Dismissed

Kerala State Cashew Development Corpn. v. M/S.Binod Cashew Corpn.

Kerala HC12 Jul 2017AS/629/2000

Case brief

AI extract

What is this about?

In this appeal, the appellant challenged a civil court decree declaring title to cashew nuts vested with the plaintiffs, relying on a Section 452 Cr.P.C. order in favor of the appellant. The High Court held that Section 452 orders only determine possession, not title, and are subject to independent civil adjudication. Upholding the lower court's finding, the appeal was dismissed.

What did the court decide?

The Appeal Suit is dismissed. No costs.

Kerala State Cashew Development Corpn. Vs M/S.Binod Cashew… — Property and Title | Kerala HC (2017)

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“C.R.”

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE SATHISH NINAN

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WEDNESDAY, THE 12TH DAY OF JULY 2017/21ST ASHADHA, 1939

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AS.NO. 629 OF 2000 (C) ----------------------AGAINST THE JUDGMENT IN O.S. NO.247 OF 1999 OF PRINCIPAL SUB COURT, KOLLAM DATED 22-06-2000

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APPELLANT(S)/1^ST DEFENDANT:

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KERALA STATE CASHEW DEVELOPMENT CORPORATION LIMITED, REGISTERED OFFICE, KOCHUPILAMOODU, KOLLAM, REPRESENTED BY ITS MANAGING DIRECTOR.

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BY ADVOCATE SHRI C.UNNIKRISHNAN, SC.

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RESPONDENT(S)/PLAINTIFFS & 2^ND DEFENDANT:

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M/S. BINOD CASHEW CORPORATION, A REGISTERED PARTNERSHIP FIRM, REPRESENTED BY ITS MANAGING PARTNER K.VINOD KUMAR, SON OF KRISHNA PILLAI, KRISHNA VILASOM BUNGLOW, KOCHUPILAMOODU, KOLLAM.

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VINOD KUMAR, MANAGING PARTNER, M/S. BINOD CASHEW CORPORATION, SON OF KRISHNA PILLAI, KRISHNA VILASOM BUNGLOW, KOCHUPILAMOODU, KOLLAM.

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K. RADHA BAI AMMA, MANAGING PARTNER, M/S. BINOD CASHEW CORPORATION, W/O.KRISHNA PILLAI, KRISHNAVILASOM BUNGLOW, KOCHUPILAMOODU, KOLLAM.

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K. MANOJ KUMAR, PARTNER, M/S. BINOD CASHEW CORPORATION, SON OF KRISHNA PILLAI, KRISHNA VILASOM BUNGLOW, KOCHUPILAMOODU, KOLLAM.

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A.S. No.629 of 2000

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RAJEEV KUMAR, SON OF KRISHNA PILLAI, KRISHNAVILASOM BUNGLOW, KOCHUPILAMOODU, KOLLAM.

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K. KRISHNA PILLAI, CHIEF EXECUTIVE, M/S. BINOD CASHEW CORPORATION, SON OF KRISHNA PILLAI, KRISHNA VILASOM BUNGLOW, KOCHUPILAMOODU, KOLLAM.

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THE INDIAN BANK, KOLLAM, REPRESENTED BY ITS MANAGER, KOLLAM BRANCH, KOLLAM.

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R,R1 TO R6 BY ADV. SRI.P.GOPAL R,R1 TO R6 BY ADV. SRI.P.G.PARAMESWARA PANICKER (SR.) R7 BY SENIOR ADV. SRI.E.SUBRAMANI R7 BY ADV. SRI.S.EASWARAN

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THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 03.07.2017, THE COURT ON 12.07.2017 DELIVERED THE FOLLOWING:

“C.R.”

V. CHITAMBARESH

SATHISH NINAN, JJ .

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= = = = = = = = = = = = = = = = = = A.S. No.629 of 2000

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= = = = = = = = = = = = = = = = = = Dated this the 12^th day of July, 2017

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J U D G M E N T

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SATHISH NINAN, J .

