A.K. Jain IPS Disproportionate Assests Case Judgement

7/27/2019 A.K. Jain IPS Disproportionate Assests Case Judgement

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SPECIAL CASE 62 of 2005 1

IN THE SPECIAL COURT FOR GR. BOMBAY, AT BOMBAYEXHIBIT NO.389

SPECIAL CASE NO.62 OF 2005

The State(Anti-Corruption Bureau, Mumbai

vide C.R.No.54/2000) ..Complainant

VERSUS

1) Ajaykumar Gyanchand JainA-3, Maval Flat, Moledina Road,

Camp, Pune 411001.2) Anita Ajaykumar JainA-3, Maval Flat, Moledina Road,Camp, Pune 411001. ..Accused

Appearance :Ld. SPP Smt. Kalpana Chavan for the State.Ld. Advocate Shri. Shingnapurkar for the Accused.

CORAM : H.H.The Special Judge (Under P.C.Act)SHRI V.A.DAULATABADKAR(Court Room.No.46)

Dated : 11.07.2013

J U D G M E N T

1. Accused no. 1 being a public servant has been charged under

sections, 11, 13 (1) (e) r/w Sec. 13(2) of The Prevention of Corruption Act,

1988 for amassing wealth of Rs. 48,87,549.16 ps in his name and in the

names of his dependents which is disproportionate to the known sources of

his income and his family members whereas accused no. 2 who is a wife of

accused no. 1 has been charged under Section 109 of Indian Penal Code for
http://mamta/Room.No.37http://mamta/Room.No.37


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aiding and abetting accused no. 1 for the commission of offence under

Section 13(1) (e) r/w Section 13 (2) of The Prevention of Corruption Act,

1988.

Case of the prosecution is as under ;

2. Accused no.1 was born on 07.08.1953. He is having three younger

brothers and one sister. In the year 1974, he obtained a Masters degree in

Zoology from Meerut University. His marriage was performed with accused

no. 2 on 28.02.1975 and from the said wedlock they have begotten elder

son Rahul on 19.11.1981 and another son Vipul on 07.08.1986. From

August 1974 to June 1981 he worked as a Associate professor in Degree

college, Mawana situated in Utter Pradesh. From July 1981 to August 1982

accused no. 1 served as a District Panchayat Raj Officer at Mujaffar Nagar,

Utter Pradesh. Thereafter, he was selected by Union Public Service

Commission as a IPS officer of Maharashtra cadre and he joined service as a

trainee IPS officer on 01.09.1982. From 01.09.1982 to 31.01.1984 he

undergone training at Hyderabad and Masoorie. Thereafter, he was posted

at various places in Maharashtra from the year 1984 to 1996.

3. On 05.11.1990 Joint Commissioner, Anti Corruption Bureau,

Maharashtra State, Mumbai was asked to keep a discreet watch on the

activities of accused no. 1 who then was working as a Deputy Commissioner


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of Police, Zone IX in Mumbai. Thereafter, on 05.03.1992 Joint

Commissioner, Anti Corruption Bureau, Mumbai ordered a discreet inquiry

in to the assets of accused no. 1 and his family members which was

completed on 31.12.1992 and report was forwarded to Additional Chief

Secretary, Home Department, Maharashtra, Mumbai and permission was

sought to conduct an open enquiry in to the assets of accused no. 1 and his

family members and the said permission was given on 05.03.1994.

Accordingly open enquiry was conducted relating to the assets of accused

no. 1 and his family members and then report to that effect was forwarded

to the Competent Authority. During the enquiry it was found that accused

no. 1 has amassed wealth in his name and his family members which is

disproportionate to the known sources of his income and of his family

members. Therefore, Additional Deputy Commissioner of Police Shri.

Kamalakar Pandurang Sawant then attached to Anti Corruption Bureau,

Mumbai filed a First Information Report on 06.11.2000 against accused no.

1 & 2 for the offences under Sections 13 (1) (e) r/w Section 13(2) of The

Prevention of Corruption Act, 1988 r/w Sec. 109 of Indian Penal Code.

Accordingly, a crime bearing no. 54/2000 was registered against both the

accused by ACP Wable and investigation was commenced.

4. In the First Information Report it was alleged that from


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01.09.1982 to 31.03.1995 accused no. 1 and 2, their two sons, A.K. Jain

(HUF) and Saralkanta Jain Family Trust of which the accused no. 2 is the

sole trustee have earned income of Rs. 23,53,499/- from known and legal

sources. It was also alleged that during the said period their expenses were

found to be of Rs. 9,64,560/- and after deducting these expenses from the

income, likely saving would be of Rs. 13,88,939/- but both the accused,

their sons, A.K. Jain (HUF) and Saralkanta Jain Family Trust have found in

possession of assets of Rs.45,36,956/- and as per these calculations accused

no. 1 found in possession of assets worth Rs. 31,48,017/- disproportionate

to his known sources of income. It was also stated in F.I.R. that certain

heads of income claimed by both the accused, their sons and their firms

have been rejected for cogent and valid reasons. Complainant had spelt out

description of all the heads relating to income, expenditure and assets of

both the accused and their dependents in F.I.R.

5. After registration of crime, Investigating officers ACP Wable

decided to carry out search of the house of accused as well as at his other

known addresses. Accordingly, he decided to carry out search at the house

of accused situated at Pune and instructed ACP Rane and ACP Sanghai to

conduct search at two other addresses of the accused.

6. On 07.11.2000 ACP Wable carried out search at Flat no. A-3,


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Maval flats, Moledina Road, Camp, Pune which belongs to both the

accused. At the time of house search, accused no. 2 was present in the

house and search was carried out in her presence. At the time of search one

valuer namely Shivalkar was also called. Some gold and silver ornaments

were found during the said search. Inventories of all these articles were

separately prepared. Ornaments were got valued from the valuer.

Accordingly, panchanama Exh. 195 was completed by ACP Wable in

presence of two panchas. At the time of search ACP Wable seized one

receipt Exhibit 26 and valuation report Exh. 197 Colly. On that day ACP

Rane and ACP Sanghai have also carried out search at the residence of one

Rajesh Tripathi and at Deccan Queen Restaurant respectively and seized

some documents.

