Khageshwar Prasad (Since Died) Through LRs Vs State of Chhattisgarh

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2025:CGHC:48426

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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CRA No. 946 of 2003

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1 - Khageshwar Prasad (Since Died) Through LRs As Per Hon'ble Court Order Dated 19-10-2023.

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1.a . Smt. Rohini Haripriya Wd/o Late Khageshwar Prasad Aged About 75 Years R/o 102, Civil Lines, Sarangarh, District : Sarangarh-Bilaigarh, Chhattisgarh

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1.b . Shankar Haripriya S/o Late Khageshwar Prasad Aged About 60 Years R/o House No. 14, Pink City, District : Indore, Madhya Pradesh

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1.c . Durga Choubey D/o Late Khageshwar Prasad Aged About 56 Years R/o Choudhary Hospital, Near Capital Petrol Pump, District : Bhopal, Madhya Pradesh

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1.d . Arvind Haripriya S/o Late Khageshwar Prasad Aged About 54 Years R/o 102, Civil Lines, Sarangarh, District : Sarangarh-Bilaigarh, Chhattisgarh

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1.e . Arun Haripriya S/o Late Khageshwar Prasad Aged About 52 Years R/o Fx-52, F-7, Arera Colony, District : Bhopal, Madhya Pradesh

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1.f . Anil Kumar Haripriya S/o Late Khageshwar Prasad Aged About 50 Years R/o 102, Civil Lines, Sarangarh, District : Sarangarh-Bilaigarh, Chhattisgarh

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... Appellant(s)

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versus

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1 - State Of Chhattisgarh Thru Inspector, Special Police Establishment, Lokayukta Office, Branch Bilaspur, District : Bilaspur, Chhattisgarh

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... Respondent(s)

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(Cause title taken from Case Information System)

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Digitally signed by VED VED PRAKASH PRAKASH DEWANGAN DEWANGAN Date: 2025.12.10 10:58:13 +0530

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For Appellant(s)	: M r. As hish Shrivastava, Senior Advocate
	along with Mr. Rohishek Verma, Advocate
For Respondent(s)/State	: Mr. Akhilesh Kumar, Govt. Advocate

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Hon'ble Shri Justice Ravindra Kumar Agrawal

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Order on Board

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19/09/2025

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Challenge in the present Criminal Appeal is the legality, correctness and propriety of the judgment of conviction and sentence dated 22.08.2003, passed by learned Special Judge, Bilaspur, in Special Case No. 03/1996, whereby the learned trial court convicted the accused Khageshwar Prasad (since dead) and sentenced him for the offence under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 and sentenced for R.I. for One Year with fine of Rs. 20,000/-, in default of payment of fine, further R.I. for two months.

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During the pendency of this appeal, the accused Khageshwar Prasad died on 16.06.2023, and on the application filed by his near relatives to continue the appeal, leave was granted on 19.10.2023, and they have been impleaded in the appeal as the appellants.

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The case of the prosecution, in brief, is that the accused Khageshwar Prasad (since dead) was initially appointed as Excise Officer in the year 1964, and promoted time to time to the post of Assistant Commissioner (Excise) and Deputy Commissioner (Excise) and posted at various places, between 01.01.1980 to 30.04.1992. On receiving a complaint against the acquisition of disproportionate property by him in the names of his family members, the Inspector of Police conducted a preliminary inquiry and found that he acquired certain immovable properties at various places. The unnumbered FIR Ex. P-121 was registered and based on unnumbered FIR, the offence was registered as Crime No. 107/1991 at Special Police

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Establishment, Anti-Corruption Bureau, Bhopal. After obtaining authority to investigate the matter by Ex. P-11, and search warrant Ex. P-122, he along with the trap party, conducted search in the residential house of the accused at Gwalior (Madhya Pradesh) on 29.04.1992. Inventory Ex. P-54 was prepared and valuation of the property was assessed. After the search proceeding, it was found that as on 01.01.1990, the accused had the savings of Rs. 36001.25 NP, however, in the check period, his income from the known sources was Rs. 10,47,130.35 NP. Thus, his total income was Rs. 10,85,131.60 NP, and his excess expenditure from his total income was Rs. 8,13,554.45 NP, for which he could not give any plausible explanation. After completion of the investigation, charge sheet was filed before the learned trial Court for the offence under Section 13(1) (e) and 13(2) of the Prevention of Corruption Act, 1988.

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Learned Trial Court framed charge for the offence under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988, and proceeded for trial.

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In order to prove the charge against the accused, the prosecution examined as many as 25 witnesses. Statement of the accused under Section 313 of the Cr.P.C. has been recorded in which he denied the circumstances that appear against him, pleaded innocence and has submitted that earlier also, the Lokayukta police had inquired about his property, but nothing adverse was found against him. His father was a Malgujar of Sarangarh State and was an MLA from Sarangarh Constituency. He obtained his ancestral property, and his family members are income tax payers. His income is more than the value of the property purchased by him, and he is innocent.

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The accused has examined 02 defence witnesses and exhibited the documents Ex. D-1 to D-6 in his support.

