G. Malliga, Selvaraj and Manimekalai vs State

S. Ashok Kumar, J.—Criminal Appeal No. 79/2000 has been preferred by the first accused against the judgment passed by the learned

Special Judge/XI Additional Sessions Judge, Chennai, in Special C.C. No. 12 of 1997, dated 12.1.2000 by which she was convicted for the

offences under Sections 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 and sentenced to undergo rigorous imprisonment for

7 years and to pay a fine of Rs. 1 lakh, in default to undergo rigorous imprisonment for six months.

Criminal Appeal No. 83 of 2000 has been preferred by the second accused against the judgment passed by the learned Special Judge/XI

Additional Sessions Judge, Chennai, in Special C.C. No. 12 of 1997, and 1/2000 dated 12.1.2000 and 13.1.2000 respectively by which he was

convicted for the offences under Sections 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 read with Section 109 IPC and

sentenced to undergo rigorous imprisonment for 7 years and to pay a fine of Rs. 1 lakh, in default to undergo rigorous imprisonment for six months.

Criminal Appeal No. 106 of 2000 has been preferred by the third accused against the judgment passed by the learned Special Judge/IX

Additional Sessions Judge, Chennai, in Special C.C. No. 12 of 1997, and 1/2000 dated 12.1.2000 and 13.1.2000 respectively by which she was

convicted for the offences under Sections 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 read with Section 109 IPC and

sentenced to undergo rigorous imprisonment for 1 year and to pay a fine of Rs. 1,000/=, in default to undergo rigorous imprisonment for one

month.

Criminal Appeal No. 610 of 1997 has been preferred earlier in point of time against the judgment passed by the learned Principal District and

Sessions Judge, Cuddalore in Crl.M.P. No. 563 of 1997, dated 21.7.1997 by which the properties of the accused were attached. The said

attachment was made on the application filed by the Prosecution Agency pending disposal of the Special Case No. 12/1997 filed before the

learned Special Judge/XI Additional Sessions Judge, Chennai.

Now, as against the judgment and conviction in the said Spl.C.C.No : 12 of 1997 and 1 of 2000, A.1 to A.3 have preferred Crl.A. No. 79,83

and 106 of 2000 respectively. Thus the decision in these appeals will bind the decision on Crl.A.No : 610/97 which is preferred against the

attachment of properties.

The Vigilance and Anti-Corruption filed a final report stating that-

(a) the first accused G. Malika, was the Member of the Legislative Assembly elected from Bhuvanagiri Assembly Constituency from 17.6.1991 to

13.5.1996. Therefore she was a public servant during the said period. A.2 is the brother of A.1. A.3 is wife of A.2. They belong to Viruthangal

village. A.1 and A.2 belong to a middle class family. Their father one Govindaraj was a Luskar in Public Works Department and retired from

service on 1.4.1993. Before contesting in the Assembly Election, there was not sufficient property for A.1 and she pledged the jewels for Rs.

4,000/= and contested in the election. The jewels were redeemed on 26.2.1992 after paying a sum of Rs. 4,417/=. She received a loan of Rs.

1,000/= from her father and another relative a sum of Rs. 2,500/= before the election and repaid the loans. A.1 and A.2 had only 5 acres of land

inherited from their father. After becoming an MLA, A.1 to A.3 have purchased properties to the total value of Rs. 1,93,11,359/=. But the income

during the said check period i.e., 17.6.1991 to 13.5.1996 was only Rs. 5,18,594/= which is the total amount of her salary, daily allowances and

income from lands including interest from bank deposits. During July 1995 one Sinniah Bose sent a sum of Rs. 76,61,175 to A.1 to A.3 and one

Malarkodi, sister of A.1, through Reserve Bank of India from Dubai. Further another amount of Rs. 1.25 Crores was also sent by the said Sinniah

Bose from Dubai through RBI and the same was received in the Bank accounts of the accused. The yearly income of the said Sinniah Bose was

only Rs. 3,93,000/=. Therefore, he could not have sent such an amount. During the check period the expenditure incurred by the accused is Rs.

48,23,621/=. But they have spent Rs. 43,05,027/= more than their income. Thus from 13.5.1996, A.1 in her name and in the names of A.2 and

A.3 have amassed wealth to the extent of Rs. 2,36,15,386/=., When notice was issued to her asking her to explain, she did not give proper reply.