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The 1^st defendant in a suit for declaration and consequential reliefs is the appellant.

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During the period at which the incidents which steered into this litigation occurred, there were restrictions on the procurement, sale and distribution of raw cashew nuts. Kerala Raw Cashewnuts (Restriction on Marketing) Order, 1976, Kerala Raw Cashewnuts (Procurement and Distribution) Order, 1977, Kerala Raw Cashewnuts (Restriction on Transport) Order, 1977 were in force. Collection of raw cashew nuts and its distribution were effected through the Kerala State Co-operative Marketing Federation. The dispute involved in the suit centres around the title over 375 bags of cashew nuts. The suit was decreed by

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A.S. No.629 of 2000

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the court below declaring title of the plaintiffs over the same. It is under challenge by the 1^st defendant.

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On 25.06.1980, police seized 375 bags of cashew nuts from the factory of the plaintiffs at Kalloorvila, alleging that the said goods belonged to the 1^st defendant and was stolen in transit. Plaintiffs claimed that the goods belong to them and are not stolen goods. The 1^st defendant, on the other hand, claimed title over it.

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Heard Shri C.Unnikrishnan, learned counsel for the appellant/1^st defendant and Shri P.G.Parameswara Panicker, learned Senior Counsel for respondents 1 to 6.

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Submissions of the learned counsel for the appellant/1^st defendant is rested upon the proceedings that took place before the criminal court for disposal of the seized cashew under Section 452 of the Code of Criminal Procedure. Learned counsel, taking us through the relevant orders and judgments in the criminal proceedings,

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A.S. No.629 of 2000

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especially ExtA32 order of this Court in Crl. R.P. No.907 of 1988 contended that title over the goods has already been adjudicated therein and the said finding is to ensue. Learned Senior Counsel appearing for the respondents/plaintiffs would contend that the proceedings under Section 452 of the Cr.P.C. is only summary in nature and the question of adjudication of title does not arise therein. Referring to the oral and documentary evidence in extenso, the learned Senior Counsel submits that the finding on title entered into by the court below is based on material and is not liable to be interfered with.

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Undisputedly, 375 bags of cashew nuts were taken possession of from the plaintiffs on 25.06.1980. In the criminal proceedings, originally an order was passed in favour of the plaintiffs granting interim custody of the cashew, subject to furnishing of bank guarantee towards its value. Thereafter the proceedings came up to this Court wherein as per Ext B2 order the matter was remanded

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A.S. No.629 of 2000

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and it finally culminated in Ext A32 order dated 19.03.1991 in Crl.R.P. No.907 of 1988. Therein it was found that the 1^st defendant is entitled to the goods.

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The first question which will have to be answered is as to the effect of Ext B32 order under Section 452 of the Cr.P.C holding that the 1^st defendant is entitled to the goods. The scope of the proceedings under Section 452 of the Cr.P.C. is no longer res integra. A decision under Section 452 of the Cr.P.C is subject to a judgment on title by a Civil Court. We feel that it would be worthwhile to refer to few precedents on the issue. In Sivasankaran Pillai v. State of Kerala (1972 KLT 61) with regard to a proceeding under Section 517 of the old Criminal Procedure Code of 1898 corresponding to Section 452 of the Cr.P.C. it was observed thus:

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“...An order under this Section only decides the question of possession and not that of ownership or title which has to be decided by a Civil Court....”

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In Malabar Cashewnuts and Allied Products v. State

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A.S. No.629 of 2000

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of Kerala (1982 KLT 532), it was held:

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“Disposal of property at the conclusion of a criminal trial has to be made under S.452 of the Code of Criminal Procedure, 1973. The claims are to be decided by the Criminal Court. But this does not mean that a Criminal Court under S.452 will have any power which a criminal court cannot have under the Code, and which only a Civil Court has. Even if it is assumed for the sake of argument that the power of the Criminal Court under S.452 is quasi civil in nature it cannot be said that under S.452 a criminal court can assume the powers of a Civil Court and decide questions which only a Civil Court is competent to decide...”