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After appreciation of oral as well as documentary evidence produced by the parties, the learned Trial Court passed the judgment of conviction and sentence and convicted the accused and sentenced him as mentioned in the earlier part of this judgment. Hence, this appeal. After the death of the accused during the pendency of the appeal, the present appeal is continued through his near relatives.

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Learned counsel for the appellants would submit that the accused was innocent and had been falsely implicated in the offence. The prosecution was unable to prove its case beyond a reasonable doubt. He would further submit that the prosecution has not prepared the inventory properly and legally. The valuation of the articles in the inventory, Ex. P-54 was not done by any certified valuer. The investigating officer, P.W. 24, Hemant Khare, has, on his own fancy and whims, mentioned the value of the property without any basis in the inventory. Therefore, the trial Court’s reliance on the valuation made in the inventory cannot be found basis for conviction of the accused for Section 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988. He further submits that apart from the accused, his wife and other family members were also the earning members and income tax payers. He would further submit that the father of the accused was a Malgujar and was also an MLA of the Sarangarh area. He inherited valuable properties from his parents, and all other family members were income taxpayers. Earlier, the Lokayukta inquired, but nothing was found against the

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accused. The learned trial court has mechanically accepted the evidence of the prosecution witnesses and has convicted the accused, which is erroneous. The income and expenditure of the accused and his family members have not been properly considered by the police, as well as by the learned trial Court. There is no disproportionate property with that of the income of the accused, which can be said to be beyond his known source of income. In support of his submission, he would rely upon the judgment of “ State of T.N. v. R. Soundirarasu ”, 2023 (6) SCC 768, “ M. Narayanan Nambir v. State of Kerala ”, AIR 1963 SC 1116, “Ambi Ram v. State of Uttrakhand”, 2019 (17) SCC 396, “ K. P. Singh v. State (NCT of Delhi) ”, 2015 (15) SCC 497 and “ K.K.S. Nair v. State of Chhattisgarh ”, judgment dated 08.09.2025 passed in Cr.A. No. 902/2001 (C.G. High Court).

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Per contra, learned counsel appearing for the State opposes the submissions made by learned counsel for the appellants. He submits that the prosecution has proved its case beyond reasonable doubt by producing sufficient and cogent evidence. It has been proved in the case that the total amount of the income earned and received by the deceased/appellant, his family members and the expenditures done by him during the check period. The learned trial Court has rightly considered the inventory prepared by the police authorities and its valuation put by the approved valuer. The prosecution was able to prove that an amount of Rs. 8,13,554.45 NP was disproportionate to the known source of income of the deceased/appellant. He would further submit that the valuation of the movable and immovable properties was correctly done by the prosecution and the learned trial

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Court on the basis of the evidence of the prosecution witnesses comes to the findings that the property acquired by the deceased/appellant was the disproportionate property to the known source of his income. He would also submit that the amount, which is said to have been contributed by the family members of the deceased/appellant for acquisition of the property was also taken into consideration, when the inventory was prepared, therefore, this cannot be accepted that the amount has to be deducted. He would also submit that the investigating officer- Hemant Khare (PW-24) and PW-25/Vinod Kumar Tiwari have categorically stated that on the basis of the witnesses, they came to a conclusion that the properties seized from the house of the deceased/appellant as well as from other areas, belongs to the deceased/appellant. The learned trial Court has given the depreciation amount and after deducting the due appreciation and other expenses, came to conclusion that the deceased/appellant has the amount of Rs. 2,24,716/disproportionate to his known source of income, therefore, the well merited finding recorded by the learned trial Court is not liable to be interfered with and the appeal is liable to be dismissed.

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I have heard learned counsel for the parties and perused the record of the trial Court with utmost circumspection.

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In the present case, the charge against the deceased/appellant was for acquisition of disproportionate assets of Rs. 8,13,554/- from his known source of income in between the check period of 01.01.1980 to 30.04.1992.

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In the present case, PW-24/Hemant Khare has investigated the matter. He stated in his evidence that, he was working as Inspector at Special Police Establishment, Lokayukta, Bilaspur from 17.11.1989 to 21.04.1994. On receiving a complaint against Khageshwar Prasad Haripriya (deceased/appellant), the then Deputy Commissioner, Excise Department, he conducted the preliminary enquiry and found that the deceased/appellant has acquired a house at Housing Board, Bhopal, plot at Rajkishore Nagar, Bilaspur, one Maruti car, agricultural land and residential plot in the name of his son, a house at Sarangarh in the name of his father Shiv Prasad and a MIG plot purchased at Bhopal. He registered the offence on 16.09.1991 under Section 5(1)(d), 5(2) of the Prevention of Corruption Act, which is exhibit P-121. It was sent to headquarter for its registration and Crime No. 107 of 1991 was registered and he was authorized by the letter (exhibit P-111) to investigate the matter. He obtained search warrant to search the house of the deceased/appellant from the Special Judge, Bilaspur, which is exhibit P-122. After obtaining the search warrant, he along with the team consists of Mr. R.D. Diwan, Inspector- Mr. M.K. Tiwari, Head Constable and Constable had gone there. They conducted search of the house of the deceased/appellant at Darpan Colony, Gwalior in presence of the witnesses and prepared the inventory of the articles found on his house, which is exhibit P-54. The articles of serial No. 1 to 28 of the inventory was given in interim custody to the deceased/appellant and they came back to Bilaspur. He made correspondences with respect to the properties discovered at the time of search proceeding and then it was disclosed that 8.110

