Andhra HC (Pre-Telangana)
G.V.S. Lingam vs State Of A.P. on 2 November, 1998
Equivalent citations: 1999(1)ALD413, 1999(1)ALD(CRI)50, 1999(1)ALT(CRI)290, 1999CRILJ1026
Author: Vaman Rao
Bench: Vaman Rao
JUDGMENT
1. This appeal is directed against the judgment of Special Judge for CBI Cases Visakhapatnam dated 22-3-1995 rendered in CC No,9 of 1990 under which the appellant has been held guilty and convicted for an offence under Section 5(1)(e) read with Section 5(2) of Prevention of Corruption Act, 1947 and has been sentenced to undergo rigorous imprisonment for four years and to pay a fine of Rs. 1,00,000/- and in default of payment of fine to suffer rigorous imprisonment for one year.
2. The facts leading to this appeal may be stated briefly as follows : The appellant, accused has joined Food Corporation of India as a Quality Control Assistant and later was promoted as Assistant Manager and was working as Deputy Manager on the relevant date. Being an employee of Food Corporation of India he was a public servant within the meaning of Section 21 of the Indian Penal Code. On 27-8-1987 searches were conducted in the house of the accused at Visakhapatnam. Various assets and properties were seized during the course of search, which included five items of primary gold weighing 32273 grams which was also said to be in contravention of Gold Control Act. A sum of Rs.1,80,600/- in cash and pronotes worth and G.V.V. Rajeswara Rao in favour of the accused were also seized. Several bank fixed deposit receipts and bank pass-books showing deposits of huge amounts were also seized.
The primary gold was seized by the Central Excise Authorities at the request of CBI and other articles were seized by the CBI. Income tax file which is at Ex.P6 was also seized under mahazar report Ex.P 1 dated 27-8-1987. PW37 the Inspector of Police, CBI, Visakhapatnam registered acase in RCNo.28/ 87 on 24-8-1987 under Section 5(1)(e) read with Section 5(2) of Prevention of Corruption Act. Under the orders of the concerned Superintendent of Police Ex.P99 first information report was issued. During the course of investigation PW37 obtained three search warrants for searching the house and office of the accused and the house of P. Sambamurthy who was managing the landed properties of the accused. Search of the house of the accused was conducted on 27-8-1987 in the presence of mediators K. Ravindra Kumar and Permanand. Search list and entry under Ex.P 100 was prepared. Under search warrant one Mr. Gupta DSP conducted search of the office premises of the accused at Patna. The articles found therein were seized under search list and inventory Ex.P101 and the third search warrant was entrusted to one T.N. Rao who conducted the search of the house of PW22 and the search list and inventory was prepared under Ex.P102. The case against the accused is that he acquired and possessed assets and resources disproportionate to his known sources of income. For this purpose check period was taken as between 1-1-1 9771 to 27-1987 which is the date of search. During the course of investigation of the case it was found that at the commencement of the check period the accused had savings of Rs. 21, 929-53Ps. which includes his wife's Stridhana property in the form of cash. At about the same time the accused had acquired properties in family partition. The gold and silver articles said to have been obtained by the accused in the partition were shown in the wealth tax returns filed by him. In respect of the pronotes for Rs. 1,00,000/- seized during search, the Investigating Agency accepted the explanation of the accused that they were obtained by his father in respect of loans his father had advanced though the pronotes were taken in the name of the accused. These pronotes were thus excluded from the assets of the accused.
3. Investigation and scrutiny revealed that the accused earned a total income of Rs.9,32,691 -13 ps. from his all known sources during the check period as detailed in Annexure-A. The accused is said to have incurred expenditure of Rs.2,52,937-52 ps. during the check period for the maintenance of himself and his family members consisting of his wife Smt. G. V. Geetha and his son G.V.L. Raju and daughter Kum. G. Sonia Gandhi as detailed in Annexure-B.
