Police cannot treat unexplained cash as crime proceeds without grounds to suspect an offence, Madras High Court rules

Police searched the petitioner’s house on 15 June 2026, seized 19.916 kg of banned tobacco products and Rs.98,610 in cash, and registered Crime No. 232 of 2026 for alleged offences under Sections 275, 123 and 59 of the Bharatiya Nyaya Sanhita, 2023, and Section 6(a) read with Section 24(1) of the COPTA Act

The petitioner sought return of the cash, claiming it came from his petty shop business. The Judicial Magistrate No. 1, Ariyalur, dismissed the application because the petitioner had not proved the source of the money. He challenged that order in revision

Whether the police could seize and retain the cash under Section 106 of the BNSS on the ground that it was proceeds of the alleged offence, when the statutory preconditions for seizure were not established

Whether the petitioner was entitled to interim custody of the seized cash, subject to conditions

Section 106(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023, permits police seizure of property alleged or suspected to have been stolen, or found in circumstances creating suspicion that an offence has been committed; the court held that mere possession of cash, or inability to explain its source, does not by itself make the cash stolen property or proceeds of an offence

The court stated that, if the State sought to secure the cash for possible confiscation following conviction, it could seek attachment under Section 107 of the BNSS. The judgment also referred to the corresponding provision, Section 102 of the Code of Criminal Procedure, 1973

The prosecution’s position was that the cash represented proceeds of the alleged tobacco offence, but the court found no claim that it was stolen property or that its seizure arose from circumstances creating suspicion of an offence, as required by Section 106(1)

The petitioner’s failure to produce contemporaneous accounts or explain the cash’s origin could not, without more, establish the statutory basis for seizure or justify treating the money as proceeds of crime. The State’s interest in preserving the money could instead be pursued through an application for attachment under Section 107. The court therefore ordered interim custody to the petitioner on conditions

He was required to execute a bond for Rs.25,000 with two sureties for like sums, to the satisfaction of the Judicial Magistrate No. 1, Ariyalur, within two weeks of receiving the order; after compliance, the Magistrate was to hand over the cash within four weeks. The petitioner must produce the cash whenever required by the trial court