The Commissioner of Income Tax-II, vs. M/s Padmapriya Real Estates AND Financiers

2025:CGHC:6343

NAFR HIGH COURT OF CHHATTISGARH, BILASPUR Judgment Reserved on: 12/08/2024 Judgment Delivered on: 04/02/2025 CRA No. 478 of 2006 1 - Murlidhar Sahu aged about 53 years son of Jalam Singh, Service-Assistant Engineer, Office of Executive Engineer Mahanadi Pariyojna, Canal Division, Rudri (Dhamtari), resident of Vevekanand Nagar, Dhamtari, District Dhamtari (C.G.)

... Appellant(s) versus 1 - State of Chhattisgarh through Police Station, Anti-Corruption (Lok-aayukta Office) Bhopal, Unit-Raipur, District Raipur (C.G.)

... Respondent(s)

For Appellant(s) : Mr. Raja Sharma, Advocate. For Respondent(s) : Mr. Shailendra Sharma, Panel Lawyer Hon'ble Shri

Justice Ravindra Kumar Agrawal, J.

CAV Judgment 1. Challenge in the present criminal appeal is the impugned judgment of conviction and sentence dated 14.06.2006 passed by learned Special Judge & First Additional Sessions Judge, Raipur in Special Criminal Case No. 21/1998, whereby the appellant has been convicted for the offence under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 and sentenced for RI for 03 years with fine of Rs. 10,000/- in default of payment of fine further RI for 06 months. 2. The brief facts of the case are that the appellant was working as Assistant Engineering in Water Resources Department and was posted at various

2 places in between 01.08.1993 to 20.12.1994. A complaint was received by Anti Corruption Bureau, Special Police Establishment, Bhopal, Branch Raipur that the appellant has acquired disproportionate property and after obtaining search warrant from the competent Court, affected the search of the residential premises of the appellant on 20.12.1994. According to the prosecution the check period starts from 01.08.1983 ends on 20.12.1994. During this period, the appellant acquired properties of Rs. 3,31,696.46/- which was unexplained earning of the appellant. Inventory was prepared and investigation was completed and after obtaining sanction from the Law and Legislative Department, Madhya Pradesh, Bhopal, charge-sheet was filed against the appellant for the offence under Section 13(1)(e) and 13 (2) Prevention of Corruption Act, 1988 before the learned trial Court on 07.08.1998. 3. The learned trial Court has framed charge against the appellant for the offence under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988. The appellant denied the charge and claimed trial. 4. In order to prove the charge against the appellant, the prosecution has examined as many as 36 witnesses. The statement of the accused appellant under Section 313 of Cr.P.C. has also been recorded in which he denied the circumstances appears against him, plead innocence and have submitted that he was posted as Junior Engineer from April 1978 to 1979 at PNT Department, Nasik. He was working since February 1980 in Irrigation Department. But the income of the said period was not counted. His wife is a teacher and her income and savings have also not been counted. He himself had supervised the construction of his new house and the supervision cost to the extent 15 percent is to be deducted from the total cost of construction which has also not been done, thereby an erroneous calculation have been done by the Authorities, therefore, he is entitled for acquittal. Four defence

3 witnesses have been examined by the appellant in his defence and one document Ex.D/1 has been submitted by him. 5. After appreciation of the oral as well as documentary evidence led by the parties, the learned trial Court has convicted and sentenced the appellant as mentioned in the earlier part of the judgment. Hence this appeal. 6. Learned counsel for the appellant would submit that the judgment of conviction and sentence passed by learned trial Court is erroneous, illegal and contrary to the law applicable to the facts of the case. The prosecution has failed to prove its case beyond reasonable doubt. There are material omissions and contradictions in the evidence of prosecution witnesses which cannot be made basis for his conviction. The appellant was an employee of Water Resources Department but the sanction for prosecution was given by the Law and Legislative Department which is not proper. During the search, the articles which were seized were not valued by the authorized valuer but the valuation of the articles including the preparation of inventory is done by the Police Officers on their own. The entire prosecution case stands vitiated on account of withholding an important witness who are related to market value of the seized articles. Even before filing of the charge-sheet, no attempt was made by the prosecution to get the seized articles examined by valuer or the official valuer to establish their value. 7. It is further contended by the learned counsel for the appellant that the income of the appellant prior to the check period has also completely ignored by the learned trial Court. In his defence, the appellant proved the income of his wife but the learned trial Court did not appreciate the income of other family members of the appellant. The agricultural income which is evident from several revenue documents have also been included on the ground that for this agricultural income, there is no reference in the income tax return or any other public document. Despite there being evidence to show that the property were purchased in the name of appellant's wife, by her income as

