A Supreme Court bench comprising Justice Sanjay Karol and Justice Augustine George Masih has ruled that a vehicle’s registration certificate is an evidentiary factor but does not constitute an inflexible or conclusive rule for determining interim custody under Sections 451 and 457 of the Code of Criminal Procedure (CrPC). Adjudicating a dispute over the interim custody of five commercial vehicles between a former director and a granite mining company, the apex court affirmed an order of the High Court of Andhra Pradesh granting interim possession of the vehicles to M/s Earth Stein Private Limited.
Background of the Case
The appellant, Krishnan Narayana, is a director of M/s Pure Minerals, a firm engaged in granite quarrying, and was previously a director holding an 80% shareholding in M/s Earth Stein Private Limited. Five commercial vehicles—a Bolero City Pick-up, three excavators, and an Ashok Leyland Tipper—were purchased in the name of M/s Pure Minerals between 2014 and 2022.
According to the appellant, on May 31, 2023, he was intimidated by business associates, forced to sign blank papers, and fraudulently shown as having resigned from M/s Earth Stein Private Limited on June 16, 2023. He further alleged that on August 31, 2023, the respondents committed criminal trespass into the granite factory of M/s Pure Minerals and forcefully removed the five vehicles, leading to the registration of Crime No. 353/2023.
Conversely, the respondent company alleged that the appellant misappropriated ₹1,73,11,894 from its bank accounts and utilized those funds to purchase the vehicles in the name of M/s Pure Minerals. A counter-FIR (Crime No. 354/2023) was registered against the appellant under Section 406 of the Indian Penal Code (IPC).
During subsequent police investigation, the subject vehicles were seized on February 7, 2025, from the operational factory site of M/s Earth Stein Private Limited. Both parties moved applications before the trial court seeking interim custody of the seized vehicles under Section 451 of the CrPC. The trial court rejected both applications. Upon appeal, the High Court of Andhra Pradesh on September 18, 2025, set aside the trial court order and granted interim custody of all five vehicles to the respondent company, prompting the appellant to approach the Supreme Court.
Arguments of the Parties
The learned counsel for the appellant argued that the High Court failed to adhere to the law laid down in Sunder Bhai Ambalal Desai Vs. State of Gujarat, which mandated that under Section 451 CrPC, seized vehicles ought to be released temporarily in favor of the ostensible owner named in the registration certificate pending trial. The appellant further contended that his alleged resignation and written undertaking were fraudulently obtained and forged.
In response, the learned counsel for the respondents submitted that the vehicles were acquired using company funds, and that the appellant voluntarily resigned, transferred his shares, and encashed the consideration cheque. It was highlighted that the appellant had executed a written undertaking permitting the company to retain and operate the vehicles at its quarry until final settlement of accounts. Furthermore, the respondents submitted that loan equated monthly installments (EMIs) to Shriram Finance Ltd. for the vehicles were continuously paid from the account of the respondent company. The respondents contended that registration certificates alone cannot override physical possession, written undertakings, and settled commercial use.
Court’s Analysis
The Supreme Court framed the central question as determining which party was best entitled to interim custody under Sections 451 and 457 of the CrPC pending the outcome of the criminal trial.
Examining the scope of Sections 451 and 457 CrPC, the bench noted that these provisions vest judicial discretion in courts to grant interim possession to prevent decay and loss of value, without adjudicating ownership title. Referring to the precedent in N. Madhavan v. State of Kerala, the Court highlighted:
“The words ‘may make such order as it thinks fit’ in the section, vest the court with a discretion to dispose of the property in any of the three modes specified in the section. But the exercise of such discretion is inherently a judicial function. The choice of the mode or manner of disposal is not to be made arbitrarily, but judicially in accordance with sound principles founded on reason and justice, keeping in view the class and nature of the property and the material before it…“
Addressing the appellant’s primary reliance on the registration certificates and the judgment in Sunder Bhai Ambalal Desai, the bench clarified:
“Registration is a relevant factor, but it is evidentiary and not conclusive of entitlement to interim possession.“
The bench further observed:
“The said judgment, as discussed above, does not lay down an inflexible rule that custody must invariably follow the registration certificate irrespective of all other attending circumstances; it requires the Court to act expeditiously and judiciously, having regard to the object of preventing misuse and deterioration of property.“
Evaluating the facts, the Court identified several cumulative factors weighing against the appellant:
- Pending criminal proceedings alleging that company funds were misappropriated to purchase the vehicles in the appellant’s firm’s name.
- The undisputed seizure of the vehicles from the operational site of the respondent company.
- The appellant’s encashment of the share transfer cheque, which contradicted his claim of coercion regarding his resignation and undertaking.
- The undisputed fact that loan hypothecation installments payable to Shriram Finance Ltd. were discharged from the respondent company’s bank account, rather than by the appellant individually.
Court’s Decision
The Supreme Court held that the cumulative circumstances—namely, continued possession, discharge of loan installments, and the undertaking on record—favored the respondent company and outweighed the registration certificates held by the appellant’s firm.
Holding that the High Court’s findings were justified, the apex court concluded:
“The question as framed above therefore stands answered in favour of the respondent company “M/s Earth Stein Private Limited”, who has been rightly granted the interim possession.“
The Supreme Court accordingly dismissed the appeals. It clarified that its observations were strictly confined to the question of interim custody and would not influence the independent determination of ownership, fund misappropriation, or allegations of forgery in ongoing civil or criminal proceedings.
Case Title: Krishnan Narayana v. State of Andhra Pradesh and Ors. Etc.
Case No.: Criminal Appeal Nos. of 2026 (@ SLP (Criminal) Nos. 19205-06 of 2025)
Bench: Justice Sanjay Karol and Justice Augustine George Masih
Date: July 27, 2026
