K. Ponnuswamy v. State Of T.N By Insp...

S.N Variava, J.— These SLPs are filed against the judgment dated 12-4-2001. When these SLPs were called out Mr Ramamurthy, Senior Counsel for the State of Tamil Nadu, prayed for an adjournment of four weeks. He submitted that, as Accused 2 to 5 have been acquitted by the impugned judgment, the State was going to prefer an appeal against the same judgment. Mr Rao opposed the application on the ground that the petitioner was in jail. He submitted that if the State wanted an adjournment for such a long period, then the petitioner should be released on bail. We, therefore, felt that the best course to follow would be to hear these SLPs today. When the State files its appeal, it can be heard separately.

2. Accordingly leave is granted.

3. Heard parties.

4. By these appeals the appellant is challenging his conviction under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act.

5. Brief facts leading to these appeals are as follows:

The appellant was elected as a Member of the Legislative Assembly from Marungapuri Constituency in June 1991. He became the Deputy Speaker of the Legislative Assembly on 3-7-1991. He was the Minister of Education to the Government of Tamil Nadu from 17-5-1993 to 9-5-1996. For the sake of convenience this period from 17-5-1993 to 9-5-1996 will hereinafter be referred to as the check period.

6. Before the appellant came into the political arena he was employed as a Lecturer in Government Arts College. It has been shown that in 1973 the appellant had taken a crop loan from Bank of India for a sum of Rs 13,000. That amount had not been repaid by the appellant. Ultimately a suit came to be filed and the amount had to be collected in execution of decree in that suit. In 1985 the appellant had borrowed a sum of Rs 5000 from R. Palanivelu (PW 16) who was also working as a Lecturer along with him. For this loan the appellant had executed a promissory note. The financial condition of the appellant was such that he was unable to repay the loan. Ultimately a suit had to be filed against him and a decree came to be passed. Even after passing of the decree the amount was not repaid. The decree had to be executed. The decretal amount had to be recovered from the salary of the appellant. This clearly shows that before he became a Minister the appellant's financial condition was very weak.

7. At this stage, it must be mentioned that Accused 2 is the wife of the appellant. Accused 3 is his daughter. Accused 2 was and is merely a housewife. She admittedly had only a small agricultural income and no other source of income. Admittedly Accused 3 was a student before and during the check period. She had no source of income.

8. Accused 4 is the son of the brother of the appellant. Accused 5 is the brother of the appellant. Accused 6 is the Chartered Accountant who had submitted income tax and wealth tax returns of Accused 2 to 5.

9. The case of the prosecution was that during the check period Accused 1 acquired, in his name and in the names of Accused 2 to 5, pecuniary resources and property disproportionate to his known sources of income. The prosecution examined as many as 65 witnesses and got 297 exhibit marks. The trial court, on the basis of the evidence led, acquitted Accused 6. However, Accused 1 (i.e the appellant) was convicted under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act. Accused 2 to 5 were convicted under Section 109 IPC and also under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act. The trial court, after convicting the accused, directed confiscation of the pecuniary resources and properties to the extent of Rs 77,49,337.77.

10. The appellant and Accused 2 to 5 filed criminal appeals before the High Court against the conviction as well as against the order confiscating the pecuniary resources and properties. The High Court disposed of these appeals by the impugned judgment dated 12-4-2001. The High Court acquitted Accused 2 to 5 but confirmed the conviction of the appellant. The High Court held that as it had acquitted Accused 4 and 5 the assets standing in their names had to be excluded from the order of confiscation. The High Court, however, maintained the order of confiscation in respect of the assets of the appellant and his wife and daughter. As against this portion of the order the wife and daughter of the appellant have also filed SLPs (Crl.) Nos. 1867 and 2343 of 2001. Those were also listed on board along with these appeals. We have delinked those SLPs.

11. As stated above, the charge against the appellant is that whilst he was holding the office as Minister of Education, Government of Tamil Nadu i.e during the check period he abused his position as a public servant and acquired and possessed pecuniary resources and properties in his name and in the names of Accused 2 to 5 disproportionate to his known sources of income to the extent of Rs 77,49,337.77.

12. Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act read as follows:

“13. Criminal misconduct by a public servant.—(1) A public servant is said to commit the offence of criminal misconduct,—

(a)-(d)***

(e) if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income.

