Partly allowed

S v. Venkatesha Murthy v the State of Karnataka

Karnataka HC2 Dec 2022CRL.A/842/2009

Case brief

AI extract

What is this about?

In a criminal appeal under Section 374 Cr.P.C., a Special Judge confirmed the conviction of an Assistant General Manager under the Prevention of Corruption Act for possessing disproportionate assets. The High Court partially allowed the appeal, reducing the sentence to one year and modifying the forfeited asset value to Rs.12,25,622 by deducting construction expenses.

What did the court decide?

Conviction confirmed; sentence reduced to one year simple imprisonment with fine of Rs.10,000; forfeitable assets reduced to Rs.12,25,622.

S v Venkatesha Murthy Vs the State of Karnataka — Corruption | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 2^nd DAY OF DECEMBER, 2022

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BEFORE

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THE HON’BLE MR. JUSTICE SREENIVAS HARISH KUMAR

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CRIMINAL APPEAL NO.842 OF 2009

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BETWEEN:

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Sri S.V.Venkatesha Murthy, Aged about 60 years, S/o Late S.V.Venkataramana Iyer, No.66, 2^nd Cross, Vinayaka Layout, Maratha Halli, Bengaluru-560037.

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…Appellant

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(By Sri M.T.Nanaiah, Senior Advocate a/w Sri Prabhugowda B. Tumbigi, Advocate)

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AND:

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The State of Karnataka by CBI ACB, Bengaluru.

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…Respondent

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(By Sri Madhav Kashyap, Advocate for Sri P.Prasanna Kumar, Advocate)

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This Criminal Appeal is filed under Section 374 (2) Cr.P.C., praying to set aside the order dated 20.10.2009 passed by the XXI Additional City Civil and Sessions Judge, Special Judge for CBI cases, Bengaluru in Spl.C.C.No.51/03 and convicting the appellant/accused for the offence p/u/s 13(1)(a) of Prevention of Corruption Act and etc.

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This Criminal Appeal having been heard & reserved on 15.11.2022 , coming on for pronouncement this day, the Court pronounced the following:

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JUDGMENT

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This appeal is by the accused in Spl.

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C.C.No.51/2003 on the file of XXI Addl. City Civil

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and Sessions Judge and Special Judge for CBI Cases, Bengaluru. He was prosecuted by the CBI on the allegation that between the period 1.1.1991 and 30.11.2001, he was found in possession of assets worth Rs.15,75,392/- over and above his known source of income. He was suspected to have amassed the wealth by illegal means. He was working as Assistant General Manager, Karnataka Telecom Circle, Bengaluru on the day raid was conducted.

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The prosecution examined 36 witnesses

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and relied on 173 documents (Ex.P.1 to P.173) to establish its case. The accused led defence evidence, he examined himself as DW.1 and examined two other witnesses as DW.2 and 3. Ex.D.1 is the document produced on his behalf.

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Assessing the entire evidence the trial court recorded conviction against him for the offences punishable under section 13(2) r/w 13(1)(a) and (e) of Prevention of Corruption Act (‘PC Act’ for short) and then sentenced him to simple imprisonment for two years and fine of Rs.10,000/- with default imprisonment for three months for each of the offences under section 13(2) r/w 13(1)(a) and 13(2) r/w 13(1)(e). The disproportionate assets valued at Rs.15,44,388/were ordered to be forfeited to Government.

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I have heard the arguments of Sri. M.T.Nanaiah, learned senior counsel and Sri. Prabhugowda B.Tumbigi, learned counsel for the appellant and Sri. Madhav Kashyap for Sri. P.Prasanna Kumar, learned counsel for the respondent, CBI.

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The gist of the argument of learned counsel

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for the appellant was that the investigating officer

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did not properly compute the income, expenditure

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and assets of the accused. In their synopsis of argument, they have delineated certain expenditures which ought not to have been computed as monies expended by the accused. In this regard they argued that the children of the accused were staying in the house of their grandfather when they were studying at Madurai and the entire education expenses were met by the grandfather. The investigating officer as also the trial court failed to notice this aspect of the matter.