7. On 08.11.2000 both the search panchanamas along with seized

documents were forwarded to ACP Wable. Then ACP Wable gone through

the entire papers of enquiry handed over by complainant Sawant.

Thereafter, he called various witnesses relating to the transactions entered

into by the accused and recorded their statements. He also collected

documentary evidence from the witnesses as well as from various

authorities.

8. During investigation ACP Wable called upon both the accused to


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file explanations in respect of material found to him relating to income,

expenditure and assets. In response to it accused no. 1 filed explanation on

some occasions in respect of some of the items. However, accused no. 2 did

not file any explanation instead of several opportunities.

9. After completion of investigation it was found to ACP Wable that

accused no. 1 is in possession of assets worth Rs. 46,80,144.90 ps. which

were disproportionate to his known sources of income. Accordingly, he

prepared a final report and through his superior a proposal was forwarded

to Government of Maharashtra to obtain sanction for the prosecution of

accused no. 1. Consequently, Government of Maharashtra forwarded

proposal to the Ministry of Home Affairs, Government of India. After

considering the material produced, Government of India initially accorded

sanction vide Exh. 217 dated 2.04.2004. However, it was found that some

correction is necessary and accordingly as per the request of Government of

Maharashtra, a corrected sanction order Exh. 219 was issued by

Government of India on 16.09.2004. Accordingly, ACP M.D. Pawar filed

chargesheet against both the accused in this court.

10. After filing of the chargesheet, my Ld. Predecessor issued

process against accused no.1 for the offences under section 11, 13(1) (e)

r/w Sec. 13 (2) of P.C. Act 1988 and also issued process under section 109


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of IPC against accused no.2 on 08.12.2005. In response to it both the

accused have appeared before this court. Thereafter, my Ld. Predecessor

framed charge against accused no.1 u/s 11, 13(1) (e) r/w Sec. 13 (2) of

P.C. Act 1988 and u/s 109 of IPC against accused no.2 at Exhibit 6 on

04.10.2008. It was read over to both the accused in vernacular to which

they pleaded not guilty and claimed trial. Their pleas were recorded at

Exhibit 7 & 8 respectively. Thereafter, a notice was given by the prosecution

u/s 294 of Cr.P.C. to the defence side. Accused no. 1 and 2 have admitted

various documents and those were exhibited by my Ld. Predecessor.

Thereafter, matter was proceeded for trial.

11. In order to substantiate charge against both the accused,

prosecution has examined 19 witnesses. Thereafter, Ld. SPP filed evidence

close pursis on 08.02.2013 at Exh. 381. Thereafter, this court has recorded

statements of both the accused under section 313 of Code of Criminal

Procedure at Exh. 382 & 383 respectively on 20.02.2013. Defence of both

the accused is of total denial and of false implication. It is also defence of

accused no. 1 that calculations were not properly made and they have been

falsely implicated. However, none of the accused has chosen to adduce any

evidence in their defence. Therefore, this court heard arguments of both the

sides at length. Both the sides have also filed separate charts at Exh. 387 &


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388 respectively in respect of income, expenditure and assets in support of

their case.

12. After considering the oral and documentary evidence available

on record and the submissions of both the sides, following points arise for

my determination and I am giving my findings to it in subsequent

paragraphs ;

Sr. Nos. Points Findings

1

Whether sanction order Exh. 290 accorded for the

prosecution of accused no.1 is legal and valid.

Affirmative

2

Whether prosecution has proved that accused no.1

being a public servant during a period from

01.09.1982 to 31.03.1995 amassed assets in his

name and in the name of accused no.2, their two

sons, A.K. Jain (HUF) And S.K. Jain Family Trust

through out India and which are found to be

disproportionate to his and his familys known

sources of income and they have also failed to

account it satisfactorily and thereby guilty of

criminal misconduct as contemplated under section

13 (1) (e) r/w sec. 13 (2) of P.C. act 1988.

Affirmative


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3


being a wife of accused no. 1 had knowingly and

willing aided and abetted accused no. 1 for

acquiring assets in her name and in the name of

Saral Kanta Jain Family Trust of which she is the

sole trustee and thereby committed offence under

section 13 (1) (e) r/w sec. 13 (2) of P.C. act 1988

r/w sec. 109 of IPC.

Affirmative

4


being a public servant between January 1990 to

November 1991 accepted a Maruti Van, a valuable

thing free of cost or for inadequate consideration

from a slumlord namely Birendrakumar

Muneshwarnath Shukla who then was active

within zone IX , Mumbai and connected with the

official functions of accused no.1 who then was

working as a Deputy Commissioner of Police of

that area and thereby committed an offence

punishable under section 11 of P.C. Act 1988.

Negative

5

What order ?. As per final

order


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REASONS

AS TO POINT NO.1

13. Ld. SPP Smt. Kalpana Chavan submitted that in this case P.W. 14

who was then working as a Under Secretary in ministry of Home Affairs of

Government of India is examined by the prosecution in order to prove

sanction order Exh. 219. She further submitted that while deposing before

this court he stated that initially opinion was obtained by Government of

Maharashtra from its Law and Judiciary department and thereafter proposal

seeking sanction for the prosecution of accused no. 1 was forwarded to

Government of India. Thereafter, he obtained opinion of various authorities

i.e. of Director of Police, Joint Secretary, Police, Home Secretary, Deputy

Prime Minister and Home Minister, Vigilance Section attached to Ministry

of Home affairs, Deputy and Joint Secretary of Vigilance, Central Vigilance

Commission and lastly a proposal was submitted with Chief secretary of

home department. All these authorities have gone through the entire papers

of investigation and after being satisfied and with the approval of Home

Minister, Government of India sanction order for the prosecution of accused

no. 1 has been issued by Government of India. According to her P.W. 14 has

signed the sanction order on behalf of Government of India according to


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rules of business framed by Government of India. Therefore, in this case it is

immaterial as to whether P.W. 14 was competent to remove accused no. 1

from his service at the relevant time. The Government of India is competent

to remove accused no. 1 from his service. Perusal of sanction order also

shows application of mind on the part of Government of India. Nothing has

been brought during cross examination of P.W. 14 that sanction order Exh.

