Only the vehicle owner or owner’s agent may claim interim custody of an NDPS-seized vehicle.

On 24 April 2025, Police Station Neemuch City intercepted Swift car No. RJ-27-CK-7132 pursuant to information that Dhanraj Singh was transporting opium.

The police recovered 7 kg of opium from his conscious possession and registered Crime No. 201/2025 under Section 8/18 of the NDPS Act.

Respondent No. 2 was the registered owner of the vehicle and had purchased it through a loan of ₹5,04,741 from the petitioner-financier, repayable in 36 monthly instalments.

The petitioner alleged default of ₹4,70,274.20 and relied on the loan agreement’s repossession clause to seek interim custody of the seized vehicle under Sections 497 and 503 of the BNSS.

The Special Judge (NDPS Act), Neemuch, dismissed the application on 2 April 2026, holding that the petitioner was not the registered owner.

The financier challenged that order in the present criminal revision.

Whether a financier possessing contractual repossession rights and a hypothecation endorsement on the registration certificate is entitled to interim custody (supurdagi) of a vehicle seized in an NDPS case?

Whether the Special Judge’s refusal to release the vehicle to the petitioner suffered from perversity, patent illegality, non-application of mind, or jurisdictional error warranting revisional interference?

The Court considered Sections 438 and 442 of the BNSS governing criminal revision and Sections 497 and 503 of the BNSS concerning custody and delivery of property.

It applied the principle in Bishwajit Dey v. State of Assam, (2025) 3 SCC 241, that where contraband is recovered from the owner or the owner’s agent, the vehicle ordinarily should not be released on superdari until the statutory reverse burden is addressed; however, where the vehicle is stolen or contraband is recovered from a third-party occupant without allegations of the owner’s knowledge or connivance, it should ordinarily be released to the owner on appropriate bond and security.

The Court further held that a financier’s contractual right of repossession is a civil right and cannot be enforced through criminal proceedings for interim custody.

A hypothecation endorsement protects the financier’s financial interest but does not make it the statutory owner for criminal-proceeding purposes.

The Court held that the petitioner’s reliance on the loan agreement and alleged EMI default raised a civil or contractual dispute, which could be pursued through appropriate civil or arbitral proceedings but could not determine custody under Sections 497 and 503 of the BNSS.

Although the petitioner was recorded as the financier, Respondent No. 2 remained the registered owner, and the hypothecation endorsement did not transfer ownership to the petitioner.

Applying Bishwajit Dey, the Court emphasized that interim custody in the criminal case ordinarily belongs to the owner or the owner’s agent.

The petitioner was neither the registered owner nor the owner’s agent, and the alleged violation of the loan agreement did not automatically displace the registered owner’s legal position or authorize delivery of the vehicle to the financier.

The Court therefore found no perversity, illegality, or jurisdictional error in the Special Judge’s order.

A financier, despite having a hypothecation interest and contractual repossession rights, is not entitled to interim custody of a seized vehicle merely because the borrower has defaulted, particularly where the financier is neither the registered owner nor the owner’s agent.

The criminal revision was dismissed, the order dated 2 April 2026 passed by the Special Judge (NDPS Act), Neemuch, was upheld in its entirety, and pending interlocutory applications were disposed of accordingly.