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4.1. Referring to the assets considered by the investigating officer, he argued that they were also wrongly considered as assets acquired by the appellant disregarding the fact that the wife of the appellant had acquired some property from her parents. It was also argued that property purchased by son-in-law was also considered to be

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the property of the appellant. The house at Marthahalli was excessively valued. It was not noticed that the accused was sent on deputation to Saudi Arabia and his income during deputation period was not considered. The appellant had agricultural property in Tamil Nadu and his income from agriculture source was not considered. The trial court failed to appreciate the defence evidence. Thus it was his argument that improper computation by the investigating officer, which the trial court also failed to notice led to his conviction and therefore the same requires to be set aside.

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4.2. In regard to sanction it was argued that

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the appellant was working as Assistant General Manager at the time of raid and filing charge sheet. Sanction was obtained from the Deputy General Manager who was not the sanctioning authority. Therefore on this count prosecution of the appellant was vitiated.

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Sri. Madhav Kashyap argued that the trial

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court has given detailed reasons for accepting the evidence placed by the prosecution. The main contention of the accused was that he had income from agricultural source and the educational expense of the children was met by the grandfather. Another contention was also taken by the accused that the assets found in the name of his wife were all acquired by father-in-law and gifted to daughter. But it has come in evidence that the father-in-law of the accused had a moderate source of income and his financial condition did not permit him to acquire the property for being gifted to daughter. There are a lot of contradictions in the evidence of the defence witnesses. Referring to the evidence given by each prosecution witness, he argued that the computation of income, expenditure and assets was made properly and most of the witnesses were not discredited in the cross-examination.

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5.1. Referring to the argument of appellant’s counsel on the sanction, he argued that sanction was obtained from PW.34, who was working as Member (Services), Telecom Commission at New Delhi. He was the sanctioning authority. Therefore sanction was proper and valid. In this view, he argued that there are no grounds to entertain the appeal.

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I have considered the arguments and perused the records. Firstly the argument of the appellant’s counsel with regard to sanction may be examined. PW.34 P.P.Ramachandran was examined by the prosecution to prove that before subjecting the appellant to prosecution, sanction order was obtained. PW.34 deposed that from February, 2003 to November, 2003 he worked as Member (Services) of Telecom Commission at New Delhi and he was the competent authority to remove the gazetted officers of Group A and Group

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B. He stated that appellant was working as SubDivisional Engineer in Group B and he was competent to issue sanction order. His evidence shows that he perused the entire records and arrived at a conclusion that a prima facie case existed for prosecuting the appellant and thereafter issued sanction order as per Ex.P.105. This witness was not cross-examined at all. The trial court has held that the prosecution obtained valid sanction. I do not find any infirmity in the finding of the trial court about sanction. If according to the appellant PW.34 was not the competent authority to accord sanction, he should have been cross-examined. For this reason the argument of the appellant’s counsel about sanction cannot be accepted.

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Now with regard to the prosecution case about acquisition of property and assets by the appellant exceeding his known source of income, if

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the judgment of the trial court is perused, it appears that the trial court has not cross verified the computation made by PW.36, the investigating officer; but it has just referred to the evidence of all the prosecution witnesses and the defence witnesses, and then found that the appellant has no explanation for acquisition of some properties. It is found by the trial court that the defence evidence itself consists of contradictions and thereby there is no preponderance of probability in the defence put forward by the appellant. For this reason the prosecution case has been accepted by the trial court.

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In the light of arguments advanced by learned counsel, if the findings recorded by the trial court are examined, the emerging picture is as below.

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PW.36 is the investigating officer, and he was one of the officers who conducted raid at the house of the accused and before that he registered FIR. It is better to consider his evidence first, for all other prosecution witnesses, except PW.35, speak about the information provided by them during investigation.

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In the examination chief he has given details of raid conducted by him and other officers at various other places, and evidence collected by him during investigation. If his cross-examination is perused, it appears that the defence has made an attempt to bring to fore that his computation of income, expenditure and asset of the accused is incorrect. Trend of cross-examination of PW.36 is like this: he was given a suggestion that the father of the accused had huge rental income, but no further suggestion was given to him as to what was the amount the father was getting from

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rental. Second question was that accused had income from agricultural source, but while questioning so, PW.36 was not suggested the survey number of the land, and its extent, and the village where it is situated. Thirdly, PW.36 was suggested a question that the wife and children of accused were residing in the house of father-inlaw of the accused and that the father had borne all their expenses including the educational expenses of the children. To this question, PW.36 answered that the wife and children of accused lived for some time in the house of father-in-law and they set up a separate residence, and that the accused himself looked after the educational and other expenses of his children.

