Lakshman Srinivasan vs Republic Of India (Cbi) ……. … on 10 April, 2025

Orissa High Court

Lakshman Srinivasan vs Republic Of India (Cbi) ……. … on 10 April, 2025

         THE HIGH COURT OF ORISSA AT CUTTACK

                      CRLREV No.660 of 2024

(In the matter of an application under Section 397 read with Section 401
of the Criminal Procedure Code, 1973; r/w Section 442 read with
Section 438 of the Bharatiya Nagarik Suraksha Sanhita, 2023)


Lakshman Srinivasan             .......                   Petitioner

                              -Versus-

Republic of India (CBI)         .......                 Opposite Party


      For the Petitioner : Mr. Debashis Sinha, Advocate

      For the Opp. Party : Mr. Sarthak Nayak,
                           Special P.P. -Cum- Retainer Counsel (CBI)

CORAM:

 THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA

Date of Hearing: 13.03.2025        : Date of Judgment: 10.04.2025

S.S. Mishra, J.   The present Criminal Revision Petition is filed by the

petitioner under Section 397 read with Section 401 of the Cr.P.C, 1973,

[Corresponding provision- Section 442 read with Section 438 of the

Bharatiya Nagarik Suraksha Sanhita, 2023], assailing the order dated

14.08.2024 passed by the learned Special Judge (CBI), Court No.1 -cum-
 the Additional Sessions Judge, Bhubaneswar in Crl. Misc Case No.32 of

2024 arising out of T.R. No.03 of 2023 corresponding to CBI/SCB/Kol

P.S. Case No.RC.30/S/2014-Kol dated 05.06.2014 rejecting the

application filed by the petitioner U/s. 451 read with Section 457 of

Cr.P.C, 1973 seeking release of cash seized by the CBI; during

investigation.

2.          The learned Special Judge (CBI) - Court No.1-cum- The

Additional Sessions Judge, Bhubaneswar, rejected the application of the

petitioner seeking release of Rupees Fifteen Lakhs which was seized by

CBI by the impugned order. It will be apposite to reproduce the

operative part of the impugned order which reads as under:

           "...The cash of Rs.l5 lakhs seized from the office chamber of
           the accused-petitioner during search is not properly
           accounted for by him. The source of the seized cash is not
           clear as to whether it is legal or illegal from the averments of
           the petition and submissions made on behalf of the petitioner.
           5. Considering the facts and circumstances of the case,
           nature of allegation and gravity of the offence as well as
           improper keeping of huge unaccounted money in shape of
           cash I am not inclined to allow the petition filed by the
           petitioner to release the cash of Rs. 15 lakhs in his favour..."

Aggrieved by such finding of the court below, the present Revision

Petition has been preferred by the petitioner.



                                                                      Page 2 of 26
 3.        Heard, Mr. Debashis Sinha, learned Counsel for the petitioner

and Mr. Sarthak Nayak, learned Special P.P. -Cum- Retainer Counsel

(CBI) for the opposite party.

4.        The present petitioner who is an accused in this case, is alleged

to have been involved in an illegal money collusion fraud through M/s

Infinity Realcon Ltd. by operating various investment schemes without

obtaining the requisite statutory approval from the Reserve Bank of

India. Following his arrest on 26th September 2022, officials of the

Central Bureau of Investigation (CBI) conducted searches on the same

day at multiple locations, including the office of M/s. Finshore

Management Services Ltd. at Anand Lok Building, 227, A.J.C. Bose

Road, Kolkata - 700020, his previous residence at Tolly Apartments and

Golf Towers, and his present residence during the late hours of that

night. During the search, an amount of ₹15.00 lakh cash was seized from

the cupboard of his chamber/exclusive room at Anand Lok Building,

227, A.J.C. Bose Road. Subsequently, the accused petitioner was granted

bail by the Hon'ble Supreme Court vide order dated 03.10.2023 in SLP

No. 9318/2023.


                                                              Page 3 of 26
 5.      Mr. Sinha, the learned counsel for the petitioner while justifying

the source of the cash contended that out of the total amount seized,

₹4.50 lakh was withdrawn from the petitioner's and his spouse's bank

accounts, while ₹4 lakh was received as a loan from a professional

friend, who is a family to him. Additionally, a portion of the amount

comprised the petitioner's mother's widow pension of ₹30,000 per

month, which had been accumulated over a long period, along with gifts

received from various relatives. It is further submitted that the

petitioner's mother had entrusted him with these funds for medical and

other emergency and family expenses. The amount was kept in the

office, because several hospitals are situated in the vicinity, allowing for

immediate access in case of emergencies.