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hectares land was purchased in the name of Shiv Prasad, 2.803 hectares land was purchased in the name of Shankar Lal, 0.10 acre was purchased in the name of Shiv Prasad, 6.734 hectares land was purchased in the name of Shankar Lal, one residential plot in the name of K.P. Haripriya, which was purchased on 21.05.1987 for the consideration of Rs. 17,280/-, one HIG plot at Shahpura Housing Board, Bhopal, one LIC policy of Rs. 25,000/- in the name of K.P. Haripriya. Likewise; the number of properties they found either in the name of the deceased/appellant or in the name of his family members. In the year 1994, he was transferred and the further investigation was done by another police officer. In crossexamination, he stated that in the preliminary enquiry, only the statement of witnesses can be recorded and the documents cannot be seized. After starting the investigation, he has not made the seizure memo and whatever documents were available to him, he annexed in the present case. He admitted that the deceased/ appellant has informed him that earlier also the Lokayukta enquiry has already been conducted and the case was closed. The written reply of the accused was exhibit D-1. He has not verified the reply submitted by the accused from his office and his reply is not available in the case diary. He further stated that he recorded the statement of Shiv Prasad Gautiya, who was the ex-MLA. He also admitted that he was the ex-Malgujar. He also recorded the statement of Shankar Lal, who was the medical student at that time. He further admitted that the accused had submitted the income tax return of his father Shiv Prasad Gautiya and his son Shankar Lal and Arvind. He also admitted that Shankar Lal was having a vehicle, which was running

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as Taxi and the children of the accused receiving scholarship. He also admitted that the children of the accused were receiving stipend for their medical education. He also admitted that the accused family was having their ancestral property.

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The further investigation in the case was done by PW-25/Vinod Kumar Tiwari. He stated in his evidence that, he has prepared the income and expenditure chart of K.P. Haripriya, which is exhibit P- 124. The income and expenditure chart of the accused is exhibit P- 125. Prior to the check period from the date of his appointment up to 31.12.1979, the total income from salary was Rs. 90,003.05 NP and prior to the check period, the expenditure was Rs. 54,001.80 NP. During the check period, he received salary of Rs. 3,16,791.35 NP in between 01.01.1980 to 30.04.1992 and the expenditure was Rs. 1,90,074.80 NP. The accused was also withdrawn Rs. 91,300/- from his provident fund, which was considered as his income. He also gave the details of various income and expenditure of the accused and after its calculation, he found disproportionate assets of Rs. 8,13,554.45 NP and prepared a chart, which is exhibit P-126. In cross-examination, he stated that he prepared the document exhibit P-124 on the basis of the statements. It has not been mentioned in exhibit P-124 as to when the sons of the accused have passed their medical and engineering examination. He also not disclosed as to whether Shankar Lal Haripriya is in government service or not. He did not see the income tax assessment of the sons of the accused. He has not adjusted the income of the accused from the ancestral property, because the accused has not disclosed the same. He has

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not read over the report of Justice Bhave Lokayukta. He admitted that he has not received the documents exhibit D-2 to D-6.

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PW-1, Mujar Hussain is the clerk at Bilaspur Development Authority, Bilaspur, who stated in his evidence that a land of 2250 sqft was allotted to Shankar Lal for consideration of Rs. 56,250/- and he deposited the amount and then the lease of plot No. C-24 was issued in his favour. He also proved the application (exhibit P-41), allotment orders (exhibit P-42 and P-43) and the lease deed (exhibit P-44). The 2250 sqft of land was also allotted to Arvind Kumar, his application is exhibit P-45, allotment order is exhibit P-46 and the lease deed is exhibit P-48. Nothing has been asked in his crossexamination to challenge his evidence.

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PW-2, Brijmohan Shukla is the Assistant District Excise Officer, who submitted the details of the salary and allowances of the accused from the period of December, 1967 to June, 1969 to the Special Police Establishment, Lokayukta, Bilaspur.

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PW-3, Ranjeet Singh is the Deputy Commissioner, Excise, who also submitted the details of salary and allowances of the accused from the period of 1977 and 1993, when he was posted at Sagar, which is exhibit P-52. He also proved the document (exhibit P-53), which is the details of salary and allowances from the month of June, 1992 to October, 1993.

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PW-4. R.D. Diwan is the witness, who was a member of search party, when the PW-24/Hemant Khare conducted search of the house of the accused at Gwalior. He also stated that the inventory (exhibit P- 54) was prepared in his presence.

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PW-5, Manharan Singh Thakur is the Assistant Administrative Officer, LIC, Raigarh, who stated about the LIC policy in the name of Arun Kumar Haripriya, Ku. D. Haripriya, Arvind Kumar Haripriya and Anil Kumar Haripriya. In cross-examination, he stated that he could not tell as to whether the premium of the said LIC policy was paid by cash or cheque.

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PW-6, Manoj Kumar Bada is the Sub-Registrar at Registration Office, Sarangarh. He proved the sale-deeds executed in the name of the accused and his family members. In cross-examination, he stated that the minors were represented through their elder brother Shankar Lal.

