Allowed

B.T.Nagappa v. State by Lokayukta Police

Karnataka HC8 Aug 2013CRL.A/814/2010

Case brief

AI extract

What is this about?

The High Court allowed the appeal challenging conviction under the Prevention of Corruption Act for amassing disproportionate assets. The Court held the prosecution failed to prove benami transactions or assault correct property valuations. The Trial Court erred by relying on hypothetical figures; consequently, the conviction and forfeiture order were set aside.

What did the court decide?

The impugned judgment of conviction and sentence is set aside; the forfeiture order is also set aside; the appeal is allowed.

B.T.Nagappa Vs State by Lokayukta Police — Corruption | Karnataka HC (2013)

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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

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DATED THIS THE 08^TH AUGUST 2013

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BEFORE

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THE HON’BLE MR.JUSTICE V.SURI APPA RAO

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CRL.A.NO.814/2010

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BETWEEN:

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B.T.NAGAPPA S/O THIMMA SHETTY AGED ABOUT 64 YEARS, NO.C-52, HOUSING BOARD COLONY LAXMISAGAR, KADUR CHICKMAGALUR DIST.

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. . . APPELLANT

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(BY SRI.A.H.BHAGWAN, ADV.)

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AND: STATE BY LOKAYUKTA POLICE HASSAN (BY SMT.T.M.GAYATHRI, SPL. P.P.)

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. . . RESPONDENT

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 374(2) CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT OF CONVICTION AND SENTENCE DT.7/9.8.2010 PASSED BY THE PRL. SESSIONS JUDGE & SPL. JUDGE, HASSAN IN SPL. CASE No.127/2004 CONVICTING THE APPELLANT/ ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 13(1) (e) R/W 13(2) OF THE PREVENTION OF CORRUPTION ACT, 1988.

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This Criminal Appeal coming on for Hearing having been heard and reserved for pronouncement of judgment this day, the Court delivered the following:

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JUDGMENT

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This appeal is directed challenging the judgment and

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order of conviction and sentence dated 07.08.2010 passed against the appellant in Sessions Case No.127/2004 on the file of the Principal Sessions Judge and Special Judge, Hassan, whereby the appellant was found guilty of the offence under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988, and was sentenced to undergo imprisonment for a period of five years and fine of Rs.5,000/- and in default, to undergo simple imprisonment for one month. It was further ordered that an amount of Rs.27,76,376/- for which the accused is unable to account satisfactorily shall be forfeited to the Government in accordance with law.

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Aggrieved by the above judgment of conviction and sentenced passed, the appellant has filed this appeal.

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Brief facts of the case are hereunder:

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The appellant being a public servant employed as ‘D’

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Group employee on 08.08.1966 worked as SDA from 1973,

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as FDA from 1997 and as Sub-Registrar, Belur Taluk, from 13.07.2000 and during the period between 08.08.1966 and 27.05.2001, the accused has amassed wealth

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disproportionate to his known sources of income and spent huge amount of money on various items of expenditure to the tune of Rs.48,43,000/- by indulging in corruptive activities thereby illegally earned huge money by misusing his official position and accumulated disproportionate assets which is as hereunder:

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Total assets of the accused during the Rs.39,83,000-00 check period from 1970-71 to May 2001:

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Total expenditure of the accused during Rs.8,60,000-00 the check period :

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Total of Assets & Expenditure : Rs.48,43,000-00 (-) Total Income of the accused : Rs.13,50,000-00

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Total Disproportionate Assets & expenditure of the accused during the check period :

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Rs.34,93,000-00

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Thus the appellant-official has accumulated disproportionate assets worth Rs.34,93,000/-. The respondent-complainant registered case against the appellant and after investigation filed chargesheet against the appellant under the Prevention of Corruption Act. According to the report submitted by the prosecution, the appellant who was working as Sub-Registrar, Belur Taluk, Hassan District, the basic salary of the appellant who was working as Sub Registrar was calculated roughly at Rs.500600 during 1970-71 and on that basis, the salary is calculated at Rs.12,00,000/-. Other than salary income, he is getting rents from the house bearing No.2802/2727 at Lakshmeeshanagar, Kadur Town and the rental income is roughly calculated at Rs.1,50,000/-. The report further discloses that the appellant-accused has purchased 5 acres 20 guntas of coconut garden in the name of his two sons Prakash and Umesh during the year 1998-2000. He also purchased 2 acres 34 guntas of land from T.L.Srinivasmurthy in Sy.No.210, Tangali Grama, Kadur

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Hobli, Kadur Taluk, Chikmagalur District consisting of 120 coconut trees. The purchase cost of the land is estimated to Rs.3,50,000/- during 1999-2000. The appellant had also purchased 2 acres 26 guntas of land from T.Rangaswamy in Sy.No.197 at Tangali Grama, Kasaba Hobli, Kadur Taluk with 62 coconut trees. The estimated cost is about Rs.3,00,000/-. The appellant built up a palatial house on 40’ x 60’ site at Lakshmeeshanagar, Kadur Town and estimated cost of the said house is calculated to Rs.8,00,000/- in the name of his wife Smt.Parvathamma. He also constructed another house at Municipal Katha No.2802/2727 measuring 75’ x 35’ site at