4 well as her 'stridhan' and this fact has been totally rejected by the learned trial Court. Further that the wife of the appellant is working as a teacher and her income has also been included in the income of the appellant. The learned trial Court has also erred in ignoring the evidence of the defence witnesses and the document filed by the appellant to substantiate his defence. The evidence of the prosecution witnesses are not sufficient to prove the case against the appellant, therefore, impugned judgment being patently illegal and is liable to be set aside. 8. On the other hand, learned counsel for the State supporting the impugned judgment of conviction and sentence submits that the learned trial Court has absolutely justified in holding that the appellant possessed the properties which are disproportionate to his valid source of income, therefore, the present appeal being without any substance and is liable to be dismissed. 9. I have heard learned counsel for the parties and perused the material available on record. 10. As per the FIR, the check period was from 01.08.1983 to 20.12.1994 and during this period the total income of the appellant was calculated Rs. 12,05,761.54/- and the valuation of the movable and immovable properties of the appellant was calculated at Rs.15,49,559/-, therefore, the unexplained expenditure during the check period was assessed at Rs. 3,31,696.46/- which is uncounted money of the appellant. 11. PW-36, P. K. Shukla is the Investigating Officer, in his detailed examination accepts the various documents Ex.P/99 is the sale deed in the name of the present appellant purchased from Devnarayan Mishra on 13.11.1992 for the consideration of Rs. 86,420/-. Another sale deed Ex.P/100 which is in the name of the wife of the appellant Smt. Rukmani Sahu which was purchased from Rajan @ Devnarayan Mishra on 24.09.1991 for Rs. 98,695/- and on the same day another piece of land was also purchased for the total consideration of Rs. 10,960/- on 20.12.1994. The amount of interest of Rs.

5 2456.10/- deposited in the bank account of the appellant was considered as his income and the amount of Rs. 1216.51 which was the interest accrued from the State Bank of India has also been counted as his income. The amount of Rs. 1797.33/- which was the interest of the bank account of the Rukmani Sahu, wife of the appellant has also been taken into consideration as the income of the appellant. The interest obtained in other bank account of the appellant as well as his wife were taken into consideration as the income of the appellant. The amount deposited in between 03.08.1990 to 26.09.1990 by the appellant at Central Bank of India, Dhamtari amounting of Rs. 30,000/- was counted as expenditure of the appellant whereas Rs. 60735/- was counted as his income. The amount of Rs. 15000/- which was lying in fixed deposit in the name of son of the appellant at Dena Bank, Dhamtari was also counted as his expenditure, the amount of Rs. 32062/- was counted as his income. The loan obtained by the appellant for Rs. 22000/- from Central Bank of India, Dhamtari has also been counted as his income and its repayment of Rs. 31,144/- has been counted as his expenditure, likewise other amount deposited either in the name of appellant, his wife or his son has been considered while preparing the inventory. The life insurance policy of the wife and the amount deposited towards premium was also been considered as an expenditure, the income from ancestral property obtained by the petitioner for the period in between 1991 to 1994- 1995 has also been taken as his income. The amount of Rs. 27,630/- for which he purchased the motorcycle and amount of its insurance policy, the cost of refrigerator has also been considered as his expenditure. The part final payment of Rs. 85,000 obtained by the appellant from his provident fund account has also been considered as his income. The amount of Rs. 4,10,130/- was considered as the expenditure in the construction of the house of the appellant at Dhamtari which was considered in the year 1993-

