Police Cannot Directly Seize Vehicles Purchased From Proceeds of Crime: Madras HC

The Madras High Court clarified that law enforcement agencies cannot directly seize vehicles allegedly purchased with proceeds of crime, emphasizing that the appropriate legal remedy is to seek attachment under the BNSS.

A single-judge bench of Justice C.Kumarappan heard the criminal revision petitions challenging the denial of interim custody of two high-end vehicles. The Court noted that while the prosecution alleged the vehicles were bought using cheated funds, the direct seizure was in contravention of the established legal framework for property attachment.

Direct Seizure vs. Statutory Attachment

The Court observed that with the advent of the BNSS, specific procedures have been laid down for dealing with properties suspected to be proceeds of crime. The bench emphasized that the police should have moved for attachment rather than unilateral seizure.

The Court, in its reasoning, observed: "even if any properties purchased through proceeds of crime, the remedy available to the respondent police is to invoke Section 107 of BNSS for attachment and other consequential reliefs, contrarily any seizure becomes illegal."

Rationale on Deterioration of Seized Assets

Referencing the landmark decision in Sunderbhai Ambalal Desai Vs. State of Gujarat ( "(2002) 10 SCC 283": 2002 CaseBase(SC) 113), the Court reiterated that keeping seized vehicles idle in police stations serves no purpose as it leads to the deterioration of the asset's value. The Court noted that as long as the Registration Certificates stood in the names of the petitioners, interim custody should be granted subject to sufficient security.

The Court has the following directions:

"(i) The petitioner in Crl.R.C.No.401 of 2026 shall execute a personal bond for a sum of Rs.13,00,000/- with two sureties for a like sum to the satisfaction of the Court of the Metropolitan Magistrate, For Exclusive Trial of CCB Cases (Relating to Cheating Cases in and CBCID Metro Cases, Egmore, Chennai;

(ii) The petitioner in Crl.R.C.No.356 of 2026 shall execute a personal bond for a sum of Rs.40,00,000/- with two sureties for a like sum to the satisfaction of the Court of the Metropolitan Magistrate, For Exclusive Trial of CCB Cases (Relating to Cheating Cases in and CBCID Metro Cases, Egmore, Chennai;

(iii) The petitioners shall produce the original RC Books along with a self-attested copies of the same and other relevant records to prove ownership. The petitioners shall also produce the photographs of the respective vehicles;

(iv) The Court of the Metropolitan Magistrate, For Exclusive Trial of CCB Cases (Relating to Cheating Cases in and CBCID Metro Cases, Egmore, Chennai shall verify the RC Books and other records, retain xerox copies thereof and return the originals to the petitioners;

(v) The petitioners shall not alter, encumber or alienate the vehicles in any manner;

(vi) The petitioners shall file undertakings that they will produce the vehicles as and when required by the respondent police or by the Court; and

(vii) The return of the properties shall be subject to the result of confiscation proceedings, if any, and the proceedings to be initiated, if any under Section 107 of BNSS."

Background:

The dispute arose after the Central Crime Branch seized a Mercedes Benz S350 and a Land Rover Defender from the petitioners. The police claimed these vehicles were purchased from Futuristic Global Resource Private Limited the accused in a cheating case using proceeds of crime. The lower court had refused to grant interim custody, citing a lack of proof regarding the payment of sale consideration and the 'proceeds of crime' nature of the vehicles.

The petitioners argued that the vehicles were transferred into their names before the FIR was registered and that under Section 107 of BNSS, the police only had the power to seek attachment, not direct seizure. They relied on several precedents including S.Nithya Vs. State and Vaidhehi Vs. Deputy Superintendent of Police to support their claim for interim custody.

Setting aside the lower court's order, the High Court held that while the police are at liberty to initiate attachment proceedings, the summary denial of interim custody based on 'proceeds of crime' allegations without following statutory procedure was unsustainable. The Court allowed the revisions, granting interim custody to the owners upon execution of bonds.

Case Details:
Case No.: Crl.R.C.Nos.356 and 401 of 2026
NeutralCitation: 2026:MHC:1789
Case Title: A.J.Prabhakaran Vs. State rep. By The Inspector of Police and others
Appearances:
For the Petitioner(s): Mr.R.Vivekananthan, Mr.J.Satheesh
For the Respondent(s): Mr.R.Kishore Kumar (Government Advocate), Mr.M.G.Martin Manivannan

Source: 2026 CaseBase(MAD) 268