219 has been issued without application of mind. Therefore, she submitted

that prosecution has proved that a valid sanction has been given for the

prosecution of accused no. 1.

14. Per contra, Ld. Adv. Shri. Shingnapurkar appearing for both the

accused submitted that in sanction order Exh. 219 there is no reference that

opinion from Central Vigilance Commission was obtained. Sanction order

also shows that incorrect figures in respect of income, expenditure and

assets have been shown by the sanctioning authority. Sanctioning authority

while giving sanction for the prosecution of accused no.1 for the offence

under section 11 has not considered that no document was forwarded to

show that Virendrakumar Shukla is a slumlord. Even in absence of this

material sanction has been given wrongly for the offence under section 11

of P.C. Act, 1988. In sanction order there is no reference in respect of

intimation given by accused no. 1 to the Government about acquiring of


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assets. Therefore, with these submissions he submitted that there is non

application of mind on the part of sanctioning authority and the material

available on record shows that sanction is accorded in mechanical manner.

Therefore, for this sole reason accused no. 1 is entitle for acquittal.

15. In order to prove that a legal and valid sanction order has been

issued for the prosecution of accused no. 1, prosecution has examined P.W.

14 Shri. Yashpal Dhinga who in the year 2004 was working as under

Secretary in the Ministry of Home Affairs of Government of India.

16. While deposing before this court this witness has stated that

along with proposal his ministry had received opinion Exh. 212 given by

Law and Judiciary department, Government of Maharashtra. He also

deposed that initially the proposal was verified by his department and then

forwarded to Law Ministry, Government of India. He further deposed that

thereafter proposal was forwarded to various authorities related with the

service matters of IPS officers and finally proposal was submitted to Home

Minister who after going through the papers gave his consent for issuance

of sanction order. In order to show that the consents were given by various

authorities, he has produced notesheets Exh. 213,214 , 215 & 216.

17. This witness also deposed that after receipt of consent from all

the concerns, he prepared sanction order and then signed it and issued on


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behalf of Government of India for the prosecution of accused no. 1 for the

offences under sections 11, 13( 1) (e) r/w Sec. 13 (2) of P.C. Act, 1988.

Though adv. for accused raised several grounds to show that sanction order

is illegal and invalid but during cross examination nothing has been

brought on record in order to show that it was issued in mechanical

manner. During cross examination competency of this witness to sign the

sanction order has not been challenged by accused no. 1. Only it was

suggested to this witness that no documents to show that Virendrakumar

Shukla is a slumlord were forwarded along with investigation papers.

However, merely because documents were not forwarded which is a

admitted fact, sanction order can not be termed as invalid. There was no

reason for sanctioning authority to disbelieve the allegations made by the

investigating officer in this regard.

18. It is settled position of law that giving sanction is a

administrative act and prima facia satisfaction of the authority in respect of

existence of a prima facia case is the only requirement to accord sanction.

From sanction order it appears that after going through the material,

authority was satisfied about the existence of prima facia case and therefore

sanction was accorded for the prosecution of accused no.1. It is also settled

position of law that sanctioning authority is not expected to sit in judgment


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chair and to analyse the material meticulously. Similarly while considering

the proposal in respect of case pertains to acquiring of disproportionate

assets by a public servant, authority is not expected to carry out

mathematical calculations and only to consider as to whether or not the

assets shown to be acquired by the public servant are disproportionate to

his known sources of income. Here in this case, perusal of sanction order

shows that authority had considered all the material aspects in proper

manner and then accorded sanction.

19. Ld. SPP in support of her contentions rightly placed her reliance

on one judgment of Honble Apex court delivered in the case of State by

Police Inspector, Appellant V/s T. Vanktesh Murthy, Respondent reported in

(2004) 7 S.C. 763 in which following ratio is laid down ;

Prevention of Corruption Act, 1988 Sc 19 (3) and (4)

Offences under the Prevention of Corruption Act Invalid sanction

Effect of Merely because there is any omission, error or irregularity in

the matter of according sanction that does not affect the validity of the

proceeding unless the court records the satisfaction that such error,

omission or irregularity has resulted in failure of justice The said logic

applies to the appellate or revisional court also- On facts, sanction

granted by the Superintending Engineer of the Karnataka Electricity


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Board was not sufficient to prosecute the accused Trial court

discharging accused, but granting liberty to prosecution to obtain fresh

sanction and file a fresh charge-sheet - Revision before High Court by

State - Dismissal of Held, courts below had not kept in view the

requirements of sub-ss. (3) and (4) relating to failure of justice -

Orders of the courts below set aside- Trial court directed to record

findings in terms of sub-ss. (3) (b) and (4) Service Law Karnataka

Electricity Board Employee (Classification, Disciplinary Control and

Appeal) Regulations 1987- Words and phrases - Failure of justice -

Criminal Procedure, 1973, Ss. 465 and 401.

20. Therefore, after considering the material available on record

and the law laid down by the Honble Apex Court in the above referred

judgment, this court is of the opinion that sanction accorded in the present

case for the prosecution of accused no. 1 is legal and valid. Hence, I answer

point no. 1 in the affirmative.

AS TO POINT TO NO. 2 & 3

21. As both these points are inter dependent, I am taking these

points together for discussion in order to arrive at proper conclusion.

22. Prior to marshaling evidence available on record, the law

relating to cases of disproportionate assets and particularly in respect of


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Sec. 13 (1) (e) of P.C. Act 1988 is required to be taken in to account. Sec.

13 (1) (e) of P.C. Act 1988 reads as under ;

Criminal misconduct by a public servant (1) A public servant is said

to commit the offence of criminal misconduct-

(a) ---------------------------------------

(b) --------------------------------------

(c) --------------------------------------

(d) ----------------------------------------

(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 can not satisfactorily account, of pecuniary resources or

property disproportionate to his known sources of income.