***

(2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine.”

Thus under Section 13(1)(e) if either the public servant or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession of pecuniary resources or property disproportionate to his known sources of income the public servant would have committed misconduct unless he can satisfactorily account.

13. As stated above, the trial court convicted Accused 1 to 5 on the footing that the prosecution has established that between them assets disproportionate to the known sources of income (to the extent of Rs 77,49,337.77) had been proved. That there were large assets has not been seriously disputed. Of course there is a dispute as to the exact amount. This is set out later. What has however been disputed is that these are assets in the name of the appellant i.e that Accused 2 to 4 are holding these assets on behalf of the appellant.

14. The High Court asked the parties to give a break-up of the assets in the names of each of the accused. On such break-up it was found that so far as the appellant was concerned, in his own name, there were no pecuniary resources or assets disproportionate to his known sources of income.

15. However, it was found that assets standing in the name of his wife i.e Accused 2 were, according to the prosecution in a sum of Rs 35,23,396 and according to the defence in a sum of Rs 29,00,067. The assets standing in the name of his daughter i.e Accused 3, according to the prosecution were in the sum of Rs 11,14,772 whereas according to the defence they were in the sum of Rs 11,26,283. The assets in the name of Accused 4, according to the prosecution as well as the defence were in the region of Rs 18,55,308. The assets in the name of Accused 5, according to the prosecution were in the region of Rs 13,16,158, whereas according to the defence they were in the region of Rs 10,01,079. Whether the assets are as claimed by the defence or the prosecution is not material for purposes of these appeals. Even if the figures are as claimed by the defence, they are still quite large.

16. The High Court then holds that the prosecution had not proved or shown whether Accused 4 and 5 had any independent source of income of their own. The High Court concludes that the prosecution by failing to conduct an investigation into the individual income of Accused 4 and 5 had failed to prove that the assets standing in the names of Accused 4 and 5 did not belong to them. The High Court held that it could not, therefore, be held that Accused 4 and 5 were holding assets only on behalf of Accused 1. On this basis the High Court acquits Accused 4 and 5. As we have been told that the State is likely to file an appeal against acquittal of Accused 4 and 5, we make no comments on this aspect.

17. Accused 2 was only a housewife and Accused 3 was only a student before and during the check period. Accused 3 being a student had no source of income except some very small agricultural income. It is proved and admitted that the only source of income of Accused 2 is agricultural income from 5.45 acres of dry lands amounting to Rs 82,880 and interest on savings in bank account amounting to Rs 16,376. It is proved that prior to the check period Accused 1, 2 and 3 had no substantial income or property. Even according to the defence version, Accused 2 got assets amounting to Rs 29,00,067 and Accused 3 got assets amounting to Rs 11,14,772. According to Accused 2 and 3 the income is supposed to have been gifted to both of them by Accused 4.

18. The trial court and the High Court have dealt in detail with the evidence led by the prosecution to show the existence of the income and the purchase of properties. We are not setting out the entire evidence as in our view the following evidence would suffice to show that the prosecution has proved beyond a reasonable doubt that Accused 2 and 3 derived the income and properties during the check period.

19. The prosecution has led the evidence of PW 10, the District Registrar, Trichy who proved that Accused 2 purchased a house site in her name on 10-8-1984 for a sum of Rs 3,23,000. She purchased another property, from Mr Selvaraj, on 7-11-1994 for a sum of Rs 2,50,000. A third property was purchased by her, from one R. Vijay Lakshmi, on 25-2-1995 for a sum of Rs 3,25,000. In her statement under Section 313, all these purchases are admitted. The only explanation is that these were purchased from gift cheques received from Accused 4.

20. The prosecution has led the evidence of the Manager, Karur Vysya Bank, Main Branch, Trichy. He has produced the ledger of the Bank relating to the savings bank accounts standing in the name of Accused 2. The computer printout has been marked as Ext. PE 5. It is shown that an amount of Rs 10,00,000, as per pay-in slips, Exts. P-40 and P-41, had been deposited in the year 1993-94. Further, an amount of Rs 5,00,000 was deposited as per pay-in slip Ext. P-65. On 3-3-1995, another Rs 5,00,000 was deposited through pay-in slip Ext. P-66. On the same day, yet another amount of Rs 5,00,000 was deposited as per pay-in slip Ext. P-67. One month earlier i.e on 2-2-1995, an amount of Rs 5,00,000 was paid into the account through pay-in slip Ext. P-68. Thus an amount of Rs 20,00,000 has been deposited into the account of Accused 2 within a period of not even 40 days i.e 25-1-1995 to 3-3-1995.

