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AMICUS AI
Citation Codes
Neutral Citations
2009 INSC 104
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5(1)(e) of the Act
  • Article 20(1) of the Constitution
  • Section 5, Subsection (3) of the Act
  • Prevention of Corruption Act, Section 5(3)
  • The Act
  • Maxwell on Interpretation of Statutes, 11th Edn.
  • Prevention of Corruption Act, 1947 (Section 5(1)(e))
  • Prevention of Corruption Act, Section 5(1), Subsection (3)
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Cites
Cited by
Citation Codes
Neutral Citations
2009 INSC 104
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5(1)(e) of the Act
  • Article 20(1) of the Constitution
  • Section 5, Subsection (3) of the Act
  • Prevention of Corruption Act, Section 5(3)
  • The Act
  • Maxwell on Interpretation of Statutes, 11th Edn.
  • Prevention of Corruption Act, 1947 (Section 5(1)(e))
  • Prevention of Corruption Act, Section 5(1), Subsection (3)
Smart Summary

Factual and Procedural Background

The respondent, a government servant serving as an Inspector of Police, was subjected to a raid at his residence on 28 December 1971. He was prosecuted and convicted by the trial court under Section 5(1)(e) of the Prevention of Corruption Act, 1947 for possessing pecuniary resources and property allegedly disproportionate to his known sources of income. The trial court sentenced him to one year of imprisonment and imposed a fine of ₹2,50,000.

On appeal, a Division Bench of the Bombay High Court set aside the conviction and directed his acquittal, holding that assets accumulated prior to 18 December 1964 (the date on which Section 5(1)(e) came into force) could not be considered for determining disproportionate wealth. The State appealed that decision to the Supreme Court.

Legal Issues Presented

  1. Whether, for a charge under Section 5(1)(e) of the Prevention of Corruption Act, 1947, pecuniary resources or property acquired by a public servant before 18 December 1964 can be taken into account when assessing whether the assets are disproportionate to known sources of income.

Arguments of the Parties

Appellant’s Arguments

  • The High Court mis-construed the scope and ambit of Section 5(1)(e) by excluding assets acquired prior to 1964, thereby ignoring binding Supreme Court precedent.

Respondent’s Arguments

  • The High Court’s view was correct; alternatively, even if the legal position favoured the appellant, other factual aspects would entitle the respondent to an acquittal—issues that the High Court had not examined.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sajjan Singh v. State of Punjab, AIR 1964 SC 464; (1964) 4 SCR 630 Section 5(1)(e) is not retrospective, yet property acquired before the section came into force can be considered; Section 5(3) is a rule of evidence, not a new offence. Relied upon as the controlling authority; the Court found the High Court’s contrary view to be in direct conflict with this ruling.
State of Maharashtra v. Kaliar Koll Subramaniam Ramaswamy, (1977) 3 SCC 525 Cited by the High Court to exclude pre-1964 assets. The Supreme Court noted that the High Court’s reliance created a conflict with Sajjan Singh.
Ramanand Pundalik Kamat v. State of Maharashtra, ILR 1973 Bom 1066 Followed by the High Court for the same proposition as above. Likewise found inconsistent with Sajjan Singh.
State of Bombay v. Vishnu Ramchandra, AIR 1961 SC 307 Illustration that a statute is not retrospective merely because it draws upon antecedent facts. Cited within the passage from Sajjan Singh to support that reasoning.
C.S.D Swami v. State, AIR 1960 SC 7 Held that Section 5(3) prescribes a rule of evidence, not a separate offence. Mentioned in Sajjan Singh to clarify the evidentiary nature of Section 5(3).
Surajpal Singh v. State of Uttar Pradesh, AIR 1961 SC 583 Same principle as C.S.D Swami regarding Section 5(3). Referenced in Sajjan Singh for the same evidentiary clarification.