6 1994 and after its valuation from Engineer of PWD, the said cost was comes and the same was considered as expenditure of the appellant. In between the check period, the appellant has received 3,47,530/- as his salary and from the general practice and circular of the police department, the 60 percent of the total income is to be deducted towards daily household expenditure and that 60 percent was comes to Rs. 20,8518/-. The wife of the appellant Rukmani Sahu also earned Rs. 1,67027/- as her salary from teacher-ship and 60 percent of her income i.e. Rs. 1,00216/- has been considered as the expenditure of the appellant. The cash amount of Rs. 13465/- was seized at the time of raid in the house of the appellant. The total 49.700gm golden ornaments amounting to Rs. 20,622/- was also considered as expenses of the appellant. The total Rs. 873gm silver ornaments amounting Rs. 5900/- was also considered to be the expenditure of the appellant. The luxury items worth Rs. 28,750/- also found in the house of the appellant which was also counted as his expenditure. Prior to the check period, the income from salary of the appellant was Rs. 30,204/- and 60 percent of that amount that Rs. 18,121/- was also counted in his expenditure and after consideration total income of expenses of the appellant, Rs. 3,31696.45/- is found to be disproportionate and unexplained expenditure of the appellant which has been acquired from illegal source. The inventory is Ex.P/101 which he has been prepared in 9 sheets. In his cross-examination he admitted that at the time of marriage, the parents usually given the necessary articles to bride and groom like bed, sofa and almirah etc. He further admitted that the ornaments are also usually given at the time of marriage to the bribe and the groom. He could not remember as to whether he recorded the statement of the wife of the appellant Rukmani Sahu or not. But he recorded statement of the father of Ruknani Bai. He further admitted that in the inventory an amount of Rs. 17,219/- has been considered as the income from agriculture in between

7 period of 1991-1992 to 1994-1995. Since he has not got any evidence with respect to income of Rs. 11,75,600/- with respect to the land of Jalam Singh and he has not recognized it. Accepting the 60 percent income as expenditure and 40 percent his savings, he did not know about any circular with that respect. He has given the ratio of 60 - 40 percent under the instruction of the departmental Officers. He admitted that the wife of the appellant is a teacher, he could not tell if the husband and wife are residing together and both of them were earning then the income of one of the member can be taken as savings. He further admitted that he has not counted income prior to 07.02.1980. Since it requires lengthy time having lengthy process, therefore, he has not counted income prior to 07.02.1980. He further admitted that the insurance policy of Rukmani Sahu and the fixed deposits purchased in her name has also been considered as the expenditure on the appellant's part. He further stated that the luxurious items seized from the house of the appellant worth Rs. 28,000/- has not been considered because he has not found any receipt of the said articles. 12. PW-1, Rakehs Trivedi who was the Commercial Tax Inspector was the member of the search party and proved the search proceedings. 13. PW-2, K. P. Mishra is the District Coordinator Scheduled Caste Department, Raipur was also a member of search party and proved the search proceedings. 14. PW-3 Jayanti Vekant @ Surya Narayan Murti he was the Deputy Collector. 15. PW-4, Ratnesh Jain is the witness of the sale deed Ex.P/6 and Ex.P/7 and correction deed Ex.P/8. The said sale deeds Ex.P/7 and Ex.P/8 was registered in the name of Rukmani as purchaser. In cross-examination he admitted that he is the property broker. The negotiation was made through Nandulal Sahu and the consideration of the sale deed was paid to seller by Nandulal Sahu. He admitted that on various occasions, the person have

8 usually get the sale deed registered in the name of their father, brother, wife husband and others. 16. PW-5, Praveen Kumar Gupta is the Branch Manager State Bank of India Agriculture Department Branch Jagdalpur and he issued the recurring account statement of the appellant Ex.P/10. He admitted that the account was opened on 05.11.1980 and the last entry was of May 1980. 17. PW-6, Mohamadd Umar Khan has proved the document Ex.P/12 which relates to the bank account opening form of the appellant at Bilaspur Raipur Regional Rural Bank Branch Aamdi, District Raipur. He admitted that on 24.11.1994, the total Rs. 404/- was balance in the said account. 18. PW-7, Neeraj Parihar has proved the document Ex.P/14 in which the last entry was made on 01.10.1994 and total balance was Rs. 229/-. 19. PW-8, N. R. Sahu is the Tahsildar, Dhamtari and proved Ex.P/15 and Ex.P/16 by which the details of lands of appellant and wife Rukmani and Jalam Singh were sent to the police. 20. PW-9, S.R. Kamti is the Branch Manager, Pearless General Fiance and Investment Company, who proved the document Ex.P/17 and Ex.P/18. He stated in his cross-examination that in his company, the persons have deposited their savings. If the husband and wife both are working, the income of the one of them would go in their savings. 21. PW-10, Krishna Shankar Gupta who is the Stamp Vendor have stated in his evidence that for the document Ex.P/6, total Stamp of Rs. 17620/- was sold to Dayaram which was purchased by him for Rukmani Bai and for the document Ex.P/7 Stamp of Rs. 1960/- was purchased by Dayaram for Rukmani. 22. PW-11, S. R. Sharma is the Executive Engineer Water Resources Department, District Dhamtari have proved the document Ex.P/35 and Ex.P/37 by which the salary detail of the appellant was sent to the police.

