“Name-Lending” Is Not Enough – The Supreme Court’s Split Verdict on Spousal Liability for Disproportionate Assets under the Prevention of Corruption Act

1. Introduction

The decision in P. Nallammal v. State by Inspector of Police (2025 INSC 643) has produced a rare split verdict in the Supreme Court of India on a question that has troubled anti-corruption jurisprudence for decades: When, and on what evidentiary basis, can a non-public-servant spouse be criminally liable for the “disproportionate assets” amassed by a public-servant spouse?

The case stems from allegations that the late A. M. Paramasivam (then an MLA and Minister) amassed assets worth over Rs. 33 lakh beyond his known sources of income between 1991 and 1996 (“check period”). His wife, P. Nallammal, was prosecuted for abetment under s. 109 IPC read with ss. 13(1)(e) & 13(2) of the Prevention of Corruption Act, 1988 (“PC Act”) because several properties were bought in her and their minor children’s names.

Justice Sudhanshu Dhulia affirmed her conviction, whereas Justice Ahsanuddin Amanullah acquitted her, holding that mere purchase of properties in the spouse’s name, unaided by proof of knowledge or intent, does not establish abetment. Owing to this disagreement, the appeal has been referred to a larger Bench.

2. Summary of the Judgment

Facts in brief: Assets worth ~Rs. 33–35 lakh were allegedly accumulated during the check period; only ~Rs. 2.17 lakh salary was proven. Properties were in names of wife & children; attachment ordered under the 1944 Ordinance. Trial Court convicted both spouses; High Court confirmed. Accused No. 1 died during appeal.
Issues: (i) Was the wife guilty of abetment? (ii) Legality of attachment; (iii) Whether the High Court could relist the appeal after an alleged but untraceable 2013 acquittal order.
Amanullah J. (Acquittal)
- Burden lies on prosecution to prove knowledge/intentional aid by the spouse; mere “name-lending” insufficient.
- No evidence showed awareness of illicit origin of funds.
- Relied on K. Ponnuswamy (2001) and Uttamchand Bohra (2022).
- Confirmed attachment of properties excess to proven sources; upheld High Court’s administrative relisting order.
Dhulia J. (Conviction)
- Spouse’s active participation (multiple visits to registry, repeated purchases) + implausibility of ignorance → intentional aid.
- Reiterated reverse burden under s. 13(1)(e); wife failed to discharge it.
- Applied earlier precedent in P. Nallammal (1999) (same parties).
Common ground: Both upheld quantification by High Court, validated attachment, and found no procedural wrong in relisting the appeal.

3. Analysis

3.1 Precedents Cited and Their Influence

P. Nallammal v. State (1999) – earlier round where the Court held non-public servants can abet s. 13 offences. Dhulia J. drew on the “third illustration” (holding wealth benami) to sustain liability. Amanullah J. distinguished it, emphasising lack of proof of knowledge.
K. Ponnuswamy (2001) – wife & daughter acquitted absent proof of instigation/knowledge. Relied on by Amanullah J. as factually similar; Dhulia J. rejected it as distinguishable.
State v. Uttamchand Bohra (2022) – discharge of an alleged abettor because custody of sale deed alone not enough. Strengthened Amanullah J.’s insistence on “something more”.
State of T.N. v. R. Soundirarasu (2023) – reaffirmed reverse burden under s. 13(1)(e) PC Act. Both judges relied on it, but differed on whether the burden was discharged.

3.2 Legal Reasoning

Amanullah J.:

Abetment requires mens rea. Section 107 IPC’s three limbs (instigation, conspiracy, intentional aid) need positive evidence.
Reverse burden is only on the public servant; for a non-public-servant spouse prosecution must establish knowledge/intention first.
Name-lending not culpable per se; absence of evidence that wife knew funds were illicit.

Dhulia J.:

Circumstantial inference: Repeated, sizeable purchases during husband’s ministerial tenure; wife’s absence of income; knowledge presumed from proximity.
Reverse burden extends indirectly: once prosecution shows properties in wife’s name unexplained by her own income, inference of intentional aid arises unless rebutted.
Public policy: Allowing spouses to escape would defeat anti-corruption aims.

3.3 Impact on Future Cases

Though not yet binding due to the referral, the ratio that appears to gather momentum is:

Elevated proof threshold when prosecuting non-public-servant relatives – courts may require direct or strong circumstantial evidence of knowledge/participation.
Potential narrowing of prosecutorial reliance on mere benami registration.
Guidance for investigators: Meticulous tracing of money trail, statements indicating awareness, and digital/financial footprints will be crucial.
Attachment orders under the 1944 Ordinance remain viable even if criminal culpability of all holders is not established (since Amanullah J. still upheld attachment).
The forthcoming larger-Bench ruling could crystallise a definitive test, much like Vasanthakumar clarified disproportionate-assets computation.

4. Complex Concepts Simplified

Check Period: The span of public service under scrutiny for illicit enrichment.
Disproportionate Assets (DA): Property whose market value exceeds a public servant’s lawful income during the check period.
Reverse Burden (s. 13(1)(e)): Once prosecution shows DA, the accused must satisfactorily explain the excess.
Abetment (s. 107 IPC): Three modes – instigation, conspiracy, intentional aid. Requires mens rea; proximity of relation alone is insufficient.
Attachment under the Criminal Law Amendment Ordinance, 1944: Preventive seizure of suspected tainted assets, independent of criminal conviction.
Split Verdict: Two-judge Bench delivers opposing conclusions; matter is escalated to a larger Bench for final determination (Art. 145(5) Constitution; Order VI Rule 2 SC Rules).

5. Conclusion

The judgment represents a critical turning point in the debate on spousal liability for corruption. While Justice Dhulia stresses deterrence and the improbability of ignorance within a marital household, Justice Amanullah underscores due-process safeguards, warning against guilt by association. The larger Bench will now have to balance anti-corruption objectives with fair-trial rights.

Regardless of the ultimate outcome, the decision already delivers two clear messages:

Investigative agencies must gather concrete evidence of knowledge and participation when prosecuting non-public-servant relatives.
Courts will increasingly scrutinise the quality of circumstantial proof rather than relying on presumptions arising from matrimonial proximity.

Until the larger Bench speaks, P. Nallammal (2025) serves both as a cautionary tale for prosecution strategy and as a lodestar for defence arguments seeking to delineate the boundary between familial closeness and criminal complicity.