6.           Learned counsel for the petitioner further submits that the

present petitioner is the rightful custodian of the money seized and for

that the money should be accordingly released and given back to the

petitioner. While contending this, the learned counsel places reliance on

Section 451 read with Section 457 of Cr.P.C., 1973. For ready reference,

the said provisions are reproduced as under: -


                                                               Page 4 of 26
 "451. Order for custody and disposal of property pending
trial in certain cases.
When any property is produced before any Criminal Court
during any inquiry or trial, the Court may make such
order as it thinks fit for the proper custody of such
property pending the conclusion of the inquiry or trial,
and, if the property is subject to speedy and natural decay,
or if it is otherwise expedient so to do, the Court may,
after recording such evidence as it thinks necessary, order
it to be sold or otherwise disposed of.
Explanation. - For the purposes of this section, "property"
includes -
(a)property of any kind or document which is produced
before the Court or which is in its custody;
(b)any property regarding which an offence appears to
have been committed or which appears to have been used
for the commission of any offence."
"457. Procedure by police upon seizure of property.
(1)Whenever the seizure of property by any police officer
is reported to a Magistrate under the provisions of this
Code, and such property is not produced before a
Criminal Court during an inquiry or trial, the Magistrate
may make such order as he thinks fit respecting the
disposal of such property or the delivery of such property
to the person entitled to the possession thereof, or if such
person cannot be ascertained, respecting the custody and
production of such property.
(2)If the person so entitled is known, the Magistrate may
order the property to be delivered to him on such
conditions (if any) as the Magistrate thinks fit and if such
person is unknown, the Magistrate may detain it and shall,
in such case, issue a proclamation specifying the articles
of which such property consists, and requiring any person
who may have a claim thereto, to appear before him and
establish his claim within six months from the date of such
proclamation."




                                                         Page 5 of 26
           Further, he has relied upon the following passage from the

judgment of Hon'ble Apex Court in Sunderbhai Ambalal Desai v. State

of Gujarat1:

             "5. Section 451 clearly empowers the court to pass appropriate
             orders with regard to such property, such as:
             (1) for the proper custody pending conclusion of the inquiry or
                  trial;
             (2) to order it to be sold or otherwise disposed of, after recording
                  such evidence as it thinks necessary;
             (3) if the property is subject to speedy and natural decay, to
                  dispose of the same.
             7. In our view, the powers under Section 451 CrPC should be
             exercised expeditiously and judiciously. It would serve various
             purposes, namely:
               1.

owner of the article would not suffer because of its remaining
unused or by its misappropriation;

2. court or the police would not be required to keep the article
in safe custody;

3. if the proper panchnama before handing over possession of
the article is prepared, that can be used in evidence instead
of its production before the court during the trial. If
necessary, evidence could also be recorded describing the
nature of the property in detail; and

4. this jurisdiction of the court to record evidence should be
exercised promptly so that there may not be further chance
of tampering with the articles.

8. The question of proper custody of the seized article is raised in
a number of matters. In Basavva Kom Dyamangouda
Patil v. State of Mysore [(1977) 4 SCC 358 : 1977 SCC (Cri)
598] this Court dealt with a case where the seized articles were
not available for being returned to the complainant. In that case,
the recovered ornaments were kept in a trunk in the police station
and later it was found missing, the question was with regard to