Explanation For the purposes of this section, known sources of

income means income received from any lawful source and such

receipt has been intimated in accordance with the provisions of any

law, rules or orders for the time being applicable to a public servant.

23. So reading of this section shows that after a public servant

found to be in possession of assets disproportionate to known sources of

income, then it is for accused to satisfactorily account and to disclose

pecuniary resources available to him in order to show that he is not


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acquired any assets disproportionate to his known sources of income.

Secondly, as per the explanation to this section the sources from which the

income is received must be lawful sources and in addition to it, it also duty

of the public servant to intimate all the income and sources from which he

acquired assets and accordance with the provisions of law, rules or orders

applicable to a public servant.

24. Similarly, Hon'ble Apex court in the case of State of

Maharashtra. Appellant V/s Vasudeo Ramchandra Kaidalvar, Respondent

reported in AIR 1981 S.C. 1186 while dealing with sec. 5 (1) (e) of the old

Act, observed in para no. 12 & 13 as under;

Prevention of Corruption Act (2 of 1947 S. 5 (2) read with S. 5

(1) (e) Public Servant Possession of assets disproportionate to income

Failure to account satisfactorily for such possession Liable to be

convicted for offence under S. 5 (2) r/w S. 5 (1) (e) Prosecution nee d

not disprove all possible sources of his income. Decision of Bombay H.C.

Reversed (Evidence Act. 1872 ), Ss. 101 to 104 ; 114)

12. The term and expressions appearing in S. 5 (1) (e) of the Act

are the same as those used in the old Section 5 (3). Although the two

provisions operate in two different field, the meaning to be assigned to

them must be the same. The expression known sources of incomes


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means Sources known to the prosecution, so also, the same meaning

must be given to the words for which the public servant is unable to

satisfactorily account occurring in S. 5 (1) (e). No doubt, S. 4 (1)

provides for presumption of guilt in cases falling under S. 5 (1) (e)

therein. For, the reason is obvious. The provision contained in S. 5 (1)

(e) of the Act is a self- contained provision. The first part of the Section

casts a burden on the prosecution and the second on the accused. When

S. 5 (1) (e) uses the words for which the public servant is unable to

satisfactorily account, it is implied that the burden is on such public

servant to account for the sources for the acquisition of

disproportionate as sets. The High Court, therefore, was in error in

holding that a public servant charged for having disproportionate

assets in his possession for which he can not satisfactorily account

cannot be convicted of an offence under Section 5 (2) read with Section

5 (1) (e) of the Act unless the prosecution disproves all possible sources

of income.

13. That takes us to the difficult question as to the nature and

extent of the burden of proof under section 5 (1) (e) of the Act. The

expression burden of proof has two distinct meanings (1) the legal

burden, i.e. the burden of establishing the guilt, and (2) the evidential


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burden, i.e. the burden of leading evidence. In a criminal trial, the

burden of proving everything essential to establish the charge against

the accused lies upon the prosecution, and that burden never shifts.

Notwithstanding the general rule that the burden of proof lies

exclusively upon the prosecution, in the case of certain offences, the

burden of proving a particular fact in issue may be laid by law upon the

accused. The burden resting on the accused in such cases is, however, no

so onerous as that which lies on the prosecution and is discharged by

proof of a balance of probabilities. The ingredients of the offence of

criminal misconduct under S. 5 (2) read with S. 5 (1) (e) are the

possession of pecuniary resources or property disproportionate to the

known sources of income for which the public servant can not

satisfactorily account. To substantiate the charge, the prosecution must

prove the following facts before it can bring a case under S. 5(1) (E)

namely, (1) it must establish that the accused is a public servant (2) the

nature and extent of the pecuniary resources or property which were

found in his possession, (3) it must be proved as to what were his

known sources of income i.e. known to the prosecution, and (4) it must

prove, quite objectively, that such resources or property found in

possession of the accused were disproportionate to his known sources of


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income. Once these four ingredients are established, the offence of

criminal misconduct under S. 5(1) (e) is complete unless the accused is

able to account for such resources or property. The burden then shifts to

the accused to satisfactorily account for his possession of

disproportionate assets. The extent and nature of burden of proof

resting upon the public servant to be found in possession of

disproportionate assets under Section 5 (1) (e) cannot higher than the

test laid by the court in Jhagans case (AIR 1966 SC 1762)Supra, i.e. to

establish his case by a preponderance of probability. That test was laid

down by the court following the dictum of Viscount Sankey, L.C. in

Woolmington V. Director of Public Prosecutions (1935) AC 462. The

High Court has placed an impossible burden on the prosecution to

disprove all possible sources of income which were within the special

knowledge of the accused. As laid down in Swamys case (AIR 1960 SC

7) (Supra), the prosecution can not, in the very nature of things, be

expected to know the affairs of public servant found in possession of

resources or property disproportionate to his known sources of income,

i.e. his salary. Those will be matters specially within the knowledge of

the public servant within the meaning of S. 106 of the Evidence Act,

1872, Section 106 reads :


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Section 106, When any fact is especially within the knowledge of any

person, the burden of proving that fact is upon him.

In this connection, the phrase the burden of proof is clearly used in the

secondary sense, namely, the duty of introducing evidence. The nature

and extent of the burden cast on the accused is well settled. The accused

is not bound to prove his innocence beyond all reasonable doubt. All

that he need do is to bring out a preponderance of probability.

25. While dealing with scope of section 5 (1) (e) of the P.C. Act of

1964 which is almost identical to sec. 13 (1) (e) of the present Act,

constitution bench of the Hon'ble Apex court in the case of K.

Veeraswami, Appellant V/s Unions of India & Ors, Respondents observed

in para 72 to 74 as under ;

Prevention of Corruption Act, 1947 Section 5 & 6 Held (per

majority: Bverma J. contra), applicable to Judges of High Courts and

Supreme Court including Chief Justice of India.

