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CASE NO.:

Appeal (crl.) 759 of 2001

PETITIONER:

K. PONNUSWAMY

Vs.

RESPONDENT:

STATE OF TAMILNADU BY INSPECTOR OF POLICE,

DATE OF JUDGMENT: 31/07/2001

BENCH:

K.T. Thomas & S.N. Variava

JUDGMENT:

[WITH Criminal Appeal No. 760 of 2001 (arising out of SLP (Crl.) No. 1622/2001)]

J U D G M E N T

S. N. VARIAVA, J.

These SLPs are filed against the Judgment dated 12th April, 2001.

When these SLPs were called out Mr. Ramamurthy, Senior Counsel for the

State of Tamil Nadu, prayed for an adjournment of four weeks. He

submitted that, as Accused Nos. 2 to 5 have been acquitted by the impugned

Judgment, the State was going to prefer an Appeal against the same

Judgment. Mr. Rao opposed the Application on the ground that the

Petitioner was in jail. He submitted that if the State wanted an adjournment,

for such a long period, then the Petitioner should be released on bail. We,

therefore, felt that the best course to follow would be to hear these SLPs

today. When the State files its Appeal it can be heard separately.

Accordingly leave is granted

Heard parties.

By these Appeals the Appellant is challenging his conviction under

Section 13 (1)(e) read with Section 13(2) of the Prevention of Corruption

Act.

Brief facts leading to these Appeals are as follows:

The Appellant was elected as a member of Legislative Assembly from

Marungapuri constituency in June 1991. He became the Deputy Speaker of

the Legislative Assembly on 3rd July, 1991. He was Minister of Education to

the Government of Tamil Nadu from 17th May, 1993 to 9th May, 1996. For

the sake of convenience this period from 17th May, 1993 to 9th May, 1996

will hereinafter be referred to as the check period.

Before the Appellant came to the political arena he was employed as a

Lecturer in the Government Arts College. It has been shown that in 1973

the Appellant had taken a crop loan from the Bank of India for a sum of Rs.

13,000/-. That amount had not been repaid by the Appellant. Ultimately a

Suit came to be filed and the amount had to be collected in execution of

decree in that Suit. In 1985 the Appellant had borrowed a sum of Rs.

5,000/- from R. Palanivelu (P.W.16) who was also working as a Lecturer

along with him. For this loan the Appellant had executed a promissory

note. The financial condition of the Appellant was such that he was unable

to repay the loan. Ultimately a Suit had to be filed against him and a decree

came to be passed. Even after passing of the Decree the amount was not

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repaid. The Decree had to be executed. The decreetal amount had to be

recovered from the salary of the Appellant. This clearly shows that before

he became a Minister the Appellant's financial condition was very weak.

At this stage, it must be mentioned that Accused No. 2 is the wife of

the Appellant. Accused No. 3 is his daughter. Accused No. 2 was and is

merely a house-wife. She admittedly had only a small agricultural income

and no other source of income. Admittedly Accused No. 3 was a student

before and during the check period. She had no source of income.

Accused No. 4 is the son of the brother of the Appellant. Accused

No. 5 is the brother of the Appellant. Accused No. 6 is the Chartered

Accountant who had submitted income tax and wealth tax returns of the

Accused Nos. 2 to 5.

The case of the prosecution was that during the check period the

Accused No. 1 acquired, in his name and in the names of Accused Nos. 2 to

5, pecuniary resources and property disproportionate to his known sources

of income. The prosecution examined as many as 65 witnesses and got 297

exhibit marks. The Trial Court, on the basis of the evidence lead, acquitted

Accused No. 6. However, Accused No. 1 (i.e. the Appellant) was convicted

under Section 13 (1) (e) read with Section 13(2) of the Prevention of

Corruption Act. Accused Nos. 2 to 5 were convicted under Section 109

I.P.C. and also under Section 13(1)(e) read with Section 13(2) of the

Prevention of Corruption Act. The Trial Court , after convicting the

Accused, directed consfication of the pecuniary resources and properties to

the extant of Rs. 77,49,337.77.

