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Government Liability for the Goods Lost in Custody
: A Step in the Direction of Reasonable Accountability

by Bhuvaneshwar B. Pande

Cite as : (1977) 4 SCC (Jour) 13

The Supreme Court decision in Smt Basavva Kom Dyamangouda Patil v. State of Mysore1 marks a movement in the direction of demasking the Government by retionalizing its legal accountability in the light of contemporary realities.2 However, in view of the relatively less known device resorted to for determining liability in the instant case and the absence of references to traditional governmental liability legislative and judicial landmarks,3 this decision is not likely to receive the attention that a case of kind ordinarily deserves.

The facts of this case are far from uncommon. A theft took place in the house of Smt Dyamangouda Patil in the course of which ornaments worth rupees ten thousand were stolen. On the recovery of the ornaments by the police, panchanamas were prepared and produced before the Magistrate, who directed the police officer to retain the custody of the ornaments until they were verified and their value ascertained by the goldsmith. The ornaments were stolen from the guardroom for the second time and the police filed a complaint about the theft. After the final disposal of the original charge sheet, which resulted in the acquittal of all the five accused involved in the first theft, the appellant filed an application under Section 517 of the Criminal Procedure Code, 1898 for the return of the stolen ornaments or their value.4 The application was rejected by the Magistrate's Court, Sessions Court and the High Court mainly on the ground that as the ornaments had never reached the custody of the Court, there could be no order for their restoration. In the appeal by special leave the Supreme Court rejected the lower court findings and held, "We do not agree with the High Court that once the articles are not available with the Court, the Court has no power to do anything in the matter and is utterly helpless".5 The Court further observed that, "Where the property is stolen, lost or destroyed and there is no prima facie defence made out that the state or its officers had taken due care or caution to protect the property, the Magistrate may, in appropriate case, where the ends of justice so require, order payment of the value of the property".6 Thus, the Supreme Court had no difficulty, in view of their interpretation of the statutory power of passing disposal order to indemnify the owner of a lost or destroyed property, in accepting the application of the appellants and directing the State to pay rupees ten thousand, the accepted approximate price of the lost property, in lieu of the property which was sought to be restored.

The Supreme Court decision is significant for, atleast, two reasons, namely: (i) it gives a meaningful extension to the Court's powers relating to disposal of properties connected with enquiries and trials, and (ii) it highlights an alternative remedy for the owner whose property is lost while in the custody of the Government, in the course of judicial proceedings.

The burden of the procedural provisions relating to the "Disposal of Property" is that property seized by the police ought not to be retained in the custody of the police or the court for a period longer than what is absolutely necessary.7 These provisions not only regulate the seizure and retention of property but also accords to the owner of the seized property a consequential statutory remedy against undue retention and deprivation of the property. Section 452 contributes towards the object of just and fair disposal of property by empowering the criminal court to pass order in respect of property by empowering the criminal court to pass order in respect of property produced before it or in its custody or related with the offence in question.8

The present case relates to disposal order involving the delivery of property to the claimant after enquiry or trial is concluded. The lower Courts and the High Court unanimously took the view that the court could not have passed any order under Section 517 because the essential requirement of the property being produced before the Court or being in its custody was not fulfilled in this case. Such an interpretation in substance meant that the Court's power was limited to only those cases where the property in question or its sale proceeds were physically produced before the court or were actually in the custody of the Court. Thus, where the property was not physically brought before the Court, there could be no restoration order in regard to it.9 In this regard the Supreme Court took an entirely different view when it observed that:

"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 stage where it has taken cognizance."10

Such a view has a welcome tendency of enhancing the field of judicial power to pass a disposal order in all cases which would virtually cover every case of retention of property excepting where the property is held without judicial control of any kind. This interpretation of the judicial powers under the Code is of considerable significance particularly in the light of the growing judicial awareness to rationalize the laws of accountability for governmental actions which affect the interests of the citizens.11 Such a decision, it is hoped, would give a better scope to the judiciary to not only protect the hapless citizens, who could, as in the present case, be the victim of double governmental default but would also help in raising the standard of vital administrative agencies like police, who of late are becoming known for their irregular and arbitrary actions. The responsibility of the government to restore the property taken into custody in the course of criminal proceedings was very aptly described by the Supreme Court in the following words: "just as a finder of property has to return it, so the State Government was bound to return the said vehicle once it was found that the seizure and confiscation were not sustainable. There being thus a legal obligation to preserve the property intact and also the obligation to take reasonable, care of it so as to enable the government to return it in the same condition in which it was seized."12

However, it may be suggested that the Supreme Court would have done well by availing this opportunity of laying down certain guidelines for a meaningful exercise of the extended judicial power. Such a step would have been particularly useful for the lower judiciary which takes care of the bulk of varied disposal order matters. The guidelines could be bases on the criterion of resultant hardship or the cruciality of the property for the owner. At least, in some cases where property of immediate use such as tools and implements of a artisan or the J. T. (Jama Talashi) of a beggar13 is involved, such guidelines do away with unnecessary discretion in an undisputable matter.