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Lakshmeeshanagar, Kadur Taluk and Town in his name and the estimated cost of the house is calculated at Rs.12,00,000/-. The appellant had also purchased a site measuring 48’ x 30’ in the name of his wife Smt.Parvathamma at Lakshmeeshanagar and Municipal Khata No.2533/2468. The estimated cost of the said site is Rs.2,00,000/-. Apart from it, it discloses that the appellant

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also purchased 3 acres of land adjacent to Sy.No.210 from one Venkateshwaralu for Rs.2,00,000/- and also the report discloses that the accused himself and his family members are having more than Rs.2,50,000/- worth gold jewellery, silver articles, bank deposits worth Rs.1,00,000/- and household articles including electrical and electronic goods worth Rs.3,50,000/-. They also invested Rs.1,50,000/- in Veda Finance and Sudha Finance. The appellant is also in possession of two wheeler vehicle in the name of his sons worth Rs.80,000/-. After estimating the total assets and expenditure, the complainant alleged that the appellant had amassed wealth disproportionate to his known source of income to the tune of Rs.34,93,000/-. The percentage of disproportionate assets and expenditure is calculated to 258.74%. After completion of investigation the complainant filed chargesheet for the offences punishable under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act.

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After hearing the Special Public Prosecutor for the

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State and the defence Counsel, the Trial Court framed charges for the offences under Section 13(1)(e) and 13(2) of the Prevention of Corruption Act, against the appellant. The accused pleaded not guilty and claimed to be tried. In order to bring home the guilt of the accused for the above offences under Prevention of Corruption Act, the prosecution in all examined PWs.1 to 16 and marked documents at Exs.P1 to P29. On behalf of the appellant DWs.1 and 2 are examined

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and marked documents at Exs.D1 to D30.

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Considering the evidence of prosecution and the defence, the Trial Court found the appellant guilty of the offence under Section 13 (1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 and passed the above order of conviction and sentence on the ground that the appellant had amassed wealth disproportionate to his known source of income in his wife’s name and in the name of his sons to the extent of Rs.27,76,376/-.

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Heard the learned Counsel for the appellant and the

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Spl. Public Prosecutor for the State.

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The point that arise for consideration is:

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“Whether the prosecution has established the charge that the appellant had amassed wealth disproportionate to his known sources of income to the extent of Rs.27,76,376/- ?”

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The learned Counsel for the appellant submits that

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the entire case is based on the evidence of the Investigation Officer who had neither personal knowledge nor specialised knowledge with regard to the facts of the case and erroneously fixed the value of the property on the basis of conjectures and surmises but not on the basis of substantial evidence. The value of the property has been inflated by more than 100% without any basis. It is further submitted that the Trial Court has not considered the evidence of DW1 father-in-law of the accused and DW2 son of the accused, who have given evidence that they have financially supported the accused in the form of cash and

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property to acquire the properties in the name of Parvatamma, wife of the accused and also in the name of sons of the accused. It is further submitted that the Trial Court relying upon Ex.P13 convicted the accused-appellant without any legal evidence. It is for the prosecution to prove the benami nature of holding, if the money has flown from the accused for the purpose of purchasing the property in the name of wife and son. But the prosecution neither proved nor made an attempt to prove the same.

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In support of his contention, the learned Counsel for the appellant placed reliance on the decision of the Hon’ble Supreme Court in the case of Ashok Tshering Bhutia Vs. State of Sikkim, reported in (2011)2 SCC (Cri)258, wherein it is held that:

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“Rule 19(i) of the 1981 Rules does undoubtedly require government servants to, on first appointment to any service or post and thereafter at the close of every financial year, submit to the Government the return of their assets and

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liabilities. However, it is to be noted that the said Rule envisages that public servants will submit such returns in a prescribed form. Despite being repeatedly questioned the respondents were unable to produce such form. Thus, it cannot be said that the appellant did not comply with the said Rule as in the absence of such a form it was impossible for him to have done so (through no fault of his own). In any event, failing to submit such returns even if there had been no such form, would make the appellant liable to face disciplinary proceedings under the service rules applicable at the relevant time.”

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In the case of Jagan M.Seshadri Vs. State of

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Tamil Nadu reported in 2002 Crl.L.J. 2982, it is alleged that during the check period from 11.05.1977 to 31.03.1984, the appellant, who, at the relevant time, was serving as a Superintendent of Police, had acquired assets disproportionate to his known source of income. The learned Special Judge, Madras, on appreciation of evidence, acquitted the appellant of all the charges by a detailed

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judgment. Aggrieved by the order of acquittal recorded by the Special Judge, the State filed an appeal against the acquittal of appellant before the High Court. The High Court accepted the appeal of the State and reversed the order of acquittal of the appellant and the appellant was convicted for the offence under Section 13(1)(e) read with Section 13(2) of Prevention of Corruption Act, 1988. The accused by filing Special Leave Petition, has challenged the order of the High Court. The Hon’ble Supreme Court held on a careful perusal of the explanation given by the appellant regarding the source of receipt of Rs.50,000/-and Rs.40,000/- which amounts alone were canvassed to be beyond the ‘known sources of income’ of the appellant and find ample support for his explanation in the prosecution evidence itself. The evidence of PWs.19, 27, 30 and 31 clearly support the explanation given by the appellant. The appellant had thus, discharged the burden of explaining the sources of those amounts. Their non-mention in the property statement of the appellant would have no

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consequence because explanation to Section 13(1)(e) is not to be read as an explanation to Section 5(1)(e) of the 1947 Act.