4. The accused was found in possession of both movable and immovable assets valued at Rs.16,32,402- 33 ps. as on the date of the search which includes the assets held by him at the commencement of the check period to the tune of Rs. 21,929-53 ps. Thius it was ascertained that the likely savings of the accused during the check period would be around Rs.6,79,753-61 ps. from out of the total income mentioned in Annexure-A. These savings are shown in Annexure-C.
5. Thus the accused, according to the prosecution was found in possession of total assets and pecuniary resources to the tune of Rs. 16, 10, 472-80 ps. as against the sources available to him and his family members to the tune of Rs. 9, 30, 719-19 ps. which are said to be disproportionate to his known sources of income for which the accused could not satisfactorily account, inspite of an opportunity having been given to him in this regard. It is thus charged that the accused committed offence punishable under Section 5(1)(e) read with Section 5(2) of Prevention of Corruption Act, 1947. Sanction for prosecution of the accused has been given under Section 6(1)(c) of Prevent ion of Corruption Act, 1947 by the Managing Director of Food Corporation of India, New Delhi who is the competent authority to remove the accused from service.
6. On behalf of the prosecution PWs. 1 to 38 have been examined and Exs.Pl to P1 86 have been marked. On behalf of the accused DWs. 1 to 4 have been examined and Exs.Dl to D19 have been marked.
7. On this evidence the learned Special Judge found that the prosecution has established beyond reasonable doubt that the accused had assets and pecuniary resources which were disproportionate to his known sources of income and accordingly convicted him for the offence under Section 5(l)(e) read with Section 5(2) of the Prevention of Corruption Act, 1947 and sentenced him to suffer imprisonment and to pay fine as stated above.
8. The question for consideration arising in this appeal is whether this finding of the learned Special Judge can be sustained on the basis of the evidence available on record ?
9. The issues in controversy in this appeal, as canvassed during the course of arguments by the learned Counsel for the accused, fall in a narrow ambit.
10. Annexure-A contains the details of income of the accused during the check period. In regard to income as shown in Annexure-A, the trial Court accepted the plea of the accused regarding net pay and allowances during the check period and income derived from certain bank investments and accordingly raised the income figure to Rs. 10,12,114-65 ps. instead of Rs.9,32,691-13 ps. as per the prosecution. In regard to items of expenditure detailed in Annexure-B the learned trial Judge has accepted the plea of the accused partly in respect of domestic expenditure and arrived at the overall figure of expenditure under various items to Rs.2,12,547-37 ps. instead of Rs.2,52,937-52 ps. as mentioned in Annexure-B and set up by the prosecution. It may, however, be stated here that in this Court neither the prosecution nor the accused has raised any objection as to the finding of the Court on these aspects.
11. Another aspect of the matter canvassed by the learned Counsel for accused pertains to the value of the assets found in possession of the accused as detailed in Annexure-C. As stated above, the value of the assets held by the accused during the check period as per the prosecution version was Rs.16,10,470-80 ps. The Court, however, arrived at the value of the assets at Rs. 14,41,370-30 ps. The Court accepted partly the plea of the accused in regard to the value of his house purchased by the wife of the accused being item No.4 in Annexure-C. The prosecution gave the value of this house at Rs. 1,17,000/-. The Court found its value at Rs.89,000/-. Another item is in respect of batik balance of the accused. The prosecution set forth the value of this asset at Rs.3,33,335-95 paise but the Court found the value of this asset at Rs.2,19,159-17 ps. In respect of item No.10 in Annexure-C namely investments made with Shanti Enterprises on 1-4-1987 the prosecution set up the figure of this at Rs.25,000/-. The Court reduced its value to Rs.20,000/-. Another item relates to Recurring Deposits in Account No.45/84, dated 10-3-1983. According to the prosecution, the value of this asset was Rs.21,000/- but the trial Court has chosen to delete this item of asset altogether. In respect of item No.20 relating to the house-hold articles, the prosecution has presented their value at Rs.22,304-25 ps. But the Court has chosen to reduce it to Rs.15,000/-. After allowing these reductions the Court has arrived at the net figure of the value of the assets held by the accused at Rs.14,41,370-30 ps. as against the plea of the prosecution for Rs.l6,10,472-80ps.
