2026 INSC 748 | 27 July 2026
What the case was about
This case concerns the limited but important power of criminal courts to decide who should hold seized property while a criminal trial is ongoing. Krishnan Narayana, a director of M/s Pure Minerals, and his former company, M/s Earth Stein Private Limited, both claimed five commercial vehicles that police had seized from Earth Stein’s granite factory. After the High Court of Andhra Pradesh granted interim custody to Earth Stein, Narayana appealed to the Supreme Court. The appeals turned on how criminal courts should exercise their discretion under Sections 451 and 457 of the Code of Criminal Procedure, 1973 (CrPC), and whether the registered owner of seized property must automatically receive it back pending trial. The ruling clarifies that registration certificates are only one factor among many in this provisional exercise.
The key facts
Narayana is a director of M/s Pure Minerals and was previously a director and 80 per cent shareholder of M/s Earth Stein Private Limited. The five vehicles in dispute—one Bolero City Pick-up, three Excavators, and one Ashok Leyland Tipper—were purchased in the name of M/s Pure Minerals between 2014 and 2022.
Narayana alleges that his resignation from Earth Stein was forged and that the vehicles were forcibly taken away in August 2023, leading to the registration of FIR Crime No. 353 of 2023. Earth Stein tells a different story: it claims Narayana misappropriated ₹1,73,11,894 of company funds to buy the vehicles for his own firm, and it lodged counter-FIR Crime No. 354 of 2023 under Section 406 of the Indian Penal Code. The vehicles were seized by police from Earth Stein’s factory on 7 February 2025.
Both sides filed custody petitions, and by a common order dated 18 September 2025 the High Court dismissed Narayana’s Criminal Petition No. 3712 of 2025 and allowed Earth Stein’s Criminal Petition No. 7896 of 2025, directing that interim custody of the vehicles be given to the respondent company subject to an undertaking affidavit. Narayana then filed Special Leave Petitions, which were converted into Criminal Appeal Nos. 3458–3459 of 2026.
The questions before the Court
The Supreme Court framed the issue succinctly: “As to who, between the parties, is entitled to interim custody of the subject vehicles at this stage, in terms of Sections 451 and 457 of the CrPC?” (para 25). The appeal also required the Court to decide whether the registration certificate in the appellant’s company name should be treated as conclusive.
What the Court decided and why
A bench of Justices Sanjay Karol and Augustine George Masih dismissed the appeals and upheld the High Court’s order, explaining the narrow scope of the power involved.
The Court emphasised that Sections 451 and 457 CrPC confer a discretionary power to grant custody “to whomever it deems fit,” using the language of “possession” and “custody” rather than title (para 27). The purpose of these provisions is to ensure that seized property does not suffer “waste, misuse, or deterioration” and remains available for production at trial; the court need only make a prima facie assessment of who is best entitled to possession, leaving questions of ownership to the competent civil forum (paras 27, 30).
The Court also rejected the appellant’s argument that Sunder Bhai Ambalal Desai v. State of Gujarat creates an inflexible rule that the registered owner must invariably receive interim custody. Registration is relevant, but it is “evidentiary and not conclusive of entitlement to interim possession” and cannot override other attending circumstances such as actual possession, the source of funds, and express undertakings (para 32). The judgment in Sunder Bhai itself requires courts to act “expeditiously and judiciously,” having regard to the object of preventing misuse and deterioration of property (para 33).
Applying those principles, the Court found that the cumulative weight of the record favoured Earth Stein. The vehicles had remained in the respondent company’s continued possession and use. The hypothecation instalments for the vehicles were paid from the respondent company’s account, not by Narayana individually. Additionally, an undertaking concerning the vehicles appeared on record and supported the respondent company’s claim.
Weighing these circumstances together—the continued possession, the payment of instalments from the company account, and the undertaking on record—the Court held that they outweighed the appellant’s reliance on the registration certificates standing in the name of M/s Pure Minerals (para 37). The respondent company was therefore best entitled to interim custody, and the High Court’s order was upheld subject to an undertaking affidavit.
Finally, the Court expressly clarified that its observations were confined to interim custody alone and carried no opinion on the ultimate questions of ownership, misappropriation, or the validity of the resignation and share transfer, which remain open for determination in the pending proceedings (para 39).
Why it matters
This judgment restates the boundaries of interim custody powers under the CrPC. It reassures litigants and lower courts that registration papers are not a trump card in such applications; rather, courts must look at the broader factual matrix, including who has possession, who paid for the asset, and what undertakings have been given. By stressing that criminal courts should not resolve questions of title under the guise of granting interim possession, the decision also helps prevent criminal proceedings from being used as proxies for civil asset disputes. For businesses, the ruling is a practical reminder that assets purchased through inter-company arrangements can become the subject of contested seizure, and that consistent payment records and documentary undertakings may carry decisive weight at the interim stage.