1
(2002) 10 SCC 283

Page 6 of 26
payment of those articles. In that context, the Court observed as
under: (SCC p. 361, para 4)
“4. The object and scheme of the various provisions of the
Code appear to be that where the property which has been
the subject-matter of an offence is seized by the police it
ought not to be retained in the custody of the court or of the
police for any time longer than what is absolutely
necessary. As the seizure of the property by the police
amounts to a clear entrustment of the property to a
government servant, the idea is that the property should be
restored to the original owner after the necessity to retain it
ceases. It is manifest that there may be two stages when the
property may be returned to the owner. In the first place it
may be returned during any inquiry or trial. This may
particularly be necessary where the property concerned is
subject to speedy or natural decay. There may be other
compelling reasons also which may justify the disposal of
the property to the owner or otherwise in the interest of
justice. The High Court and the Sessions Judge proceeded
on the footing that one of the essential requirements of the
Code is that the articles concerned must be produced before
the court or should be in its custody. The object of the Code
seems to be that any property which is in the control of the
court either directly or indirectly should be disposed of by
the court and a just and proper order should be passed by
the court regarding its disposal. In a criminal case, the
police always acts under the direct control of the court and
has to take orders from it at every stage of an inquiry or
trial. In this broad sense, therefore, the court exercises an
overall control on the actions of the police officers in every
case where it has taken cognizance.”

Learned counsel for the petitioner in addition to this also placed

reliance on the judgement of the High Court of Delhi in the case

of Manjit Singh v. State2,

2
2014 SCC OnLine Del 4652

Page 7 of 26
“65. The currency notes seized by the police may be released
to the person who, in the opinion of the Court, is lawfully
entitled to claim after preparing detailed panchnama of the
currency notes with their numbers or denomination; taking
photographs of the currency notes; and taking a security bond.

66. The photographs of such currency notes should be attested
or countersigned by the complainant, accused as well as by the
person to whom the custody is handed over and memo of the
proceedings be prepared which must be signed by the parties
and witnesses.

67. The production of the currency notes during the course of
the trial should not be insisted upon and the releasee should be
permitted to use the currency.”

Learned counsel relying on the aforesaid judgments contended

that the petitioner is entitled to the release of the seized money as its

rightful custodian. He submitted that the Hon’ble Supreme Court, in the

case of Sunderbhai Ambalal Desai v. State of Gujarat (supra) has

emphasized that property seized by the police should not be retained

unnecessarily and must be released to the rightful owner at the earliest.

He has further contended that under Sections 451 and 457 of Cr.P.C.,

1973, the court has the power to order the return of seized property to its

lawful owner, subject to appropriate safeguards.

Additionally, the learned counsel draws the court’s attention to the

judgment of the High Court of Delhi in the case of Manjit Singh v. State

Page 8 of 26
(supra) which lays down specific guidelines regarding the release of

seized currency notes in the course of investigation and while pending

trial. He argued that as per the principles enunciated in the said case, the

seized amount may be returned to the petitioner after proper

documentation, including a detailed panchnama, photographing of the

currency notes, and obtaining a security bond.

7. However, on the contrary, Mr. Nayak, learned Special P.P. –

Cum- Retainer Counsel(CBI) for the opposite party vehemently opposed

the contentions of the petitioner’s counsel and submitted that the afore-

said judgements would only be applicable in the case when the person is

lawfully entitled to such currency notes and relied on the order of the

Trial Court which state that the seized amount was properly not

accounted for by the accused-petitioner and the source of seized cash

was not clear as to whether the same was legal or illegal.

8. In addition to this, Mr. Nayak, learned Special P.P. -Cum-

Retainer Counsel(CBI) for the opposite party submitted that the present

case against the accused petitioner was registered pursuant to the

Page 9 of 26
Hon’ble Supreme Court’s orders in WP(C) No. 401 of 2013 and WP(C)

No. 413 of 2013, treating FIR No. 82 dated 14.05.2013 as the original

FIR. During the investigation, it was revealed that investors had

deposited money with M/s IRL through its agents under various illegal

schemes, amassing approximately ₹565 crores in between 2009-2014,

out of which ₹343 crores remained unpaid to investors.

The Hon’ble Supreme Court, in Subrata Chattoraj v. Union of

India3, noted the involvement of influential persons and the need for

further investigation into the money trail. In compliance, the CBI probed

deeper into the larger conspiracy, regulatory lapses, and financial

misappropriation.

The investigation revealed that the accused-petitioner, Lakshman

Srinivasan, conspired with the Directors of M/s IRL and facilitated the

formation of two Multi-State Credit Co-operative Societies, M/s Golden

Society and M/s Pride Society, using fraudulent means to bypass

3
(2014) 8 SCC 768

Page 10 of 26
regulatory scrutiny. The accused-petitioner received ₹4.15 crores from

M/s IRL without any legal documentation, and misappropriated ₹3.93

crores for personal gain.