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Relying on the above decisions, the learned Counsel for the appellant submits that the appellant has clearly explained the source of other income through his wife and children for purchasing the properties as his wife and sons are having independent income and thus discharged the burden of explaining the source of the amounts for purchasing the property by adducing evidence of his father-in-law and son as DWs.1 and 2 and it is for the prosecution to prove the alleged benami transactions.

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For the above proposition of law, the learned

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Counsel for the appellant further placed reliance in the case

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of M.Krishna Reddy Vs. State Deputy Superintendent of Police, Hyderabad, reported in 1992 SCC (Cri) 801 [(1992) 4 SCC 45]. In the above case, the accused is charged for possession of assets and pecuniary resources

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disproportionate to the known sources of income. The prosecution alleged benami transactions. The appellant claimed that value of certain items should be deducted from the value of the alleged disproportionate assets and substantiated his claim by producing evidence of income tax and wealth tax returns submitted about a year before the research conducted in the house of the appellant by Anti Corruption Department. The Hon’ble Supreme Court held burden of proof in disproving the claim of the appellant not satisfactorily discharged by the prosecution, the burden of proof lies on the prosecution for the alleged benami transactions. Having regard to the totality of circumstances and cumulative effect thereof, held, that the conviction and sentence recorded by High Court affirming the judgment of the trial Court cannot be sustained in view of the fact that the appellant completed unblemished service of over 25 years.

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14. In Krishnanand Agnihotri Vs. State of M.P.

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reported in AIR 1977 SC 796, the Hon’ble Supreme Court

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held the burden of showing that a particular transaction is benami and the 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.

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Relying on the above decision, the learned Counsel

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for the appellant further contended that it is for the prosecution to prove onus of establishing the transaction as benami is on the presumption the burden has to be discharged by adducing legal evidence of definite character and suspicion however strong cannot take the place of proof.

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Per contra, the Special Public Prosecutor submitted that the prosecution prepared Ex.P13 source report showing the properties purchased by him in his name and in the name of his sons and wife.

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PW16 gave the details of the value of the properties

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mentioned in Ex.P13 source report. Even if the value of some of the items is excluded on the ground of excess calculation, still the appellant has got disproportionate assets. Therefore there are no grounds to interfere with the judgment of conviction and sentence passed against the appellant.

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Out of the prosecution witnesses examined PW1

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Meena is the panch witness for Ex.P1 seizure mahazar.

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PW2 B.K.Parashivamurthy is the panchwitness for Ex.P3 seizure mahazar prepared at the house of DW1.

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PW3 K.Siddaramaiah, is the panchwitness for Ex.P4 seizure panchanama prepared at the Sub-Registrar’s office.

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PW4 Manjunatha, gold Smith was taken to the house of the accused to weigh the gold ornaments. He has deposed that he does not remember as to which of the gold ornaments he has weighed and also does not know the weight of the said ornaments.

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PW5 is the panchwitness for Ex.P3 seizure mahazar prepared at the house of Hanumanthamma – CW13. But he has stated in his deposition that he is not aware about Lokayukta police visiting the house of CW13 but he was taken to the house of CW13 and was made to sign the papers.

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PW6 is Balaji, Manager of Arya Vysya Sangha Kalyana Mantap, Kadur, where the marriage of the daughter of the accused was performed.

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PW7 Jayalakshmi is the sister of the wife of the accused. PW8 is Seethamma, another sister of the wife of the accused. They have stated that they have lent some amounts to the wife of the accused as hand loan.

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PW9 is Chandregowda, has stated that he has not advanced an amount of Rs.75,000/- to the accused.

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PW10 Parvathamma is the neighbour who has stated

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that wife of the accused was doing tailoring work.

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PW11 Ramaswamy Iyengar, has deposed that the

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accused had purchased 3 acres of land adjacent to his land. He has also stated that his children were doing agricultural work and looking after arecanut nursery.

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PW12 Khaleemulla, has deposed that the accused was

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having land adjacent to his land and in the said land, his children were looking after coconut garden and arecanut nursery.

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PW13 Erendra @ Prashanth has deposed that his father was a deed writer and he knows the accused. He has also stated that his father Mogappa Gowda had purchased 2 acres of land from the accused in the year 1999 and there is an agreement to that effect.

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PW14 Krishnappa is the Inspector who prepared Ex.P3 mahazar.

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PW15 Harisingh, Sub-Inspector of Police, searched the

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office of the accused and prepared Ex.P4 seizure mahazar.

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PW16 M.S.Patel, Investigation Officer, searched the

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house of the accused and prepared his report as per Ex.P13.

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Out of these witnesses, PW4 Gold smith, PWs.5, 7, 8, 10, 11, 12 and 13 have turned hostile to the prosecution witness and did not support the prosecution case.

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According to the prosecution, during the check period between 08.08.1966 to 27.05.2001, the appellant being public servant initially employed as ‘D’ group employee worked as S.D.A. with effect from 12.04.1973. Thereafter he was promoted as F.D.A. from 29.08.1997 and as Sub-Registrar with effect from 13.07.2000. The appellant has amassed wealth disproportionate to his known sources of income and spent huge amount of money on various items of expenditure shown in Ex.P1 mahazar to the tune of Rs.48,43,000/- and thus amassed wealth by indulging in corrupt activities and by misusing his official position.

