Vehicle Registration Certificate Relevant But Not Conclusive For Deciding Interim Custody Under Section 451 CrPC: Supreme Court

"Registration is a relevant factor, but it is evidentiary and not conclusive of entitlement to interim possession." Supreme Court, in a significant ruling dated July 27, 2026, held that a vehicle's registration certificate is merely an evidentiary factor and not conclusive proof of entitlement when deciding interim custody under Sections 451 and 457 of the Code of Criminal Procedure (CrPC).

A bench of Justices Sanjay Karol and Augustine George Masih observed that the power to grant interim custody is discretionary, and courts must assess who is "best entitled" to possession based on cumulative circumstances rather than relying solely on the registration document.

The dispute arose between the appellant, a director of M/s Pure Minerals, and M/s Earth Stein Private Limited over the custody of several commercial vehicles. While the appellant claimed the vehicles were forcefully taken from his factory and relied on the registration certificates in his company's name, the respondent company alleged that the appellant had misappropriated its funds to purchase the assets. Following the seizure of the vehicles by the police during the investigation of cross-FIRs, the High Court of Andhra Pradesh granted interim custody to the respondent company, prompting the present appeal.

The primary question before the court was who, between the warring parties, is entitled to interim custody of the subject vehicles under Sections 451 and 457 of the CrPC. The court was also called upon to determine whether interim custody must invariably follow the owner named in the registration certificate irrespective of other attending circumstances.

Court Exercises Discretion To Prevent Property Decay

Analyzing Sections 451 and 457 of the CrPC, the court clarified that these provisions vest judicial discretion to determine who is best entitled to possess the property during the pendency of a trial. The bench noted that the objective is not to adjudicate the final title or ownership, which falls within the exclusive domain of a civil forum. The limited purpose is to ensure that the seized property does not suffer waste, misuse, or deterioration, and remains available for production before the court.

"The use of the words ‘possession’ and ‘custody’ emphasize that the Court does not adjudicate title but merely undertakes the exercise of granting interim possession, with the object of preventing decay and diminution in the value of the subject property."

Registration Certificate Not The Sole Determinant

The appellant relied heavily on the precedent set in Sunderbhai Ambalal Desai v. State of Gujarat, arguing that the vehicles must be released to the ostensible owner as per the registration certificates. Rejecting this rigid interpretation, the Supreme Court held that the earlier judgment does not lay down an inflexible rule that custody must invariably follow the registration document. The court emphasized that a magistrate must act expeditiously and judiciously based on a cumulative assessment of all attending facts.

Cumulative Circumstances Favour Respondent Company

Applying these principles to the facts at hand, the bench observed that several circumstances weighed against the appellant’s claim to interim custody. The court pointed out that criminal proceedings were pending against the appellant for allegedly misappropriating the respondent company's funds to acquire these very vehicles. Furthermore, the court noted an undisputed written undertaking executed by the appellant, which allowed the respondent company to continue operating the vehicles at their site until the settlement of accounts.

Payment Of Loan EMIs By Respondent Crucial

Another critical factor that tilted the balance in favour of the respondent was the undisputed payment of the hypothecation installments. The court observed that the loan availed for the subject vehicles from Shriram Finance Ltd. had been admittedly discharged from the accounts of the respondent company, and not by the appellant in his individual capacity. This financial burden borne by the company, combined with the appellant's own undertaking, considerably weakened his claim of exclusive individual entitlement.

"If the vehicles were, as claimed, the personal property of the appellant, there is no explanation forthcoming as to why the financial burden of servicing the loan secured over them was borne by the respondent company."

Based on a cumulative assessment of continued possession, the payment of EMI installments, and the written undertaking, the Supreme Court upheld the High Court's findings. The bench dismissed the appeals, confirming that the respondent company was rightfully granted interim possession, while clarifying that these observations would not affect the merits of the pending trials regarding ownership or misappropriation.

Date of Decision: 27 July 2026