Appellant and Accused Nos. 2 to 5 filed Criminal Appeals before the

High Court against the convistion as well as against the Order confiscating

the pecuniary resources and properties. The High Court disposed of these

Appeals by the impugned Judgment dated 12th April, 2001. The High Court

acquitted Accused Nos. 2 to 5 but confirmed the conviction of the Appellant.

The High Court held that as it had acquitted Accused Nos. 4 and 5 the assets

standing in their names had to be excluded from the Order of confiscation.

The High Court, however, maintained the order of confiscation in respect of

the assets of the Appellant and his wife and daughter. As against this

portion of the Order the wife and daughter of the Appellant have also filed

SLP (Crl.) Nos. 1867 and 2343 of 2001. Those were also listed on Board

along with these Appeals. We have delinked those SLPs.

As stated above, the charge against the Appellant is that whilst he was

holding the office as Minister of Education, Government of Tamil Nadu i.e.

during the check period he abused his position as a public servant and

acquired and possessed pecuniary resources and properties in his name and

in the names of Accused Nos. 2 to 5 disproportionate to his known sources

of income to the extent of Rs. 77,49,337.77.

Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act read

as follows:

"13. Criminal misconduct by a public servant.- (1) A public

servant is said to commit the offence of criminal misconduct.-

(a) xxx xxx xxx

(b) xxx xxx xxx

(c) xxx xxx xxx

(d) xxx xxx xxx

(e) if he or any person on his behalf, is in possession or has,

at any time during the period of his office, been in

possession for which the public servant cannot

satisfactorily account, of pecuniary resources or property

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disproportionate to his known sources of income.

(2) Any public servant who commits criminal misconduct

shall be punishable with imprisonment for a term which shall

be not less than one year but which may extend to seven years

and shall also be liable to fine."

Thus under Section 13(1)(e) if either the public servant or any person on his

behalf, is in possession or has, at any time during the period of his office,

been in possession of pecuniary resources or property disproportionate to his

known sources of income the public servant would have committed

misconduct unless he can satisfactorily account.

As stated above, the Trial Court convicted Accused Nos. 1 to 5 on the

footing that the prosecution has established that between them assets

disproportionate to the known sources of income (to the extent of Rs.

77,49,337.77) had been proved. That there were large assets has not been

seriously disputed. Of course there is a dispute as to the exact amount.

This is set out later. What has however been disputed is that these are assets

in the name of the Appellant i.e. that Accused Nos. 2 to 4 are holding these

assets on behalf of the Appellant.

The High Court asked the parties to give a break up of the assets in

the names of each of the accused. On such break up it was found that so far

as the Appellant was concerned, in his own name, there were no pecuniary

resources or assets disproportionate to his known sources of income.

However, it was found that assets standing in the name of his wife i.e.

Accused No. 2 were, according to the prosecution in a sum of Rs.

35,23,396/- and according to the defence in a sum of Rs. 29,00,067/-. The

assets standing in the name of his daughter i.e. Accused No. 3, according to

the prosecution were in the sum of Rs. 11,14,772/- whereas according to the

defence they were in the sum of Rs. 11,26,283/-. The assets in the name of

Accused No. 4, according to the prosecution as well as the defence were in

region of Rs. 18,55,308/-. The assets in the name of Accused No. 5,

according to the prosecution were in the region of Rs, 13,16,158/-, whereas

according to the defence they were in the region of Rs. 10,01,079/-.

Whether the assets are as claimed by the defence or the prosecution is not

material for purposes of these Appeals. Even if the figures are, as claimed

by the defence, they are still quite large.

The High Court then holds that the prosecution had not proved or

shown whether Accused Nos. 4 and 5 had any independent source of income

of their own. The High Court concludes that the prosecution by failing to

conduct an investigation into the individual income of Accused Nos. 4 and 5

had failed to prove that the assets standing in the names of Accused Nos. 4

and 5 did not belong to them. The High Court held that it could not,

therefore, be held that Accused Nos. 4 and 5 were holding assets only on

behalf of Accused No. 1. On this basis the High Court acquits Accused Nos.

