeds of crime from transactions with multiple victims.

• Outcome: The Supreme Court allowed the appeal, set aside the High Court's order, and restored the orders of the lower courts which had refused the release of the money.

4. Explanation of the Judgment

Background and Procedural History

The case originated from an FIR (CR No. 11206078220159 of 2022) alleging that the appellant-accused, through his proprietary firm, had cheated the complainant and several other merchants in transactions involving castor seeds, totalling over ₹3.49 crores. During the investigation, the police seized ₹50,00,000 in cash as alleged proceeds of crime.

Respondent No. 2, Bhargav Patel, who was listed as a prosecution witness, filed an application before the Trial Court seeking release of this seized cash. He claimed it was owed to him for goods sold by his concern to the appellant's company and supported his claim with a bill, audit report, and ledger account.

The Trial Court (Additional Chief Judicial Magistrate, Unjha) and the Revisional Court (Additional Sessions Judge, Mahesana) both rejected his application. They reasoned that:

1. The accused was alleged to have cheated a large number of merchants.

2. The seized money was considered proceeds of crime.

3. Determining the true ownership of the money was a matter of evidence to be decided during the trial.

4. Releasing it to one claimant at an interim stage would be premature and unjust to other potential victims.

However, the Gujarat High Court, relying on the precedent in Sunderbhai Ambalal Desai, allowed the release. It held that no prejudice would be caused to the prosecution if the cash was released to Respondent No. 2 on a personal bond of the equivalent amount, after preparing a detailed panchnama (inventory) of the currency notes.

The Supreme Court's Analysis and Reasoning

The Supreme Court, upon hearing the appeal, disagreed with the High Court's application of the law to the facts of this case. The Court provided an in-depth analysis:

• Misapplication of Precedent: The Supreme Court acknowledged that the High Court correctly referred to Sunderbhai Desai, which encourages courts to release case property during trial to prevent it from becoming useless. However, the Court emphasized that the High Court failed to appreciate the crucial factual distinction. In Sunderbhai Desai, the guidelines often concern property whose ownership is relatively straightforward (e.g., a vehicle, or ornaments stolen from a specific house). In this case, the ownership of the cash itself was the central controversy.

• Nature of the Seized Property: The Court highlighted that the seized cash was not a distinct identifiable object but "proceeds of crime" from alleged transactions with multiple victims. The money was the very subject matter of the controversy. Simply because the amount claimed by Respondent No. 2 (₹50 lakhs) matched the amount seized did not conclusively prove it was his money. The Court noted it was "entirely possible that the said sum of money was part of some other transaction" with other merchants.

• Primacy of Trial for Determining Ownership: The Supreme Court firmly held that in such a scenario, where multiple parties have claims against the accused, the appropriate forum to determine the true ownership of the money is the trial court. The evidence presented by Respondent No. 2, and any counter-evidence, must be tested through cross-examination and evaluated alongside the claims of all other alleged victims. Releasing the money at an interim stage, before this adjudication, would be "unjustified and premature."

Supreme Court's Directions and Final Order

1. Allowed the Appeal: The Supreme Court allowed the appeal filed by the accused.

2. Set Aside High Court Order: The impugned judgment of the Gujarat High Court was set aside.

3. Restored Lower Courts' Orders: The orders of the Additional Sessions Judge and the Trial Magistrate, which had refused the release of the cash, were restored.

4. Directed Return of Funds: Since Respondent No. 2 had already withdrawn the cash pursuant to the High Court's order, the Supreme Court directed that the amount, along with any accrued interest, be deposited back with the Registry of the Trial Court immediately.

5. Condition for Withdrawal: The Court further directed that if Respondent No. 2 still had the original currency notes, he must deposit them with the Trial Court. Only after a cross-verification of these notes with the detailed panchnama (inventory) prepared earlier would he be permitted to withdraw the amount he had deposited with the Supreme Court's Registry.

In essence, the Supreme Court's judgment underscores a vital legal principle: while courts should proactively prevent the deterioration of case property, they must not pre-empt the trial process when the property itself is the core of the dispute and its ownership is contested among multiple parties. The right to property must yield to the necessity of a fair trial and the interests of all stakeholders.