21. The prosecution has examined PW 6 Manager of Andhra Bank, Trichy. His evidence shows that Lockers Nos. 122 and 32 were kept by Accused 2 and 4 jointly. These lockers were opened in the presence of PW 23, the then Deputy Commissioner of Commercial Taxes by the Deputy Superintendent of Police, Vigilance on 2-9-1996 at about 2.30 p.m In total, there were 37 items of jewels and Ext. P-114, search list was prepared and signed by PW 23 and PW 6. PW 34, the proprietor of Devi Jewellers, Trichy states that Accused 2 purchased jewels through cash bills Exts. P-202 to P-214. The various dates of purchases are 16-12-1993, 24-1-1994, 28-1-1994, 18-3-1994, 31-3-1994, 28-7-1994, 28-11-1994, 26-12-1994, 10-2-1995, 28-2-1995, 20-3-1995 and 31-3-1995. Even as per the worksheet submitted by the defence, the total value of the jewels purchased by Accused 2 from M/s Devi Jewellers is Rs 8,88,086.

22. Further, PW 50, the Accountant of Coimbatore Jewellers has deposed that Accused 2 purchased jewels worth Rs 84,250 on 15-3-1995. The carbon copy of the bill was marked as Ext. P-265. On the same day, jewels were purchased for Rs 18,000 as per Ext. P-266. According to the witness, on 25-3-1995, jewels for a value of Rs 1,46,000 were purchased as per Ext. P-267, cash bill. Even as per worksheet filed by the defence from 15-3-1995 to 25-3-1995 jewels were purchased from PW 50 Coimbatore Jewellers for Rs 3,08,250. When the abovesaid evidence of PW 34 and PW 50 was put to A-2 during the course of questioning her under Section 313 CrPC, she admitted the abovesaid purchase but failed to explain through what income she purchased those jewels. She only stated at the end of her examination that she purchased movables and immovables out of the gift cheques received by her through Accused 4.

23. The prosecution has also led the evidence of PW 10 District Registrar, Trichy. This witness proved that on 25-11-1990, Accused 3 purchased property under sale deed Ext. P-69. Accused 3 also purchased another property on 24-11-1994 under sale deed Ext. P-71. The above properties were of the value of Rs 1,90,000 and Rs 1,95,000. It must be noted that Accused 2 had also purchased other properties from the very same party. Thus the daughter of the appellant (i.e Accused 3) who was merely a student and had no source of income had purchased properties, paid for the stamp duty and other costs. When this fact was put to her, Accused 3, she admitted that the purchases were made in her name. But she failed to explain the source of income from which the properties were purchased.

24. The prosecution has, through the evidence of T. Ramachandran (PW 5) i.e the Manager of Karur Vysya Bank, Main Branch, Trichy, also proved that Accused 3 had savings bank a/c in that Bank. The computer printout of the ledger was marked as Ext. P-34. In that an amount of Rs 5,00,000 was deposited on 24-11-1994 through pay-in slip Exts. P-35 and P-36. When this fact was put to her in her examination under Section 313, she admitted the account but said that she did not know anything about it. Even with regard to the lockers standing in her name, she stated that she knew nothing about it.

25. The prosecution has thus proved beyond reasonable doubt that substantial wealth was acquired by Accused 2 and 3 during the check period. The only explanation given for the acquisition of this wealth was that it had been gifted to them by Accused 4. Both the trial court and the High Court have disbelieved the story of gift and concluded that these were in fact the properties held by these persons on behalf of Accused 1. On this basis Accused 1 had been convicted.

