The Supreme Court of Canada has ruled that the province of Ontario was within its powers when it held onto nearly $30,000 that was found in the car of a university student six years ago.

On March 27, 2003, Robin Chatterjee was pulled over by York Regional Police because his car had no front licence plate.

Through a computer search, police determined that Chatterjee was in breach of probation because he was living in Thornhill, Ont., when he was supposed to be staying in Ottawa.

Police then arrested Chatterjee and searched his car.

Inside they found $29,020 in cash, an exhaust fan, as well as a light ballast and light socket, which officers said all smelled of marijuana.

While no drugs were found in the car and Chatterjee was not charged with any related offences, the Attorney General of Ontario was granted an order under the Civil Remedies Act to take control of the seized money.

This order presumed that the money came from unlawful activity.

Under the Civil Remedies Act, property can be seized if "under the balance of probabilities" a provincial Superior Court judge decides that it qualifies as "proceeds of unlawful activity" -- even if, in Chatterjee's case, a resident has not been charged with a particular crime.

Chatterjee brought the matter to the Ontario Court of Appeal on the grounds that the law was unconstitutional, but he was unsuccessful in getting his money back.

Last fall, Chatterjee brought the case to the Supreme Court, which handed down its judgment on Friday.

The Supreme Court ruled that the Civil Remedies Act is designed to discourage and to make it unprofitable for criminals to commit crimes that society pays the price for -- both financially and otherwise.

The law would be toothless, the court said, if it was unable to take away the proceeds of crime.

"It would be out of step with modern realities to conclude that a province must shoulder the costs to the community of criminal behaviour but cannot take legislative steps to suppress it," the court said in its decision, which was written by Justice Ian Binnie.

As a result, the court ruled that the Civil Remedies Act was valid provincial legislation.