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It is the case of the prosecution that total assets of

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the accused during the check period from 1970 to 1971 to May 2001 was Rs.39,83,000/- and the total expenditure during the check period incurred by him is Rs.8,60,000/-. Thus total assets and expenditure is Rs.48,43,000/- and the total income of the accused during the check period is Rs.13,50,000/-. Thus the accused accumulated

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disproportionate assets worth Rs.34,93,000/-.

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The prosecution contended that the accused is getting rental income from the house bearing Sy.No.2802/2727 at Lakshmeeshanagar, Kadur town and rental income is roughly calculated to Rs.1,50,000/- other than the salary income. It is further contended that the accused purchased 5 acres 20 guntas of coconut garden in the name of his two sons during the year 1998-99, 19992000 and 2 acres 34 guntas from T.L.Srinivasmurthy in Sy.No.210, Tangali Grama, Kasaba Hobli, Kadur Taluk with 120 coconut trees for Rs.3,50,000/-. He also purchased 2

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acres 26 guntas of land in the year 1999-2000 from T.Rangaswamy in Sy.No.197 of Tengali Grama with 62 coconut trees for Rs.3,00,000/-.

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The prosecution further estimated the cost of the house situated at Lakshmeeshanagar, Kadur, at

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Rs.8,00,000/- which stands in the name of Parvathamma, wife of the accused. Another house is constructed in the name of the accused at Lakshmeeshnagar, Kadur Taluk, bearing Municipal Khata No.2802/2727 was estimated at Rs.12,00,000/-. Another site is purchased in the name of Smt.Parvathamma at Lakshmeeshanagar, Kadur, bearing Municipal Khata No.2533/2468 which is estimated at Rs.2,00,000/-. Another 3 acres of land adjacent to Sy.No.210 is purchased from one Sri Venkateshwara, in the name of accused which is estimated at Rs.2,00,000/-. Besides the above properties, the prosecution contends that family members are having more than Rs.2,50,000/- worth gold and silver articles and bank deposits of Rs.1,00,000/-,

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household articles worth Rs.3,50,000/-, investments are estimated at Rs.1,50,000/- and two wheeler vehicles worth Rs.80,000/-. Thus according to the prosecution, the total value of the assets possessed by the accused is Rs.39,83,000/-. As against the above, the prosecution deducted Rs.8,60,000/- towards expenditure incurred by the accused i.e., Rs.1,00,000/towards educational expenditure of four children, Rs.2,00,000/towards marriage expenditure of first daughter of the accused and domestic expenditure at Rs.3,50,000/-, house tax at Rs.5,000/-, KEB, water-tax and telephone charges is estimated at Rs.2,00,000/-, fuel and maintenance of other vehicles at Rs.5,000/- and after adding the total expenditure of Rs.8,60,000/- to the total assets of the accused of Rs.39,83,000/-, the total assets and expenditure is estimated at Rs.48,43,000/-. After deducting total income of the accused and rental income of the accused Rs.13,50,000/-, the prosecution estimated the

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disproportionate assets at Rs.34,93,000/-.

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PW1 is the panchwitness for Ex.P1 mahazar

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prepared at the house of the accused. Ex.P1 details of the articles and documents found in the house of the accused

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were noted. PW1 Meena attested Ex.P1 mahazar at the house of the accused and Ex.P2, being the value of the gold ornaments which was furnished by PW4.

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PW2 attested Ex.P3 mahazar prepared at the

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house of father-in-law of the accused. PW3 attested Ex.P4 mahazar drawn at the office of the accused. PWs.1 to 3 supported the case of the prosecution about the seizure of the items mentioned in Exs.P1, P3 and P4 mahazar.

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PW4 gold smith has stated that he knows the

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accused and the police took him to the house of the accused to weigh the gold ornaments. He has not given any statement before the Lokayukta Police. Thus PW4 did not support the prosecution case about Ex.P2 mahazar said to have been issued by him giving details of the jewellery belonging to the accused.

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PW14 who is panch witness for Ex.P3 mahazar

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prepared at the house of the father-in-law of the accused supported the case of the prosecution. He has stated that he attested Ex.P3 prepared by the police. But in the evidence of PW16 who prepared Ex.P13 report assessing the value of the assets and the income and expenditure of the accused stated in the evidence that Krishnappa PW14 who conducted search at the house of father-in-law of the accused as per Ex.P3 report stated that no valuable goods were found during the course of search. He also stated that PW15 who conducted search at the office of the accused also submitted mahazar proceedings as per Ex.P4 and Ex.P5 stating that no documents whatsoever in connection with Ex.P13 were found during the course of search.

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DW1 Channabasappa, father-in-law of the accused

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has deposed that he is getting rent of Rs.2,000/- from the house he has let-out and he and his wife are getting old age pension. He has also deposed that till he was doing

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business till 1998 such as coconut and jowar business apart from doing agricultural work. He had sufficient income to perform the marriage of his daughter Parvathamma with the accused and as per customs he had given gold chain, gold bangles, earstud etc. in all weighing 150 grams and that his daughter was also doing tailoring work.