Hence the Vigilance and Anti-corruption filed a final report against the accused A.1 u/s 13(2) read with u/s 13(1)(e) of the Prevention of

Corruption Act and read with Section 109 IPC also as against A.2 and A.3. The case was taken on file by the Special Court as Special Calendar

Case No. 12 of 1997.

(b) On behalf of the prosecution, P.Ws 1 to 81 were examined and Exs.P.1 to P.168 were marked. ON behalf of the accused, D.W.1 to D.W.35

were examined and Exs.D.1 to D.36 were marked, besides Exs.C.1 to C.6 produced by the witnesses. When the accused were questioned u/s

313 Cr.P.C., with regard to the incriminating circumstances appearing against them in the evidence of the prosecution witnesses, they denied the

same as false and incorrect by filing separate written statements. A.1 in her written statement has given details as to her income from various

sources, besides denying the evidence of some of the prosecution witnesses. A.2 in his written statement disputed the evidence of several

witnesses and accepting the evidence of certain witnesses. He also explained certain income received through his lands and shrimp farms. A.3 has

also filed a written statement wherein she has stated that she does not know anything and all the transactions are known only to her husband A.2.

But on a consideration of the oral and documentary evidence, the learned Special Judge, Chennai came to the conclusion that the offences under

Sections 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988 has been proved as against A.1 to A.3, and also read with

Section 109 IPC as against A.2 and A.3 and imposed the punishment as stated earlier. Aggrieved over the said conviction and sentence, these

appeals are preferred by the accused.

Mr. S. Ashok Kumar, learned senior counsel appearing for A.1 made the following submissions:

(a) The learned Special Judge, did not give sufficient opportunity to the accused to examine her witnesses in spite of an order made by this Court in

Crl.R.C. No. 1274 of 1999 and has erred in convicting A.1 without giving her sufficient opportunity.

(b) The investigation has started with the presumption that A.1 had only 15 sovereigns of gold ornaments/jewels and with Rs. 1,000/= cash prior

to the check period as her assets. This is totally wrong. It is an admitted fact that A.1 was employed as a Social Worker in Pondicherry with a

regular monthly income prior to the check period and also had income from her lands which were not taken into account by the Investigating

Officer.

(c) The Investigating Officer has not taken into account the fact that A.1 and her brother A.2 have filed income tax returns from the year 1990

onwards, which were accepted by the Income Tax authorities. But the incomes as shown therein were not included as income during the check

period or earlier to the check period.

(d) A.1 has produced several documents like promissory notes, court decrees etc., for having obtained loans from various persons, which were

accepted by the Income Tax authorities. After examination of those persons by the Investigating Officer, it was said to have been given as loans to

A.1. But the amounts so obtained through loans have not been added as income of the accused.

(e) The expenditure of the accused is held to be Rs. 48,23,621/= during 5 years of check period, which would mean that the accused have spend

more than Rs. 80,393/= per month as expenditure for which there is no proof and thus the Investigating Officer has inflated the expenditure said to

have been incurred by the accused.

(f) Though it is admitted that through one Sinniah Bose of Dubai, the accused have received a sum of Rs. 76,61,175/= and Rs. 1.25 crores, the

Investigating Officer has held that the annual income of the said Sinniah Bose is only Rs. 3,36,000/= and therefore he could not have sent such

huge amounts. But the said Sinniah Bose was admittedly not examined by the Investigating Officer.

(g) If the total income obtained from Dubai and loans obtained from local people are taken together, there is no proof to show that it is

disproportionate than the income during the check period of the accused.

Mr. I. Subramaniam, learned Senior Counsel appearing for A.2 would contend that though he was an income tax assessee from the year 1990

onwards, his assets prior to the check period were not taken into consideration and no notice was issued to A.2 and his wife A.3 calling for

explanation with regard to the assets owned by them. According to the learned Counsel, the failure to issue notice and obtaining explanation from

A.2 and A.2 will amount to a denial of opportunity to explain the allegations against the accused which is against the principles of natural justice.

Mr. T. Sundanthiram, learned senior counsel appearing for A.3 would also submit that A.3 was a house wife and in her own 313 Cr.P.C.,

statement she has simply stated that she does not know anything about the cases and all the transactions are made only by her husband and no

notice was issued to her also calling for explanation regarding the allegations against her that she was holding disproportionate assets to the known

sources of her income.