Additionally, the petitioner has been involved in multiple similar

scams, amounting to crores of rupees misappropriated from the hard-

earned money of the public. Furthermore, it is submitted that the

investigation still remains open under Section 173(8) Cr.P.C., 1973. In

the preliminary charge-sheet, it has conclusively established the

petitioner’s direct role in aiding and abetting the illegal deposit schemes.

Therefore, it is submitted that the present application is devoid of merit

and ought not to be entertained owing to the gravity and magnitude of

economic offences caused by the petitioner.

9. I have carefully scrutinized the materials placed before this Court

and the judgment cited by both the learned Counsel appearing for the

parties. The larger picture emerging from the facts of the present case is

that petitioner and others targeted the innocent citizens, exploited them

and amassed huge wealth, sometimes resulting in cash currency

Page 11 of 26
hounding. When application for release of said cash/currency of

economic offences of such magnitude, the Courts become

circumspective to release the amount. However, the release of money

ensures that the seized currency remains in circulation, thereby aiding

the national economy. If the money remains stagnant, it serves no

practical purpose and fails to contribute to economic activity. Currency

is meant to be in circulation to facilitate trade, commerce, and overall

economic growth. Keeping large sums of money idle in custody neither

benefits the State nor the affected individuals. Instead, it restricts

liquidity in the financial system and prevents the owner from utilizing

the funds for legitimate purposes.

10. In recent past when a question relating to the release of the

currency note came before this Court in the case of Santosh Kumar

Tripathy Vs. State of Odisha4, this Court in the disposal order held thus:

“4. Regard being had to the submissions made by the learned
counsel and the facts of the present case, I am inclined to
allow the petition. The trial court is directed to release the

4
CRLMC No. 2631 of 2023, High Court of Orissa, Cuttack

Page 12 of 26
seized cash deposited by the I.O. in the court in favour of the
petitioner by preserving color photographs of the currency
notes. It is open for the trial court to impose any other
condition as deemed fit and proper.”

Similar modus can be applied in the present case.

Furthermore, in Santosh Kumar Tripathy v. State of Odisha

(supra), this Hon’ble Court recognized the importance of preserving the

evidentiary value of seized cash through colour photographs while

ensuring that the currency itself remains available for economic use. This

principle aligns with broader economic considerations, where

unnecessary stagnation of monetary resources can hinder financial

fluidity. Releasing the seized cash with proper safeguards, such as the

preparation of Panchnamas and photographic documentation, balances

both the interests of justice and economic utility.

Thus, allowing the release of the seized currency under

appropriate conditions would not only comply with legal precedents but

also serve the larger public interest by ensuring that money continues to

contribute to the economy rather than remaining unutilized in the

custody.

Page 13 of 26

11. In light of the above discussion and considering the judicial

precedents, this Court is inclined to direct the release of the seized

amount of ₹15.00 lakhs (Fifteen Lakhs) to the accused petitioner, subject

to certain conditions that ensure both the integrity of the investigation

and the smooth conclusion of trial.

It is well established that money, as a movable property, should

not remain stagnant in judicial custody when it can be preserved through

alternative means without prejudicing the prosecution’s case. In the

lights of the judgements cited, the release of seized cash should be

considered while ensuring that its evidentiary value is duly preserved,

which can be used for trial.

Accordingly, before releasing the amount, the following broad

safeguards shall be ensured:

I. Preparation of a Detailed Panchnama – A formal record

(Panchnama) of the seized cash shall be prepared under the

supervision of the trial court, documenting essential details such as

Page 14 of 26
the total amount, denominations, serial numbers (where feasible),

and other relevant particulars.

II. Preservation of Colour Photographs – High-resolution colour

photographs of the seized currency shall be taken to ensure that its

physical attributes are recorded for evidentiary purposes. These

photographs shall be signed by the investigating officer, the

accused petitioner, and two independent witnesses before being

placed on record.

III. Security for the Released Amount – To balance the interests of

justice and financial security, the petitioner shall be required to

furnish a bank guarantee equivalent to 50% of the seized amount

(i.e., ₹7.50 lakh) which shall remain valid until the conclusion of

the trial. Additionally, the petitioner shall also secure the remaining

50% (i.e., ₹7.50 lakh) through the indemnification of any

immovable property or other financial security, to the satisfaction

of the trial court, as an assurance against potential liabilities arising

from the case.