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DW2 Prakash, son of the accused has stated in his

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evidence that he being the LIC agent was getting income by way of commission by the concerned LIC authorities and was also doing agricultural work by maintaining coconut garden in the ancestral property measuring 2 acres 10 guntas. In 1997 he purchased 2 acres 36 guntas at Tengali Grama, of coconut garden. Banana was grown as a main produce in the agricultural land and was getting income from it. He along with his brother were doing agricultural work and maintained arecanut nursery and he had sufficient sources to maintain his family.

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The prosecution examined PW6, Manager, Arya

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Vysya Choultry to prove about the marriage expenditure of the daughter of the accused, but he did not support the prosecution case. He has stated that he does not know as to how much rent the accused paid for the kalyan Mantap.

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PWs.7 and 8 are sisters of the wife of the accused.

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Both of them did not support the prosecution case. They have stated that they have lent Rs.2,500/- each to the accused.

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So also PW9 did not support the prosecution case.

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He has not stated before Lokayukta P.I. that he lent Rs.75,000/- to the accused when the accused pressurised him to lend loan of Rs.75,000/-.

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PW11 has stated in the evidence that in the year 1997 the accused has purchased 3 acres of land adjacent to

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his land. He has further stated that the accused has two sons by name Umesh and Prakash, who are taking care of

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the nursery and agriculture. He has also stated that Lokayukta Police have not recorded his statement. He has denied the suggestion that the sons of the accused are not getting any income out of the nursery.

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PW12 has also stated that he is having land adjacent to the land of the accused and that the sons of the accused were taking care of the coconut and arecanut garden and that he has not given any statement before Lokayukta Police on 19.06.2003.

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PW13 also stated that his father Mogappa Gowda purchased 2 acres of agricultural land from the accused through sale deed and his statement was not recorded by the Lokayukta Police.

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PW16 the then Dy.S.P., Police Division, Mysore, is the crucial witness in this case, who has prepared Ex.P13 report and filed chargesheet after obtaining sanction order from the D.I.G., Lokayukta. His evidence shows that after

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completing formalities and after submitting Ex.P13 report to the superior Officers he registered case against the accused. He also investigated the case after obtaining search warrant from the Magistrate. According to PW16, he raided the house of the accused on the early morning of 27.05.2001 along with his staff. After serving search warrant on the accused, he searched the house in the presence of the panchas and found the articles mentioned in Ex.P1 mahazar fixing the approximate value for all the articles. Thereafter he called goldsmith by name Vishwanath and after examining the gold and silver articles and after weighing the same through him its approximate value is fixed.

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PW16 also stated that he has taken the documents available in the house and fixed deposit receipts obtained in

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the name of the wife of the accused and his two sons. His evidence further shows that PW14 Krishnappa, who was deputed for searching the house of the Channabasappa, father-in-law of the accused submitted the report stating

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that no valuable goods were found at the house of DW1 during the course of the search. He also stated that PW15 who also conducted search in the office of the accused submitted report stating that no documents in connection with F.I. report was found during the course of search.

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His evidence further shows that after preparing Ex.P16 report, he submitted requisition to the Public Works Department for fixing the value of two houses of the accused and collected ledger extract of Savings Account standing in the name of the accused from Vijaya Bank and also ledger account standing in the name of the children of the accused and ledger extract of his wife as per Exs.P17, 18 and 19 respectively. He also obtained ledger account standing in the name of the accused from SBM, Sakleshpura Branch and Manager, SBM, Kadur. Thereafter on 06.06.2001 he requested the office of the LIC to furnish the details of the policies taken by Prakash, son of the accused from their office and obtained Ex.P23. He also collected evidence from

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Housing Board, Kadur in respect of loan sanctioned in the

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name of the wife of the accused and the details of repayment. He obtained Ex.P25 valuation report in respect of two houses of the accused from Executive Engineer, Kadur. He also obtained Ex.P26 details of ancestral properties of the accused and obtained the details of assets and liabilities from the office of the District Registrar, Hassan and also the salary report of the accused from the Office of the Inspector General of Registration and Commissioner of Stamps, Bangalore, as per Ex.P29.

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In the cross-examination, PW16 has stated that he

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cannot remember when he first received information that the accused is possessing excess property. He has admitted in the cross-examination that after searching gold and silver articles the signature of the gold smith Vishwanath, was not obtained in Ex.P1 report, who weighed the gold and silver articles and estimated their value.

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His evidence further reveals that he has not obtained the signature of another gold smith PW4 Manjunath in Ex.P2 mahazar, who was taken to the bank for searching the locker of the accused. He also admitted that Ex.P1 mahazar which contains 12 pages was not typed

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in the house of the accused. He also admitted that list of articles were not prepared earlier to Ex.P1 typed mahazar. He also admitted in the evidence that separate list of income and expenditure consisting the accused are not prepared during the course of search. According to him, the police officials and panch witnesses have decided the value of the articles mentioned in Ex.P1 mahazar but most of the panch witnesses did not support the prosecution case and they have not mentioned the procedure followed by them in fixing the value of the articles.

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He further admitted that during the cross-

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examination PW16 clearly admitted that the accused is possessing agricultural lands but he has not examined what

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are the crops grown by him in his lands. It also came to his notice that two sons of the accused are also working independently after completion of their studies and looking after agricultural lands. He also got two daughters and he does not know as to who is giving tuitions to the students. He denied the suggestion that he submitted Ex.P13 report without any basis. However, he has admitted that he has given Form No.1 to 10 to the accused for which the accused has given reply on 03.12.2001.

