Esaf Small Finance Bank Limited vs The State Of Madhya Pradesh

NEUTRAL CITATION NO. 2026:MPHC-JBP:46446
1 MCRC-29410-2026
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR

BEFORE
HON'BLE SHRI JUSTICE HIMANSHU JOSHI
th
ON THE 29 OF JUNE, 2026
MISC. CRIMINAL CASE No. 29410 of 2026
ESAF SMALL FINANCE BANK LIMITED
Versus
THE STATE OF MADHYA PRADESH
Appearance:
Shri Takmeel Nasir - Advocate for applicant.
Shri Deepak Sahu - Panel Lawyer for the State.
ORDER
The present petition under Section 528 of the Bharatiya Nagarik
Suraksha Sanhita, 2023 has been preferred by the applicant (ESAF Small
Finance Bank Limited) assailing the order dated 02.04.2026 passed by the
learned First Additional Sessions Judge, Sihora, District Jabalpur in Criminal
Revision No.2/2026 (Annexure-P/2), affirming the order dated 06.10.2025
passed by the learned Judicial Magistrate First Class, Sihora in MJC
No.696/2025 (Annexure-P/1), whereby the applicant's application under
Section 503 BNSS seeking interim custody of seized gold ornaments was
rejected.
2. As per the facts pleaded, the applicant is a scheduled banking institution
engaged, inter alia, in providing gold loan facilities. It is stated that on
11.08.2025, a dacoity occurred at the applicant's Sihora Branch, District
Jabalpur, wherein unknown assailants forcibly entered the branch, threatened
the staff at gunpoint and decamped with gold ornaments weighing about
Signature Not Verified
Signed by: PANKAJ NAGLE
Signing time: 02-07-2026
12:29:38

NEUTRAL CITATION NO. 2026:MPHC-JBP:46446
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14,873.50 grams pledged by various customers and cash amounting to

Rs.5,08,675/-. Pursuant to registration of FIR No.262/2025 at Police Station
Khitola for offences under the Bharatiya Nyaya Sanhita, investigation was
undertaken and certain gold ornaments weighing approximately 3.090
kilograms were recovered and seized by the police. Five accused persons
were also arrested.
3. Learned counsel for the applicant submitted that the recovered gold
ornaments represent pledged articles belonging to various customers and the
applicant-bank is legally obliged to safeguard and return the same upon
discharge of the respective loans. It was argued that continued retention of
the ornaments in police custody would cause hardship not only to the bank
but also to the customers whose valuable articles remain unavailable despite
recovery. It was further contended that the Courts below erred in rejecting
the application merely on the ground that the articles may be required during
trial.
4. Learned Panel Lawyer appearing for the State opposed the petition and
supported the impugned orders. It was submitted that the seized ornaments
constitute material property connected with a serious offence of dacoity and
the investigation and trial proceedings are yet to attain finality. It was
contended that identification of the recovered ornaments and establishment
of their nexus with the crime are matters to be examined during trial and,
therefore, the Courts below has rightly declined release of the property at the
present stage.
5. Heard learned counsel for the parties and perused the material available
Signature Not Verified
Signed by: PANKAJ NAGLE
Signing time: 02-07-2026
12:29:38

NEUTRAL CITATION NO. 2026:MPHC-JBP:46446
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on record. The question which falls for consideration is whether the Courts

below were justified in rejecting the application for interim custody solely on
the ground that the seized property may be required during trial. The law
relating to custody and disposal of seized property is very clear.
6. In Sunderbhai Ambalal Desai vs. State of Gujarat, (2002) 10 SCC 283 ,
the Supreme Court emphasized that valuable articles should not be retained
in police custody for an unduly long period and appropriate orders for
interim release ought to be passed after preparing detailed panchnama,
photographs and other necessary records. In paragraph 21, the Supreme
Court has observed as under:
“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 police would not be
required to keep the article in safe custody; (3) proper
panchnama before handing over possession can be used
in evidence instead of production of the article before
the court during trial.”
7. The aforesaid principles have repeatedly been followed in cases
involving gold ornaments and other valuables. The object behind such orders
is to prevent deterioration, misplacement or unnecessary retention of
valuable property while simultaneously protecting the interests of the
prosecution through suitable safeguards.
8. In the present case, there is no dispute that the recovered ornaments
were part of the property looted from the applicant-bank. The applicant-bank
was in lawful possession of the pledged ornaments at the time of the incident
and claims custody as a bailee and secured creditor. The Courts below have
Signature Not Verified
Signed by: PANKAJ NAGLE
Signing time: 02-07-2026
12:29:38

NEUTRAL CITATION NO. 2026:MPHC-JBP:46446
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not recorded any finding that release of the ornaments would prejudice the

investigation or that adequate safeguards cannot be imposed. The sole reason
assigned is that the articles may be required during trial. Such reasoning runs
contrary to the law laid down in Sunderbhai Ambalal Desai (supra), wherein
the Supreme Court specifically held that detailed inventories, photographs
and other documentary evidence can adequately preserve the evidentiary
value of the property.
9. At the same time, considering that the criminal case pertains to a serious
offence of dacoity and the claims of individual borrowers may ultimately
require verification, the release of the property cannot be unconditional. The
interests of justice would be adequately protected by directing release of the
seized ornaments in favour of the applicant-bank upon furnishing appropriate
security and after preparation of a detailed inventory and photographic
record.
10. Consequently, the petition deserves to be allowed. The order dated
02.04.2026 passed by the learned First Additional Sessions Judge, Sihora,
District Jabalpur in Criminal Revision No.02/2026 (Annexure P/2) and the
order dated 06.10.2025 passed by the learned Judicial Magistrate First Class,
Sihora in MJC No.696/2025 (Annexure P/1) are hereby set aside.
11. The learned trial Court is directed to release the seized gold ornaments
in favour of the applicant-bank, subject to the following conditions:
(i) a detailed inventory and panchnama of each ornament shall be
prepared by the Investigating Officer in the presence of the applicant's
authorized representative;
(ii) high-resolution photographs and videography of the ornaments
Signature Not Verified
Signed by: PANKAJ NAGLE
Signing time: 02-07-2026
12:29:38

NEUTRAL CITATION NO. 2026:MPHC-JBP:46446
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shall be undertaken and preserved as part of the record;

(iii) the applicant-bank shall furnish a bank guarantee or security to
the satisfaction of the trial Court equivalent to the value of the released
ornaments;
(iv) the applicant-bank shall file an undertaking that the ornaments
shall be produced before the Court whenever directed and shall not be
alienated or otherwise disposed of in a manner prejudicial to the
proceedings;
(v) release of the ornaments shall remain subject to the final outcome
of the criminal case and shall not create any equity in favour of any person
regarding ultimate ownership.
12. With the aforesaid directions, the petition stands allowed.
(HIMANSHU JOSHI)
JUDGE
pn

Signature Not Verified
Signed by: PANKAJ NAGLE
Signing time: 02-07-2026
12:29:38