Per contra, Mr. P. Kumaresan, learned Special Public Prosecutor would contend that the prosecution has proved the assets of the accused

through relevant records and therefore, the offence alleged against the accused under Sections 13(1) read with 13(1)(e) of the Prevention of

Corruption Act are amply proved by the prosecution.

Now let us come to the contentions one by one urged by the learned senior counsels for the accused.

As regards the first contention that no reasonable opportunity was given to A.1 to examine her witnesses to show her sources of income,

according to the learned senior counsel since the learned Special Judge did not allow her to examine more witnesses and short listed the number of

witnesses, she was forced to file Crl.R.C.No : 1274 of 1999 before this Court and by order dated 15.12.1999, the learned Single Judge directed

the trial court as follows:

The grievance of the petitioner is that she has to prove nearly 56 promissory notes and that therefore, much hardship would be caused to her if

she is not permitted to examine the other witnesses who would unfold the fact leading to the execution of the promissory notes. The special court

has permitted only 15 witnesses out of witness Nos : 1 to 99 and 101 to 125. The special court has not given any reason as to why the court has

allowed only 15 witnesses, especially when the accused wants to prove nearly 56 documents. It cannot be disputed that when the execution of the

document is specifically denied by other parties, the party who relies upon such documents has to prove the execution of the document by

examining the attestors and scribe. If one of the attesters turns hostile, it is open tot he party to examine other witnesses to prove the execution of

the documents. If the order of the Special Court permitting the petitioner to examine only 15 witnesses is implemented, then the accused would be

precluded from examining the other witnesses. The right of the accused to examine the witnesses who would unfold the relevant facts touching the

point in issue cannot be denied. Therefore, I hold that the order of the special court restricting the petitioner to examine only 15 witnesses cannot

be sustained.

As regards witness Nos. 126 and 127 the Special Court has permitted to examine both. the Special Court has also permitted the accused to

examine witness Nos. 128 and 129 and witness No. 10. But as regards witness Nos. 130 to 135 and 136 to 140, the Special Court has permitted

the accused to examine any two of the witnesses. As already stated, if one or two witnesses permitted by the special court turned hostile, it is open

to the accused to examine other witnesses mentioned in the list. The right of the accused to prove a particular fact would be defeated if the accused

is permitted to examine only one or two witnesses. It is no doubt true that Section 134 of the Indian Evidence Act states that no particular number

of witnesses shall in any case be required for the proof of any fact. It can be said in other words that the court has to take into consideration only

the quality of the evidence and not the quantity. The above question will arise only at the time of conclusion of the entire evidence. It has to be

stressed at this stage that the right of the accused to examine the witnesses of her choice cannot be curtailed by directing the accused to examine

only 25 witnesses of her choice. In the above circumstances I hold that the order of the Special Court has to be modifed.

In the result, the criminal revision case is disposed of with the following directions:

(1) The Special court is directed to permit the revision petitioner to examine some more witnesses of her choice mentioned in the list of witnesses

Nos. 1 to 99 and 101 to 125.

(2) The Special Court is directed to permit the accused to examine witnesses Nos. 130 to 135 and 136 to 140.

(3) The revision petitioner is permitted to furnish list of other witnesses mentioned in the list to the prosecution containing full particula Rs.

(4) The examination of defence witnesses should be completed within a reasonable time as fixed by the Special Court.

When the above order was produced before the learned Special Judge, he passed an order on 22.12.1999 directing the appellant/A.1 to

examine 20 witnesses every day and complete their evidence. The appellant in the meanwhile examined D.Ws 1 to 4 on 8.12.1999, D.Ws 5 to 8

on 9.12.1999, D.Ws 9 to 13 on 10.12.1999, D.Ws 14 to 17 on 13.12.1999, D.Ws 1i to 20 on 19.12.1999, D.Ws 21 to 26 on 3.1.2000, D.Ws

27 to 31 on 4.1.2000 and DWs 32 to 35 on 10.1.2000 and marked Exs.D.1 to D.35. The case was then adjourned to 11.1.2000 for completion

of examination of Defence Witnesses and for argument on 12.1.2000. On 12.1.2000, the counsel sought time for making submission before the

court though not able to complete the defence evidence. But the learned Special Judge without conceding the reasonable request of the counsel

seeking time for making arguments, delivered a judgement of conviction on the very same day when the case is posted for arguments. The learned