9 23. PW-12, S.P. Sahu Assistant Grade-III has proved the document Ex.P/39 which is document with respect to the salary of the appellant for the period in between 07.04.1982 to 08.08.1983. 24. PW-13, Parmanand Sahu, has proved the posting order of the appellant Ex.P/14. 25. PW-14, Deepak Kumar is the witness to the sale deed which has been purchased by Jalam Singh and Murlidhar. 26. PW-15, Rakesh Mohadkar was the employee of LIC, Bilaspur who proved the insurance policy issued in the name of the present appellant on 01.01.1988 and total premium of 9 installments was paid as Rs. 7622.10/-. 27. PW-16, Chandrashekher Sharma is the Accountant at Union Bank of India, Dhamtari has proved the account statement Ex.P/50 and Ex.P/51 of the appellant. He sent the necessary information to the Bank vide document Ex.P/57 and Ex.P/58. 28. PW-17, Rajesh Tiwari is the employee posted at Registrar Office, Dhamtari he proved the sale deed Ex.P/52 by which the appellant has purchased the land for total consideration of Rs. 75,000/- from Jalam Singh. 29. PW-18, Manoj Sharma is the Manager Balaji Agency have proved the invoice Ex.P/53 of the motorcycle purchased by the appellant. 30. PW-19, Naveen Dua has proved the cost of the electronic goods purchased in the check period. 31. PW-20, Abdul Habib is the Manager (Legal), LIC, Raipur who proved the loan sanction letter Ex.P/54 by which the appellant was sanction loan of Rs. 1 lakh for construction of the house. Out of the loan of Rs. 1 lakh, he withdrew Rs. 77,000/- in 3 installments upto 23.09.1996 and there was no repayment of loan till 23.09.1996. 32. PW-21, Madan Ramrath is the employee of the Central Bank, Dhamtari had proved the document Ex.P/75 and Ex.P/76 by which the ledger of the bank

10 account of the appellant has been proved. He gave details of the deposits of the appellant Murlidhar as well as his wife Rukmani Sahu. 33. PW-22, Rajendra Singh is the employee of Dena Bank, Dhamtari who has also proved the document Ex.P/59, Ex.P/60 and Ex.P/61 which is the details of the bank account of the appellant. 34. PW-23, Nakul Ram Nishad is the Assistant Grade-III at RTO, Raipur have proved the registration certificate of the motorcycle Ex.P/62 and letter Ex.P/63. 35. PW-24 J.R. Jimwale is the Assistant Administrative Officer LIC, Dhamtari has also proved the insurance policies of appellant as well as his wife and the document Ex.P/67, Ex.P/68 and Ex.P/69. 36. PW-25 Radheshyam Pawar is the Assistant (Legal Cell), Municipal Council, Dhamtari proved the sanction letter of map for construction of the house which is Ex.P/73. 37. PW-26, Tilakram who has taken the unnumbered FIR from Lokayukta, Raipur to Bhopal for numbered FIR which is Ex.P/74. 38. PW-27, Rambharos Soni is the SDO (PWD) has done the valuation of the house of the appellant. He valued the cost of the house as Rs. 3,59,000/-. The said house was constructed in the year 1993-94 and at that time total Rs. 5,12700/- was expenditure in its construction and after deducting 30 % of depreciation, cost of the construction was comes to Rs. 3,59,000/- and he proved the valuation report Ex.P/78. He also proved the document Ex.P/79 and Ex.P/80 and he also opined that at the time of valuation of the house it comes to Rs. 4,10,130/- after depreciation of 20% after two years. In cross- examination he admitted that he has not attached any Government circular with respect to the valuation of the construction. He further stated that at the time of preparing the first report, he was not informed about the check period and when the check period was informed by the Lokayukta Police, he prepared the second report. He is having knowledge that the appellant is