26. Mr Rao has seriously assailed the judgments of the trial court and the High Court. He submitted that it has been established in the High Court that Accused 1 himself did not have any pecuniary resources or properties disproportionate to his known sources of income. He submitted that the prosecution has miserably failed to show that the properties standing in the names of Accused 2 and 3 were held by them on behalf of Accused 1. He submitted that it was for the prosecution to prove beyond reasonable doubt and by means of legal evidence that these were benami properties of Accused 1. Mr Rao submitted that Accused 4 had been acquitted by the High Court on the ground that the prosecution has not investigated into his personal source of income. He submitted that, therefore, it could not be presumed that Accused 4 had no personal source of income. He submitted that Accused 4 was the nephew of the appellant and, therefore, out of love and affection he had gifted the properties to Accused 2 and 3. He submitted that it was for the prosecution to establish by legal and cogent evidence that the gifts were not genuine and that these were not the properties of Accused 2 and 3. He submitted that as the prosecution had miserably failed to discharge the burden and prove that the properties were held benami by Accused 2 and 3 on behalf of Accused 1, neither the trial court nor the High Court could have convicted Accused 1 under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act.

27. In support of his submission Mr Rao relied upon the authority of this Court in the case of Krishnanand v. State of M.P (1977) 1 SCC 816 In this case this Court has held as follows:

“It is well settled that the burden of showing that a particular transaction is benami and the appellant owner is not the real owner always rests on the person asserting it to be so and this burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of benami is the intention of the parties and not unoften, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of the serious onus that rests on him, nor justify the acceptance of mere conjectures or surmises as a substitute for proof. It is not enough merely to show circumstances which might create suspicion, because the court cannot decide on the basis of suspicion. It has to act on legal grounds established by evidence.”

There can be no dispute with the legal proposition. However, let us see what is meant by “proved”. Section 3 of the Evidence Act defines “proved” as follows:

“3. ‘Proved’.—A fact is said to be proved when, after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.”

Further, Section 114 of the Evidence Act reads as follows:

“114. Court may presume existence of certain facts.—The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.”

Thus the fact is said to be proved when after considering the matters before it, the court believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. In coming to its belief the court may presume existence of any fact which it thinks likely to have happened having regard to the natural course of event, human conduct and public and private business, in relation to the facts of each case.

28. Now, let us see the facts of this case. The prosecution has established beyond a reasonable doubt, that prior to the check period Accused 1, 2 and 3 had no real source of income, except some meagre income i.e Accused 1 only earned a small salary as a Lecturer and Accused 2 had a small agricultural and other income. Accused 3 being a student had no real source of income. Prior to the check period the financial condition of the family was such that Accused 1 could not even repay his small debts. The creditors had to recover their amounts by filing suits and executing decrees. We are presuming that Accused 4 had independent income. However, prior to the check period Accused 4 had not been afflicted by any love and affection and had not made any gifts to any member of the family of Accused 1. Prior to the check period Accused 4 did not even extend help to pay off the small debts of Accused 1 even after the decrees had been passed against Accused 1. Yet suddenly, during the check period i.e when Accused 1 is a Minister, Accused 4 donates large sums of money to Accused 2 and 3. The natural presumption, considering the common course of natural events and human conduct is that Accused 1 would have used his nephew Accused 4 to transfer his (Accused 1's) monies to Accused 2 and 3. This is the supposition which any prudent man under these circumstances would act upon considering the natural course of events. The trial court and the High Court thus rightly took this as proved by legal evidence. The prosecution having established by legal evidence that the monies were transferred by Accused 1 to Accused 2 and 3 through Accused 4 and that these were monies of Accused 1 in the hands of Accused 2 and 3, it was for the appellant to satisfactorily account for the gifts. He could have done so by showing that even before the check period Accused 4 had made gifts of substantial amounts. It has not been claimed by Accused 2 and/or 3 and/or 4 that before the check period also Accused 4 had made any such gifts. It is also not their case that after the check period gifts were made. Thus the trial court and the High Court were right in not believing the case of gifts supposedly made out of a sudden burst of love and affection. Both the trial court and the High Court were right in convicting the appellant. As we are told that the State is going to file an appeal against the acquittal of Accused 2 and 3, we are not making any comments thereon.

29. In our view, there is no infirmity in the order of the High Court so far as the conviction of the appellant is concerned. We see no reason to interfere.

30. Accordingly these criminal appeals stand dismissed. There will be no order as to costs.