Page 15 of 26
IV. Undertaking of Compliance – The petitioner shall submit an

affidavit affirming that the released amount shall remain available

for restitution if required by the court at a later stage, and that any

misuse or misappropriation of the released amount shall lead to

immediate legal consequences.

With these conditions in place, the Court finds no justifiable reason to

retain the seized cash in judicial custody when its circulation could

contribute to economic activity without compromising the investigation

or trial proceedings.

Similar course of action may be taken in such cases arising out of the

jurisdiction of this Court, keeping in mind the demand and need (which

may vary) in different cases.

12. In addition to this, it is also desirable that not only regarding

cash but also other materials which are seized such appropriate action

must be taken by the authorities and courts below to do the needful and

dispose of the items unless necessary to be in custody, which will

Page 16 of 26
additionally save the resources of the state and will also aid in the well-

being of the rightful owner.

By taking into consideration, the law laid down by the

Hon’ble Supreme Court in Sundarbhai (supra) judgement and various

other High Courts, this Court feels it expedient to cull out following

principles regarding disposal of the seized article in form of broader

guidelines, which may not be exhaustive but to some extent inclusive:

1. General Principles

1.1 Courts and investigating authorities must ensure that seized

property is not retained indefinitely without valid legal justification. It

is imperative to take steps for its prompt release or disposal unless

required for an ongoing investigation or trial.

1.2 The disposal process should adhere to the provisions of Sections

451, 452, and 457 of the Criminal Procedure Code (Cr.P.C.) and be

guided by established judicial precedents.

1.3 The primary objective should be to prevent unnecessary storage,

avoid wastage of resources, and ensure that valuable assets retain their

Page 17 of 26
utility keeping in mind the investigation and trial process is not

compromised.

2. Handling of Seized Cash

2.1 In cases involving seized currency, courts may consider its release

upon fulfilment of the following conditions:

 High-resolution colour photographs should be taken for

permanent record-keeping.

 A detailed panchnama should be prepared and signed by the

investigating officer, the claimant, and other relevant parties

and/or witnesses.

 Appropriate conditions or security bonds should be imposed to

ensure compliance.

2.2 If immediate release is not feasible, the cash must be deposited in

a nationalized bank to prevent stagnation and contribute to the

economy. Keeping cash in judicial or police custody for extended

periods serves no practical purpose.

Page 18 of 26

3. Releasing of Bank Deposits/ Fixed Deposits

3.1 Bank deposits and/or fixed deposits may be released against

similar or varied amount of property securities or bank guarantee

made by the accused petitioner, as per the direction of the competent

authorities or court.

3.2 Such bank deposits/fixed deposits, shall not be released, in case

when attachment and/or confiscation proceeding regarding the same

assets have already been initiated. In such cases the release shall be

decided by the competent court.

4. Disposal of Seized Vehicles

4. Vehicles that remain impounded in police stations deteriorate in

value and become unfit for use. To prevent such depreciation, courts

and authorities must ensure their early release by:

 Verifying ownership and allowing release to the rightful

owner upon submission of a security bond and valid proof of

ownership.

Page 19 of 26
 Ensuring that any legal dispute concerning ownership

are resolved efficiently through judicial orders.

 If a vehicle cannot be immediately returned, it should be

stored in a secure facility instead of being left exposed to

damage.

 If the rightful owner is untraceable or the vehicle is

linked to a serious crime, the court may order its auction or

disposal through appropriate channels after preserving

appropriate records and photographs for the process of trial(in

case linked to a crime) subjecting the provisions of law.

5. Management of Precious Articles (Gold, Jewellery, and

Valuables)

5.1 Precious items such as gold, silver, and gemstones should not be

kept in police custody for extended periods. Instead, they should be

stored in proper lockers or bank lockers under court supervision.

5.2 If ownership is clear, the magistrate may order their release after

verification, ensuring that:

Page 20 of 26

 Photographic or video graphic evidence is recorded for reference.

 The claimant provides a bond ensuring return if required for trial.

5.3 If ownership is contested or the valuables are crucial evidence,

they should be preserved under strict security protocols until the

matter is resolved.