Court’s Reasoning and Analysis

The Supreme Court observed that the High Court limited its analysis to a single question: whether assets amassed before 18 December 1964 could be counted under Section 5(1)(e). Referring extensively to the three-judge Bench decision in Sajjan Singh, the Court clarified that:

  • Section 5(1)(e) does not have retrospective penal operation, but inclusion of pre-1964 assets for assessing disproportionate wealth does not amount to retrospective application of the law.
  • Section 5(3) is purely a rule of evidence enabling the prosecution to prove the offence already charged; it does not create a new offence.
  • Consequently, excluding earlier acquisitions would require reading words into the statute that are not present and would lead to anomalous results.

Because the High Court’s interpretation directly conflicted with the binding precedent of Sajjan Singh, the Supreme Court set aside that portion of the judgment. However, it noted that the High Court had not examined other factual or legal issues raised by the respondent, and those matters needed adjudication.

Holding and Implications

Holding: The appeal is allowed to the extent that the Bombay High Court’s view on Section 5(1)(e) is set aside. The matter is remitted to the High Court for consideration of the remaining issues, with a request to decide them within four months.

Implications: The decision re-affirms the authority of Sajjan Singh and clarifies that, in proceedings under Section 5(1)(e), assets acquired before 18 December 1964 may be included when assessing disproportionate wealth. No new legal standard is created, but the High Court must now reassess the appeal on all other grounds.

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    State Of Maharashtra v. Krishnarao Dudhappa Shinde .

    Dr. Arijit Pasayat, J.— Challenge in this appeal is to the judgment of a Division Bench of the Bombay High Court. By the impugned judgment the High Court set aside the judgment of the trial court and directed acquittal of the respondent.

    2. The background facts in a nutshell are as follows:

    The respondent a government servant was the Inspector of Police at the time when a raid was conducted in his house on 28-12-1971. He was convicted for offence punishable under Section 5(1)(e) of the Prevention of Corruption Act, 1947 (in short “the Act”) and was sentenced to undergo the minimum sentence of one year and was directed to pay a fine of Rs 2,50,000.

    3. The only point which was examined by the High Court was whether the respondent could be convicted for acquisition of wealth disproportionate to his known sources of income prior to 1964 i.e from the date of inception in service on 29-5-1944 till the date of raid under Section 5(1)(e) which came into force only on 18-12-1964. The High Court was of the view that any acquisition of wealth said to be disproportionate to his known sources of income prior to 1964 could not be taken into account since prior to 1964 the same was not an offence. Reliance was placed on two judgments for the purpose, one of this Court in State of Maharashtra v. Kaliar Koil Subramaniam Ramaswamy (1977) 3 SCC 525 and the other of the Bombay High Court in Ramanand Pundalik Kamat v. State of Maharashtra ILR 1973 Bom 1066.

    4. The primary stand of learned counsel for the appellant is that the scope and ambit of Section 5(1)(e) of the Act has been lost sight of. Learned counsel for the respondent on the other hand supported the judgment.

    5. Section 5(1)(e) of the Act reads as follows:

    “5. Criminal misconduct in discharge of official duty.—(1) A public servant is said to commit the offence of criminal misconduct—
    (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.”

    6. A three-Judge Bench of this Court in Sajjan Singh v. State of Punjab AIR 1964 SC 464, (1964) 4 SCR 630 noted as follows: (AIR pp. 468-69, paras 12-15)