Special judge to justify his refusal to give time for argument relied on Section 248(1) Cr.P.C., stating that there is no need to hear the arguments of

the counsel. Aggrieved over the denial of opportunity to make submission and to let in evidence, the appellant/A.1 filed an application before this

Court in Crl.M.P. No. 4138/2006 to permit the appellant to raise and mark additional documents such as decrees of various courts passed as

against the appellant for having borrowed money on promissory notes from the list of defence witnesses cited by the appellant before the court

below and also certified copies of orders passed by the Commissioner of Income Tax, Chennai accepting the fact of borrowal of money to the

tune of Rs. 56 lakhs as genuine and bona fide. Therefore, the said documents being certified copies of the respective courts and public officers

cannot be disputed by anyone.

In her petition before the Special Court, A.1 has alleged that it took one and half years for the prosecution to examine 81 witnesses, but she

was directed to examine 20 witnesses every day, which was not possible, because some of the witnesses may not be able to attend the court on a

particular date. A perusal of the docket orders would show that on 10.1.2000 D.Ws 32 to 35 were examined and Exs.D.30 to D.35 were

marked and the case was adjourned to 11.1.2000 for remaining witnesses. On 11.1.2000 only A.1 was present and A.2 and A.3 were absent. A

petition filed for condoning their absence was allowed. No defence witnesses were present. The evidence of defence witnesses was closed. As per

the order in Crl.M.P.No : 1848 of 1999 on that day Crl.M.P. No : 69 of 2000 filed and dismissed. Then it was adjourned to 12.1.2000 for

arguments. Having posted the case to 12.1.2000 for arguments after closing defence witnesses on 11.1.2000, an application has been filed on

12.1.2000 in Crl.M.P. No. 84 of 2000 which was also dismissed. though the case was adjourned to 12.1.2000 for arguments, the learned Special

Judge did not hear the arguments, but dispensed with the arguments holding that the arguments are not necessary in view of Section 248(1)

Cr.P.C. and straight away convicted the accused on 12.1.2000 after questioning her regarding sentence. the case was split up as against A.2 and

A.3 since they were absent on that date and they were convicted on the next day i.e., on 13.1.2000 when they appeared before the Court.

A perusal of Section 248 Cr.P.C., would show that under Sub-section (1) of Section 248, if the Magistrate finds that the accused is not guilty,

he shall record an order of acquittal. It does not say that no opportunity should be given to the accused to put forth his arguments. Therefore, the

reasoning given by the learned Special Judge that u/s 248(1) Cr.P.C., no opportunity need be given to the accused to put forth her arguments is

not sustainable. In fact, the case was adjourned to 12.1.2000 for arguments as seen from the docket order. Thus a perusal of the docket order

and the orders passed by the learned Special Judge would show that the learned Special Judge has passed hasty orde Rs.

A perusal of the judgement would show that it contains 61 pages and 19 pages as annexures and thus totally 78 pages. Mr. S. Ashok Kumar,

learned senior counsel appearing for A.1 would contend that if really the learned Special Judge decided to pass orders in the case only on

12.1.2000, is it humanly possible to type 78 pages on the same day and deliver judgement after questioning the accused regarding the sentence to

be imposed on her and therefore, the learned Senior Counsel would submit that the judgement against the A.1 was already available even before

closing of defence witnesses and i.e., on 12.1.2000 when the case was posted for arguments, the learned Special Judge instead of hearing the

arguments, has delivered judgement which consists of 80 pages which is humanly impossible. Further the judgment would show that the judgment

was made as Part-I and Part-II. Part-I deals with A.1 and Part-II deals with A.2 and A.3. It is not known how can there be a separation of the

judgment by Part-I and Part-II that too in a criminal case, even before the judgment was made ready. Therefore there is force in the contention of

the learned Senior Counsel that the learned Special Judge has already made up his mind and prepared the judgment even before closing of the

defence witnesses and thus he would contend that justice hurried is justice buried.