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PW-7, Satish Chandra Choudhary is the Assistant Excise Officer, Hoshangabad, who proved the salary and allowances details of the accused from the period of 01.07.1970 to 20.06.1973, which are exhibit P-56 and P-57. In cross-examination, he stated that the salary statement was prepared by the Treasury Officer. PW-8 has also proved the salary and allowances details of the accused (exhibit P-58 to P-60). PW-9, Ashok Kumar Shivhare is the Additional Collector, who is the witness to the search of the accused’s house and the inventory (exhibit P-54). PW-10, Amarnath Saluja is another Excise Officer, who proved the salary and allowances details of the accused (exhibit P-61 to P-63). PW-11 is also a witness, who proved the salary and allowances details of accused (exhibit P-64 and P-65), which was the details from the period of 1978 to 1980 and 1986 to 1990. PW-12, Jitendra Pratap Singh is the Chief Manager, State Bank of India, M.P. Nagar, Bhopal, who proved the accounts

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statement of Anil Kumar (exhibit P-66) and stated that up to 05.01.1994, the amount of Rs. 2555.10 NP was balanced in the account. PW-14, Pardeshi Ram Raj is the Assistant Branch Manager, LIC, Ambikapur, who proved the details of LIC policy issued in the name of accused, which is exhibit P-68. The policy was issued on 20.12.1973 and its maturity date was 09.10.1993. The policy was of Rs. 25,000/- and up to October, 1991, total Rs. 27,172.80 NP was paid towards premium of the policy.

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PW-15, Sameer Kumar Nag was the Tahsildar, Sarangarh, who proved the income from the agricultural land of the accused, which is exhibit P-70 to P-72. He stated that in between 1981 to 1990-91, the total income of the agricultural land recorded in the name of Arvind, Shankar Lal, Arun and Anil was Rs. 1,34,100/- after deduction of its expenditure and the income from other land was Rs. 1,53,560/-. In cross-examination, he stated that the income of the year 1991-92 and 1992-93 is not shown in the aforesaid documents. The expenditure in the agriculture work was about 40% of the total income. He did not state as to on what basis the income certificate has been issued, because he was not posted there at that time. The income from agriculture was assessed on apprehension and it may vary.

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PW-16, U.A. Kapishwar is the Estate Officer, M.P. Housing Board, Bhopal, who proved the allotment of the land to Shankar Lal, Arvind, K.P. Haripriya, which are exhibit P-74 to P-83. The value of the property allotted in the name of Shankar Lal was Rs. 1,40,547/-, the property of Arvind Kumar is valued Rs. 1,71,304/- and the value of the property of the accused is Rs. 3,27,057/-. In cross-examination,

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he stated that before allotment of the land, the salary certificate of the government employee was taken by them. The house allotted to the accused was under the Hire Purchase scheme and allotted through lottery. The house allotted to Arvind was also under the Hire Purchase scheme and after payment of its last installment, the deed was registered in the year 2000 and 1992.

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PW-17, K.K. Jain is the Branch Manager of State Bank of Indore, Marwadi Road, Bhopal, who proved the bank account statement of Durga, which is exhibit P-84 and P-85, TDR in the name of Shankar Lal (exhibit P-86), accounts detail of Arun Kumar (exhibit P-89). In cross-examination, he did not state, as to who deposited the amount in the bank account of Durga.

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PW-18, Premnarayan Pateriya has proved the assessment order of Arvind Kumar, which was of the year 1990-91, which are exhibit P-90 to P-108. PW-19, S.L. Verma has also proved the salary and allowances details of the accused from the month of July, 1975 to December, 1975, which is exhibit P-109. The document (exhibit P- 109) was prepared on the basis of information submitted by the Treasury Office, Chhindwada. There is a difference in the documents exhibit P-109 and exhibit D-1 with respect to the salary of the accused for the month of August, 1975 to December, 1975.

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PW-20, Kalaram Kurre is the President of Guru Ghasidas Grih Nirman Sahakari Samiti, Raipur. He stated that Arvind Kumar has deposited Rs. 25,000/- for purchasing of 2400 sqft of land. He did not know about the details of Arvind Kumar. After his tenure, the saledeed was registered in his name. PW-21, Hileri Toppo is the

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Superintendent of Police, Special Police Establishment, Raipur. He stated that he authorized Hemant Khare, Inspector to investigate the matter, which is exhibit P-111. PW-22, G. Lal has registered the FIR (exhibit P-112). PW-23, P.K. Netam is the Assistant Excise Officer, who also proved the salary and allowances details of the accused from the month of June, 1969 to January, 1970, which are exhibit P- 113 to P-120.

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The accused has examined DW-1/Arun Kothari, who is a chartered account. He stated in his evidence that Dr. Shankar Haripriya, who is the son of accused, is submitting the income tax return since 1981. Arvind is also submitting his income tax return since 1988-89. The capital and liability was shown in their income tax return up to 21.03.1992. He also submitted the income tax return of the accused and gave the property details of their joint family property to the income tax department. He proved the documents (exhibit D-7 to D- 10), which are the assessments of the income tax of the accused, Dr. Shankar, Arvind Haripriya and Shiv Prasad. In cross-examination, he stated that the copy of income tax return before 1990 has not been submitted. In the year 1989-90, the income of joint family was shown as Rs. 50,350/-. The income from agriculture source was not shown in the income tax return of Shiv Prasad. The agriculture income of Shankar Lal was shown as Rs. 40,064/-. In the income tax return of the joint family, only the details of ancestral property are to be given and in the individual income tax return, their individual income are to be shown.