12. Based upon these figures, the Court found that the accused was in possession of assets worth Rs.14,41,370/-. The income of the accused during the check period as ascertained by the Court is Rs.10,12,084/-. The figure for house-hold articles ami other expenditure of the accused has been arrived at Rs.2,12,517/-. Thus the net resources of the accused has been assessed at Rs.7,99,567-28 ps. Thus the excess assets would come to Rs.6,41,803/-. The trial Court deducted a sum of Rs.50,248/- from this amount towards the value of the assets acquired by the accused during pre-scrutiny period. Thus the total quantum of the excess assets has been arrived at Rs.5,91,555/-. Thus these excess assets arc said to be disproportionate to his own sources of income which he failed to explain. On this basis the trial Court convicted the accused for the offence under Section 5(1)(e) read with Section 5(2) of the Prevention of Corruption Act.
13. The learned Counsel for the accused contended that even according to some figure arrived at by the trial Court, the value of the alleged excess assets would comedown further to Rs.4.32,545-42 paise and that the figure of Rs.5,91,602/- arrived at by the trial Court was error in compilation. This contention appears to be true in respect of certain items. It appears that an additional income of Rs.2,105/-which was admitted by the trial Court as seen from page 43 of the judgment (page 214 of the paper book). Similarly a sum of Rs.21,000/-was treated by the trial Court as gift to the son of the accused from his grand father. Similarly the trial Court accepted the contention of the accused as seen from para 56 of the judgment that amount of interest accrued on bank deposits identified as Rs.75,232-82 paise ought not to have been included in the assets. But the calculation arrived af the value of the assets does not give any such deduction. Thus if these are also included in the calculations, then the alleged excess assets would get reduced by Rs.98,337-83 paise. Thus the value of the excess assets would be (5,91,555-98,000) Rs.4,93,5557-even according to what has been accepted by the trial Court.
14. The correctness of the finding of the trial Court would depend upon the correctness of its findings as to the value of the assets and the value of income of the accused as found by the trial Court. In respect of the allowances given by the Court enhancing the figure of income of the accused and reducing the value of the assets of the accused as detailed above, no grievance is made in this Court by either party. But in this appeal two findings of the trial Court arc challenged seriously. It is the contention of the learned Counsel for the accused Sri C. Praveen Kwnurihattlie credit given for the income derived by the accused from agricultural properties under item 18 of the Annexurc-A is far too low a figure and does not represent the realities, it is not disputed that the accused had inherited from his family considerable extent of agricultural lands. PW35 Sri S. Surya Rao is the Village Assistant in Mandal Revenue Office at Srikakulam. It is his categorical evidence that the father of the accused late Lakshmana Rao had Ac,39-58 cents of dry land and Ac.35-87 cents of wet land under patta No.238 as per adangal. It is in his evidence and is not in dispute at all that late Lakshman Rao had three sons including the accused herein. Obviously and as stated by PW35 each son has an equal share in the said property. He further stated that out of the wet lands Ac.3-27 cents is channel field which means it is served by a channel or the purpose of irrigation and Ac.32-60 cents is irrigated under minor tank. He specifically stated that the lands have been under cultivation and several ryots cultivated these lands for several years. It is pertinent to mention that PW35 who is Village Assistant and is a witness examined on behalf of the prosecution is competent to state the actual extent of landed property held by the family of the accused. In regard to the agricultural income of the accused, the evidence of PW37, the Investigating Officer does not disclose any serious effort for ascertaining approximate if not true income from the agriculture. In his cross-examination PW37 merely stated that as far as agricultural income is concerned, he merely accepted whatever was stated by the accused. No document is available wherein the accused is said to have given any estimate of his agricultural income. It, however, appears from the cross-examination of this witness that he based his estimate on the income tax and wealth tax returns said to have been filed by the accused. It may be pertinent to mention here that it is not known whether at the relevant time these returns were