The Karnataka Lokayukta Police Vs Mr H v Krishnaswamy

MR. H.V. KRISHNASWAMY S/O VENKATARAVANAPPA GENERAL MANAGER, KSFC CENTRAL OFFICE, VASANTH NAGAR BENGALURU R/A HOUSE NO.1062 7^TH MAIN, III STAGE KORAMANGALA, BENGALURU.

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…RESPONDENT

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(BY SMT. MANJULA N. TEJASWI.,ADVOCATE)

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THIS CRL.A IS FILED U/S.378(1) AND (3) CR.P.C PRAYING TO a) GRANT LEAVE TO PROSECUTE THE APPEAL AGAINST THE JUDGMENT OF DISCHARGE / ACQUITTAL ORDER DATED 13.01.2021 PASSED BY THE COURT OF PRINCIPAL DISTRICT AND SESSIONS JUDGE, KOLAR IN SPL.C.(C)NO.04/2010.b) SET ASIDE THE JUDGMENT / ORDER DATED 13.01.2021 PASSED BY THE COURT OF PRINCIPAL

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HC-KAR

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DISTRICT AND SESSIONS JUDGE, KOLAR IN SPL.C.(C)NO.04/2010. c) CONVICT THE RESPONDENT FOR THE OFFENCES P/U/S 7, 13(1)(e) R/W 13 (2) OF THE PREVENTION OF CORRUPTION ACT, AND CONSEQUENTLY SENTENCE THE RESPONDENT FOR THE CHARGES LEVELED AGAINST HIM.

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THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL

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ORAL JUDGMENT

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This appeal is by the Karnataka Lokayukta Police, Kolar being aggrieved by the judgment and order dated 13.01.2021 passed in Special Case (Corruption) No.4/2010 on the file of Principal District and Sessions Judge, Kolar (hereinafter referred to as "trial Court"), by which the trial Court has acquitted the accused/respondent herein for the offence punishable under Section 13(1)(e) read with Section 13(2) of Prevention of Corruption Act, 1988.

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The case of the prosecution is that accused was working as General Manager of KSFC, Central Office, Vasanthanagar, Bengaluru during the check period between 04.12.1985 and 09.06.2006 and he was found to have legal income of Rs.1,03,16,586/-. That during the said period he has

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spent an aggregate amount of Rs.1,17,27,676/- and his total assets and liabilities for the said period was found to be Rs.1,84,31,944/- and as such accused was found in possession of excess amount in a sum of Rs.81,15,358/- which is 78.63% of his total legal income which was not properly explained by him. As such, a charge sheet was filed for the offences punishable under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988, for he possessing disproportionate assets to the known source of income.

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The prosecution examined 19 witnesses as PW1 to PW19 and produced 57 documents as Ex.P1 to Ex.P57. Statement of the accused was recorded under Section 313 of Cr.PC. Incrementing evidence brought against the accused has been denied. The accused examined himself and 24 other witnesses as DW1 to DW25 and exhibited 133 documents as Ex.D1 to Ex.D133.

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The trial Court framed the following points for its consideration;

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"1 . Whether the prosecution has proved beyond reasonable doubt that when the accused was working as General Manager in KSFC, Central Office, Vasanthanagar, Bangalore and during the check period

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from 4.12.1985 till 9.6.2006, he was found to have legal income of Rs.1,03,16,586/- and during this period, he has spent a total amount of Rs.1,17,27,676/- and his total assets and liabilities during this period was found to be amount of Rs.1,84,31,944/- and as such, he was found in possession of excess Rs.81,15,358/-, which is 78.63% of his total legal income, not properly explained by him and hence, he was found to be in possession of Rs.81,15,358/-, which is disproportionate to the assets of his known source of income and thereby he has committed an offence punishable U/s.13(1)(e) read with section 13(2) of Prevention of Corruption Act, 1988?

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2. What Order?".

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On appreciation of the evidence answered the same

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in the negative and consequently passed the impugned judgment and order of acquittal. Being aggrieved by the same, State represented by Lokayukta police is before this Court.

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Learned counsel appearing for the

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appellant/Lokayukta Police, assailing the impugned judgment and order to submits;

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(a) that when the Lokayukta police had conducted the

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search at the house of the accused at Koramangala, they had recovered cash, gold jewels, silver articles and several documents pertaining to the properties under Mahazar -Ex.P1 and they had also recovered cash and gold jewellery from bank

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locker of Indian Overseas Bank as per Mahazar-Ex.P2, which

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has not been appreciated by the trial Court.

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(b) that PW2 who assessed the value of the house

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property of the accused situated at Koramangala, submitted his report as per Ex.P4.

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(c) that PW3 who was the tenant under accused has identified Ex.P5 and Ex.P6 which has not been appreciated by the trial Court.

