Page No.# 1/7 GAHC030000942026 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : Crl.Pet./3/2026 Sh. Zonunsanga and Anr. S/o Ramhluna (L) R/o Zokhawthar Champhai District, Mizoram 2: Sh. F. Lalrinsang VERSUS State of Mizoram R/b PP/Addl. PP, Mizoram Advocate for the Petitioner : Ms. Lalngaihsaki Fanai Advocate for the Respondent : P.P./Addl.PP, Mizoram BEFORE HONOURABLE MR. JUSTICE KAUSHIK GOSWAMI ORDER 09.03.2026 Heard Ms. Lalngaihsaki Fanai, learned counsel for the petitioners. Also heard Ms. Mary L. Khiangte, learned Additional Public Prosecutor, Mizoram for the State. 2. By way of this petition under Section 528 of the BNSS read with Section 497 of the BNSS, the petitioner is seeking release of the seized currency amounting to Rs. 24,50,000/- only, which was seized in connection with SR No. 417/2023 arising out of Excise Case No. N-231/2023 under Section 21(c) of the Page No.# 2/7 ND&PS Act, 1985. 3. The prosecution case is that excise personnel seized 9.782 Kgs. of Methamphetamine from the two accused persons and in that connection, along with the two co-accused persons, the petitioner No. 1 was arrested and a sum of Rs. 24,50,000/- was seized from him on 22.08.2023 at 9:15 AM. 4. Ms. Fanai, learned counsel for the petitioners, submits that the seized cash has no nexus whatsoever with the criminal case registered against petitioner No. 1. It is contended that the said amount was intended to be paid to petitioner No. 2 towards the price of food grains purchased from his shop. She therefore submits that the seized cash cannot be construed as part of the proceeds of the seized contraband, nor can it be said to have been intended for use in any illicit drug-related activity. Placing reliance on the decision of the Apex Court in Sunderbhai Ambalal Desai -Vs- State of Gujarat reported in (2002) 10 SCC 283, she seeks release of the seized cash in question. 5. Per contra, Ms. Mary, learned APP for the State of Mizoram, vehemently opposes the prayer made in the petition seeking release of the seized cash. She submits that the cash in question forms part of the very subject-matter of the controversy and, therefore, ought not to be released to the petitioners at this stage. It is further contended that petitioner No. 1 is a Myanmar national and the seized cash represents the sale proceeds of contraband articles. According to the learned APP, the said amount has a direct nexus with the alleged offence and, being proceeds of illegal activity, constitutes black money which ought not to be released to petitioner No. 1. She further submits that petitioner No. 2 has no connection whatsoever with the seized cash, as the same was never handed Page No.# 3/7 over to him by petitioner No. 1 at any point of time. In support of her submissions, reliance is placed upon the decision of the Apex Court in Rajput Vijaysinh Natwarsinh -Vs- State of Gujarat & Others reported in (2025) SCC Online SC 2012, wherein the Apex Court set aside the order of the High Court directing release of the seized cash, holding that where the cash itself constitutes the subject-matter of the controversy and is directly connected with the alleged offence, the same ought not to be released to the accused person. 6. I have given my anxious consideration to the submissions advanced by the learned counsel appearing for the parties and have carefully perused the materials available on record, including the up-to-date scanned copy of the TCR received from the Trial Court. 7. The power of the Court to grant interim custody or release of seized property is traceable to Section 451 of the Code of Criminal Procedure (now corresponding Section 497 of the BNSS). The object of the provision, as explained by the Apex Court in Sunderbhai Ambalal Desai (Supra), is to ensure that valuable articles are not kept in police custody for an unnecessarily long period when appropriate safeguards can be imposed so that the same may be produced during trial, if required. However, the exercise of such power is discretionary and must be guided by the nature of the property seized, the stage of investigation or trial, and its relevance to the prosecution case. Relevant paragraphs of the aforesaid judgment relating to custody, inter-alia, of currency notes read as under – “11. With regard to valuable articles, such as, golden or silver ornaments or articles studded with precious stones, it is submitted that it is of no use to keep such articles in police custody for years till the trial is over. In our Page No.# 4/7 view, this submission requires to be accepted. In such cases, the Magistrate should pass appropriate orders as contemplated under Section 451 CrPC at the earliest. 12. For this purpose, if material on record indicates that such articles belong to the complainant at whose house theft, robbery or dacoity has taken place, then seized articles be handed over to the complainant after: (1) preparing detailed proper panchnama of such articles; (2) taking photographs of such articles and a bond that such articles would be produced if required at the time of trial; and (3) after taking proper security. 13. For this purpose, the Court may follow the procedure of recording such evidence, as it thinks necessary, as provided under Section 451 CrPC. The bond and security should be taken so as to prevent the evidence being lost, altered or destroyed. The court should see that photographs of such articles are attested or countersigned by the complainant, accused as well as by the person to whom the custody is handed over. Still however, it would be the function of the court under Section 451 CrPC to impose any other appropriate condition. 14. In case, where such articles are not handed over either to the complainant or to the person from whom such articles are seized or to its claimant, then the court may direct that such articles be kept in bank lockers. Similarly, if articles are required to be kept in bank lockers, it would be open to the SHO after preparing proper panchnama to keep such articles in a bank locker. In any case, such articles should be produced before the Magistrate within a week of their seizure. If required, the court may direct that such articles be handed back to the investigating officer for further investigation and identification. However, in no set of circumstances, the investigating officer should keep such articles in custody for a longer period for the purpose of investigation and identification. For currency notes, similar procedure can be followed.” 