required to be filed by the accused and whether agricultural income was liable to be included in the total income of an assessee for the purpose of fixing the slab of income-tax. If that is not so, the agricultural income shown in an income tax return cannot be considered as a basis for ascertaining income from agricultural lands. Even otherwise an income lax assessee may file his return keeping various angles in view with a view to minimise the incidence of tax on him. The statement made therein in regard to agricultural income when such income was not subjected to tax cannot be taken as admission of the accused on the question of agricultural income. At any rate, for fastening criminal liability with its help, this is not a satisfactory way of arriving at income from an asset which could be ascertained on a positive basis. It may be mentioned that towards one third share in the vast extent of land consisting of Ac.38-00 and odd of dry land and Ac.35-00 and odd of wet land, the income assumed by the trial Court was less than Rs.2,000/- per year. On the other hand the other evidence adduced on behalf of the prosecution gives some clues as to the probable income from agriculture. PW22 who is said to be a person managing the agriculture of the accused and who has been examined by the prosecution on the question of agricultural income of the accused has stated in his cross-examination that two crops were raised from the wet lands every year. He further stated that yield from the first crop as well as second crop was 20 bags per acre per crop. Out of this behalf is paid to the owners and half is retained by the tenants. PW27 P. Raja Rao is slated to be one of the cultivators of some piece of land belonging to the family of the accused. According to him, he cultivated one acre of wet land and two acres of dry land as lessee. Though it is not elicited from him as to in what year he did so, according to him, the maktha payable for the wet land was six bags per acre and any one crop can be grown in the wet land perycar. PW28 is another ryot who cultivated the lands of the accused. PW29 B. Appanna is stated to be another lessee of the land. Both these witnesses have stated that whenever there were failure of crops due to floods, they were not paying any maktha. Thus, it is seen that the evidence adduced by the prosecution in regard to agricultural income is wholly unsatisfactory. This circumstance should not go against the accused. Considering the fact that the accused had wet lauds, which according to the Village Officer were double crop wet lands and taking into account the statement of PW27 as against the statement of PW22 that yield from agricultural wet land was 20 bags per acre per crop and even considering these variations, the total income towards the accused's share in the agricultural lands arrived at Rs.30,723.78 which works out to around Rs.1920/- or so per year docs not appear to be justified, Taking into account the wide variations in the yields in different years even giving scope to the fact that sometime in some years due to floods or other natural calamities there may be total failure of crop but also taking into account the fact that wet lands are double crop wet lands which alleast itt some years would yield two crops in a year, a minimum of Rs.500/- per acre as net profit from wet lands can be presumed at Rs.250/- per acre. On this estimate the total income from the wet lands would be Rs. 17,935-00 (35.87 x 500) and total income from the dry lands at Rs.250/-per acre would be Rs.9,645-00 (38.58 x 250). This modest estimate would also cover variations in prices of agricultural produce during the check period. Thus, the total income from the agricultural lands would be Rs.27,580/-. One third share of the accused in this income would be Rs.9, 190-00. Even assuming at round figure of Rs.9,000/- per year, the agricultural income during the check period which covers sixteen crop years can be estimated at Rs.9,000/- per year which comes to Rs. 1,44,000-00 as against Rs.30,723-78 accepted by the trial Court. Thus the total income in view of this finding stands enhanced from Rs.10,12,114-65.
15. In regard to the value of the gold it is contended by the learned Counsel for the accused that the prosecution has set forth the value of !he gold on the basis of market value on the date of the search which is totally unfounded. On the other hand Sri B. Adinaraynna Rao, learned Additional senior Standing Counsel for the CBI contends that in the absence of any plea on the part of the accused as to when that asset namely gold was acquired by him, the Court is left with no option except to assess the value of the gold on the basis of the market value as on the date of seizure.