As regards the next contention of the learned senior counsel, in Annexure-II of the final report, the Investigating Officer has stated that the

assets of A.1 prior to the check period was only 15 Sovereigns of gold jewels and Rs. 1,000/= cash. The evidence of P.W.20, 21 and 22 would

show that the father of the appellant owned 10 acres of land and a house and also left a Will bequeathing all his properties to the appellant and

other accused, A.2. P.W.81, Investigating Officer himself has admitted in his evidence that prior to the election as MLA, A.1 was working as a

Social Worker for a monthly salary of Rs. 2,000/=. The evidence of the Income Tax Officer who was examined as P.W.68, would reveal that the

appellant was an Income Tax assessee right from the year 1990-91 and filed her returns for the respective years. According to his evidence for

1990 to 1996, A.1 was getting agricultural income of Rs. 15,000/= per year and also income towards lease of land of Rs. 75,000/= besides other

income. According to his evidence as per Ex.P.122, the capital of A.1 as on 31.3.1990 is about Rs. 3,20,438/=. The evidence of the Income Tax

officer falsify the case of the prosecution that the appellant was penniless and did not own any property at the commencement of the check period

namely on 17.6.1991. The above evidence would prove that the appellant was owning assets worth several lakhs as on 17.6.1991 i.e., at the

commencement of the check period and therefore the entire basis for the prosecution for commencement of the investigation is lacking in bonafides

and totally erroneous. P.W.40 has deposed that the father of the appellant was owning a pump-set and earned money by letting it out and they

were also doing real estate business with the help of one Purushothaman and Murugaian and the father of the appellant was one of the affluent

persons in the village. He further stated that if they had shown all the income, they will be getting not less than a sum of Rs. 2 lakhs as income per

year. Thus the evidence of P.Ws 20 to 22, 40 and 68 would show that the accused A.1 to A.3 had several lakhs of rupees as income even prior

to the commencement of the investigation. Admittedly the FIR Ex.P.161 was lodged only on 4.10.1996. But for obvious reasons, the Investigating

Officer has not taken into account these incomes and has simply stated that A.1 had 15 sovereign of gold jewels and only Rs. 1,000/= cash prior

to the starting of the check period which is totally false and unsustainable.

As regards the contentions (c) to (e), it is submitted by the learned senior counsel for A.1 that the appellant has examined the Defence

Witnesses to show that she obtained money by way of loans on execution of promissory notes and also she has mentioned in her Tax Returns

about the receipts of various loan amounts on promissory notes. In fact P.W.68, the Income tax officer has admitted that in Ex.P.122 for the

assessment year 1992-93, the appellant had borrowed a loan of Rs. 1,74,200/= and for the assessment year 1993-94 the appellant had borrowed

a loan of Rs. 1,79,282/= and for the assessment year 1994-94, the loan amount borrowed by the appellant was about Rs. 7,25,341/= and for the

assessment year 1995-96 the loan borrowed was Rs. 55,68,004/=. These Returns were filed as Income tax returns long prior to the registration of

FIR in this case by A.1 on her own within time and there is no delay in filing the same. The Commissioner of Income Tax by his order dated

30.9.1999 in Appeal No. 40/98-99 and by order dated 29.12.1999 in Appeal No. 75/1999-2000 has accepted the receipts of loan amount from

various persons as bona fide and genuine. He has also stated that the witnesses who have alleged to have be given loans and pro notes are capable

of giving such amount and claim of the accused was accepted and orders have been passed thereon.

The orders passed by the Income Tax authorities on 30.9.1999 for Rs. 31,21,203/= and order dated 29.12.1999 for Rs. 31,66,100/= with

added income of Rs. 1,80,000/= totalling Rs. 64,67,303/= was not taken into account as income by the Investigating Officer. But no reason is

attributed for the non inclusion of these income which were accepted as income of he accused as admitted by the Income Tax authorities during the

relevant period.

In this respect the judgment in Ananda Bezbaruah v. Union of India 1994 Cri. L.J. 12 is pressed into service wherein, the Gauhati High Court

has held as follows:

It is not mere acquisition of property that constitutes an offence, under the provisions of the Act but its failure to satisfactorily account for makes

the possession offending.

Thus where accused was charged with the offence of having resources and property disproportionate to his income and trial court failed to

consider and evaluate the Income Tax return which clearly established that the property included in the assets of accused and shown to be

disproportionate is the wife''s property bought from her own resources and should have been excluded from assets of the accused and the income

which should have been taken as savings was taken as expenditure thereby overlooking the actual savings and expenditure, which if calculated,

showed that income of accused was proportionate to his source of income, inclusion of property of wife, without evaluating the materials on

record, which a satisfactorily accounted for the assets disproportionate to income, do not establish the ingredients of the offence and order of

framing of charge in such circumstances is liable to be quashed.