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Admittedly in this case, the check period is between 08.08.1966 to 27.05.2001 i.e., for about 35 years. He was not involved in any corrupt practice and he has not faced any enquiry or disciplinary proceedings against him. PW16 who prepared the crucial documents about fixing the value of the assets and the expenditure of the accused has clearly admitted that in the evidence the accused is possessing agricultural property. Subsequently also he purchased 2 acres of land.

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PW11 has clearly admitted in his evidence that the sons of the accused by name Umesh and Prakash are maintaining the nursery and also looking after the coconut and arecanut garden and getting independent income from the agricultural and nursery.

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PW16 clearly admitted in the evidence that he came to know that the accused is having ancestral agricultural property, but he did not attempt to know the types of crops grown by him and the value of the crops. He also clearly admitted in the evidence that the sons of the accused also attending agricultural operations and DW2 is an LIC agent and getting independent income.

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PW10 neighbour of the accused has also stated in her evidence that wife of the accused is doing tailoring work and got independent income of her own.

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The prosecution contended that the properties purchased by the accused in his name and names of his

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wife and sons are benami in nature. They were purchased

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from out of the amount earned by the accused illegally.

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The prosecution asserts that the transactions that

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covered by the sale deeds in the name of his wife and children are benami. The burden is on the prosecution to discharge the same by adducing legal and acceptable evidence. The burden should be strictly discharged to prove the fact of benami transactions. In order to prove the transaction is benami, the vendors of the properties are the attestors and document writing of the documents are proper persons to prove the benami nature of transactions.

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In the instant case, though the prosecution contended that the accused purchased the properties the property in the name of his wife and children and the nature of purchase are benami in nature. The prosecution examined PW11 to prove that the accused purchased land adjacent to his land and that the sons of the accused are attending to cultivation and maintaining nursery.

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The evidence of PW13 Erendra @ Prashant examined by the prosecution clearly shows that his father Mogappa Gowda had purchased 2 acres of land from the accused. Therefore it is clear by the evidence of PWs.11 and 13 that accused sold 2 acres of land and purchased three acres of land. The prosecution has not examined any other vendor covered by the sale deed executed in the name of the wife and sons of the accused to prove that the accused himself purchased the said properties in the name of his wife and children and paid the consideration and the said transactions are benami in nature.

¶181

PW16 has clearly admitted in his evidence that the accused gave detailed report as per Ex.P24 in Form Nos.1 to 10 supplied to him on 03.12.2001 itself. In Exs.P24, the accused has furnished information regarding the average domestic expenditure. In the said explanation he has clearly mentioned that he had inherited wet and garden lands from his father with coconut and banana plantation

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derived from Hindu Undivided Family income shown in the

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schedule-7 his two sons stopped their education in the middle and started coconut and arecanut nursery in the self-employment scheme and derived income from sale of seedlings and deposited the same in Kishan Vikas Patras, Fixed deposits and also utilised the income for purchase of lands and invested some amount for the purpose of increasing nursery activity. It is also mentioned that the foodgrains grown were utilised for self-consumption so as to reduce the cost of maintenance. He has also produced Schedule No.1 Pay and allowances received during the check period.

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In Schedule-II he has mentioned the list of properties inherited from his ancestors right from the year 1972 onwards.

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In Schedule-3 he has furnished immovable properties acquired by him after obtaining permission from the competent authority. He has also furnished information

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about the loans availed by him as per Schedule-3. He has availed loan of Rs.93,000/- in the year 1990, by savings Rs.26,000/-, borrowed loan of Rs.1,00,000/from Krishnappa. He also mentioned the amounts earned from theagricultural income and sale of site in the year 1977 vide register No.2522/1977-78. He also furnished information about the income earned by his wife by doing tailoring, handloans from PWs.7 and 8 sisters of his wife, who have admitted that they lent Rs.2,500/- each to the wife of the accused. He has also furnished the income of the residential house and agricultural land in Sy.No.197/1 measuring 2 acres 26 guntas the value being Rs.2,12,000/and intimated the income to the higher authorities vide letter dated 01.03.1999. He purchased agricultural land measuring 3 acres in the year 1997 from T.S.Narasimha Murthy and T.K.Srinivas Murthy and Smt.T.S.Vimala Srish for Rs.1,50,000/- and after obtaining permission by letter dated 1/97-98 dated 25.04.1997 from Senior Gazetted SubRegistrar, Chickmagalur. In Column No.2 it has been

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mentioned that the sale deed is not registered for technical observations and the same is pending for valuation. It has been clearly mentioned that he purchased the property from out of the income from nursery and agricultural income an amount of Rs.50,000/- was raised from coconut and arecanut nursery.

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In Schedule 4 he has stated that gold ornaments and silver articles are given to his wife at the time of marriage in the year 1968 itself. He purchased some more small items subsequently and he has furnished the value of the same in the source of income for purchasing the said items including household items mentioned in Ex.P1. Most of the items are worth below Rs.1,000 to Rs.2,000/-.

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Schedule-5 the appellant submitted reply stating that the policies mentioned in schedule-5 amounts mentioned belong to him and the premium relating to the items are paid from out of his salary by way of the amount at source and for the insurance policies in the name of his sons and

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daughter, the premiums were paid by his sons and daughter. The source of income of the property is by way of giving coaching to students and also by doing tailoring work. The half yearly premium for sons and daughter is below Rs.500/-.