11 himself is an Engineer. He admitted that if the Engineer himself supervise the constructions, the total cost of the construction would reduced upto 15%, he has not endorsed the said fact in his report because it is under the Authority of his Senior Officer. 39. PW-28, Chandra Singh Ambe has proved the document Ex.P/81 by which he authorized Mr. B.K. Shukla, inspector for further investigation. 40. PW-29, Hari Vishnu Patel is the Assistant Project Officer, Agriculture, has proved the document Ex.P/82 to Ex.P/87 which are the documents with respect to the agriculture income of the appellant in between the period of 1990-1991 to 1994-95. In cross-examination he admitted that in the details he has not written any khasra number and owner of the land. He himself has not visited the field but prepared the report on the basis of report submitted by his subordinates. He further admitted that in the all reports, the signature of Patwari is not there. 41. PW-30, Sahid Ali is the Inspector of Lokayukta Police, Raipur he proved the document Ex.P/89 which is warrant issued by the Court for search of the house of the appellant. He searched the house of the appellant on 20.12.1994 along with the search party and prepared the seizure memo Ex.P/5. The panchnama Ex.P/4 was also prepared by him. During the search he also recorded the statement of the witnesses Mahendra Kumar, Shailendra and Rain Singh. 42. PW-31, Hilori Toppo is the Superintendent of Police at Lokayukt Raipur. He proved the document Ex.P/90 and Ex.P/91, by which he authorized the Inspector M.L. Mishra for investigation. In cross-examination he stated that he could not remember as to whether any overwriting was done at the time when he instructed to M.L. Mishra for conducting the search. Since no initial was there in the document, therefore, he could not tell about any overwriting in the documents. Due to the over-burden of work, he himself has not investigated the case. He did not know as to whether wife of the appellant

12 was in Government service or not. He also did not received any information about the source of income of the appellant and his family members. He admitted in his cross-examination about giving the articles to the bride and groom at the time of their marriage by the family members and the articles received by the bride is treated to be of her 'stridhan' but what he has been considered in the present case he did not know because of the reason that he was already promoted at that time. He did not know about any guidelines with that effect. 43. PW-32, Kapurchand Jain has proved document Ex.P/92 which is the agriculture income of the appellant. 44. PW-33, Mahohar @ Omprakash is an Advocate who proved the sale deed and consideration of stamp paid by Jalam Singh as well as the appellant. 45. PW-34, Dinesh Kadam has proved the sanction for prosecution obtained from Law and Legislative Department, Bhopal. In cross-examination he stated that on what basis the sanction has been given he could not tell the reason. 46. PW-35, Mishrilal Mishra is the Police Inspector and Investigating Officer of the case, he proved the document Ex.P/95 by which he received the search warrant of the house of the appellant. At the time of search of the house of the appellant he prepared the inventory which is in 20 pages. The valuable articles has been seized vide seizure memo Ex.P/2. At the time of coming out from the house of the appellant, the panchnama was prepared which is Ex.P/3. The Authority to investigate the case was also given to him vide document Ex.P/90 and Ex.P/91. The ornaments seized from the possession of the appellant was also examined and the document Ex.P/96 was obtained. The details of the place of posting was also obtained vide document Ex.P/97. After getting his transfer at Jagdalpur, he handed over the further investigation to Sahid Ali / P. K. Shukla under the instruction of Superintendent of Police. In cross-examination he admitted that he has not

