New Delhi, September 18: In a significant ruling on the handling of seized cash during criminal trials, the Supreme Court on Thursday set aside a Gujarat High Court order that had directed the release of ₹50 lakh to a private claimant. The bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra restored the earlier decisions of the trial and sessions courts, stressing that the true ownership of the money can only be determined during trial.
Background
The case began in April 2022 when a Mahesana-based trader, Chiragkumar Modi, accused businessman Rajput Vijaysinh Natwarsinh of cheating multiple merchants in castor seed deals worth over ₹3.49 crore. Cheques issued allegedly bounced, prompting police to seize ₹50 lakh as muddamal-a Gujarati term for property recovered during investigation.
One witness, claiming the cash belonged to his own tobacco business transactions with the accused, sought its release. Both the magistrate and the sessions court refused, citing ongoing evidence gathering and multiple potential victims.
Court’s Observations
The High Court in December 2024 had disagreed, citing a 2002 Supreme Court precedent (Sunderbhai Desai) that allows interim release of valuable property to rightful claimants if proper records are kept.
But the apex court today noted crucial differences. “The money in question was recovered as part of an investigation in which the exchange of money is the subject matter of controversy,” the bench observed. Merely matching the seized sum with the witness’s claim, it said, “does not establish that he is the only claimant to the said amount.”
The justices emphasised that all alleged victims must be heard before anyone can be declared the rightful owner. They clarified that Sunderbhai Desai permits early release only when ownership is undisputed or clearly proved.
Decision
Allowing the appeal, the Supreme Court quashed the High Court’s direction and restored the trial and sessions courts’ orders. The ₹50 lakh, which had already been withdrawn under the High Court’s instructions, must now be re-deposited with the trial court along with accrued interest. The private respondent was directed to return the original currency notes if still available.
With this, the seized cash will remain under judicial custody until the Mahesana trial concludes and all claims are properly tested.
Case Title: Rajput Vijaysinh Natwarsinh vs. State of Gujarat & Others – Supreme Court on Release of Seized ₹50 Lakh
Date of Judgment: 18 September 2025