    “12. Mr Lall contends that when the section speaks of the accused being in possession of pecuniary resources or property disproportionate to his known sources of income only pecuniary resources or property acquired after the date of the Act is meant. To think otherwise, says the learned counsel, would be to give the Act retrospective operation and for this there is no justification. We agree with the learned counsel that the Act has no retrospective operation. We are unable to agree however that to take into consideration the pecuniary resources or property in the possession of the accused or any other person on his behalf which are acquired before the date of the Act is in any way giving the Act a retrospective operation.
    13. A statute cannot be said to be retrospective ‘because a part of the requisites for its action is drawn from time antecedent to its passing’. (Maxwell on Interpretation of Statutes, 11th Edn.., p. 211; see also State of Bombay v. Vishnu Ramchandra AIR 1961 SC 307). Notice must be taken in this connection of a suggestion made by the learned counsel that in effect sub-section (3) of Section 5 creates a new offence in the discharge of official duty, different from what is defined in the four clauses of Section 5(1). It is said that the act of being in possession of pecuniary resources or property disproportionate to known sources of income, if it cannot be satisfactorily accounted for, is said by this sub-section to constitute the offence of criminal misconduct in addition to those other acts mentioned in clauses (a), (b), (c) and (d) of Section 5(1) which constitute the offence of criminal misconduct. On the basis of this contention the further argument is built that if the pecuniary resources or property acquired before the date of the Act is taken into consideration under sub-section (3) what is in fact being done is that a person is being convicted for the acquisition of pecuniary resources or property, though it was not in violation of a law in force at the time of the commission of such act of acquisition. If this argument were correct a conviction of a person under the presumption raised under Section 5(3) in respect of pecuniary resources or property acquired before the Prevention of Corruption Act would be a breach of fundamental rights under Article 20(1) of the Constitution and so it would be proper for the Court to construe Section 5(3) in a way so as not to include possession of pecuniary resources or property acquired before the Act for the purpose of that sub-section. The basis of the argument that Section 5(3) creates a new kind of offence of criminal misconduct by a public servant in the discharge of his official duty is however unsound. The sub-section does nothing of the kind. It merely prescribes a rule of evidence for the purpose of proving the offence of criminal misconduct as defined in Section 5(1) for which an accused person is already under trial. It was so held by this Court in C.S.D Swami v. State AIR 1960 SC 7 and again in Surajpal Singh v. State of U.P AIR 1961 SC 583 It is only when a trial has commenced for criminal misconduct by doing one or more of the acts mentioned in clauses (a), (b), (c) and (d) of Section 5(1) that sub-section (3) can come into operation. When there is such a trial, which necessarily must be in respect of acts committed after the Prevention of Corruption Act came into force, sub-section (3) places in the hands of the prosecution a new mode of proving an offence with which an accused has already been charged.
    14. Looking at the words of the section and giving them their plain and natural meaning we find it impossible to say that pecuniary resources and property acquired before the date on which the Prevention of Corruption Act came into force should not be taken into account even if in possession of the accused or any other person on his behalf. To accept the contention that such pecuniary resources or property should not be taken into consideration one has to read into the section the additional words ‘if acquired after the date of this Act’ after the word ‘property’. For this there is no justification.
    15. It may also be mentioned that if pecuniary resources or property acquired before the date of commencement of the Act were to be left out of account in applying sub-section (3) of Section 5 it would be proper and reasonable to limit the receipt of income against which the proportion is to be considered also to the period after the Act. On the face of it this would lead to a curious and anomalous position by no means satisfactory or helpful to the accused himself. For the income received during the years previous to the commencement of the Act may have helped in the acquisition of property after the commencement of the Act. From whatever point we look at the matter it seems to us clear that the pecuniary resources and property in possession of the accused person or any other person on his behalf have to be taken into consideration for the purpose of sub-section (3) of Section 5, whether these were acquired before or after the Act came into force.”

    The view expressed by the High Court is apparently in conflict with the view expressed by this Court in Sajjan Singh case AIR 1964 SC 464, (1964) 4 SCR 630.

    7. Learned counsel for the respondent submitted that even if the accused has no case on the legal question raised on facts the respondent was bound to succeed. We find that the High Court did not examine the other aspects and only dealt with the applicability of Section 5(1)(e) of the Act on the factual position highlighted above.

    8. While we set aside the order of the High Court so far as it relates to the scope and ambit of Section 5(1)(e) of the Act, we remit the matter to it for considering the other aspects which according to learned counsel for the respondent were in issue before the High Court in appeal filed by the accused person. Since the matter is pending since long we request the High Court to take up the matter at an early date and make an effort to dispose of the same within a period of four months from the date of receipt of our judgment.

    9. The appeal is allowed to the aforesaid extent.

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    Comments

    State Of Maharashtra v. Krishnarao Dudhappa Shinde .
    (Feb 5, 2009)