4 and 5. As we have been told that the State is likely to file an Appeal

against acquittal of Accused Nos. 4 and 5 we make no comments on this

aspect.

Accused No. 2 was only a house-wife and Accused No. 3 was only a

student before and during the check period. Accused No. 3 being a student

had no source of income except some very small agricultural income. It is

proved and admitted that the only source of income of Accused No. 2 is

agricultural income from 5.45 acres of dry lands amounting to Rs, 82,880/-

and interest on saving in bank account amounting to Rs. 16,376/-. It is

proved that prior to the check period Accused Nos. 1, 2 and 3 had no

substantial income or property. Even according to the defence version,

Accused No. 2 got assets amounting to Rs. 29,00,067/- and Accused No. 3

got assets amounting to Rs. 11,14,772/-. According to Accused Nos. 2 and 3

the income is supposed to have been gifted to both of them by Accused No.

4.

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The Trial Court and the High Court have dealt in detail with the

evidance led by the prosecution to show the existence of the income and the

purchase of properties. We are not setting out the entire evidance as in our

view the following evidance would suffice to show that the prosecution has

proved beyond a reasonable doubt that Accused 2 and 3 derived the income

and properties during the check period.

The prosecution has led the evidance of PW10, the District Registrar,

Trichy who proved that Accused No. 2 purchased a house site in her name

on 10th August, 1984 for a sum of Rs. 3,23,000/-. She purchased another

property, from Mr. Selvaraj, on 7th November, 1994 for a sum of Rs.

2,50,000/-. A third property was purchased by her, from one R. Vijay

Lakshmi, on 25th February, 1995 for a sum of Rs. 3,25,000/-. In her

statement under Section 313 all these purchases are admitted. The only

explanation is that these were purchased from gift cheques received from

Accused No. 4.

The prosecution has led the evidence of the Manager, Karur Vyasya

Bank, Main Branch, Trichy. He has produced the ledger of the bank relating

to the saving bank accounts standing in the name of Accused No. 2. The

computer print out has been marked as Ex. P.E.5. It is shown that an

amount of Rs. 10,00,000/-, as per pay in slips, Exs. P.40 and 41, had been

deposited in the year 1993-94. Further an amount of Rs. 5,00,000/- was

deposited as per pay in slip Ex. P.65. On 3.3.1995 another Rs. 5,00,000/-

was deposited through pay in slip Ex. P.66. On the same day, yet another

amount of Rs. 5,00,000/- was deposited as per pay in slip Ex. P.67. One

month earlier i.e. on 2.2.1995 an amount of Rs. 5,00,000/- was paid into the

account through pay in slip Ex. P. 68. Thus an amount of Rs. 20,00,000/-

has been deposited into the account of Accused No. 2 within a period of not

even 40 days i.e. 25.1.1995 to 3.3.1995.

The prosecution has examined P.W.6, Manager of Andhra Bank,

Trichy. His evidence shows that locker Nos. 122 and 32 were kept by

Accused Nos. 2 and 4 jointly. These lockers were opened in presence of

P.W. 23, the then Deputy Commissioner of Commercial Taxes by the

Deputy Superintendent of Police, Vigilance on 2.9.1996 at about 2.30 p.m.

Totally, there were 37 items of jewels and Ex. P 114. Search list was

prepared and signed by P.W.23 and PW 6. PW 34 the proprietor of Devi

Jewellers, Trichy states that Accused No. 2 purchased jewels through cash

bills Ex. P. 202 to 214. The various dates of purchases are 16.12.1993,

24.1.1994, 28.1.1994, 18.3.1994, 31.3.1994, 28.7.1994, 28.11.1994,

26.12.1994, 10.2.1995, 28.2.1995, 20.3.1995 and 31.3.1995. Even as per

the worksheet submitted by the defence, the total value of the jewels

purchased by Accused No. 2 from M/s. Devi Jewellers is Rs. 8,88,086/-.