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In Puthiyadathu Kavu Devaswom Temple Committee v. Manoharan (2002 [2] KLT 167) it is held that an order under Section 452 of the Cr.P.C. will only be subject to decision by a competent civil court. To quote:

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“In an enquiry of the present nature, the question of possession and right to possession alone will be considered in the normal course. Ownership and title are matters for decision by competent Civil Court in case of further dispute and an order under S.452 will not stand in the way of such decision by competent Civil Court because return of the articles by Criminal Court under S.453 will only be subject to decision by competent Civil Court.”

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In Arjunan Chettiar v. State (1985 KUC 764) it was

A.S. No.629 of 2000

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observed thus:

“...Questions of title are not matters to be gone into in any enquiry regarding disposal of property. Question of possession and right to possession alone will be considered in the usual course. Ownership and title may be matters for decision by competent civil courts in cases of dispute. In fact a decision under S.452 will only be subject to such a decision by a competent civil court....”

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The very same learned Judge again in Yadav Agencies (P) Ltd. v. Philomina (1985 KLT 560) reiterated the principle:

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“Even an enquiry under S.452 of the Code, though conclusive in connection with the criminal proceeding, strictly it is also not a final disposal as between rival claimants because it is always subject to final decision by a competent civil court, which alone could decide the rival claims to title finally....”

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This Court in N.K. Moidinkunhi v. K.N. Abdulla (1977 Cri. L.J. 665) observed thus:

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“.....a proceeding relating to disposal of the property under the Code of Criminal Procedure is not a criminal case but is really in the nature of a proceeding analogous to a civil proceeding....”

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This Court in Pathu Haijumma, Ammad Haji v. State of Kerala K.M. Andy, Chekkotty Moosa Haji Ammad Haji (2007 [2] Laws (Ker.) 424) observed:

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A.S. No.629 of 2000

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“A criminal court under Sec.457/451 or 452 of the Cr.P.C. is not expected to make a final authentic pronouncement on the title or the right of the parties for possession. A criminal court is only expected to decide who is the best person who can be entrusted with possession of the property in question. It is for the civil courts to pass appropriate authentic orders on the title and rights after considering the contentions of the rival contestants”

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The other High Courts have also endorsed the same view. In B.S. Tookappa v. The State by Ripponpet Police (1977 Cri. L.J. 1850) dealing with the provision for disposal of property it was observed thus:

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“The final title to property or right to possess the same are to be determined by the Civil Court any other Court of competent jurisdiction. Complicated questions of civil law are not required to be decided by the Magistrate....”

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The court referred to the decision of the Calcutta High Court in Sri Prem Chand Kar v. State of West Bengal (1963 [1] Cri. L.J. 117) wherein it is stated:

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“The orders under Section 517 and S.523 do not settle any rights or confer any title. They are merely empowering sections to dispose of the property seized in a summary way. The orders are concerned only with the right to immediate

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A.S. No.629 of 2000

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possession and not to the question of title or proprietary right to the property. The jurisdiction of the Civil Courts to decide the question of title to the property in such a case remains unaffected..”

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The view of the Madras High Court is not any different. The Court in Muthiah Muthirian v. Vairaperumal Muthirian (AIR 1954 Madras 214) observed thus:

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“But a Criminal Court, as well pointed out in the exhaustive analysis in Chitaley and Annaji Rao's Criminal Procedure Code, Vol.III, 4^th (1950) Edn. at page 2862. is not expected, under the provisions of S.517 to “try” civil cases. It is not the function of a criminal Court to decide nice questions involving principles of civil law, if there is a dispute between rival parties claiming a return of the property...”

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“Where the property is delivered to one of the parties, the only effect of such order, is, that it determines which of the parties should be left to sue in the civil Court - 'Bhagwat Ram v. Emperor', 12 Cri. LJ 400 (Mad) (M); - Rahman v. Afadul Samad', AIR 1919 Low Bur 51 [1] (N)....”