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Then PW.36 was questioned on the gift of a residential site to the wife of the accused by his father-in-law, and it was suggested to him that the father-in-law himself got the house constructed. A

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further suggestion was also given to him that the father-in-law of accused made a gift of residential site to each of his children and he engaged a contractor namely ‘Sughee Builder’ for constructing houses in all the sites. PW.36 admitted the gift of a site by father-in-law to his every son and daughter, but denied the suggestion that father-in-law met the construction expenses. The other prominent suggestions given to PW.36 were that he did not properly account the motor cycle maintenance expenses, that wife of the accused had independent income as she was selling sarees and sewing clothes in a Womens’ Association, that in spite of premiums on LIC and Postal Insurance were being deducted every month from the salary he again accounted the premiums towards expenditure, which was wrong, and last suggestion being that he (PW.36) had not taken the difference of amount in RYALS and INR. Of course PW.36 has admitted that accused was being

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paid salary in RYALS when he was deputed to Saudi Arabia and he did not take the difference between RYALS and INR.

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The evidence given by three defence witnesses may be examined. DW.1 is the accused himself. He has deposed that his father was an agriculturist. Theirs was a joint family, and in the year 1991, his father had saved Rs.7,00,000/earned by agriculture. His further deposition is that before he joined as Junior Telecom Officer in the Department of Telecommunications, he worked for a few years in the Department of National Highways and then joined Agricultural Mechanical Department of Government of Tamil Nadu and saved Rs.5,000/-. He also deposed that after joining the Telecommunications Department, he was able to save Rs.7,00,000/- out of salary income, and when he was deputed to Saudi Arabia in the year 1987, he was able to save

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Rs.2,00,000/-, and thus as on January, 1991 his total savings was Rs.14.5 lakhs.

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DW.1 has given certain other details in

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the examination-in-chief - they are that the premium amounts payable by him on the life insurance policies and postal insurance policies were being deducted from the salary, but the I.O. again showed those payments towards expenditure which was wrong. Secondly, motor cycle expenditure was wrongly calculated. His two children were staying in the house of his father-inlaw at Madurai and entire expenses of the children for food, education etc., was met by the father-inlaw. In regard to Demand Drafts received by his wife, he stated that he had no official dealings with the firms viz., M/s. Foundry of India, Ranchi and M/s. Techno Ceramics India Private Limited, Calcutta. He was not working in the purchase department of the Telecommunication Department

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and therefore there was no occasion for him to come in contact with those firms. But he has stated that because he was working as SubDivisional Engineer, his counter signature was necessary on the bills and therefore he had to sign the bills. He gave further explanation that in the year 1988, his wife P.K.Padmavathi received four demand drafts for a total sum of Rs.27,000/-, and when he asked her about the DDs for this sum, she gave an explanation that they pertain to the business of her brother Ravish. He then made enquiries with his brother-in-law who also told him that his friends had to pay him a certain sum of money in relation to his business and that the DDs sent to Padmavathi pertained to his business. Before referring to cross-examination of DW.1, the evidence given by DW.2 and 3 may be adverted to.

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DW.2 is Ravish K., the brother-in-law of DW.1. His deposition is that his father

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Krishnamurthy was working as a Manager in a Textile Mill and later on he started his own commission agency in food products, textiles, aromatics and perfumes. He has ancestral agricultural property and therefore his father had income from different sources. His further deposition is that his father purchased lands nearby his house and thereafter built separate houses for the residence of his children. Thus he constructed totally six houses and gave one of the houses to his younger sister, i.e., Padmavathi. His father engaged a contractor by name Murugan of Sughee Constructions. He stated further that in the year 1996 his father purchased a property in the name of Padmavathi at Imyam Nagar in Madurai. There was no contribution by the accused for the construction of the house and purchase of property at Imyam Nagar. Then he stated that when his brother-in-law went to Saudi Arabia, his sister went to Singalur of Coimbatore

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district to stay in the house of her father-in-law and her children came to Madurai and stayed in his father’s house. In this regard he stated that his father and the father of the accused shared the expenses of children equally. In regard to his occupation he stated that he was working in the Marketing section of a company viz., Brijbasi Udyog Limited and he was also doing business in the sale of perfumes and aromatic products. In connection with his business, he used to receive money in the form of DDs drawn in the name of his sister Padmavathi because she was his trusted sister. He has stated that he did not know any firm by name Techno Ceramics or Foundry India Limited.