Further, PW 50, the accountant of Combatore Jewellers has deposed

that Accused No. 2 purchased jewels worth Rs. 84,250/- on 15.3.1995. The

carbon copy of bill was marked as Ex.P.265. On the same day, jewels were

purchased for Rs. 18,000/- as per Ex. P. 266. According to the witness on

25.3.1995, jewels for a value of Rs. 1,46,000/- were purchased as per Ex.

P267, cash bill. Even as per worksheet filed by the defence from 15.3.1995

to 25.3.1995 jewels were purchased from PW 50 Combatore Jewellers for

Rs. 3,08,250/-. When the above said evidence of PW 34 and PW 50 was put

to A2 during the course of questioning her under Section 313 Cr.P.C. she

admitted the above said purchase but failed to explain through what income

she purchased those jewels. She only stated at the end of her examination

that she purchased movable and immovable out of the gift cheques received

by her through Accused No. 4.

The prosecution has also led the evidence of P.W.10, District

Registrar Trichy. This witness proved that on 25th November, 1990 Accused

No. 3 purchased property under Sale Deed Ex. P.69. Accused No. 3 also

purchased another property on 24th November, 1994 under Sale Deed Ex.

P.71. The above properties were of the value of Rs. 1,90,000/- and Rs.

1,95,000/-. It must be noted that Accused No. 2 had also purchased other

properties from the very same party. Thus the daughter of the Appellant

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(i.e. Accused No. 3) was merely a student and had no source of income had

purchased properties, paid for the stamp duty and other costs. When this

fact was put to her Accused No. 3 she admitted that the purchases were

made in her name. But she failed to explain the source of income from

which the properties were purchased.

The prosecution has, through the evidence of T. Ramachandran

(P.W.5), i.e. the Manager of Karur Vysya Bank, Main Branch, Trichy, also

proved that Accused No. 3 had Saving Bank A/c in that bank. The

computer print out of the ledger was marked as Ex. P.34. In that an amount

of Rs. 5,00,000/- was deposited on 24th November, 1994 through pay in slip

Exs. P.35 and P.36. When this fact was put to her in her examination under

Section 313 she admitted the accounts but said that she did not know

anything about it. Even with regard to the lockers standing in her name she

stated that she knew nothing about it.

The prosecution has thus proved beyond reasonable doubt that

substantial wealth was acquired by Accused Nos. 2 and 3 during the check

period. The only explanation given for the acquisition of this wealth was

that it had been gifted to them by Accused No. 4. Both the Trial Court and

the High Court have disbelieved the story of gift and concluded that these

were in fact the properties held by these persons on behalf of Accused No. 1.

On this basis Accused No. 1 had been convicted.

Mr. Rao has seriously assailed the Judgments of the Trial Court and

the High Court. He submitted that it has been established in the High Court

that Accused No. 1 himself did not have any pecuniary resources or

properties disproportionate to his known sources of income. He submitted

that the prosecution has miserably failed to show that the properties standing

in the names of Accused Nos. 2 and 3 were held by them on behalf of

Accused No. 1. He submitted that it was for the prosecution to prove

beyond reasonable doubt and by means of legal evidence that these were

Benami properties of Accused No. 1. Mr. Rao submitted that Accused No.

4 had been acquitted by the High Court on the ground that the prosecution

has not investigated into his personal source of income. He submitted that,

therefore, it could not be presumed that Accused No. 4 had no personal

source of income. He submitted that Accused No. 4 was the nephew of the

Appellant and, therefore, out of love and affection he had gifted the

properties to Accused Nos. 2 and 3. He submitted that it was the

prosecution to establish by legal and cogent evidence that the gifts were not

genuine and that these were not the properties of Accused Nos. 2 and 3. He

submitted that as the prosecution had miserably failed to discharge the

burden and prove that the properties were held benami by Accused 2 and 3

on behalf of Accused 1 neither the Trial Court nor the High Court could

have convicted Accused No. 1 under Section 13(1)(e) read with Section

13(2) of the Prevention of Corruption Act.

