Special statute custody over seized money prevails over general criminal procedure when enforcement investigation requires the property.

Where seized money was required by the Enforcement Directorate for investigation under the Foreign Exchange Regulation Act, 1947, the Magistrate was not to conduct a general inquiry into ownership under Section 523 of the Criminal Procedure Code. The property was not being finally adjudicated between rival claimants; it was needed for temporary custody and inquiry under a special statutory scheme. The court therefore treated the general criminal procedure power as inapplicable in these circumstances and required the money to remain with the enforcement authorities for investigation. The refusal to deliver the amount for that purpose was set aside.

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Issues: Whether the Magistrate could direct an inquiry into the ownership of money seized in the course of investigation and refuse delivery of the amount to the Enforcement Officer for further investigation under the Foreign Exchange Regulation Act, 1947.

Analysis: The property was not the subject of a rival claim for final disposal, but was required by the Enforcement Directorate only for investigation into an alleged contravention of the Foreign Exchange Regulation Act, 1947. The Act itself provided a special machinery for summoning and examining witnesses and for conducting the inquiry, and the seized amount was therefore to remain in the custody of the enforcement authorities for that purpose. The general power under Section 523 of the Code of Criminal Procedure to inquire into entitlement to possession of seized property did not justify a full inquiry into ownership in these circumstances, because the Magistrate was not deciding a rival claim to the property but only the question of temporary custody for investigation. Any contrary direction would only create an empty and meaningless formality, since the money could otherwise be returned and immediately re-seized by the Enforcement Officer.

Conclusion: The Magistrate had no occasion to conduct an inquiry into ownership and ought to have delivered the money to the Enforcement Officer for investigation; the refusal to do so was set aside.

Ratio Decidendi: Where seized property is required by a specialised enforcement authority for investigation under a special statute, the Magistrate should not undertake a general inquiry into ownership under the Criminal Procedure Code and must give effect to the statutory scheme governing custody and investigation.

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