The accused have also produced documents to show that they have obtained loans from various persons in connection with real estate

business. They have also examined 35 witnesses. The promissory notes and the decrees obtained by the creditors from various courts have been

marked and to examine the remaining witnesses, the learned Special Judge did not permit the accused. Nearly 35 suits have been filed against the

accused and the copy of the pronotes viz. Exs.D.1 to D.35 were marked. P.W.81, Investigating Officer during cross examination would admit that

he examined D.Ws.2, 4, 5, 6, 7, 8, 9, 10, 11, 15, 18, 19, 20, 21, 22, 24, 27, 32, 33, 34, 35 and also Mariammal, Sowrirajan, Gnanasundari,

Ranganayagi, narayanasami, Santhamery, Rajakumari, Kandasamy, Kamalam, Thilagavathi, Saroja, Thaialnayagi, Mani, Govindasamy, Vadivel,

Ramasamy, Amarjothi, Kuppusamy, Valarmathi, Ashokan, Purushothaman, Danalakshmi, Rajaram, and one Kaliaperumal who are said to have

advanced loans to the accused on the promissory notes and he also seized the promissory notes from them. There is a clear admission that

P.W.81, Investigating Officer has examined the above witnesses and seized the promissory notes from the above witnesses. But he has not

mentioned anything about the amount borrowed by the accused from the above persons. We are not aware as to how many lakhs or crores these

persons have advanced to the accused and the court cannot do the work of an Auditor and it is the duty of the prosecution to find out the amounts

given by various witnesses and include the same as income during the check period. But all these incomes have been suppressed. He would further

admit that loans advanced by these persons comes to Rs. 56,36,000/=. But he did not take into account the same because according to him they

were not true. P.W.81 Investigating Officer further admitted that during the check period as a Member of the Legislative Assembly, A.1 has

obtained salaries, Dearness Allowances, Tour Allowances besides agricultural incomes and interests on deposits in banks to a total extent of Rs.

81,79,769/=. In Forms 1 to 6 A.1 has given particulars of receiving loans of Rs. 56,30,000/= as admitted by P.W.81. He would further admit that

he did not include both these amounts in the income of the accused.

As regards the contention (f), similarly one Sinniah Bose of Dubai has sent Rs. 76,61,175/= to the accused which were not included in the

income of the accused. It is also mentioned in the charge sheet that ""In addition, during the same period a total sum of About Rs. 1,25,00,000/=

(One crore and twenty five lakhs) said to have been sent by the same Chinnya Bose is found credited in various other accounts. Thus a total sum

of Rs. 2,01,61,175/= has been sent by the said Sinniah Bose from Dubai to the accused. It is admitted by P.W.81 that he did not examine the said

Sinniah Bose with regard to his earnings or income and the purpose for which he sent the money to the accused. He also did not enquire whether

any amount was sent to the said Sinniah Bose at Dubai either by the accused or by her relatives during the check period which was in turn sent

back through Reserve Bank of India. There is no evidence by the Investigating Officer P.W.81, as to how he came to the conclusion that Sinniah

Bose has no source of money to send so much of amount and that his earnings was only Rs. 3,36,000/= per year during the relevant period.

A perusal of the typed set filed in these appeals would show that the Reserve Bank of India, Madras by order dated 19.2.1996 granted its

post-facto approval to the first accused G. Malliga, for availing a loan of Rs. 30,68,100/= from the said Sinniah Bose for personal purposes or for

carrying on business activities. Similarly, the RBI, Chennai has accorded its post-facto approval for the inward remittance of loan of Rs.

15,34,050/= from the said Sinniah Bose to the second accused G. Selvaraj. Likewise, the RBI, Chennai has accorded its post-facto approval for

the inward remittance of loan of Rs. 15,34,050/= from the said Sinniah Bose to the third accused, S.Manimegalai.

In his order dated, 29.12.1999, the Commissioner of Income Tax (Appeals) Chennai has mentioned as follows:

The counsel submitted that there is no denial by the officer regarding the source of investment. The money was remitted from abroad by one Sri

Chinniah Bose of Dubai to the appellant. In this connection letter of confirmation from Sri Chinniah Bose and permission letter from Reserve Bank

of India dated 19.2.1996 were filed before me. He also filed copy of the bank remittance slip in this regard. As the loan from the NRI had come

through proper channel with the permission of the Reserve Bank, the fact of the loan is to be accepted. In that view of the matter I hold that the

appellant is the owner of the building as well as the shares as the consideration had been paid by her from the loan obtained by her.