13 come across about any circular that 60% of the total amount is to be considered as expenditure and 40% is to be considered as savings. He further admitted that usually the bride and groom were given certain articles including ornaments at the time of their marriage by their parents and other relatives. He admitted that he has not inquired about the seized articles as to from where it has been purchased. 47. DW-1, Chammanlal Tirakar is the younger brother of the appellant have stated in his evidence that his father has got partitioned their ancestral property in the year 1982 and all the brothers have their separate land. He stated that the appellant is in possession of his land since 1982 and he earned Rs. 72,000/- per year. In cross-examination he stated that since he was having good relation and faith upon the appellant, he has given his land to the present appellant for cultivation. 48. DW-2, Motilal is also the witness of the agriculture income of the appellant. 49. DW-3, Satish Sahu is the father-in-law of the appellant, he proved the fact that he has given certain articles at the time of marriage to his daughter which was valued of about Rs. 25,000/-. His father Nandu Sahu has purchased two plots in the name of Rukmani Sahu during his life time. The land which has been purchased by his father was given to Rukmani Bai by all the three brothers by executing the declaration Ex.D/1. The list of articles which were given at the time of their marriage was Ex.D/2. Since they are residing outside of the village, therefore, they kept their ornaments to the appellant for keeping it with him. In cross-examination he admitted that in the year 1980, he too was in service and the appellant was also in service. He was Class-II Gazetted Officer and he disclosed about the declaration to his senior Authorities. 50. DW-4, R. K. Sharma is not relevant because he was called along with the document but he could not obtain the document as the same was not available at Raipur and the document of prior to 2003 was at Bhopal.

14 51. From perusal of the deposition of the Investigating Officer PW-36 as well as the other witnesses, it is clear that the articles mentioned in the document Ex.P/1 without getting the same valued by any valuer, on the basis of his own or at the instance and / or the witnesses. The value has been put in the inventory. It is also admitted by the prosecution that before the check period, the appellant was posted in other department. But his salary before the check period was not calculated by the prosecuting agency. 52. In the matter of State of MP Vs. Rajendra Singh Yadav, AIR Online 2021 Chh 155, the co-ordinate Bench of this Court referring to various judgments of the Hon’ble Supreme Court held in paras 9, 10 and 11 as under: “9. In order to prove the charge under Section 13(1)(e) of the PC Act, 1988, the prosecution must prove the following ingredients, namely (1) the prosecution must prove that the accused is a public servant, (2) the nature and extent of the pecuniary resources or property which are found in his possession, (3) it must be proved as to what were his known sources of income i.e. known to the prosecution, (4) it must prove quite objectively that the resources or property found in possession of the accused were disproportionate to his known source of income. Once the abovementioned ingredients are satisfactorily proved, the offence of criminal misconduct under Section 13(1)(e) of the PC Act, 1988 is complete, unless the accused is able to account for such resources or property and it is only thereafter the burden shifts to the accused to prove his innocence. 10.The Supreme Court in the matter of State of Maharashtra v. Wasudeo Ramchandra Kaidalwar, AIR 1981 SC 1186, dealing with Section 5(1)(e) of the Prevention of Corruption Act, 1947 which is parimateria to Section 13(1)(e) of the PC Act, 1988, has held that the accused having been found in possession of disproportionate assets, he is duty bound to account satisfactorily for such possession. It was observed as under: “13.....To substantiate the charge, the prosecution must prove the following facts before it can bring a case under S. 5(1)(e); namely, (1) it 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

15 sources of income. Once these four ingredients are established, the offence of criminal misconduct under S. 5(1) (e) is complete, unless the accused is able to account for such resources or property. The burden then shifts to the accused to satisfactorily account for his possession of disproportionate assets.....” 11. Similarly, in the matter of M. Krishna Reddy v. State Deputy Superintendent of Police, Hyderabad, AIR 1993 SC 313, Their Lordships of the Supreme Court again analyzing the provisions contained in Section 5(1)(e) of the Prevention of Corruption Act, 1947 (parimateria provision to Section 13(1)(e) of the Act of 1988) held that it is not the mere acquisition of property that constitute an offence under the provisions of the Act but it is the failure of accused to satisfactorily account for such possession that makes the possession objectionable as offending the law. Their Lordship further held that 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. It was observed as under: “6. An analysis of Section 5(1)(e) of the Act, 1947 which corresponds to Section13(1)(e) of the new Act of 1988 shows that is not the mere acquisition of property that constitutes an offence under the provisions of the Act but it is the failure to satisfactorily account for such possession that makes the possession objectionable as offending the law. 7. To substantiate a charge under Section 3(1)(c) 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 under Section 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.” 53. The investigating officer has also admitted this fact that he had not investigated into this fact as to how many members of the appellant’s family were working and what was their financial condition. The defence witnesses