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In Schedule-6 he has also furnished details of loans taken by him. Schedule-6A Nil statement regarding lending of amount to others by the accused.

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In Schedule 7 he has given particulars of income derived from house rent, agricultural income and other source of income.

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Schedule-8 Statement showing details of savings in Posts Office, Savings Bank deposits and other deposits.

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For the savings certificates found in the house, the appellant has explained that he has obtained the certificates in his name from his earnings from salary and his wife and children purchased savings certificates from out of their own

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earnings by way of tailoring and income of the agriculture and nursery.

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In schedule-10 he has explained the details of expenses incurred for education of his children and also particulars of dependents and their source of income and expenditure. He has also mentioned the loans availed by him to meet educational expenditure of his children. Thus the accused clearly gave reply about the source of income and expenditure during the check period PW16 Investigation Officer has admitted that he received the reply Ex.P24 from the accused on 03.12.2001 itself.

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Admittedly in this case the respondent-Police filed chargesheet on 05.07.2004 long after receipt of the reply from the accused. In the reply the appellant has clearly mentioned the value of the land purchased by him and by his wife and sons. Admittedly the value mentioned in the documents are not mentioned in the statements of assets prepared by PW16. The item No.1 as shown in judgment of

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Spl. Case No.127/2004, Sy.No.210 measuring 2 acres 34 guntas was purchased for Rs.3,50,000/- and the sale deed dated 19.03.1997 is available in the documents seized by the Investigation Officer but the same was not marked. The value of it was mentioned as Rs.3,50,000/- and on perusal of the said document the accused purchased the said property for only Rs.1,50,000/-. Likewise 2 acres 26 guntas of land in Sy.No.197 said to have been purchased from T.R.Rangaswamy, the value is mentioned as Rs.3,00,000/by the prosecution, whereas the actual consideration paid by the accused is Rs.2,12,000/-.

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For item No.3 the value of the house property in the name of the wife is shown as Rs.8,00,000/- but the prosecution has not produced any documentary evidence nor examined the Engineer to prove the value of the house. But as per the reply given by the accused, the said site was purchased for Rs.15,000/- only and construction was started in the year 1980 by spending Rs.4,00,000/-. For

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item No.4 the value is mentioned as Rs.12,00,000/- but as per the accused the value of the property is Rs.3,000/- only. He also furnished copy of the deed obtained from the SubRegistrar, Kadur. The source for purchasing the said property is by sale of ancestral house bearing No.86 situated at Belavadi for Rs.3,000/-. According to the accused, construction started in the year 1979 it is a self-constructed house and the value of the construction is Rs.65,000/- and first floor is Rs.2,50,000/-. The year of construction is about 30 years back. But the value of the site and construction is shown as Rs.12,00,000/-. Likewise, for item No.5 site measuring 48’ x 30’ purchased by Parvathamma, wife of the accused, the prosecution estimated the value at Rs.2,00,000/- but according to the accused, the site is purchased for Rs.20,000/- only.

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For item No.6 the value is mentioned as Rs.2,00,000/- but as per the reply, the said property was purchased for Rs.1,50,000/- only by sale deed dated

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20.03.1997 registered vide Register No.3164/1996-97. The household articles according to the prosecution is Rs.3,50,000/- but the prosecution has not examined any valuer or the competent person to assess the value of household articles which are small items as per Ex.P1 and the gold and silver articles are not properly valued. According to the accused most of the gold ornaments given to his wife by her parents at the time of marriage in the evidence of PW16 could not say whether they are new or old ornaments. It appears the value of gold is mentioned when the gold ornaments were given at the time of marriage about 30 years back. As already stated the vendors of the sale deeds collected by the Investigation Officer were not examined. The vendors of the accused, his wife and children were not examined to prove the benami nature of transaction as alleged by the prosecution.

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Learned Counsel for the appellant submitted that the accused served unblemished service in the Department

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by doing hardwork besides attending to agricultural work in the ancestral land. When he was due to retirement by 31.05.2001 the search was conducted on 27.05.2001 just three days before his retirement, while he was working as Sub-Registrar, Belur. It is further contended that PW16 himself valued the properties without any assistance of anybody who were capable of assessing the items properly. The prosecution failed to examine the Engineers to prove the value of the construction and the value of the houses as was mentioned by the prosecution.

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DW1 father-in-law of the accused and father of the

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wife of the accused has clearly stated in his evidence that he gave gold ornaments to his daughter at the time of marriage. PW4 who was examined by the prosecution to prove the value of the gold found at the house of the accused did not support the prosecution case. According to him, he does not remember the value of gold found at the house of the

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accused and he has stated in his deposition that he has not given any statement before the Lokayukta Police.

¶218

So far as the value of the construction of the houses, the Engineers who are the competent persons to speak about the value of the construction based on the prevailing rates and in which year construction was started and completed, it appears without obtaining information about the value of the cement, iron bricks by the date of construction the prosecution mentioned the value of construction without any basis and failed to examine the Engineers who are competent to give evidence regarding the value of the construction.