The above orders of the Commissioner of Income Tax (Appeals), Chennai would show that receipt of money from Sinniah Bose from Duabi

through proper channel i.e., with the permission of the Reserve Bank of India to the tune of more than Rs. 2 Crores has been found correct by the

said authority also.

The ingredients to be proved to establish a charge u/s 13(1)(e) are discussed in various judgments of the High Courts and Supreme Courts. In

M. Krishna Reddy Vs. State Deupty Superintendent of Police, Hyderabad, , the Supreme Court has held as follows:

It is not the mere acquisition of property that constitutes an offence u/s 5(1)(e) but it is the failure to satisfactorily account for such possession that

makes the possession objectionable as offending the law. To substantiate a charge u/s 5(1)(e) of the Act, the prosecution must prove the following

ingredients, namely (1) the prosecution must establish that the accused is a public servant,(2) the nature and extent of the pecuniary resources or

property which were found in his possession (3) it must be proved as to what were his known sources of income, i.e., known to the prosecution

and (4) it must prove, quite objectively, that such resources or property found in possession of the accused were disproportionate to his known

sources of income. Once the above ingredients are satisfactorily established, the offence of criminal misconduct u/s 5(1)(e) is complete, unless the

accused is able to account for such resources or property. In other words, only after the prosecution has proved the required ingredients, the

burden of satisfactorily accounting for the possession of such resources or property shifts to the accused.

In a case of this nature, where allegations are made against the public servant that he had assets disproportionate to the known sources of his

income, the duty of the Investigating Officer is as follows:

(i) The Investigating Officer should assess the value of the assets of the public servant immediately prior to the check period with relevance to the

tax Returns of the concerned person and also loans and other incomes available to the person and also about the liability of the person prior to the

check period.

(ii) The actual income during the check period and the expenditure actually incurred by the public servant should be calculated without any inflation

and on a reasonable basis.

(iii)The total income during the check period and assets prior to the check period must be taken together as the total assets of the public servant

from which the actual expenditure and amounts saved either by cash or by properties must be deducted from the total amount and see whether

there is much disproportion to the known sources of income of the public servant and the assets on his hand. While making the calculation

regarding the value of the properties and expenditure a reasonable margin has to be given this way or that way to find out the truth. Such kind of

procedure to be adopted only by an unbiased Investigating Officer. There should be no suppression of income or under estimation of the income of

the accused or inflation of the expenditure or inflation of the assets of the accused.

(iv) The Investigating Officer should not suppress any of the income, by way of loan or gift while considering the income of the public servant.

(v) Similarly after finding out that there is any disproportionate wealth in the hands of the public servant beyond his known sources of income, the

accused must be given an opportunity to explain the same. Failure to give an opportunity to the accused to explain the same is fatal to the

prosecution.

In this case as highlighted by Mr. I. Subramaniam, and Mr. T. Sudanthiram, learned senior counsels, no notice was given to A.2 and A.3

before prosecuting them to explain with regard to the income in their hands. Both the learned senior counsels also relied on the judgment in

Vedagiri In re 1985 M.L.J Cri 151, wherein it is held as follows:

Under Section 5(1)(e) of the Act, it is not merely the possession of the property disproportionate to the known sources of income that constitute

an offence, but it is the failure to satisfactorily account for such possession that makes the possession objectionable and offending the law. In other

words, two phases are contemplated in the investigation, firstly the discovery of the existence of property disproportionate to the source of income

openly known to the investigation machinery, and secondly the scrutiny of the explanation that the public servant might offer in disclosing other

source of legal income or in any other manner. Therefore, for an offence u/s 5(1)(e) of the Act the Investigating Officer has necessarily to satisfy

himself that the concerned public servant has not satisfactorily accounted for the possession of pecuniary resources or property, found by the

Investigating Officer disproportionate to his own source of income. It is thus obvious that the Investigating Officer should give an opportunity to the

person investigated against to explain the disproportion found by him.