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(d) that PW5 has deposed that accused had spent an amount of Rs.11,57,015/- towards family expenditure and has given a certificate as per Ex.P7.

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(e) that PW7, Assistant Director of Agriculture has given Expenditure Income Certificate of the accused.

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(f) that PW8, Subbarao is the Forest Range Officer who

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assessed a net profit of Rs.92,500/- from the Eucalyptus plantation after deduction of expenditure. Thus, the trial Court has not appreciated these material evidence produced by the prosecution.

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(g) that PW10 had issued letter as per Ex.P11,

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indicating accused having borrowed Rs.20,00,000/-.

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(h) that PW11 had spoken about issuing certificate as per Ex.P12 toward expenditure of the vehicle of the accused.

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(i) that PW13 has spoken about accused borrowing the loan of Rs.20,00,000/- from Cauvery Urban Co-operative Bank as per Ex.P14. The trial Court has not appreciate the evidence of these witnesses.

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(j) that PW16 has spoken about accused having borrowed housing loan from Canara Bank, Vasanthanagar Branch, Bengaluru which is also not been appreciated by trial Court. Thus, the oral and documentary evidence produced by the prosecution established the fact of accused possessing excess amount of Rs.81,15,358/- as against known source of income. Though the prosecution has proved the case beyond reasonable doubt, the trial Court on trivial grounds and reasons passed the impugned judgment and order of acquittal. Hence seeks for allowing of the appeal.

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Per contra , learned counsel appearing for the

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accused/respondent taking this Court through the impugned judgment, more particularly paragraph 35 submits that the Investigating Officer-PW19 has admittedly not considered the 23 documents produced by the accused as Annexure-1 to Annexure-23 in justification of his claim of he having legal known source of income.

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(a) She also points out that the Investigating Officer admitting of he not taking into consideration the income of the wife of the accused, was initially working as a teacher drawing a salary and thereafter running a business of blazer.

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(b) She submits that the accused was also possessing 4 sites which she had sold and had generated sufficient income. Calculated in aggregate wife of the accused herself possessed amount in excess of what is found to be illegal in the possession of the accused.

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(c) She submits that in the case of disproportionate assets, the income of the family has to be taken into consideration and only thereafter the prosecution has to come

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to the conclusion whether or not the accused possessed income within his legal means or in excess of it. That admittedly the prosecution has not discharged its burden in this regard.

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(d) She submits that the trial Court has adverted not only to the case of the prosecution but also to the oral and documentary evidence produced by the accused in extenso resulting in acquittal of the accused, warranting no interference and seeks for rejection of the appeal.

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Heard. Perused the records.

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As noted above, the case of prosecution is that accused had the legal income of Rs.1,03,16,586/- while he had spent Rs.1,17,27,676/- and there was an excess spending/ possessing of Rs.81,15,358/-. Perusal of the impugned order more particularly paragraph 35 indicate that the accused during the investigation in justification of his possessing Rs.81,15,358/- had produced 23 documents as Annexure 1 to Annexure 23.

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Ex.D16 and Ex.D17 are the endorsements issued by the Investigating Officer for having received the said

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documents at Annexure No. 1 to 23 by the accused. As taken note of by the trial Court, PW19 the Principal Investigating Officer has admitted that at the time of submission of the charge sheet, the said documents have not been produced. He has also admitted the fact that he did not find accused having produced any fake documents at the time of investigation. Thus, the trial Court has come to conclusion that the Investigating Officer has failed to produce documents-Annexure 1 to 23 before the Court while submitting the charge sheet which leads to inference of accused having substantiated he possessing income of Rs.81,15,358/-.

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The trial Court has also taken note of the fact that the amount mentioned at Item No. 59, 61, 63 of documentEx.D9 i.e. Rs.2,77,000/-, Rs.12,00,000/- and 10,50,000/- was the income of the accused which aggregated in a sum of Rs.25,27,000/- which has not been taken into consideration by the prosecution. Further the trial Court has also taken note of the fact that the Investigating Officer- PW19 having admitted to the fact that accused had raised Rs.7,50,000/- towards

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education of his daughter from Canara Bank which was spent subsequent to the check period.

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That PW19 had further admitted that under Ex.D15

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education expenses of the daughter of the accused was shown as Rs.3,85,760/- which included the total education expenses of his daughter in a sum of Rs.9,61,665/- which was spent subsequent to the check period. Thus, the trial Court has found that the Investigation Officer ought to have deducted the said amount which was wrongly taken into consideration to show accused possessing the excess amount.

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The trial Court has further found that the wife of the

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accused who was earlier working as a teacher drawing salaries and had an amount of Rs.8,40,000/-. A document in this regard was produced not considered by the Investigation Officer, which fact has been admitted by the PW19. The trial Court has also found that the wife of the accused having resigned from her job had started business of blazers and was supplying the same to several schools and had earned an amount of Rs.21,55,800/- during the check period. The accused had

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produced documents in this regard which have not been taken to consideration by the Investigation Officer.