The criminal proceedings in respect of private property, seized or retained by the government, in terms of the provisions of the Code of Criminal Procedure is in a way an alternative for a civil action for the same cause. The difference between the two lies in the form and the forum. A civil action is based on a general notion of right of the property-owner to compensation from anyone who has breached the general duty towards him. The criminal proceedings of the present kind are an aspect of the court's power to dispose property, which incidentally provides a remedy to the owner of the property also. Furthermore, a statutory action like the present one is subject to the requirements of Section 452, which limits the remedy only to cases where the enquiry or trial is finally concluded and the property is in the custody of the court. The criminal proceedings also do not confer any title or settle the issue of right over the property.

Thus, two courses of action are open for a person whose property is lost or destroyed while in the governmental custody. First, in case the property has come in the custody of the court, he can institute an application for the restoration of property under Section 452 of the Code of Criminal Procedure. Secondly, in all other cases of loss of property in the governmental custody, a civil action, alleging vicarious liability of the government would still lie and civil action would also be the exclusive course of action where private property interest are harmed in other ways than loss or destruction in the government custody. Thus, once the essentials of Section 452 are found to be present, the course of criminal proceedings seems to provide a less complicated and more speedy way of getting redress.14 This is so because the civil action, particularly in cases of the present type, would be still subject to the Supreme Court bench ruling in Kasturi Lal Ralia Ram Jain v. State of U.P.15 in which, in a similar fact situation, the civil action was defeated on account of the court finding that the activity in question involved the exercise of sovereign powers, therefore, it is immune from civil liability. The effects of Kasturi Lal case are yet to be fully assessed.

Finally, the Supreme Court decision is notable for being to the point and brief. The judgment has strictly confined to the boundaries set by the pleading and the cause of action. The mention of law points and judicial authorities are not directly relevant to the issue in hand. Particularly worth mentioning is the judicial omission (or self restraint?) of Kasturi Lal case, which still remains a landmark case in this area. This is not only a leading case of the highest court of the land, but it had been referred to even by the High Court in the judgment appealed against. There is no doubt that the Kasturi Lal case had no direct relevance for the criminal action involved in the present case, therefore, the court could be in a way fully justified in not referring to it. However, the court could have rendered a useful judicial function by distinguishing this case, from the Kasturi Lal case, which has almost similar facts. Referring to Kasturi Lal case would have also given some indication of the judicial mind about a field of liability which is still far from up-dated. It would have also served as a reminder for those who have dragged their feet on governmental liability legislation for much too long.

  1. (1977) 4 SCC 358: hereinafter refered to as the Dyamangouda Patil case. Return to Text
  2. The past age notions of the all knowing and everright King or the Crown (substituted by the State today) are increasingly under attack today and the mythical justifications associated with the special treatment are being fast replaced by those based on new constitutionalism and legalism of the modern era. See for a detailed discussion of the demythification trend perforating the Escutcheon of Sovereign Immunity" (1974) 2 SCC (Jour) 9-12 by the same author. Return to Text
  3. Such as the maxim respondeat superior, Sovereign immunity or sovereign functions, statutory authority and functions, statutory authority and cases like Kasturi Lal Ralia Ram Jain v. State of U.P., AIR 1965 SC 1039 and other cases on this line. Return to Text
  4. Section 517 of the Old Code is reproduced verbatim in Section 452 of the Code of Criminal Procedure, 1973, which falls in Chapter XXXIV relating to "Disposal of Property'". Return to Text
  5. Dyamangouda Patil case at p. 362. Return to Text
  6. Ibid at p. 362. Return to Text
  7. See the scheme of Chapter XXXIV, particularly Sections 451 and 452. Return to Text
  8. Section 452(1) reads: "When an enquiry or trial in any criminal court is concluded, the court may make such order as it thinks fit for the disposal, by destruction, confiscation or delivery 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." Return to Text
  9. ". . . so long as the property is not available or its proceeds available, the Magistrate cannot make an order under Section 517, Criminal P.C." C. Honniah J. in Basavva Kom Dyamangouda Patil v. State of Mysore, 1971 Cri LJ 566 at p. 570. Return to Text
  10. Dyamangouda Patil case. at p. 361 (Para 4). Return to Text
  11. See Shyam Sunder v. State of Rajasthan, (1974) 1 SCC 690. Return to Text
  12. J. M. Shelat J. (for himself, R. S. Bachawat & V. Bhargava JJ.) in State of Gujarat v. Memon Mohomed Haji Hasam, AIR 1967 SC 1885 at 1889. Return to Text
  13. Usually property found in the person of the detained or arrested person is designated as Jama Talashi. J. T. of the beggar detained under beggary legislation is particularly relevant for the present discussion. Return to Text
  14. However, even in the present case the following observation of the court that: "It is clear that in the instant case, no plea had been taken by the State that the property was lost inspite of due care or caution having been taken by it or due to circumstances beyond its control", (Dyamangouda Patil case at p. 362) gives an impression that the court is suggesting governmental accountability on the basis of a fault principle. This might leave the owner without any remedy in cases where the government is able to show proper care or uncontrollable circumstances. Could the court not base the accountability on strict liability principle? The government is certainly in the best position to distribute losses. At least, better than the innocent owner. Return to Text
  15. AIR 1965 SC 1039 hereinafter referred to as Kasturi Lal case. Return to Text
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