In Gunjit Singh v. The State 1996(4) Cri 1 the Delhi High Court has held as follows:

(i) In a case under Prevention of Corruption Act documents the original sale agreement and letter of attornment seized by prosecution during

investigation - At no stage prosecution doubted or disputed genuineness of any of these documents & rather placed reliance on the same - Public

Prosecutor had called upon appellant to admit or deny those documents - Documents became authentic & contents thereof became substantive

evidence - Observation of trial court that genuineness of these documents was in doubt was erroneous.

(ii)Prevention of Corruption Act, 1947-Section 5(1)(e) - Prosecution for appellant, an inspecting Assistant Commissioner of Income Tax, in

possession of pecuniary resources disproportionate to his known source of income - Documents produced by prosecution amply proved that

appellant by entering into sale transaction of his house had received Rs. 7,50,000/- as advance - That amount if taken into consideration fully

accounted for appellant''s income - Trial Court was in error to conclude that appellant could not substantiate his plea on basis of documents

produced by prosecution - Conviction is unsustainable.

3.The cardinal principles of criminal jurisprudence are (i) that the onus lies affirmatively on the prosecution to prove its case beyond reasonable

doubt and it cannot derive any benefit from correctness or falsity of the defence version by proving its case, (ii) that in a criminal case accused must

be presumed to be innocent unless proved guilty, and (iii) that the onus of the prosecution never shits.

Admittedly, A.1 has been filing Income Tax Returns from the year 1990 onwards. The assets in the hands of A.2 and A.3 prior to the check

period were not taken into account in the final report. When other accused also stand charged on the ground that they are holding the properties

acquired by the public servant, during the tenure of his office as such, it is the paramount duty of the prosecution to exclude the individual income

that would have been earned by the particular accused by investigating into his assets liabilities and earning during the check period. There is no

evidence at all to show that any money flew from the accounts of A.1 to A.2 and A.3. There is no proof that A.2 and A.3 acted as benamidars of

A.1. All the grounds raised and decided in favour of A.1 are also applicable to A.2 and A.3 as well.

As already discussed, the assets immediately prior to the check period was not properly assessed by the Investigation Officer and the

Annexure-II of the charge sheet in which it is stated that A.1 had only 15 sovereigns of gold jewellery and a sum of Rs. 1,000/= as cash is not true.

The loans and the promissory notes obtained from various persons were more than a year prior to the registration of the case. The income tax

returns were also filed in time and they were admitted by the Commissioner of Income Tax (Appeals). The amount received from the Non

Resident Indian to the tune of Rs. 2,00,00,000/= (Two Crores) has not been included as income during the check period. The investigation has

failed to find out as to how this amount was sent by Sinniah Bose and for what purpose. According to the accused, the amounts were borrowed

from various persons including Sinniah Bose for doing Real Estate business. The said explanation has not been falsified during investigation.

Similarly, the expenditure of more than Rs. 48 lakhs during the check period is also on the higher side and the prosecution has not come forward

on what grounds such a huge amount was shown as expenditure during the check period. The finding of the learned Special Judge that before

election, she was penniless and contested the election by pledging of jewells because her relatives did not come forward to give her loan as

contended by her, but now A.1 is able to produce number of promissory notes, is only on surmises, because, after becoming as a Member

Legislative Assembly, her status as MLA became better in the minds of the public and therefore considering her status anybody would come

forward to give her loans as requested by her. Therefore when the promissory notes were found even during the investigation by the Investigating

Officer and also suits were filed based on the said promissory notes and decrees were also passed by the competent civil courts, these whole

transactions have to be accepted as income during the check period. But all these facts were not taken into consideration by the Investigating

Officer before laying the charge sheet. The investigation has not been done in a proper manner to some how prosecute A.1 to A.3. In the

circumstances it is to be held that the prosecution has miserably failed to bring home the guilt of the accused beyond all reasonable doubts and

therefore the accused are entitled for acquittal.

Since the Crl. Appeal Nos. : 79,83 and 106 of 2000 filed by the accused against the judgment and conviction of the Special Judge, Chennai,

are allowed by setting aside the same, consequently, Crl. No : 610 of 1997 which has been filed as against the attachment of the properties, is also

allowed and the attachments are raised.

In the result, all the four Criminal Appeals are allowed. The accused are acquitted of the offences charged with. Consequently, connected Crl.

M.P. No : 4138 of 2006 to receive additional evidence is closed. The order of attachment on the properties of the accused shall stand raised. Fine

amounts already paid by the appellants shall be returned to them. Bail bonds executed by them shall stand cancelled.