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The same view was followed by the Madras High Court in Bose v. State S.I. of Police Another (1997 CrlLJ 3482) wherein it is observed thus:

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“....the Court is primarily concerned only with the question as to who is entitled to the immediate possession of

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A.S. No.629 of 2000

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the case properties. In other words, any order by Court under S.452 of the Code of Criminal Procedure would not confer any title over the properties to a person in whose favour the order is made...”

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The Bombay High Court in Mevaldas Takhatmal Lekhawani v. State of Maharashtra and another (1982 Cri. L.J. 46) referring to the scope of the proceedings under Section 452 of the Cr.P.C. observed thus:

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“....It was a fit case where the Court should exercise jurisdiction conferred upon it by Section 452 to do substantial justice in a summary manner, and to direct possession of the property to the person who had better title to the same at least prima facie. It was, therefore, ordered that the property in question be delivered to the possession of the complainant subject to the right of the accused to establish his claim to the property in Civil Court.....”

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The Rajasthan High Court asserted the view that final title on the property could be determined only by the Civil Court. It would be relevant to refer to certain observations of the judgment in Beni Dan v. Laxmichand and another (1996 Crl. L.J. 1191):

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“Section 452(1), Cr.P.C. proclaims that when an inquiry

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A.S. No.629 of 2000

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or trial in any Criminal Court is concluded, the Court may make such order as it thinks fit for the disposal by is destruction, confiscation or deliver to any person claiming to be entitled to possession thereof or otherwise, of any property or document produced before it or in its custody, or regarding which any offence appears to have been committed, or which has been used for the commission of any offence. The scope of power under Section 452 is summary in nature and an order thereunder does not adjudicate upon the Civil rights of the parties. The person aggrieved is free to file suit for the enforcement of his right to property. The Magistrate is not a Civil Court and has no power to decide dispute about the title while passing an order for disposal of property at the conclusion of enquiry or trial under Section 452, Cr.P.C. The Court is not to adjudicate or decide as to which party is the owner of the property. On the other hand such enquiry is limited to find out as to who is prima facie entitled to the possession of such property. Once it is ascertained that such property was seized from the lawful possession of a person then such person should be held to be best entitled to possession thereof unless of course his possession was unlawful..”

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“In Kailash Chandra v. Parasmal , 1981 RLW, 260, it has been held that the fact of registration is only relevant for inquiry of the title and the consequent possession. A final title to the property or right to possess the same can only be determined by the Civil Court of competent jurisdiction. Complicated and intricate question of civil law are not required to be decided by the Magistrate, before whom the single

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A.S. No.629 of 2000

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question is to which of the party is best entitled for possession and after considering the right to possess claimed by either party if the Magistrate decides in favour of one and against the other that should be the end of the matter as far as his Court is concerned.”

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“...As mentioned earlier under Section 452, C.P.C. a Magistrate has not to decide about ownership of the property seized by the police and produced in the Court, but has to find out while ordering for disposal of the property at the conclusion of the trial as to who is the person entitled to possession thereof to whom the delivery of such property is to be made. He is not required to decide intricate question of ownership of the property, which is the domain of Civil Court....”

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The Karnataka High Court in Nanda Kishore v. State of Karnataka and others (1979 Cri. L.J. 733) observed:

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“..The question to be considered while disposing of the property under S.517 is the 'right to possess' and not the ownership of the property to be disposed of....”

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Incidentally, we feel that it would be worthwhile to refer to the following observations made by the Law Commission while recommending combining of Sections 517 and 518 of the Code of Criminal Procedure, 1898:

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“43.9 The principles to be deduced from reported decisions regarding the Court's power under this section may be summarised as follows:- (i) The ordinary rule is that if the accused is acquitted of an offence regarding property, the Court must restore the property to him if it was recovered from his possession. The criminal Court should not enter into questions of title in respect of property, (ii) The rule is the same regards cash or currency note (AIR 1953 SC 508), (iii) Ordinarily, the Court would not be justified in detaining the property till the decision of the civil Courts (AIR 1937 Pat. 591; AIR 1963 HP 45). (iv) An order for indefinite detention in Court custody or in the custody of one of the parties conditional on a civil suit, would not be desirable (of observations in AIR 1938 Cal. 17 (20). The various possible courses to be adopted were analysed in a Madras case (AIR 1954 Mad. 214). (v) Even a conditional order of restoration does not seem to be contemplated in ordinary cases. The contrary view was, however, taken in one case (AIR 1918 Mad. 588).”

