Source: Supreme Court 

Why in News? 

A bench of Justice BR Gavai, Justice Prashant Kumar Mishra and Justice KV Vishwanathan laid down the law on possession of stolen property under Section 411 of    the Indian Penal Code, 1860 (IPC) (Section 317 of BNS).  

• The Supreme Court held this in the case of Hiralal Babulal Soni v. The State of Maharashtra (2025). 

What was the Background of Hiralal Babulal Soni v. The State of Maharashtra (2025) Case?   

• The case involved fraud committed through fake Telegraphic Transfers and subsequent withdrawals amounting to Rs. 6,70,00,000/- at Vijaya Bank, Nasik Branch, Maharashtra. 
• On 6th February 1997, a bank account was opened for a fictitious firm called Globe International using forged documents. 
• Between April and August 1997, multiple fraudulent Telegraphic Transfers totaling Rs. 6,70,00,000/- were credited to this account and subsequently withdrawn. 
• The Central Bureau of Investigation found that most of the Demand Drafts were issued to M/s. Chenaji Narsinghji (M/s. CN) for purchasing gold bars that were delivered to accused No. 3 (Nandkumar Babulal Soni). 
• On 1st June 2001, a search at accused No. 3's shop led to the seizure of 205 gold bars and other documents. 
• The Trial Court convicted accused Nos. 1 (S.K. Sheenappa Rai), 2 (Devdas Shetty), and 3 (Nandkumar Babulal Soni) for various offences but directed that the 205 gold bars be returned to accused No. 3. 
• The High Court overturned the convictions of accused Nos. 1 and 2 but upheld the conviction of accused No. 3. The court also quashed the Trial Court's order to return the gold bars to accused No. 3 and ordered them to be confiscated. 
• Criminal appeals were subsequently filed by accused No. 3 challenging his conviction and seeking the return of the gold bars, and by Hiralal Babulal Soni and Vijaya Bank also seeking the return of the gold bars. 

What were the Court’s Observations? 

• In the present facts the prosecution relied on Section 411 Indian Penal Code, 1860 (IPC) (Section 317 of Bharatiya Nyaya Sanhita, 2023 (BNS)) and Section 106 of Indian Evidence Act, 1872 (IEA) (Section 109 of Bharatiya Sakshya Adhiniyam, 2023 (BSA)) in order to establish the commission of offence. 
• The defence set up by the appellant/accused in this case was that: 
  • Firstly, there was a delay of four years in finding out the property. 
  • Secondly, the appellant/ accused himself is the jeweller. 
  • Thirdly, the gold bars are not proved to be stolen property due to differences in markings. 
• The Court observed that in the facts of the case the prosecution has failed to prove the identity of the seized gold as being the same gold which were sold by M/s CN to M/s Globe International. 
• Further, it was held that due to the delay of 4 years in recovery of the property the very basis of identification was found shattered and hence the possibility of mistaken identification cannot be ruled out. 
• Further, it was also observed by the Court that Section 114 of IEA cannot be invoked in the facts of the present case as the prosecution has failed to discharge it’s initial burden. 
• With Respect to Section 106 of IEA the Court held that Section 106 of IEA is applicable only when the prosecution is able to establish the facts from which a reasonable inference can be drawn that there are certain facts especially within the knowledge of the accused.  
• Where the case is resting on circumstantial evidence if the accused fails to offer a reasonable explanation in discharge of burden under Section 106 of IEA, such failure may provide an additional link in the chain of circumstantial evidences. 
• However, the Court held that in the present facts this provision cannot be invoked. 
• Therefore, the Court held that identity of the seized property being stolen property is not established and hence the appeal preferred by the Vijaya Bank stood dismissed. 
• Hence, the Court dismissed the appeal of Hiralal Babulal Soni seeking return of gold.

What is the Offence of Possession of Stolen Property? 

• The offence of possession of stolen property was contained in Section 411 of Indian Penal Code, 1860 (IPC). This is now contained in Section 317 of BNS. 
•  Comparative Analysis of the two provisions is as follows 

• In order to bring home the charge under Section 411 of the IPC, it is the duty of the prosecution to prove  
  • That the stolen property was in the possession of the accused. 
  • That some persons other than the accused had possession of the property before the accused got possession of it. 
  • That the accused had knowledge that the property was stolen property.