72. the soundness of the reasoning in Wasudeo Ramchandra

Kaidlwar case has been doubted. Counsel for the appellant urged that

the view taken on Section 5 (3) can not be imported to clause (e) of

Section 5 (1) and the decision, therefore, requires reconsideration. But

we do not think that the decision requires reconsideration. It is


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significant to note that there is useful parallel found in Section 5(3)

and clause (e) of Section 5(1). Clause (e) creates a statutory offence

which must be proved by the prosecution. It is for the prosecution to

prove that the accused or any person on his behalf, has been in

possession of pecuniary resources or property disproportionate to his

known sources of income. When that onus is discharged by the

prosecution, it is for the accused to account satisfactorily for the

disproportionality of the properties possessed by him. The section

makes available statutory defence which must be proved by the accused.

It is a restricted defence that is accorded to the accused to account for

the disproportionality of the assets over the income. But the legal

burden of proof placed on the accused is not so onerous as that of the

prosecution. However, it is just not throwing some doubt on the

prosecution version. The legislature has advisedly used the expression

satisfactorily account. The emphasis must be on the word

satisfactorily. That means that accused has to satisfy the court that

his explanation is worthy of acceptance. The burden of proof placed on

the accused is an evidential burden though not a persuasive burden.

The accused however, could discharge that burden of proof on the

balance of probabilities either from the evidence of the prosecution


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and/or/evidence from the defence.

73. This procedure may be contrary to the well-known principle

of criminal jurisprudence laid down in Woolmington v. Director of

Public Prosecutions that the burden of proof is always on the

prosecution and never shifts to the accused person. But parliament is

competent to place the burden on the certain aspects on the accused as

well and particularly in matter specially within his knowledge.

(Section 106 of the Evidence Act. ) Adroitly, as observed in Swamy case

(at p.469) and reiterated in Wasudeo case (at p. 683 : SCC p. 205), the

prosecution can not , in the very nature of thing, expected to know the

affairs of a public servant found in possession of resources or property

disproportionate to his known sources of income. It is for him to

explain. Such a statute placing burden on the accused can not be

regarded as unreasonable, unjust or unfair. Nor it can be regarded as

contrary to Article 21 of the Constitution as contended for the

appellant. It may be noted that the principle re affirmed in

Woolmington case is not a universal rule to be followed in every case.

The principle is applied only in the absence of statutory provision to the

contrary. (see the observations of Lord Templeman and Lord Griffiths in

Rig V. Hunt.)


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74. Counsel for the appellant however, submitted that there is no

law prohibiting a public servant having in his possession assets

disproportionate to his known sources of income and such possession

becomes an offence of criminal misconduct only when the accused is

unable to account for it. Counsel seems to be focusing too much only on

one part of clause (e) of Section 5(1). The first part of clause (e) of

Section 5 (1) as seen earlier relates to the proof of assets possessed by

the public servant. When the prosecution proves that the public servant

possesses assets disproportionate to his known sources of income, the

offence of criminal misconduct is attributed to the public servant.

However, it is open to the public servant to satisfactorily account for

such disproportionality of assets. But that is not the same thing to state

that there is no offence till the public servant is able to account for the

excess of assets. If one possess assets beyond his legitimate means, it

goes without saying that the excess is out of ill-gotten gain. The assets

are not drawn like nitrogen from the air. It has to be acquired for

which means are necessary. It is for the public servant to prove the

source of income or the means by which he acquired the assets. That is

the substance of clause (e) of Section 5(1).

26. Similarly, while dealing with the term used in the explanation


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to sec. 13 (1) (e) as known sources of income Hon'ble Apex court in the

case ofN. Ramkrishnaiah (Dead) through L.R. V/s State of A.P. Reported

in 2009 Cri. L.J. as observed in para 14 & 15 as under ;

14. Section 13 of Prevention of Corruption Act, 1988 (in short

the Act) deals with various situations when a public servant can be said

to have committed criminal misconduct. Clause (e) of Sub-Section (1) of

the Section is applicable when the public servant or any person on his

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

office, been in possession for which the public servant can not

satisfactorily account of pecuniary resources of property

disproportionate to his known sources of income. Clause (e) of Sub-

Section (1) of Section 56 of the Old Act was in similar lines. But there

have been drastic amendments under the new clause, the earlier

concept of known source of income has under gone a radical change.

As per the explanation appended, the prosecution is relieved of the

burden of investigating into source of income of an accused to a large

extent, as it is stated in the explanation that known sources of income

of an accused to a large extent as it is stated in the explanation that

known sources of income means income received from any lawful

sources, the receipt of which has been intimated in accordance with the


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provisions of any law, rules or orders for the time being applicable to a

public servant. The expression known source of income has reference

to sources known to the prosecution after thorough investigation of the

case. It is not and can not be contended that known sources of income

means sources known to the accused. The prosecution can not in

the very nature of things be expected to know the affairs of an accused

person. Those will be matters specially within the knowledge of the

accused withing the meaning of Section 106 of the Indian Evidence Act,

1872 (in short, the Evidence Act.

15. The emphasis of the phrase known sources of income in

section 13(1) (e) (old Section 5 (1) (e) is clearly on the word income.

It would be primary to observe that qua the public servant, the income

would be what is attached to his office or post commonly known as

remuneration or salary. The term income by itself, is classic and has a

wide connotation. Whatever comes in or is received is income. But,

however, wide the import and connotation of the term income , it is

incapable of being understood as meaning receipt having no nexus to

ones labour, expertise, or property, or investment, and being further a

source which may or may not yield a regular revenue. These essential

characteristics are vital in understanding the term Income.


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Therefore,it can be said that though income in receipt in the hand of

its recipient, every receipt would not partake into the character of

income. for the public servant, whatever return he gets of his service,

will be the primary item of his income. Other income which can

conceivably be income qua the public servant will be in the regular

receipt from (a) his property, or (b) his investment. A receipt from

windfall, or gain of graft crime or immoral secretions by persons prima

facie would not be receipt for the known source of income of a public

servant.

27. So after going through these pronouncements and in the light

of section 13 (1) (e) the position which emerges is that once prosecution

has proved that a public servant is in the possession of assets

disproportionate to known sources of his income, then burden would shift

on the shoulders of public servant to account it satisfactorily and to show

that he acquired those assets from lawful sources.