16 have clearly stated that major son of the appellant Vivek Mehra is working and his wife also stated that she has agricultural income but the prosecution did not investigate into this fact. 54. The Hon’ble Supreme Court in the matter of Krishnanand Agnihotri Vs. State of MP, AIR 1977 SC 796, held in para 25 as under: “25. The next item of assets to which we must refer is the land at Varanasi which was purchased for Rs. 2,500/- in 1956. The sale deed of this land was in the name of Shanti Devi and hence it must be presumed, unless the contrary is shown by the prosecution, that the land belonged to Shanti Devi in whose name it was purchased and it stood in the records of the Municipal authorities. The case of the appellant was that this land was purchased by the father of Shanti Devi for her benefit and the consideration for the sale was also provided by the father of Shanti Devi. Ramadhar Avasthi D. W. 22, the father of the first husband of Shanti Devi, clearly stated in his evidence that Anant Ram, the father of Shanti Devi had purchased a plot of land for Shanti Devi for Rs.2,500/- and this was supported by Bachhalal D. W. 11 who was one of the attesting witnesses to the sale deed. It is indeed difficult to see how this evidence led on behalf of the appellant could be brushed aside and without any evidence whatsoever led on behalf of the prosecution, it could be concluded that the purchase price of the land was paid by the appellant and that the land was purchased by the appellant in the name of Shanti Devi. We must, therefore, exclude this land in computing the total assets belonging to the appellant.” 55. In the case of Manoranjan Kalita Vs. The State of Assam, 2014 Cri.L.J. 689, the Hon’ble Supreme Court held in paras 19 & 20 as under: “19. Merely submitting a list of assets and liabilities is not enough to attract the offence under Section 13(1)(c) of the PC Act. Someone has to prove the correctness of the entries made in such a list. 20. In order to sustain an offence, under Section 13(1)(e) read with Section 13(2) of the PC Act, 188, three essential conditions are required to be satisfied. Firstly, the prosecution has the burden to prove that the value of the property or properties, which the accused was alleged to have had in possession, either personally or through any member(s) of his family. Secondly, there must be proof of known source of income and, thirdly, there must be proof that properties, in question, are disproportionate to known source of income. In short, thus, the prosecution ought to have, in the present case, disclosed, on record, with the help of evidence, as to what known source of income of the accused-appellant had been. If mere valuation of property of

17 the accused is given without providing or adducing any evidence with regard to the income of the accused from his known source, the prosecution cannot be said to have discharged its burden of having proved the offence, under Section 13(1)(e) read with Section 13(2) of the PC Act, 1988, and, until the prosecution discharges its initial burden of proving its case, the onus does not shift to the accused to satisfy the Court with his explanation, by adducing evidence, that either the valuation of his property has not been correctly done, or that his known source of income, or in the light of his known source of his income, he has never been in possession of property or properties disproportionate to his known source of income.” In the case in hand also, the inventory was prepared by the investigating officer and valuation of all the articles was written only on the basis of experience or presumption. The investigating officer has admitted that he did not got the valuation of the golden and silver ornaments done from any goldsmith or any other competent person. 56. In the matter of DSP Chennai Vs. K. Inbasagaran, AIR 2006 SC 55, the Hon’ble Apex Court held in para 16 as under: “16. Now, in this background, when the accused has come forward with the plea that all the money which has been recovered from his house and purchase of real estate or the recovery of the gold and other deposits in the Bank, all have been owned by his wife, then in that situation how can all these recoveries of unaccounted money could be laid in his hands. The question is when the accused has provided satisfactorily explanation that all the money belonged to his wife and she has owned it and the Income-tax Department has assessed in her hand, then in that case, whether he could be charged under the Prevention of Corruption Act. It is true that when there is joint possession between the wife and husband, or father and son and if some of the members of the family are involved in amassing illegal wealth, then unless there is categorical evidence to believe, that this can be read in the hands of the husband or as the case may be, it cannot be fastened on the husband or head of family. It is true that the prosecution in the present case has tried its best to lead the evidence to show that all these moneys belonged to the accused but when the wife has fully owned the entire money and the other wealth earned by her by not showing in the Income-tax return and she has accepted the whole responsibilities, in that case, it is very difficult to hold the accused guilty of the charge. It is very difficult to segregate that how much of wealth belonged to the husband and how much belonged to the wife. The prosecution has not been able to lead evidence to establish that some of the money could be held in the hands of the