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43.10. In our opinion, it is not advisable to insert a provision as suggested in the Andhra Pradesh case (AIR 1957 AP. 1024 (pr.11). Such a provision would go against the scheme of the Code, which contemplates final orders as to disposal by criminal Courts either under S.517 or under S.518 read with S.523. It may be left to the discretion of the aggrieved party to move the civil Court and obtain interim protection of property, till final adjudication about its title. For the same reason we are not in favour of a radical revision of the existing section as suggested by the Bar Council.”

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A.S. No.629 of 2000

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The case law on the subject is umpteen. As noticed, the proceedings are often referred to as, in the nature of, a summary proceeding, a quasi-civil proceeding, analogous to a civil proceeding, etc. All that is determined in the said proceeding is as to the prima facie entitlement for possession. Adjudication of title does not form the subject matter of enquiry therein, though incidentally title may also often go into the zone of consideration. However, the jurisdiction to decide on title ultimately vests with the Civil Court. Suffice to say that adjudication on title if any in a proceeding under Section 452 of the Cr.P.C., is always subject to the decision on the same by the Civil Court. The finding on title in a proceeding under Section 452 of the Cr.P.C could not be made the basis for determination of title in the civil Court. The civil Court has to independently adjudicate on title.

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The Learned Senior Counsel appearing for the respondents-plaintiffs referred to the judgment

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of various High Courts and the Apex Court regarding the extent to which the judgment in a criminal case is relevant in a civil case. In Anil Behari v. Latika Dassi (AIR 1955 SC 566), though a person (named Charu) was convicted and sentenced for life in a Sessions trial, in a subsequent civil litigation the Apex Court held that the Civil Court has to independently decide on evidence if he was the murderer. The relevant portion of the judgment runs as under:

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“The learned counsel for the contesting respondent suggested that it had not been found by the lower Appellate Court as a fact upon the evidence adduced in this case, that Girish was the nearest agnate of the testator or that Charu had murdered his adoptive father, though these matters had been assumed as facts. The Courts below have referred to good and reliable evidence in support of the finding that Girish was the nearest reversioner to the estate of the testator. If the will is a valid and genuine will, there is intestacy in respect of the interest created in favour of Charu, if he was the murderer of the testator. On this question the Courts below have assumed on the basis of the judgment of conviction and sentence passed by the High Court in the sessions trial that Charu was the murderer. Though that judgment is relevant only to show that there was such a trial

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resulting in the conviction and sentence of Charu to transportation for life, it is not evidence of the fact that Charu was the murderer. That question has to be decided on evidence.”

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As noticed, the judgment of the Criminal Court was held to be relevant only to show that there was such a trial which ended up in conviction and sentence. If in a subsequent civil proceedings the very issue arises, the civil court has to independently consider the evidence and reach at its own conclusion. To sum up, independent on the finding under Section 452 of the Cr.P.C, the Court has to enter a finding on title, on its own.

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Now, onto the issue of title, as per Ext A1 allotment order dated 06.06.1980, 95 tonnes of cashew nuts were allotted to the plaintiffs by the Marketing Federation. Out of the same, 38 tonnes were to be delivered at their factory situated at Kalloorvila and 57 tonnes at their factory at Inchakkau (Chakkuvila). The quantity to be delivered to the factory at Kalloorvila were carried in four lorry loads, each load carrying 120