16. Before the question of value of the gold is taken up for consideration it is necessary to deal with another contention of the learned Counsel for the accused challenging the correctness of the finding on the ground that the primary gold in the form of ingots and billets in three pieces under item No. 18 of Annexure-C does not belong to the accused at all. A plea was taken on behalf of the accused that these items of gold were not in possession of the accused or his wife at all. According to this version, a few days before the search of the house of the accused, the wife of the accused who has been examined as DW4 had gone to the premises of Visakha Flour Mill where for want of space in the house an iron safe given to them by her father-in-law under the Will deed Ex.P70 was kept. Apparently there was nothing in that safe. It is the version of DW4 that when she grumbled that her father-in-law had not given them anything valuable to them under the Will-deed except an empty sate, some of her relatives namely DW2 and others expressed a view that there might be something in that iron-safe which her father-in-law might have secretly kept for them. On the basis of such suspicion she got the safe closely examined and found that in a secret niche below a shelf, which was visible only after all the drawers were removed, they found these three pieces of primary gold listed under item No. 18 along with two gold ornaments. Thus, the case of the accused is that these three pieces of primary gold were received by his family under a gift and were not his acquisitions as contended by the prosecution. Accordingto the version of DW4, on discovering this item she immediately wrote a letter under Ex.D18 to the accused, who was then posted at Patna. When this letter reached, the accused was said to be not there in his office and one of his subordinates received it and made an endorsement on it that it should be conveyed to the accused. The trial Court has disbelieved this evidence entirely. I am inclined to accept the contention of the learned Standing Counsel for the Central Government that this appears to be a far-fetched version invented for the purpose of this case. It is difficult to conceive that when the father of the accused wanted to convey something to him, there would have been any need for secrecy. Even if something was to be conveyed under a Will, the secrecy, if any, which the executant of the Will wanted to maintain, could have been achieved by other modes known in this behalf, namely registration of a Will by keeping it under a sealed cover lo be opened after the death of the deceased. It is incredible, that the father of the accused, who according to the evidence on record, was not only an educated person being a busy practising lawyer in those days at Srikakuiani but also a man of wisdom who acquired vast properties on the basis of his efforts would have kept the gold secretly. At any rate, the letter Ex.D18 was produced in the Court for the first time during the examination of DW4. This plea was not taken even during the examination of the accused under Section 313 Cr.PC. The Subordinate of the accused, who is said to have received this letter has not been examined. I have no hesitation in rejecting this version as a cock and bull story.
17. However, in regard to other two items of gold listed under item No. 18 in Annexure-C, the plea of the accused is that they are not primary gold and that they are traditional conservative type of ornaments made with a rope of gold which is known as 'Nanem' and these items were inherited by them. This plea is stated to have been buttressed by the circumstances that these two pieces of ornaments namely 4 and 5 under item No. 18 in Annexure-C were shown as Hindu joint family property in the wealth tax and income lax returns filed by the accused on 27-6-1986 which was prior to the date of search namely on 27-8-1987. The fact that such return has been filed under Ex.P 10 is deposed to by the Income Tax Officer PW3, who also states that the return of the accused in this regard was accepted. The assertions made in an income tax return filed by an assessee are in the nature of self-serving statements. They cannot be considered as a substantive piece of evidence for proving a fact in issue. The trial Court has rightly rejected this plea.
18. The only question that arises for consideration is whether the value of the items I to 5 under item No. 18 in Annexure-C as slated by the prosecution and accepted by the trial Court could be justified ?
19. The total weight of items 1 to 5 under item No.18 of Annexure-C comes to 3227-378 grams. Its value has been ascertained on the basis of market value of the gold as on the date of search as stated by PW37 the Investigating Officer and accordingly it has been arrived at Rs.8,39,625-00. The question that arises is whether it is appropriate to arrive at the value of gold assets mentioned above held by the accused on the basis of its market value as on the date of search in the absence of any evidence that they were acquired in the vicinity of the date of search. The learned Counsel for the accused strenuously contended that the trial Court erred in adopting this method and he has suggested that the market value either on a day midday between the dates of the check period or the average of the market value on the beginning of the check period and the date of check ought to have been adopted. On the other hand the learned Standing Counsel for Central Government contends that initially it is quite justified to ascertain the value of the gold assets on the basis of the market value as on the date of check period and it is for the accused to plead and explain that they were not acquired on the date or in the vicinity of the date of seizure and then to come up with the information as to when they were acquired and what market value was prevailing on the date of their acquisition. It is true that once it is shown by the prosecution that Hie accused has been in possession of assets which were apparently disproportionate to his known sources of income, the burden shifts on the accused to satisfactorily account for the same by explaining that he had resources with which he could have acquired those assets which were not taken into account by the prosecution.