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The trial Court has also taken note of the fact that

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wife of the accused possessed 4 sites bearing Nos. 88, 89, 99 and 100 which she has sold and received the sale proceeds of Rs.35,00,000/- which amount was declared in her income tax returns and other documents during the year 2005 to 2006. That PW19- Investigating Officer had not taken this income of Rs.35,00,000/- of the wife of the accused into consideration. Thus, the trial Court has found that if these amounts were taken to consideration it would have aggregated in a sum of Rs.64,95,880/- during the check period.

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The trial Court has also found in addition to the said amount accused was receiving rental income from the first floor of the house at Koramangala and had received a sum of Rs.19,71,000/- during the check period and the same was declared in his income tax returns which amount has neither been collected nor the material in this regard have been taken into consideration by the Investigating Officer. Thus, admittedly the said sum of Rs.19,71,000/- was also left out of calculation.

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The trial Court has found accused having produced document - Ex.D5 which is an order passed by this Court in ITA No.69/2007 wherein the hand loan raised by the accused was considered to be his income by the income tax authorities.

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The trial Court has also taken into consideration the hand loans raised by the accused in a sum of Rs.7,50,000/from Weizmann Bank Ltd. and Rs.20,00,000/- from Cauvery Urban Cooperative Bank as per Ex.D14, which also have not been taken into consideration by the Investigating Officer. Further at paragraph 39, the trial Court has also adverted to the documents produced by the accused and the deposition of DW1 to DW23, justifying the claim of the accused possessing Legal income.

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The Apex Court in the case of NIRANKAR NATH PANDEY vs . STATE OF U.P. AND OTHERS passed in Criminal Appeal No.5009/2024 (arising from SLP (Crl.) No.10101/2024). At paragraphs 9 and 10 and 11 has held as under;

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"9. We are of the view that the Appellant's wife's income must be considered as well while calculating the total income and assets. Both the Appellant and his wife have filed the relevant income tax returns in order to show their respective incomes and assets. The Respondents in their Counter-Affidavit have not denied these income tax

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returns or alleged them to be forged or fabricated. Therefore, when a public servant is submitting his income tax returns, they should be presumed to be true and correct. If you duly consider the income tax returns of the Appellant and his wife for the check period of the year 1996-2020, the total income is coming up to be Rs.1,21,06,268/-(Rupees One Crore Twenty One Lakh Six Thousand Two Hundred Sixty Eight only) which is in fact more than the assets amounting to Rs.1,16,02,669/- (Rupees One Crore Sixteen Lakh Two Thousand Six Hundred Sixty Nine only) which is said to be the disproportionate assets in question under the present FIR.

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10. Further, we have considered that the check period is from the year 1996 to 2020, which is almost twenty five years. It must be taken into account that over such a long period of time, there is inflation and a natural progression in the changing economy that affects the value of assets such as property. This can understandably lead to discrepancies in declaring the value of assets over the years. Therefore, there should be a more dynamic approach while considering an individual's income and assets over the span of two decades, such as in the present case. The notion that the declared value of an asset such as property or gold will remain static is flawed. This has to be considered while examining an individual's assets and income while making determination regarding disproportionate assets. Such an examination needs to reflect such adjustments and changes as is natural a with the progression of time.

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11. We find it pertinent to note that in cases such as these where disproportionate assets are being dealt with, the amounts under scrutiny cannot be looked at in the same manner as one would do a Bank statement or daily ledger of income and expenditure. The scrutiny process cannot be as mechanical as that when you are examining declared assets and the income of an individual over such a long period of time. There has to be a certain margin that is given while making such an assessment as there are invariably economical fluctuations that would have taken place, especially over the course of nearly twenty-five years. It is crucial to have a nuanced appreciation of how time and economic conditions affect asset value in such cases".

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Thus, the facts involved in the case as noted above

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and in the light of requirement of wife's income to be considered as the income of the accused while calculating the total income and assets, and in the light of PW19-Investigating Officer, unequivocally admitting to he having left out the documentary explanation furnished by the accused, this Court do not find any irregularity or illegality in the reasoning and conclusion arrived at by the trial Court as noted above. The appeal therefore, devoid of merits, dismissed .

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Sd/(M.G.S. KAMAL) JUDGE

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RU

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List No.: 1 Sl No.: 31

The Karnataka Lokayukta Police v. Mr H v Krishnaswamy

Case brief

What is this about?

What did the court decide?

The Karnataka Lokayukta Police v. Mr H v Krishnaswamy

Case brief

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What did the court decide?

What the court decided

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