28. As far as framing of charge of abatement against a person who

is not a public servant in a trial u/s 13 (1) (e) of P.C. Act is concerned, the

Hon'ble Apex court in the case of P. Nallammal and Anr, Appellants V/s

State represented by Inspector of Police, Respondent reported in (1999)

6 S.C. 559 has observed in para no. 12 to 15 as under ;


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Prevention of Corruption Act, 1988 Ss. 13 (1) (e) , 4 , 3 (1), 10 and

12 Offence under S. 13 (1) (e) not unabettable- Trial of non-public

srevant for abetment of offence under S. 13 (1) (e) along with public

servant by Special Judge not barred Penal Code 1860, Ss. 107 & 109.

12. It is true that Section 11 deals with a case of abetment of

offences defined under Section 8 and Section 9 , and it is also true that

Section 12 specifically deals with the case of abetment of offences under

Section 7 and 11. But that is no ground to hold that the PC Act does not

contemplate abetment of any of the offences specified in Secton 13 of

the PC Act. Learned counsel focussed on Section 13 (1) (e) to elaborate

that by the very nature of that offence it pertains entirely to the public

servant concerned as there is no role for the co-accused for discharging

the burden of proof.

13 Section 13 (1) (e) reads thus :

13(1) A public servant is said to commit the offence of criminal

misconduct-

(a) ---------------------------------------

(b) --------------------------------------

(c) --------------------------------------

(d) ----------------------------------------


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(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 can not satisfactorily account, of pecuniary resources or

property disproportionate to his known sources of income.

Explanation For the purposes of this section, known sources of

income means income received from any lawful source and such

receipt has been intimated in accordance with the provisions of any

law, rules or orders for the time being applicable to a public servant.

14 It may be remembered that this court has held in M. Krishna

Reddy V. State Dy. Supdt. of Police thus : (SCC p. 47, para 6)

6. An analysis of Section 5 (!) (e) of the Act, 1947 which

corresponds to Section 13(1) (e) of the new Act of 1988 shows that it is

not the mere acquisition of property that constitutes an offence under

the provisions of the Act but it is the failure of satisfactorily account for

such possession that makes the possession objectionable as offending the

law.

15. Thus, the two postulates must combine together for crystallization

into the offence, namely, possession of property or resources

disproportionate to the known sources of income of public servant and

the inability of the public servant to account for it. Burden of proof


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regarding the first limb is on the prosecution whereas the onus is on the

public servant to prove the second limb. So it is contended that a non-

public servant has no role in the trial of the said offence and hence he

can not conceivably be tagged with the public servant for the offence

under Section 13(1) (e) of the PC Act.

29. After going through the judgment it can be said that a person

who possesses some assets on behalf of public servant which are found to

be disproportionate, can be charged for the offence of abatement under

sec. 109 of IPC.

30. Prior to appreciating evidence available on record it is also

necessary to take in to account certain admitted facts to both the sides

which are as under ;

31. During the trial accused no. 1 has not disputed that from

01.09.1982 to 31.03.1995 he was working as a officer of IPS cadre in the

state of Maharashtra. Therefore, it can be safely held that during the check

period accused no. 1 was working as a public servant within a meaning of

sec. 2 (c) of Prevention of Corruption Act 1988.

32. Accused no. 1 has not disputed that from 1974 to 1981 he was

working as a associate professor in a degree college situated at Mawana

(U.P.) and thereafter from 1981 to 1982 he worked as a District Panchayat


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Raj officer in the state of Utter Pradesh. It is also not in dispute that on the

next day of registration of crime house of accused no. 1 was searched by

investigating officer Wable and articles were found and the inventory

prepared at that time. It is also not in dispute that during the check period

accused no. 2 from October 1991 to January 1992 invested amount of Rs. 5

lacs in Deccan Queen Restaurant, Juhu, Mumbai as a partner of the said

firm. It is also not in dispute that during the check period accused no. 2

received deposit from OTIS Elevators for subletting her rented premises. It

is also not in dispute that accused no. 1 constructed one house in CIDCO

area of Aurangabad. Besides these major items of the assets and income

acquired by accused no.1 & 2 they have admitted maximum part of the

income, expenditure and assets shown by the prosecution.

33. After completion of open enquiry, crime was registered on

06.11.2000 on the basis of complaint filed by ACP Sawant. In F.I.R. It was

alleged that during period from 01.08.1974 to 31.03.1995 accused no. 1

and his family members have acquired assets of Rs. 31,48,017/- which are

disproportionate to known sources of income. In F.I.R. the entire details in

respect of income, expenditure and assets of accused no. 1 & 2, their two

minor sons, A.K. Jain (HUF) and S.K. Jain family trust were given. After

filing of this F.I.R., detail investigation was carried out by ACP Wable and in


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final report it is alleged that accused no. 1 and his family members are

found in possession of assets worth Rs. 46,76,933.45 ps. which are

disproportionate to their known sources of income. After completion of

investigation it was found to ACP Wable that cost of some assets is more as

shown in F.I.R., so also some figures of expenditures were not correctly

arrived at by the complainant. It was also found that some of the income

was wrongly accepted by the complainant. It would be convenient to spell

out a chart in respect of income, expenditure and assets of accused no. 1

and his family members and their two firms found at the time of FIR and at

the time of filing of chargesheet.

COMPARATIVE STATEMENT OF INCOME, EXPENDITURE AND ASSETS

DISCLOSED DURING THE COURSE OF INVESTIGATION

AS COMPARED TO F.I.R.

Sr.No.

Head As F.I.R. Proved Remarks

ASSETS SHRI AJAY KUMAR JAIN

01 House at Jehangirabad 01,80,000=00 1,80,000=0002 Bungalow at N-5,

CIDCO, Aurangabad06,93,826=00 8,05,510=00 Cost of the

plot added tothe total

value.