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DW-2, M.K. Tiwari has stated in his evidence that, he also received the case diary for investigation on 29.09.1994 and investigated the

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matter, however, he could not tell about the investigation without seeing the case diary.

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From all these evidence led by the prosecution, it transpires that the value of the property put by the investigating officer in the inventory has not been put after valuation of the authorized valuer and the same has been mentioned without any assessment and on assumption of the investigating officer. There is no basis to ascertain the value of the articles, therefore, this cannot be relied upon to hold that the accused had spent the amount of value of articles mentioned in the inventory (exhibit P-54) and it should be discarded in toto.

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In the case of “ Manoranjan Kalita v. the State of Assam ” 2014 Crl. Law Journal 689, the Hon'ble Supreme Court held in para 19 and 20 that, barely submitting a list of assets and liabilities is not enough to attract the offence under Section 13(1)(c) of the P.C. Act, which reads as under:-

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“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

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mere valuation of property of 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.”

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In the matter of “ State of M.P. v. Rajendra Singh Yadav ” AIR

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OnLine 2021 Chh. 155, this Court referring to various judgments of the Hon'ble Supreme Court, held in para 9 to 11, which reads as

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under:-

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“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.

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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

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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:

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“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 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..…”

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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:

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“6. An analysis of Section 5(1)(e) of the Act, 1947 which corresponds to Section13(1)(e) of

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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.

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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.”

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The learned trial Court has considered the evidence of PW-2/ Brijmohan Shukla, PW-3/Ranjeet Singh, PW-7/Satish Chandra Choudhary, PW-8/M.R. Uikey, PW-10/Amarnath Saluja, PW-11/ Jayanti Sharma, who have proved the income of the accused received by his salary during his tenure, when he was posted at different places. From the documents with respect to the income from salary of the accused produced by the aforesaid witnesses (exhibit P-50 to P-65, P-109 and P-114), the total income from salary of the accused comes to Rs. 91,197.60 NP. There was a difference of Rs.

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1194.55 NP in calculation of the salary from the aforesaid documents. The accused raised objection that the salary for the month of February and March 1964 have not been included in the said income and there is no details of salary from February 1970 to June 1970. The learned trial Court has assumed that the accused might have received Rs. 161.90 NP per month as his salary, which cannot be taken into consideration in his income without any sufficient proof. Likewise; the income in between the check period of 01.01.1980 to 30.04.1992 have been calculated from the documents (exhibit P-58, P-60, P-62, P-64 and P-65), however there is certain discrepancies pointed out by the learned counsel for the appellant that the documents does not contain the complete details and it cannot be assumed that the accused might have received his salary Rs. 1956.50 NP per month, and thus, his total income from salary and allowances comes to Rs. 3,59,404.75 NP. The maturity amount of LIC policy has also been included in his total income. The learned trial Court has also considered the evidence of PW-19/S.L. Verma, who proved the salary of the accused from July 1975 to December 1975, however he admitted in his cross-examination that, there is difference from the details received from treasury office and in the document (exhibit P-109), yet the said documents have taken into consideration for determination of the income of the accused. The learned trial Court has also considered that, in between the period of 21.02.1964 to 31.12.1979, the actual income of the accused was Rs. 90,003.05 NP as per the document (exhibit P-125), but the actual salary received by the accused was Rs. Rs. 1,16,019.40 NP, which is liable to be included in the total income of the accused. Though, the

¶95

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learned trial Court has considered all these documents for determination of income from salary and allowances of the accused, however, there are differences in the documents itself and the benefit should have been extended to the accused.

¶97

The accused has also taken a defence that after death of his mother, he received Rs. 29,000/- and Rs. 15,000/- from his family and he borrowed a loan of Rs. 1,21,000/- from the bank. He also borrowed Rs. 5000/- from Canara Bank on 30.05.1983, Rs. 50,000/- from State Bank of Indore on 07.12.1987 and this amount has not been included in the total income of the accused. The accused has also taken a defence that the interest on the deposited amount, the income from the properties of the children of the accused i.e. Rs. 1,34,100/-, the agricultural income from the properties of the children of the accused i.e. Rs. 1,53,560/-, the house rent received by son of the accused Arvind i.e. Rs. 39,100/- and the income from the business of the son of the accused i.e. Rs. 1,72,742/- have also been included in the total income of the accused, which could not be included, as the same was their separate income.