18 accused. In case of joint possession it is very difficult when one of the persons accepted the entire responsibility. The wife of the accused has not been prosecuted and it is only the husband who has been charged being the public servant. In view of the explanation given by the husband and when it has been substantiated by the evidence of the wife, the other witnesses who have been produced on behalf of the coupled with the fact that the entire money has been treated in the hands of the wife and she has owned it and she has been assessed by the Income-tax Department, it will not be proper to hold the accused guilty under the Prevention of Corruption Act as his explanation appears to be plausible and justifiable. The burden is on the accused to offer plausible explanation and in the present case, he has satisfactorily explained that the whole money which has been recovered from his house does not belong to him and it belonged to his wife. Therefore, he has satisfactorily accounted for the recovery of the unaccounted money. Since the crucial question in this case was of the possession and the premises in question was jointly shared by the wife and the husband and the wife having accepted the entire recovery at her hand, it will not be proper to hold husband guilty. Therefore, in these circumstances, we are of the opinion that the view taken by the High Court appears to be justified and there are no compelling circumstances to reverse the order of acquittal. Hence, we do not find any merit in this appeal and the same is dismissed.” In this case also, the appellant’s claim that his wife and son are having their separate income but the learned trial Court did not appreciate this fact and assigned no particular reason to disbelieve the evidence of the defence witnesses, especially the statement of father-in-law of the appellant. It is not proved by the prosecution on the basis of legal and cogent evidence that the aforesaid properties were purchased by the appellant in the name of his wife, son and brother. All the defence evidence has been disbelieved by the trial Court without giving any definite finding on the issue. In this case, the offence of disproportionate property has been registered against the appellant on the basis of suspicion, assumption and presumption as is evident from the nature and quality of evidence adduced by the prosecution and the manner in which valuation of the seized articles was done and the investigation was carried out. 57. In light of the above, it appears in the present case also that the wife of the appellant was having separate income and the statement of the father-in-law

19 of the appellant DW-3 Satish Sahu clearly reflects that separate investments in the name of family members of the accused/appellant but the learned trial Court did not appreciate this fact and given no particular reason to disbelieve the evidence of the defence witnesses especially the statement of DW-3 father-in-law of the appellant in which he stated that most of the articles are her wedding gifts. It is not proved by the prosecution on the basis of clinching and cogent evidence that the aforesaid properties were purchased by the appellant. It is clear that the check period counted from 01.08.1983 to 20.12.1994 and as per the admitted fact in the case the appellant has got married in the year 1980 which is 3 years prior to the check period and no list was prepared by the prosecution agency in this regard that as to which articles were wedding gift of the appellant's wife or /articles were purchased by the appellant. In this case the offence of disproportionate property has been registered against the appellant on the basis of suspicion, assumption and presumption as is evident from the nature and quality of the evidence adduced by the prosecution and the manner in which valuation of the seized articles were done and the investigation was carried out. 58. For the aforesaid reasons, this Court is of the opinion that the prosecution has miserably failed to prove that the appellant possessed properties disproportionate to his known source of income. As such, the impugned judgment of the trial Court being based on improper appreciation of the overall evidence on record, is liable to be set aside. 59. In the result, the appeal is allowed and the impugned judgment passed by the learned trial Court is hereby set aside. The appellant is acquitted of the charge under Sections 13(1)(e) read with 13(2) of the Prevention of Corruption Act, 1988 He is reported to be on bail, therefore, his bail bond shall continue for further period of 6 months as provided under Section 481 of B.N.S.S., 2023.

20 60. The trial Court record along with a copy of this judgment be sent back to the trial Court concerned for compliance and necessary action.

Sd/- (Ravindra Kumar Agrawal)

Judge Alok ALOK SHARMA Digitally signed by ALOK SHARMA Date: 2025.02.04 19:19:44 +0530