03 Plot,K.P.C.L.E.Hsg.Society,Bangalore

01,59,200=00 1,59,200=00


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04 Orson make B & W TV 2,100=00 2,100=00

05 Videocon WashingMachine

6,000=00 6,000=00

06 Sanyo music system 20,000=00 20,000=00

07 Onida Colour TV 19,550=00 16,460=00 Amountactually spenttaken intoconsideration.

08 Vacuum Cleaner 3,990=00 3,990=00

09 Videocon air cooler 2,660=00 2,660=00

10 Nicky Tasha Kitchenette 2,323=00 2,323=0011 National Savings

Certificates1,10,000=00 1,10,000=00

12 Fixed deposit in bank 25,000=00 25,000=00

13 Bank balance inB.M.C.Bank, ColabaBranch

22,882=00 22,882=43

14 Bank Balance in State

Bank of India, WodeHouse Road Branch

11,022=00 11,022=00

15 Bank balance inB.M.C.Bank AurangabadBranch

53,053=00 53,053=90

16 Bank balance in VyasyaBank, Nanded Branch

29,698=00 29,698=00

17 Godrej refrigerator 10,800=00 Wrongly

shown asasset of MrsJain.

18 Clothes of Shri Jainfound during housesearch

32,200=00 Notconsidered inF.I.R.

19 Books found duringhouse search

1,571=00 Notconsidered inF.I.R.


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20 Furniture in the house 15,000=00 Disclosedfrom ITRS

21 Audio cassettes found in

the house

2,426=00 Disclosed

during housesearch

22 President make suitcase 3,000=00 Disclosedduring housesearch

23 Cash in hand as on31.03.1995

16,376=70 Disclosedfrom ITRS

24 Music System 10,000=00 Disclosed

from ITRS ofAY 1991-92

25 Portable Typewriter 1,200=00 Disclosedfrom ITRs of

26 Maruti Van MH-01-1136 40,000=00 Notconsidered bythecomplainant

Total 13,41,304=00 15,82,473=03

ASSETS MRS ANITA JAIN

01 Godrej refrigerator 9,600=00 5,150=00 Proved figurenowconsidered

02 VCR, National Make 10,800=00 10,800=0003 Investment in Shares 1,14,750=00 2,10,100=00 Recalculated

from ITRs

04 Balance in B.M.C. Bank,Byculla Branch a/c13183

1,18,845=00 70,843=28 Wronglyaccepted bythecomplainant

05 Onida colour TV 15,800=00 15,800=00


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06 Investment in DeccanQueen Restaurant

5,00,000=00 5,00,000=00

07 Investment in Associate

Business Technology

20,000=00 20,000=00

08 Gold and Silverornaments found in thehouse

1,33,059=00 Disclosedduring housesearch

09 Nicky Tasha TV 9,600=00 Disclosedfrom ITRs

10 Clothes of Mrs. Jain 4,200=00 Disclosedduring house

search

11 Cash in hand as on31.03.95

48,002=00 Disclosedfrom ITRs

12 Two Air conditioners 10,000=00 Disclosedfrom ITRs

13 Sony make Music System 19,550=00 Disclosedfrom ITRs

Total 7,89,795=00 10,57,104=28

ASSETS OF MASTER RAHUL JAIN

01 Balance in a/c. No.13184 in B.M.C. Bank,Byculla Branch

22,784-00 40,493=20 Wronglyaccepted bythecomplainant

02 Plot No. 78, Aurangabad 01,07,843=00 96,000=00 Amount spentforregistrationetc.treated asexpenditure

03 Flat no. 402, Lotus Co-op.Housing Society,Shimpoli Rd, Boriwali(W)

7,35,110=00 7,35,110=00


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04 Plot at Abitghar,Tal:Wada, Dist. Thane

2,00,000=00 2,00,000=00

05 Flat No. 17, Anand

Mangal Building, Nerul,New Mumbai

3,00,000=00 3,00,000=00

06 Shares in the name ofRahul Jain

25,000=00 Disclosedfrom ITRs

Total 13,65,737=00 13,96,603=20

ASSETS OF MASTER VIPUL JAIN

01 Plot no. 79, Aurangabad 1,07,843=00 96,000=00 Amount paidforregistrationetc.considered asexpenditure

02 Investment in shares 37,300=00 26,000=00 Disclosedfrom PropertyReturns

03 Balance in a/c. No.13183 in B.M.C. Bank,Byculla Branch

2,42,079=00 2,32,634=00 Actualbalance takenintoconsideration

Total 3,87,222=00 3,54,634-=20

ASSETS OF SARAL KANTA JAIN FAMILY TRUST

01 Open plot at Erangal,Mumbai

25,000=00 25,000=00

02 Investment in ShriSahayog Exhibitors,

Aurangabad

4,65,397=00 2,40,000=00 Income byway ofinterest

wronglytreated as


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asset.

03 Investment in Shares 20,0000=00 20,0000=00

04 Balance in a/c.no. 13394in BMC Bank, Bycullabranch

1,27,215=00 28,719=10 Actualbalance takenintoconsideration

05 Plot at Waladgaon,Aurangabad

68,500=00 N.A. hadsuppressedthisinformationduring

enquiry06 Cash in hand 1,06,996=10 Disclosed

from ITRs

Total 6,37,612=00 4,89,215=10

ASSETS OF SHRI AJAY KUMAR JAIN (HUF)

01 Balance in a/c. no.13185 in BMC Bank,Byculla Branch

15,286=00 7,519=35 Wronglyaccepted bythecomplainant.

Total 15,286=00 7,519=35

INCOME OF SHRI AJAY KUMAR JAIN

01 Salary from August-74 toJune-81

01,31,916=00 6,38,840=80 Actual salaryas per detailsreceived fromthe concerned

02 Salary fromSeptember-82 toMarch-95

05,63,650=00

03 Profit from sale Mavanaplot

34,000=00 9,700=00 Amountactuallyshown in


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ITRs onlytaken intoconsideration.

04 Salary asD.P.R.O.Muzaffarnagar

13,829=00

05 Interest on N.S.Cs. 46,175=00 86,175=00 Actuallycalculatedand thenconsidered.

06 Surrender of LIC policy 17,307=00 17,307=00

07 Deposit for Bungalow at

CIDCO Aurangabad

50,000=00 50,000=00

08 Interest on bankaccounts

28,149=00 20,294=87 Actual figuresreceived frombanks.