8. The limitation to the aforesaid principle has been clarified by the Apex Court in Rajput Vijaysinh Natwarsinh (Supra), wherein it has been held that where the seized money itself forms part of the subject matter of the controversy and the alleged transaction involving such money is under Page No.# 5/7 investigation, the Court ought not to release the same at the interlocutory stage. The Apex Court observed that when the ownership and true character of the seized amount cannot be conclusively determined at that stage, premature release of such muddamal property would be unjustified and the matter ought to be left to be decided upon appreciation of evidence during trial. Relevant paragraphs of the aforesaid judgment read as under – “10. The High Court has correctly referred to this judgment, however, in our considered view failed to appreciate its holding in the attending facts and circumstances of the instant case. We say so far the reason that the money in question was recovered as part of an investigation in which the exchange of money is the subject matter of controversy. As we have already noted supra, the dispute pertains to money paid to the complainant and other like firms, in the course of business. It is undisputed that respondent No. 2 has produced before the High Court certain documents to show that the proprietary firm through the appellant-accused, owned him/his concern a sum of Rs. 50,0,000/-. However, it is entirely possible that the said sum of money was part of some other transaction. Simply because the amount owned to him matches the amount recovered does not establish that he is the only claimant to the said amount. As such, we hold that the Additional District and Sessions Judge, Mehsana correctly took the view that the direct ownership of the said Respondent cannot be conclusively established. 11. The appropriate ownership of the sum of money can only be determined after consideration of all evidence and having taken into account the claims and views of all the other persons that the appellant- accused has allegedly played foul with, in business. The evidence presented by respondent No. 2 to establish his claim over the said amount will have to be considered by the Court seized of trial in the matter, and then only can a proper decision be arrived at. At this stage, therefore, releasing the muddamal would be unjustified and premature. 12. In that view of the matter, the appeal is allowed. The judgment of the High Court with particulars as mentioned in paragraph 1 is set aside and the judgment and orders of the Courts below are restored.” Page No.# 6/7 9. In the present case, the seizure of Rs. 24,50,000/- occurred in the course of investigation of an offence under Section 21(c) of the NDPS Act involving recovery of 9.782 kilograms of Methamphetamine, which indisputably falls within the category of commercial quantity. Offences involving commercial quantity under the NDPS Act are ordinarily not isolated instances of possession but form part of a larger chain of illicit narcotic trafficking which operates through an organized financial network. The circulation of substantial amounts of cash constitutes an intrinsic component of such illicit trade, representing either the proceeds of sale of narcotic substances or funds intended for procurement and distribution of contraband. 10. Therefore, money recovered from the possession of an accused during investigation of such offences cannot be viewed in isolation as a neutral piece of property. On the contrary, it assumes considerable evidentiary significance as a potential link in the financial trail of the alleged narcotics transaction. In the present case, the prosecution has specifically asserted that the seized amount represents proceeds arising out of illicit narcotic transactions and therefore bears a direct nexus with the alleged offence. 11. Viewed in the aforesaid context, the seized cash cannot be treated as a mere unrelated property lying in police custody. The prosecution case itself attributes a direct nexus between the seized amount and the alleged narcotics activity. Consequently, the said money forms part of the core subject matter of investigation and the controversy to be adjudicated during trial. The explanation offered by the petitioner that the amount was meant to be paid to petitioner No.2 towards purchase of food grains is essentially a matter of defence which can only be examined upon appreciation of evidence during trial. 12. Moreover, the materials available on record reveal that out of the eight Page No.# 7/7 witnesses cited by the prosecution, four witnesses examined so far have implicated petitioner No.1 in connection with the alleged offence. At this stage, therefore, the ownership and true character of the seized money cannot be conclusively determined. I am thus of the unhesitant view that releasing such money at the interlocutory stage would be contrary to the principle laid down by the Apex Court in Rajput Vijaysinh Natwarsinh (supra) and may potentially frustrate the evidentiary and consequential aspects of the trial under the ND&PS Act. 13. Insofar as petitioner No.2 is concerned, the materials on record do not prima facie establish any lawful claim over the seized cash, which was admittedly recovered from the possession of petitioner No.1. Consequently, no ground is made out for releasing the said amount to petitioner No.2 as well. 14. In view of the foregoing discussion, I do not find any merit in the present criminal petition. The same accordingly stands dismissed. However, it is directed that pending trial, the seized currency shall be kept secured in accordance with law so that the same remains preserved for the purpose of trial. 15. No order as to costs. JUDGE Comparing Assistant