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bags. Exhibits A4, A5, A9 and A11 are the permits relating to the said loads. The corresponding delivery notes are Exts A14 to Ext A17, respectively. Therefore the total quantity to be delivered there is 120 x 4 = 480 bags. Lorry bearing No.MYG-7987 which carried the consignment under Ext A10 permit relating to Ext A18 delivery note was to deliver it to the factory at Inchakkau (Chakkuvila). But the consignment was wrongly taken to and delivered at the factory at Kalloorvila. The said load also contained 120 bags. When the mistake was detected, out of the said 120 bags wrongly delivered, 60 bags were transported to the factory at Inchakau on 25.06.1980, thus making the number of bags at Kalloorvila as 540. On 25.06.1980 when the police seized 375 bags, it was found that the total bags of cashew available there was 540. The fact that 120 bags were wrongly delivered at Kalloorvila, out of which 60 bags were transported to the factory at Inchakau, etc., are evident from Ext.A19 stock register maintained at the factory at

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Kalloorvila. Here it is pertinent to note that as on 03.06.1980 the balance stock at the factory was nil and that it is consequent on the delivery of the consignments above referred to that as on 25.06.1980, 540 bags of cashew nuts happened to be available in the premises in question. The fact that rent for lorry bearing No.MYG-7987 which wrongly delivered the consignment to the factory at Kalloorvila was paid from the factory at Kalloorvila is evident from Ext A35 which is the cash book, the relevant entry being at page 233 therein and marked as Ext.A35(d). Therefore, it admits of no doubt that title to the said 540 bags of cashew nuts that was available at the Kalloorvila factory premises vested with the plaintiffs. Apart from harping upon the judgment in the criminal case, the appellant/1^st defendant could not demonstrate its rival claim of title. There is nothing to indicate that the 375 bags of cashew nuts seized from the factory at Kalloorvila belonged to the 1^st defendant. In the proceedings

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under Section 452 of the Cr.P.C, Ext A20 seizure mahazar was relied upon, the acceptability of which was seriously challenged by the learned Senior Counsel for the plaintiffs alleging violation of Section 100(4) and 100(7) of the Cr.P.C. According to him the mahazar cannot be relied upon for the absence of independent witnesses and for nonfurnishing copy of the mahazar. Learned Senior Counsel would further bank his arguments on Section 110 of the Evidence Act to contend that since the goods are admittedly taken possession of from the factory of the plaintiffs it is to be presumed that the title vests with the plaintiffs, unless contrary is shown. Once evidence has been adduced by either side and allegation regarding nature of possession is one of theft, the initial presumption of title following possession dwindles into insignificance. As pointed out by the learned Senior Counsel, the 1^st defendant has not proved its title to the goods that were seized from the plaintiffs' possession. The finding on title cannot

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be rested solely upon Ext.A20 seizure mahazar. On the contrary the evidence on record reveal that title to the 375 bags of cashew nuts seized from the Kalloorvila factory premises vests with the plaintiffs.

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Lastly, it is argued by the learned Senior Counsel that the entire story put up by the appellant is totally unbelievable for the sole reason that at the relevant point of time there were stringent restrictions as regards collection, distribution and transportation of cashew nuts, that the alleged theft was on 08.06.1980 and the seizure on 25.06.1980 from the open yard of the plaintiffs' factory. As rightly pointed out by the Senior Counsel, when such stringent restrictions as noticed supra, were there in force during the relevant time, it is not at all probable that stolen goods would be kept there in the original form for such a long period and that too in open yard. The suggestion regarding an element of improbability, cannot, in the facts and

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circumstances of the case, be brushed aside.

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The court below has analysed the entire evidence in the case and come to a proper conclusion. No material has been brought to our notice to dislodge the said finding. The argument of the learned counsel for the appellant that the judgment in the present suit has to rest upon the findings entered into by the court in the criminal proceedings under Section 452 of the Cr.P.C. is bound to fail.

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In the above circumstances, we do not find any merit in the appeal.

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The Appeal Suit is accordingly dismissed. No

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costs.

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Sd/-

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V. CHITAMBARESH, JUDGE.

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Sd/- SATHISH NINAN, JUDGE.