In support of his submission Mr. Rao relied upon the authority of this

Court in the case of Krishnanand v. State of M.P. reported in (1977) 1 SCC

816. In this case this Court has held as follows:

It is well settled that the burden of showing that a particular

transaction is benami and the appellant 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 circumstance unerringly and

reasonable raising an inference of that fact. The essence of

benami is the intention of the parties and not unoften, such

intention is shrouded in a thick veil which cannot be easily

pierced through. But such difficulties do not relieve the person

asserting the transaction to be benami of the serious onus that

rests on him, nor justify the acceptance of mere conjecture or

surmises as a substitute for proof. It is not enough merely to

show circumstances which might create suspicion, because the

court cannot decide on the basis of suspicion. It has to act on

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legal grounds established by evidence."

There can be no dispute with the legal proposition. However, let us

see what is meant by "Proved". Section 3 of the Evidence Act defines

"Proved" as follows:

" "Proved".- A fact is said to be proved when, after considering

the matters before it, the Court either believes it to exist, or

considers its existence so probable that a prudent man ought,

under the circumstances of the particular case, to act upon the

supposition that it exists."

Further, Section 114 of the Evidence Act reads as follows:

"114. Court may presume existence of certain facts.- The

Court may presume the existence of any fact which it thinks

likely to have happened regard being had to the common course

of natural events human conduct and public and private

business, in their relation to the facts of the particular case."

Thus the fact is said to be proved when after considering the matters before

it, the Court believes it to exist, or considers its existence so probable that a

prudent man ought, under the circumstances of the particular case, to act

upon the supposition that it exits. In coming to its belief the Court may

presume existence of any fact which it thinks likely to have happened having

regard to the natural course of event, human conduct and public and private

business, in relation to the facts of each case.

Now, let us see the facts of this case. The prosecution has established

beyond a reasonable doubt, that prior to the check period Accused Nos. 1, 2

and 3 had no real source of income, except some meager incomes, i.e.

Accused No. 1 only earned a small salary as a Lecturer and Accused Nos. 2

had small agricultural and other income. Accused No. 3 being a student had

no real source of income. Prior to the check period the financial condition of

the family was such that Accused No. 1 could not even repay his small

debts. The creditors had to recover their amounts by filing suits and

executing decrees. We are presuming that Accused No. 4 had independent

income. However prior to the check period Accused No. 4 had not been

afflicted by any love and affection and had not made any gifts to any

member of the family of the Accused No. 1. Prior to the check period

Accused No 4 did not even extend help to pay off the small debts of

Accused No. 1 even after the decrees had been passed against Accused No.

1. Yet suddenly, during the check period, i.e. when Accused No. 1 is a

Minister, Accused No. 4 donates large sums of money to Accused Nos. 2

and 3. The natural presumption, considering the common course of natural

events and human conduct is that Accused No. 1 would have used his

nephew Accused No. 4 to transfer his (Accused No 1s) monies to Accused

Nos. 2 and 3. This is the supposition which any prudent man under these

circumstances would act upon considering the natural course of events. The

Trial Court and the High Court thus rightly took this as proved by legal

evidence. The prosecution having established by legal evidence that the

monies were transferred by Accused 1 to Accused Nos. 2 and 3 through

Accused No. 4 and that these were monies of Accused No. 1 in the hands of

Accused Nos. 2 and 3, it was for the Appellant to satisfactorily account for

the gifts. He could have done so by showing that even before the check

period Accused No. 4 had made gifts of substantial amounts. It has not been

claimed by Accused 2 and/or 3 and/or 4 that before the check period also

Accused No. 4 had made any such gifts. It is also not their case that after the

check period gifts were made. Thus the Trial Court and the High Court were

right in not believing the case of gifts supposedly made out of a sudden brust

of love and affection. Both the Trial Court and the High Court were right in

convicting Appellant. As we are told that the State is going to file an appeal

against the acquittal of Accused Nos. 2 and 3 we are not making any

comments thereon.

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In our view, there is no infirmity in the Order of the High Court so far

as the conviction of Apellant is concerned. We see no reason to interfere.

Accordingly these Criminal Appeals stand dismissed. There will be

no Order as to costs.

(K. T. THOMAS)

(S. N. VARIAVA)

July 31, 2001