20. In this case, the plea of the accused in regard to these five items of gold is that out of them three pieces of ingots of primary gold were received by them as a surprise gift under Will-deed and that they do not belong to the accused as such. Similarly in regard to other two items of gold 'nanem and kante' the plea of the accused is that they form part of his Hindu undivided family properties and they are not concerned with his personal assets. As seen above, this plea of the accused has been rejected. Underthe circumstances the accused cannot be expected to further prove that he acquired those assets during a particular period ataparticular price. This in itself having regard to the provisions of Section 5(1)(e) of the Prevention of Corruption Act cannot lead to an inference of failure on the part of the accused to satisfactorily account for the assets found to be in his possession. The burden on the part of the accused, to satisfactorily account for the possession of assets alleged to be disproportionate to his known sources of income, would arise when in the first instance it is proved that he had assets which were disproportionate to his source of income. The question whether certain assets were disproportionate to known sources of income of the accused is inextricably related to the mode and method of valuation of the assets. The onus on the part of the accused to explain would arise if in the first place the assets alleged to be disproportionate to his known sources of income are shown to have been valued in a fair and reasonable manner.
21. In this case, working out the value of the assets (gold) on the basis of the market value as on the date of search would imply that it is presumed that the said assets were acquired on the date of search or in the vicinity of that date. In the absence of any evidence as to the date or the period of acquisition of such assets, the question is what would be the date or period which could be ascribed for the acquisition of those assets. It is a complex question which is not easy to answer. But any rate the assumption that they were acquired on the date of check does not appear justified. Considering the circumstance that in rural Indians in general and people belonging to Vysya Community in particular are known to be fond of gold and assuming that the accused has had resources throughout the check period, it appears more reasonable to presume that the said gold might have been acquired periodically every now and then if not in every year proportionately. Thus, in the absence of any evidence as to the period during which the gold was acquired and considering the above circumstances, it appears more reasonable to presume that the gold under item No.18 of the Annexure-C might have been acquired periodically every now and then. If it is assumed that gold might have been acquired proportionately in every year throughout the period of check, the value of the gold based on the market value prevailing in the relevant years would come to Rs.3,40,454-72 ps. (this work out is shown in the calculation sheet furnished on behalf of the accused wilh notice to the learned Addl. Standing Counsel and the same has not been disputed). Thus, the value of the gold articles under Item No.18 of Annexure would be Rs.3,40,454-72 ps. Thus the value of the gold assets would stand reduced by Rs.5,09,170-08 ps (Rs.8,39,625-00 - 3,30,454-00 - 5,09,170-08). When the figure of agricultural income, as arrived at above, is taken into consideration his known sources of income would stand increased by Rs. 1.13,000 to 9,12,567-28 ps. As seen above, the value of the assets as now ascertained has down to Rs.9,32,200-28 ps. By deducting the value of assets worth Rs.50,248-00 acquired during pre-scrutiny period as seen in para 58 of the judgment of the trial Court, the net value of assets acquired would come to Rs.8,81,952-28 ps. which is not in excess of the known sources of income as arrived at above. Thus the question of assets as held by the accused being in excess by Rs.5,91,555-00 as held by the trial Court or by Rs.4,93,555-00 as arrived at by rectification as per findings of Court does not to arise, inasmuch as the assets held by him are less than his known sources of income.
22. In the result, it is to be held that the prosecution has not succeeded in proving that the accused was in possession of assets disproportionate to his known sources of income. The conviction of the accused is set asideand the accused isacquilled of the offence under Section 5(1)(c) read with Section 5(2) of the Prevention of Corruption Act and the sentence of imprisonment and fine imposed against the appellant-accused are accordingly set aside. Fine amount, if paid, shall be refunded to the accused.