¶98

The accused has also raised an objection that the source of his income was provided to Lokayukta and he inquired into the matter, however, the prosecution has to investigate the known source of income and expenditure of the accused independently. The case of the prosecution is based on the information submitted before the Lokayukta and without there being any investigation, the accused cannot be prosecuted. The learned trial Court has shifted burden upon the accused to produce the relevant documents with respect to his known source of income, in which he fails. The income from

¶99

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agriculture is said to have been proved by Samir Kumar/PW-15, which are exhibit P-71 and P-72. In his cross-examination, he admitted that the agricultural lands are recorded in the name of minor Shankar, Arvind and others, who have cultivated the same. The expenditure in the agriculture work is about 40%. He was not posted there at the time, when the income certificates (exhibit P-71 and P- 72) were issued. He did not know, as to on what basis the said income certificates have been issued. He admitted that the income certificate is to be issued on assumption and there is variation in the income of each year. He admitted that in the document (exhibit P- 33), the income from ancestral properties is shown as Rs.78,800/yearly and the yearly income of Shiv Prasad is shown as Rs. 2 – 2.5 lakhs per year in exhibit P-21. The learned trial Court has not taken into consideration these two documents of exhibit P-21 and P-33, because of the reason that the income of Shiv Prasad was not counted as the income of the accused. The variation in the income of each year have also not been accepted by the learned trial Court by saying that, there is no evidence produced by the accused with that respect. When the witnesses have admitted the variation of the income of each year and did not know about the source of the documents, nothing further is required to disbelieve the said documents, but that has been considered against the accused. Shiv Prasad is the father of the accused and it is the claim of the accused that some of the properties are his ancestral properties and some of the properties purchased from income of the joint family. Shiv Prasad was an ex-MLA and having their own sufficient income. The income

¶101

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of his father and the income from his joint family has not been taken into consideration by the learned trial Court.

¶103

The stipend received by the son and daughter of the accused have not been mentioned in the calculation sheet (exhibit P-124). The income of the son of the accused Dr. Shankar Haripriya, who is an income tax payee since 1980-81 and earing Rs. 1000/- per month from tuition, in the year 1986, he purchased a taxi and in between 1986 to 1991, he earned Rs. 2,63,890.30 NP. The agriculture income of Shankar was Rs. 7,10,350/- and he received total stipend of Rs. 66,750/-, which have been shown in the income tax return, but the same have not been considered by the learned trial Court, as he has not produced proper defence evidence. The evidence of DW-1/Arun, who is a chartered account and proved the income tax return of the children of the accused, have not been accepted by the learned trial Court for the reason that the income tax return of previous years have not been produced.

¶104

While considering the total income and expenditure of the accused as well as his children and other family members, the learned trial Court has considered that expenditure of 60% from the total income has not been disputed by the accused and the same has also been proved by the document (exhibit P-124). Considering the amount shown in the document (exhibit P-124), the amount of sale consideration shown in the sale deeds (exhibit P-1, P-2, P-4, P-5, P- 6, P-7 and P-8), the same have been considered as the income of the accused. All these sale-deeds are in the name of children of the accused, which were of the period in between 1981 to 1986. The expenditure of Rs. 67,500/- in the land allotted to Arvind Kumar in the

¶105

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year 1989-90 at Vyapar Vihar, Bilaspur, the expenditure of Rs. 56,250/- in the land purchased by Shankar Lal at M.P. Nagar, Bhopal on 05.07.1988, have not been considered in the calculation sheet.

¶107

The inventory (exhibit P-54) was prepared by the Inspector Hemant Khare/PW-24 on 29.04.1992 at Darpan Colony, Gwalior in presence of R.D. Diwan/PW-4 and Ashok Kumar/PW-9. The articles found there, have not been considered in calculation sheet (exhibit P-124). Although, the LIC premium in the name of Ku. Durga Haripriya, Arun Haripriya, Arvind Haripriya and Anil Haripriya have been paid, which comes to Rs. 2,18,200.60 NP, but the Assistant Administrative Officer, LIC Manharan Singh/PW-5 has shown his ignorance, as to who has paid the said amount of LIC premium. The income of maturity value of the LIC policy of the accused was considered, however its expenditure have not been considered. Likewise; the expenditure of the premium of LIC policy of the wife of the accused was also not considered. The land allotted to Dr. Shankar Haripriya after payment of its consideration of Rs. 56,250/- on 19.02.1990 is not disputed. The land allotted to Arvind Kumar has also not been disputed.

¶108

PW-16/U.A. Kapishwar has proved the letter (exhibit P-74), in which the land allotted in the name of Shankar Lal by M.P. Housing Board, Bhopal, house allotted to Arvind at Shahpura Extension, Bhopal have been informed. In cross-examination, he admitted that before allotment of the land/house, the details of their income and business was to be obtained from allottees and the details of Shankar and Arvind was also there. The land allotted to the accused was under the hire purchase scheme and registration of the deed was to be

¶109

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done after 10 years. The consideration of the house allotted to Arvind have been paid in the month of March 1990 and the total amount of Rs. 1,73,579/- have been considered within the check period. Further, the amount deposited in the bank account of the accused as well as his children Ku. Durga, Shankar Haripriya, Arvind and Anil have also been considered as the income of the accused. Considering the entire transactions and documents produced by the prosecution and the calculation sheet (exhibit P-124), the learned trial Court comes to the conclusion that, the total expenditure done by the accused comes to Rs. 14,06,031.60 NP and the total income of the accused was Rs. 11,81,315/- and there is difference of Rs. 2,24,716.60 NP. The defence taken by the accused that the income of his children and the agriculture income of his ancestral properties has also been considered as his own income, but the same has been discarded by the learned trial Court on the ground that the accused has failed to prove the separate income of his children. The explanation submitted by the accused is not considered by the learned trial Court as satisfactory.

