Vehicle Registration Certificate Does Not Confer Automatic Right to Interim Custody; Court Must Decide Who Is Best Entitled to Possession; Registered Owner Has No Absolute Right to Interim Custody of Seized Vehicle Under Sections 451 and 457 CrPC: Supreme Court

Case Name: Krishnan Narayana v. State of Andhra Pradesh & Ors. Etc.

Date of Judgment: 27 July 2026

Citation: 2026 INSC 748

Bench: Justice Sanjay Karol and Justice Augustine George Masih

Held: The Supreme Court held that while deciding interim custody of seized property under Sections 451 and 457 CrPC, the Court does not adjudicate ownership or title but makes a prima facie determination as to who is best entitled to possession, keeping in view the nature of the property, circumstances of seizure and material on record. A vehicle registration certificate is a relevant evidentiary factor but is not conclusive, and Sunderbhai Ambalal Desai v. State of Gujarat does not lay down an inflexible rule requiring custody to invariably follow the registered owner. In the present case, the respondent company’s continued possession and operational use of the vehicles, payment of hypothecation instalments from its account and the undertaking permitting it to retain and operate the vehicles outweighed the registration certificates standing in the appellant’s company’s name.

Summary: The dispute concerned interim custody of a Bolero pick-up, three excavators and an Ashok Leyland tipper seized during criminal proceedings between the appellant and M/s Earth Stein Private Limited. The vehicles had been purchased in the name of the appellant’s concern, M/s Pure Minerals. The appellant alleged that the respondents had forcibly taken the vehicles after obtaining his resignation and other documents through coercion, while the respondent company alleged that the appellant had misappropriated approximately ₹1.73 crore of company funds and used those funds to acquire the vehicles in his own concern’s name.

The Andhra Pradesh High Court granted interim custody to the respondent company. Before the Supreme Court, the appellant principally relied upon the registration certificates and Sunderbhai Ambalal Desai to contend that custody should ordinarily be released to the ostensible registered owner. The Supreme Court rejected this interpretation, holding that Sections 451 and 457 CrPC confer judicial discretion to determine the person best entitled to interim possession and do not require courts to mechanically follow the registration certificate.

The Court found several circumstances favouring the respondent company. The vehicles had been seized from its operational premises where they had remained in use; an undertaking existed permitting the company to continue operating them pending settlement of accounts; and the hypothecation instalments payable to Shriram Finance had admittedly been paid from the respondent company’s account. The Court also noted that the appellant had encashed the cheque issued in connection with transfer of his shareholding, a circumstance relevant at the interim stage despite his allegation that the resignation and undertaking were forged.

Importantly, the Supreme Court declined to determine the competing claims of ownership, alleged misappropriation, validity of the resignation or alleged forgery. Those questions require evidence and remain for adjudication in the appropriate pending proceedings. Its determination was confined exclusively to interim custody and possession of the vehicles.

Decision: The Supreme Court dismissed the appeals and upheld the grant of interim custody of the vehicles to M/s Earth Stein Private Limited, finding that the company’s continued possession, payment of EMI instalments and undertaking in its favour cumulatively outweighed the appellant’s reliance on the registration certificates.