¶219

Though PW16, admitted in his evidence that the sons are having independent income and one of the son is an LIC agent and maintaining coconut garden and arecanut nursery did not make any attempt to know the income by examining Revenue Inspector or the Tahsildar. He did not choose to examine the Village Secretary to know the crops

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raised by the accused and his sons and the income thereon during the check period. As can be seen from the document seized by the police and the statement of assets prepared by the Investigation Officer, the Investigation Officer mentioned the present value of the property which was not the actual value and the actual consideration paid by the accused at the time of purchasing the properties. The value mentioned in the list furnished by the prosecution and the value mentioned in the documents are entirely different and the value mentioned by the prosecution as exorbitant without any basis. When the sons of the accused are maintaining nursery admittedly the Investigation Officer failed to obtain the income on the nursery by examining the Officer attached to the Horticulture Department to assess the approximate income during the check period. When the accused has submitted reply on 03.12.2001 itself long before filing the chargesheet it is the duty of the prosecution to ascertain the correctness or otherwise of the value of the properties furnished by the accused by collecting the evidence if

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necessary from the concerned persons and prosecution is supposed to mention the correct value of the properties purchased under the registered documents and the actual consideration paid by the vendee. Admittedly, PW16 is not a competent person to assess the construction value except marking the documents issued by the Engineer. The prosecution failed to examine the Engineer to assess the correct value of the construction with regard to the prevailing rates about 30 years back i.e., on the date of construction by the accused. The statement furnished by the accused clearly indicates that prior to 2001 he sold some landed site and purchased someother property. The prosecution failed to collect any evidence to prove that the sons of the accused are incapable of earning anything during the check period. The actual amount mentioned in the sale deeds collected by the prosecution itself are taken into account the alleged unexplained income would be grossly reduced. Thereby unexplained income would be a small amount for which any government employee who is

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also having earning members in the family would save some amount every year. The reply submitted by the accused clearly indicates that in each and every property purchased in his name and in the name of his wife and children he obtained permission from the competent authority and informed the same to his superior Officers indicating the particulars of the property and source of income for purchasing the property. It is an admitted fact that the appellant entered into service in the year 1966, he served for 34 years. He is admittedly possessing ancestral property even by the date of entering into service. Subsequently his sons are grown up and they also became earning members of the family. Wife is also earning some amount by doing tailoring work and his unmarried daughter is earning some amount by giving tuitions. The Investigation Officer has not collected any evidence about the income of the family members and the income from agriculture and ignored their contributions to the family. Thus the explanation offered by the appellant regarding the source of income which can be

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treated as the known source of income, the burden shifts on the prosecution to prove that the source of income explained by the appellant is not correct and source of income furnished by the appellant is false and incorrect. As already stated, the burden of proof lies on the prosecution to prove the alleged benami nature of transactions. In this case the prosecution utterly failed to prove that the accused has purchased properties in the name of his wife and children and the transactions are benami in nature.

¶228

The Trial Court based on the value of the properties in Ex.P13 report submitted by the Investigation found the accused guilty by accepting the same as true and correct for the check period of 35 years. When the accused who is having other sources of income from agriculture and independent income of his sons would be able to save atleast Rs.5,000/- to Rs.6,000/- per month i.e., Rs.60,000/or Rs.72,000/- per year from the ancestral property and also income of the sons savings from their salary. If the said

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income is spread over the check period and the same is taken into consideration and calculated with the actual amounts shown in the documents for purchase of the properties the difference will be a small sum as the prosecution has deliberately suppressed the correct value of the properties as on the date of acquisition. Even as per the sale deeds collected by the Investigation Officer the prosecution made calculations on hypothetical basis not with any accurate or as per the documents available on record.

¶231

In Ex.P14 proceedings issued by the Deputy

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Inspector General of Police, Office of Lokayukta, nowhere the details of assets and the known source of income of the appellant are mentioned. He simply authorised the Investigation Officer to launch prosecution against the accused. The known lawful source of income of the appellant is not collected and taken into consideration while issuing Ex.P14 proceedings.

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60. In the case of Ashok Tshering Bhutia Vs. State

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of Sikkim reported in (2011) 2 SCC (Cri) 258, the Hon’ble Supreme Court clearly held that:

¶236

“xxx When a statutory functionary passes an order, that too authorising a person to carry out a public function like investigation into an offence, an order in person to carry out a public function like investigation into an offence, an order in writing was required to be passed. A statutory function must act in a manner laid down in the statute.”

¶237

Ex.P14 proceedings do not contain the correct details of the acquisition of the properties, known source of income of the accused and his family members.

¶238

For the foregoing reasons, in view of the fact that the prosecution has mentioned the hypothetical figures without any basis alleging the appellant had acquired properties disproportionate to his known source of income for which the appellant discharged the burden of explaining

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the lawful source of income, the Trial Court has

¶241

mechanically accepted the hypothetical figures furnished by the prosecution ignoring the explanation given by the accused. The finding of the Trial Court is erroneous and unsustainable. The Trial Court was therefore not justified in convicting the accused for the offence punishable under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act of 1988. Therefore, the impugned judgment of conviction and sentence passed by the Principal Sessions Judge and Special Judge at Hassan, in Special Case No.127/2004 is hereby set aside. The forfeiture order passed is also set aside.

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Accordingly, the appeal filed by the accused is allowed.

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Sd/JUDGE

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JT/-

B.T.Nagappa v. State by Lokayukta Police

Case brief

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B.T.Nagappa v. State by Lokayukta Police

Case brief

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