¶111

Another defence has been taken by the accused that, earlier the Lokayukta inquiry was conducted by Lokayukta Justice R.G. Bhave, in which no disproportionate assets were found and a report was submitted in favour of the accused. The said report was submitted to the Superintendent of Police, Lokayukta by the accused vide document (exhibit D-1), which has not been considered by the police. The investigating officer Hemant Khare/PW-24 has admitted this fact in his cross-examination, and he has not investigated about the same. The learned trial Court has also considered that there was an

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inquiry by the Lokayukta, however, no report has been annexed in the present case and the accused has also not tried to bring the said report on record and the earlier inquiry does not have any bearing in the present case. In the considered opinion of this Court, the prosecution must have brought the report of earlier inquiry conducted against the accused, which has been admitted by the investigating officer that upon the complaint made against the accused, an inquiry was conducted by the Lokayukta with respect to disproportionate assets, in which he was exonerated. PW-24/Hemant Khare has admitted in his cross-examination that the documents of preliminary enquiry conducted by him has been made as a part of the investigation and has not prepared the separate seizure memo after starting of the investigation. He has not inquired about the Lokayukta inquiry against the accused, despite having informed about the same.

¶114

In the matter of “ Krishnanand Agnihotri v. State of M.P. ” AIR 1977 SC 796, in which the Hon'ble Supreme Court has held that:-

¶115

“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

¶116

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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.”

¶118

In the case of “ D.S.P. Chennai v. K. Inbasagara ” AIR 2006 SC 552, it has been held by the Hon'ble Supreme Court that:-

¶119

“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

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prosecution has not been able to lead evidence to establish that some of the money could be held in the hands of the 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 accused 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.”

¶122

In the case in hand, from the evidence on record, it is established that the children and father of the accused were the earning members of the family and have sufficient source of their income, either from their own source or from the ancestral properties and agricultural income, therefore, the findings recorded by the learned trial Court that, the most of the expenditure of the children and father

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of the accused are the expenditure of the accused, does not appear to be based on proper appreciation of evidence. The accused was charged that he has acquired disproportionate properties of Rs. 8,13,554/- apart from the known source of the income in between the check period of 01.01.1980 to 30.04.1992. the learned trial Court found that the appellant has expenditure of Rs. 14,06,031.60 NP. After deducting the total income of Rs. 11,81,315/-, the total disproportionate properties of the appellant was found of Rs. 2,24,716.60 NP.

¶125

The analysis of evidence reveals that there are other family members of the accused, who have their independent source of income and they acquired the property in their own name. There is no basis, upon which the house hold articles were valued. It appears to be based upon the own guess work and assumption of Hemant Khare/PW-24. The prosecution could not prove the initial burden of having disproportionate income of his known source of income, which he has to explain. The prosecution failed to prove the charge leveled against the accused beyond reasonable doubt and the accused is entitled to benefit of doubt. The prosecution to succeed in a criminal case has to pitch its case beyond reasonable doubt and place it in the realm of “must be true” and not in category of “may be true”. The evidence produced by the prosecution in the present case are not of that sterling quality, which required to prove the case beyond reasonable doubt. There are variation and discrepancies in the income of the salary of the accused, which has to be clarified by the prosecution, but they failed to do so and such shaky evidence cannot be taken into consideration as the income or expenditure of

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the accused. The prosecution failed to properly verify the value, ownership and acquisition of the assets by the family members of the accused and did not account for independent income sources of them. The methodology of the prosecution relied on inventory and valuation made without certified experts or proper documentation is the flaw in the prosecution’s case.

¶128

In the matter of “ State of Tamil Nadu v. R. Soundirarasu ” 2023 (6) SCC 768, the Hon'ble Supreme Court has held that:-

¶129

“40. Even after Section 5(3) was deleted and Section 5(1)(e) was enacted, this Court in Wasudeo Ramchandra Kaidalwar [State of Maharashtra v. Wasudeo Ramchandra Kaidalwar, (1981) 3 SCC 199: 1981 SCC (Cri) 690] has observed that the expression "known sources of income" occurring in Section 5(1) (e) has a definite legal connotation which in the context must mean the sources known to the prosecution and not sources relied upon and known to the accused. Section 5(1)(e), it was observed by this Court, casts a burden on the accused for it uses the words "for which the public servant cannot satisfactorily account". The onus is on the accused to account for and satisfactorily explain the assets. Accordingly, in Wasudeo Ramchandra Kaidalwar (State of Maharashtra v. Wasudeo Ramchandra Kaidalwar, (1981) 3 SCC 199: 1981 SCC (Cri) 690] it was observed: (SCC pp. 204-205, paras 11-13)

¶130

"11. The provisions of Section 5(3) have been subject of judicial interpretation. First the expression "known sources of income" in the context of Section 5(3) meant "sources known to the prosecution". The other principle is equally well-settled. The onus placed on the accused under Section 5(3) was, however, not to prove his innocence beyond reasonable doubt, but only to establish a preponderance of probability. These are the well-settled principles: see CSD. Swami v. State [CS.D.

