Interim custody of seized cash allowed with safeguards where no income tax proceedings were pending against the claimant.

Seized cash was ordered to be released in interim custody where no income tax proceedings had been initiated against the petitioner and the employee in possession of the money had no objection to its release. The court noted that the Magistrate had refused custody on the assumption of pending departmental action, but the absence of such proceedings justified release with safeguards. The amount could be released subject to an undertaking before the Magistrate and a bond before the Income Tax Department, with a continuing obligation to produce or make the money available whenever required.

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Issues: Whether the seized cash was liable to be released to the petitioner on interim custody, subject to an undertaking and bond, when no income tax proceedings had been initiated against him.

Analysis: The amount had been seized while in the possession of the petitioner's employee and a criminal case had been registered. The employee had stated that he had no objection to release of the money to the petitioner. The Income Tax Department had not initiated any proceedings against the petitioner, though the Magistrate had declined interim custody on the premise of pending departmental proceedings. In these circumstances, the Court found it appropriate, to meet the ends of justice, to permit release of the cash with safeguards ensuring production of the amount before the Magistrate or the department if required.

Conclusion: The petitioner was entitled to release of the seized amount on execution of an undertaking before the Magistrate and a bond before the Income Tax Department, with a condition to produce or make available the amount whenever required.

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