6. Disposal of Seized Liquor and Narcotic Substances

6.1 Alcoholic beverages and narcotic drugs must not be stockpiled

unnecessarily. Authorities must ensure that:

 Necessary samples are collected and properly sealed for

forensic analysis and trial purposes.

 The remaining quantity is destroyed promptly after obtaining

court approval in accordance with law.

6.2 Large consignments of seized liquor should not be stored

indefinitely in police stations, as this poses logistical and security

challenges. Once samples are preserved for legal proceedings, the rest

should be disposed of under proper supervision and in accordance

with law.

Page 21 of 26
6.3 In narcotics cases, forensic examination of samples should be

conducted without delay, and the remaining substances should be

disposed of as per the provisions of the Narcotic Drugs and

Psychotropic Substances (NDPS) Act.

7. Perishable Goods and Agricultural Products

7.1 Perishable goods such as food and agricultural produce must be

handled on a priority basis to prevent spoilage. Courts may consider:

 Immediate release to the rightful owner, if legally permissible.

 Auctioning or distribution through government agencies, in

cases where the goods have no direct claimant.

7.2 If required for legal proceedings, only small representative

samples should be retained, and the rest should be disposed of

efficiently.

8. Firearms, Explosives, and Dangerous Weapons

8.1 Firearms, ammunition, and explosives should be stored in

designated armouries instead of police stations to ensure safety and

security.

Page 22 of 26
8.2 If the weapons are lawfully owned, they may be returned to the

rightful owner after proper verification. However, if the arms are

linked to criminal activities or pose a public threat, courts may order

destruction or forfeiture to the State.

8.3 Any delay in processing these items may pose safety hazards;

therefore, courts should prioritize their disposal.

9. Electronic Devices and Digital Evidence

9.1 Seized electronic devices, including mobile phones, laptops, hard

drives, other storage devices, surveillance footage and other such

digital evidences, must be handled with care to prevent tampering.

Authorities should:

 Create forensic copies or digital images of the data using

proper digital forensic tools so that the integrity of the digital

evidences is not lost, before returning the device.

 A proper chain of custody must be maintained on record to

ensure authenticity.

9.2 If the device is not crucial to the case, it should be released to the

owner without unnecessary delay. However, if it at all is a key piece

Page 23 of 26
of evidence and authenticity of the digital evidence can be challenged

at a later stage then strict storage protocols must be followed for

storing the evidence.

10. Disposal of Miscellaneous Seized Property

10.1 Items that do not fall under specific categories should be assessed

based on their legal relevance and economic value.

10.2 If an item is no longer required for investigation or trial, it should

be:

 Returned to its rightful owner, if identifiable.

 Auctioned or disposed of, if no claimant comes forward within

a reasonable time.

10.3 Courts should introduce a time-bound review mechanism to

prevent unnecessary accumulation of seized goods.

11. Role of the Courts and Investigating Authorities

11.1 Magistrates should take proactive measures to ensure that seized

property is not retained for an extended period without justification.

Page 24 of 26
Court directives for the return or disposal of property should be issued

without undue delay.

11.2 Investigating officers must regularly report on seized property

and seek judicial orders for its appropriate handling.

11.3 A system of periodic review and compliance checks should be

established to prevent excessive backlog and mismanagement of

seized assets.

By implementing aforementioned structured guidelines, courts and

law enforcement agencies can ensure that seized property is managed in

a manner that is efficient, legally sound, and beneficial to both the justice

system and society at large.

The Registry of this Court is advised to transmit a copy of this

judgment to all District Courts, Special Courts, and other subordinate

courts. Additionally, copies may also be forwarded to the Director

General of Police, Odisha Police Headquarters, and all other law

enforcement agencies, including the State Vigilance Directorate, Excise

Page 25 of 26
Department, Forest Department, and other investigating agencies, for the

purpose of guidance.

13. With the above observations and directions the CRLREV is

allowed, subject to compliance with the conditions as stipulated above.

(S.S. Mishra)
Judge

The High Court of Orissa, Cuttack
Dated the 10th of April, 2025/ Swarna

Signature Not Verified
Digitally Signed
Signed by: SWARNAPRAVA DASH
Designation: Senior Stenographer
Reason: Authentication
Location: High Court of Orissa
Date: 12-Apr-2025 15:38:28 Page 26 of 26