¶131

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Swami v. State, AIR 1960 SC 7): Sajjan Singh v. State of Punjab Sajjan Singh v. State of Punjab, AIR 1964 SC 464] and V.D. Jhingan v. State of UP. [V.D. Jhingan v. State of U.P, AIR 1966 SC 1762] The legislature thought it fit to dispense with the rule of evidence under Section 5(3) and make the possession of disproportionate assets by a public servant as one of the species of the offence of criminal misconduct by inserting Section 5(1)(e) due to widespread corruption in public services.

¶133

12. The terms and expressions appearing in Section 5(1)(e) of the Act are the same as those used in the old Section 5(3). Although the two provisions operate in two different fields, the meaning to be assigned to them must be the same. The expression "known sources of incomes" means "sources known to the prosecution". So also, the same meaning must be given to the words "for which the public servant cannot satisfactorily account" occurring in Section 5(1)(e) No doubt, Section 4(1) provides for presumption of guilt in cases falling under Sections 5(1)(a) and (b), but there was, in our opinion, no need to mention Section 5(1)(e) therein. For, the reason is obvious. The provision contained in Section 5(1)(e) of the Act is a self-contained provision. The first part of the section casts a burden on the prosecution and the second on the accused. When Section 5(1)(e) uses the words for which the public servant cannot satisfactorily account', it is implied that the burden is on such public servant to account for the sources for the acquisition of disproportionate assets. The High Court, therefore, was in error in holding that a public servant charged for having disproportionate assets in his possession for which he cannot satisfactorily account, cannot be convicted of an offence under Section 5(2) read with Section 5(1)(e) of the Act unless the prosecution disproves all possible sources of income.

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13. That takes us to the difficult question as to the nature and extent of the burden of proof under Section 5(1)(e) of the Act. The expression "burden of proof" has two distinct meanings (1) the legal burden te. the burden of establishing the guilt, and (2) the evidential burden ie. the burden of leading evidence. In a criminal trial, the burden of proving everything essential to establish the charge against the accused lies upon the prosecution, and that burden never shifts. Notwithstanding the general rule that the burden of proof lies exclusively upon the prosecution, in the case of certain offences, the burden of proving a particular fact in issue may be laid by law upon the accused. The burden resting on the accused in such cases is, however, not so onerous as that which lies on the prosecution and is discharged by proof of a balance of probabilities. The ingredients of the offence of criminal misconduct under Section 5(2) read with Section 5(1)(e) are the possession of pecuniary resources or property disproportionate to the known sources of income for which the public servant cannot satisfactorily account. To substantiate the charge, the prosecution must prove the following facts before it can bring a case under Section 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 Le known to the prosecution, and (4) it muat prove, quite objectively, that such resources or property found in possession of the accused were disproportionate to his known sources of income. Once these four ingredients are 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. The burden then shifts to the accused to satisfactorily account for his

¶136

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possession of disproportionate assets. The extent and nature of burden of proof resting upon the public servant to be found in possession of disproportionate assets under Section 5(1)(e) cannot be higher than the test laid by the Court in Jhingan case [V.D. Jhingan v. State of U.P., AIR 1966 SC 1762] ie. to establish his case by a preponderance of probability. That test was laid down by the court following the dictum of Viscount Sankey, L.C., in Woolmington V Director of Public Prosecutions [Woolmington v. Director of Public Prosecutions, 1935 AC 462 (HL)]. The High Court has placed an impossible burden on the prosecution to disprove all possible sources of income which were within the special knowledge of the accused. As laid down inSwami case [C.S.D. Swami v. State, AIR 1960 SC 7]. the prosecution cannot, in the very nature of things, be expected to know the affairs of a public servant found in possession of resources or property disproportionate to his known sources of income i.e. his salary. Those will be matters specially within the knowledge of the public servant within the meaning of Section 106 of the Evidence Act, 1872. Section 106 reads:

¶138

106. Burden of proving fact especially within knowledge.-

¶139

‘When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him.’

¶140

In this connection, the phrase the "burden of proof" is clearly used in the secondary sense, namely, the duty of introducing evidence. The nature and extent of the burden cast on the accused is well-settled. The accused is not bound to prove his innocence beyond all the reasonable doubt. All that he need to do is to bring out a preponderance of probability."

¶141

(emphasis supplied)

¶142

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For the foregoing reasons, this Court is of the considered opinion that the prosecution has miserably failed to prove that the accused possessed and acquired disproportionate properties to his known source of income, as such, the impugned judgment of the learned trial Court being based on improper appreciation of overall evidence on record, is liable to be set aside.

¶144

In the result, the appeal is allowed and the impugned judgment passed by the learned trial Court is hereby set aside . The accused is acquitted of the charges under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988.

¶145

The record of trial Court be sent back along with a copy of this judgment to the trial Court concerned forthwith.

¶146

Sd/- (Ravindra Kumar Agrawal) Judge

¶147

ved

Khageshwar Prasad (Since Died) Through LRs v. State of Chhattisgarh

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Khageshwar Prasad (Since Died) Through LRs v. State of Chhattisgarh

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