Krishnan Narayana v. The State of Andhra Pradesh & Ors. Etc., 2026
Registration Certificate Not Conclusive for Interim Custody of Seized Vehicles
Judgement Details
Court
Supreme Court of India
Date of Decision
18 September 2026
Judges
Justice Sanjay Karol and Justice Augustine George Masih
Citation
Acts / Provisions
Facts of the Case
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The appellant, Krishnan Narayana, was a director of M/s Pure Minerals, a company involved in granite quarrying. He was also associated with the respondent company, M/s Earth Stein Private Limited, in which he had held an 80% shareholding.
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The dispute concerned several vehicles/machinery, namely: One Bolero City Pick-up, Three excavators and One Ashok Leyland tipper
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These vehicles had been purchased between 2014 and 2022 in the name of M/s Pure Minerals.
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The appellant alleged that certain persons had intimidated him and obtained his signatures on blank papers, which were subsequently used to fabricate his resignation from the respondent company. He further alleged that the respondents had trespassed into the granite factory and taken away the vehicles. An FIR was registered in relation to these allegations.
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The respondent company's version was different. It alleged that the appellant had misappropriated ₹1,73,11,894 belonging to the company and had used those funds to purchase the vehicles in the name of M/s Pure Minerals. A counter-FIR was registered under Section 406 IPC, and a chargesheet was filed.
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The vehicles were subsequently seized by the police on 7 February 2025 from the respondent company's operational premises. Both sides then sought interim custody of the vehicles.
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The Andhra Pradesh High Court ultimately granted interim custody of the vehicles to M/s Earth Stein Private Limited. Krishnan Narayana challenged that decision before the Supreme Court.
Issues
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Whether the appellant or the respondent company was entitled to interim custody of the seized vehicles under Sections 451 and 457 CrPC.
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Whether the registration certificates standing in the name of the appellant's company were, by themselves, sufficient to establish entitlement to interim possession.
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Whether the Court, while deciding interim custody, was required to consider other circumstances such as actual possession, use of the vehicles, payment of loan instalments and undertakings given by the parties.
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Whether determining interim custody under Sections 451 and 457 CrPC amounts to adjudicating the ultimate ownership or title over the property.
Judgement
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The Supreme Court dismissed the appeals and upheld the High Court's decision granting interim custody of the vehicles to M/s Earth Stein Private Limited.
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The Court explained that Sections 451 and 457 CrPC give criminal courts discretion to determine who is best entitled to possession of seized property at the interim stage.
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Importantly, the Court held that this exercise is not an adjudication of final ownership or title. The purpose is primarily to ensure proper custody of the property and prevent its waste, misuse, deterioration or diminution in value.
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The Court rejected the argument that the registration certificates alone required the vehicles to be handed over to the appellant.
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While registration was considered a relevant evidentiary circumstance, it was not conclusive of entitlement to interim possession. The Court instead examined the circumstances cumulatively.
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Among the circumstances favouring the respondent company were:
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The vehicles had remained in the company's continued possession and use.
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The appellant had executed an undertaking permitting the company to retain and operate the vehicles until settlement of accounts.
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The loan/hypothecation instalments relating to the vehicles had been paid from the respondent company's account.
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Criminal proceedings concerning alleged misappropriation of company funds remained pending.
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The Supreme Court therefore concluded that the circumstances supporting the respondent company's interim possession outweighed the appellant's reliance on the registration certificates.
Held
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The Supreme Court held that registration certificates are not conclusive for deciding interim custody of seized vehicles under Sections 451 and 457 CrPC.
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The Court must make a prima facie and judicial assessment of who is best entitled to possession, taking into account the nature of the property, circumstances of seizure, actual possession, use, financial arrangements and other relevant material.
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Accordingly, M/s Earth Stein Private Limited was held entitled to interim possession of the vehicles, and the appeals filed by Krishnan Narayana were dismissed.
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However, the Court expressly clarified that its observations were limited to interim custody and did not finally decide: ownership of the vehicles; alleged misappropriation; validity of the resignation; validity of the share transfer; or allegations of forgery.
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Those questions were left to be determined in the appropriate proceedings.
Analysis
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he most important principle emerging from the judgment is the distinction between possession for interim purposes and ultimate ownership.
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Sections 451 and 457 CrPC are intended to enable courts to make practical arrangements concerning seized property while criminal proceedings are pending. The court is not expected to conduct a full-fledged trial concerning title at this stage.
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The Court specifically rejected an inflexible approach under which the person or entity named in a registration certificate must automatically receive custody of a seized vehicle.
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The registration certificate is evidentiary, but the court can examine other circumstances to determine who has the better claim to interim possession.
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The Court adopted a cumulative assessment rather than relying on a single document.
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The respondent company's continued possession, payment of EMIs, undertaking by the appellant and the surrounding commercial relationship were considered together. These circumstances were found to provide stronger support for interim custody than the registration certificates standing alone.
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The judgment reinforces that proceedings concerning interim custody should not become a substitute for a civil trial concerning ownership.
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The Court expressly stated that questions of title, ownership, misappropriation and validity of resignation/share transfer were not finally determined in the present proceedings.
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The Court considered N. Madhavan v. State of Kerala (1979) and Sunder Bhai Ambalal Desai v. State of Gujarat (2002).
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These authorities emphasize that the discretion relating to seized property must be exercised judicially, expeditiously and on sound principles, with the objective of avoiding unnecessary deterioration or misuse of property.
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The judgment is particularly relevant to disputes involving commercial vehicles, machinery and other movable assets seized during criminal investigations. It makes clear that courts deciding interim custody can look beyond documentary registration and consider the actual possession, use, financial arrangements and surrounding circumstances.
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At the same time, the judgment carefully preserves the distinction between interim custody and final determination of title.