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DW.3 is the wife of the accused and her deposition in examination-in-chief is that her brother Ravish was selling agarbattis, perfumes and sarees, besides being employed in a private

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company. Because he was always traveling all over India, he had requested her to help in his business and to receive DDs, and therefore she was receiving DDs. In this regard she has stated that after receiving DDs she was handing over them to her husband for being deposited in her account.

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It was argued by learned counsel for the appellant that the evidence given by the defence witnesses should receive weightage equal to that of prosecution witnesses. There is no second word about this proposition. All that is required to be seen is whether there is preponderance of probability in the evidence given by the defence witnesses and thereby the evidence led by prosecution becomes difficult to be acted upon.

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Now if the depositions of DW.1 to 3 in their examination-in-chief is assessed in the light of their answers in the cross-examination, except

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one defence version with regard to the

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construction expenses met by the father-in-law of the accused, all other defences fail. DW.1 has clearly admitted that after the raid was conducted on his house and office, he did not submit schedule of income and assets. He has an explanation that the investigating officer did not ask him to file the schedule, but it is a different aspect altogether, because he has given further admission that when he filed income tax returns, he did not disclose income from other sources and what he disclosed was income from salary.

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His other admissions are - his wife was not gainfully employed and she was just helping in her brother’s business; Rs.7 lakhs which he claims to have inherited after death of his father was not informed to his department nor was it disclosed in the income tax return. Another sum of Rs.5 lakhs was not deposited by him in any bank. Rs.14.5

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lakhs was not the sales at the beginning of January 1991, but it was his income at that time. He purchased and sold a Fiat car without taking the permission from the department and even without giving information. He has admitted correctness of the search list marked Ex.P.111 and Ex.P.114. He did not inform to the department about inheritance of ancestral property after death of his father. He has no document to show as to how much money he could save when he worked in Saudi Arabia on deputation and he has no document in proof of conversion of Saudi Arabian Ryals into Indian currency. He did not obtain permission for purchase of site by him and in the name of his wife. He did not give intimation about those transactions to the department. He has admitted that his wife purchased properties and sold them.

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About the demand drafts drawn in the names of his wife, he admitted that he prepared challans as per Ex.P.96 to 98, P.172 and P.173 for depositing the demand drafts in the bank. His further admission is that his brother-in-law Ravish never told him at any time that the DDs belonged to him.

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DW.2 has given a very prominent admission in the cross-examination that his sister Padmavathi was not gainfully employed and that she had no independent income, that his father had not purchased any property in his name or in the names of his brothers or sisters, that he, his brother and every sister were living in separate houses and each of them was looking after their needs individually and that they were not dependent on their father and that he had no dealing with a firm by name M/s Techno Ceramic India and M/s. Foundry.

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DW.3 has admitted that her bank account

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at Indian Overseas Bank was being operated by her husband, she had no knowledge about the deposit available in the bank account, that she did not know as to how many DDs she received pertaining to the amounts due to her brother in relation to his business and that her husband used to deposit the DDs in the bank and withdraw their proceeds. She has given further admission that when her children went to her father’s house for their studies, father had already retired and at that time husband had sufficient income.

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Therefore from the answers given by DW.1 to 3 in the cross-examination, a clear inference can be drawn that their evidence is not at all believable because of many admissions given by them contradicting their stand in the examination-in-chief. It is not at all possible to believe that the accused had saved a good amount

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of money at the beginning of check period. If really he had income from agriculture and other sources, he should have disclosed the same at least in his income tax returns though he might have failed to give information of the acquisitions to his department. The evidence of PW.3 that she was doing business in sarees, perfumes and agarbattis cannot also be accepted. DW.1 has admitted that his father had seven children and if he says that at the time when his father died, there was a savings of Rs.7 lakhs which he inherited, it cannot be accepted. If really he had inherited the savings of his father he should have kept the money in a bank deposit. Similarly his assertion that he had saved Rs.5 lakhs having worked some where else before he joined the Department of Telecommunication cannot also be accepted to be correct, because that money was also not deposited by him anywhere. As has been admitted by DW.3, her father had retired when her

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children went to Madurai to pursue studies and therefore it is highly impossible to believe that her father would have met the educational expenses of the children. The son and daughter of accused might have pursued their studies at Madurai, it is highly impossible to believe that accused did not spend a pie for the educational expenses. This is a good example for demonstrating improbability in this case.

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Regarding DDs, PW.30 has deposed that his company was supplying insulators to Post and Telegraph Department. His father instructed him to purchase DD and accordingly on 15.1.1999, he submitted an application for DD in the name of P.K.Padmavathi for Rs.10,000/- which is as per Ex.P.99. Likewise on 13.3.1999, his staff viz., Kundu purchased another DD for Rs.4,000/- in the name of P.K.Padmavathi as per Ex.P.100. Then another DD for Rs.8,000/- was obtained in the

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name of Padmavathi. When this witness was cross-examined, he was not suggested that at least the DDs pertained to the business of the brother of Padmavathi. When DW.2, Ravish has clearly admitted in the cross-examination that he was not aware of the companies viz., M/s Techno Ceramic India and M/s. Foundry, the obvious inference that can be drawn is that the DDs were obtained by the accused in the name of his wife in connection with his departmental transactions with those companies.

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Though the defence theory as discussed above fails, however in view of evidence given by PW.22, the accused can claim reduction of a sum of Rs.3,49,770/- from expenditure item. DW.2 has stated that his father got constructed a house by his sons and daughters in the sites purchased by him by engaging a contractor by name M.Murugan. PW.2 is M.Murugan, who has stated that

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P.S.Krishnamurthy, i.e., the father of DW.3,

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Padmavathi engaged him for construction of a house at Plot No.37, Shanthinagar, Madurai. The total cost of construction was Rs.3,49,770/- and it was paid by P.S.Krishnamurthy. Therefore in the total expenditure of Rs.29,41,099/-, sum of Rs.3,49,770/- can be deducted. Then the total expenditure is 25,91,329/-. The total of assets and expenditure therefore comes to Rs.39,87,975/-. The difference between this sum and the income i.e., Rs.27,62,353/is Rs.12,25,622/-, which is the disproportionate income. It being more than 10% of

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Rs.39,87,975/-, conviction judgment against the accused cannot be set aside.

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So far as the sentence is concerned, the

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trial court has imposed simple imprisonment of two years and fine of Rs.10,000/- with default imprisonment of three months. It was submitted

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by counsel for accused that the appellant has grown old now and been suffering from age related ailments. These circumstances are considered. The offence pertains to period 1991-2001. Section 13(2) of Prevention of Corruption Act, as it stood

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then prescribed minimum imprisonment of one year. Therefore imprisonment period can be reduced to one year retaining the fine amount. The trial court has ordered confiscation of disproportionate assets valued at Rs.15,44,388/-. As the value of disproportionate asset is reduced to Rs.12,25,622/-, modification to this extent can be made.

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ORDER

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Appeal is partly allowed. The judgment of conviction is confirmed, however the sentence imposed by the trial court is modified. The appellant-accused is hereby directed to undergo simple imprisonment for a period of one year and pay fine of Rs.10,000/-. In default of payment of

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fine, he shall further undergo simple imprisonment

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for a period of two months.

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The disproportionate assets valued at

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Rs.12,25,622/shall be forfeited to the

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Government.

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The appellant is entitled to claim set off for the imprisonment period, if any, he has already

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spent in jail.

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Sd/JUDGE

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S v. Venkatesha Murthy v the State of Karnataka

Case brief

What is this about?

What did the court decide?

S v. Venkatesha Murthy v the State of Karnataka

Case brief

What is this about?

What did the court decide?

What the court decided

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