09 Sale of gold 45,140=00 45,140=00

10 Income from Beauty Art,Printing Press, Mavana

17,000=00 Nil This incomeis notpermissible

by law.

11 Income from House rentand deposit atJehangirbad

95,200=00 Nil This incomenot declaredto Income Taxand hencerejected.

12 Sale of old refrigerator 7,000=00 Disclosedfrom ITRs.

Total : 10,42,366=00 08,74,457=67

INCOME OF MRS ANITA JAIN

01 Dividend on Shares 30,830=00 24,302=00 Actualamountdisclosed inITRs.only


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considered.

02 Survival benefit onL.I.C. Policy

35,000=00 35,000=00

03 Sale of Silver Ornaments 10,915=00 10,915=00

04 Sale of Gold Ornaments 40,021=00 40,021=00

05 Income from sale ofSaries, tuitions andCoaching Classes

03,67,750=00 Nil Rejected asMrs. Jaincould notproduce anyevidence insupport.

06 Profit from sale of sharesof Videocon and UshaRectifiers

01,16,600=00 Nil Rejected asnot disclosedin ITRs.

07 Profit from sale ofKiradpura, Aurangabadplot.

45,380=00 45,380=00

08 Interest of Bank Savings 4,686=00 4,695=67 Actualfigures.

Total : 06,51,182=00 01,60,313=67

INCOME OF MASTER RAHUL JAIN

01 Profit on surrendering offlat no.102, at Nerul

01,000,00=00 Nil This incomefalselyclaimed by

N.A.02 Profit on sale of

Kiradpura plot atAurangabad

45,380=00 45,380=00

03 Profit on surrenderingflat no. D-1, Mangalam

Apartments, ThakurComplex, Kandivali.

24,500=00 24,500=00

04 Interest on Bank Savings 13,554=00 13,554=00


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Total : 01,83,434=00 83,434=30

INCOME OF MASTER VIPUL JAIN

01 Profit on surrendering offlat no-D-2 in Mangalam

Apts. Thakur Complex.

30,000=00 30,000=00

02 Profit from sale of flatno. 401 in Lotus Co-op.Hsg. Society, Borivali(W)

59,851=00 59,851=00

03 Profit from surrenderingflat no. 103- in Nerul.

1,00,000=00 Nil Falselyclaimedincome byN.A.

04 Profit from sale ofKiradpura plot at

Aurangabad

45,380=00 45,380=00

5 Interest on bank savings 11,863=00 11,863.50 Actual figure.

Total : 02,47,094=00 01,47,094=50

INCOME OF SHRI AJAY KUMAR JAIN (HUF)


Aurangabad

45,380=00 45,380=00

02 Interest on bank Savings 09,240=00 08,735=85 Actual figureconsidered.

Total : 54,620=00 54,115=85


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INCOME OF SARAL KANTA JAIN FAMILY TRUST

01 Interest on bank Savings 18,844=00 18,844=10

02 Interest received fromSahayog Exhibitors Pvt.No.

01,55,959=00 Nil Income notpermissibleand hencerejected.

Total : 01,74,803=00 18,844=10

EXPENDITURE OF SHRI AJAY KUMAR JAIN

01 33% of gross Salary 2,71,156=00 2,61,353=33 due todecrease inactual grosssalary.

02 premium paid for LICpolicies.

1,97,124=00 1,97,124=00

03 Income Tax paid 13,420=00 7,390=00 actual figuresconsidered.

04 Expenditure for clubs 66,454=00 68,233=00 actual figurestaken intoconsideration.

05 Visit to Singapore andMauritius

17,453=00 17,453=00

06 House rent paid inMavana

5000=00 5000=00

07 Maintenance of Scooter 3000=00 3000=0008 Maintenance of Car 2900=00 16800=00 Proved from

statements

09 Rent and deposit forHouse at Jehangirbad

95,200=00 This wasaccepted asIncome andExpendituretoo in theF.I.R.


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10 Income from beauty ArtsPrinter, Mawana

17,000=00 This wasaccepted asIncome and

Expendituretoo in theF.I.R.

11 Expenditure foreducation of Children

25,687=00 Wronglyshownagainst thenames of theminorchildren

12 Expenditure for L.P.G. 3,627=00 Notconsideredduringenquiry.

13 Transfer fee of R.T.O.Mumbai

1,005=00 Notconsidered bythecomplainant.

14 Municipal TaxAurangabad

916=75 Notconsidered bythecomplainant.

15 Stamp duty andregistration fee forErangal, Mumbai plot.


16 Amount paid to CIDCO,Aurangabad as fine andother fees.


17 Chief Minister ReliefFunds

516=00 Disclosedfrom ITRs.

18 Transfer charges paid forMavana Plot

3,310=00 Disclosedduring


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investigation.

19 Amount spent by usingDiners Cards

15,802=00 Disclosedduring

investigation

20 Commission paid toBanks

953=50

Total : 06,88,707=00 06,78,420=58

EXPENDITURE OF MRS ANITA JAIN

01 10% of gross income 36,775=00 Notapplicable

02 LIC Premium 87,601=00 87,601=00

03 Income Tax Paid 3,466=00 5,977=00 Verified figure

04 Rent for KopargaonEstate Shed

7,548=00 Notconsidered bythe complaint

05 Open Land Tax paid forKiradpura plot at

Aurangabad

916=75 Disclosedduringinvestigation.

06 Amount withdrawn forpersonal Expenditure

84,635=00 Disclosedfrom ITRs.

Total : 01,27,842=00 01,97,962=75

EXPENDITURE OF MASTER RAHUL JAIN

01 Income Tax paid 605=00 605=00 Verified fromITRs

02 Expenditure foreducation

4,800=00 Nil Thisexpenditurehas beenattributed toShri Jain


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03 LIC Premium 21,748=00 21,748=00

04 Rent paid for shed inKopargaon Estate

6,864=00 Notconsidered by

thecomplainant

05 Open land tax paid forKiradpura plot,

Aurangabad

916=75 Disclosedduringinvestigation

06 Stamp duty andregistration fee paid forflat No. 402, Ansal Vihar,

Boriwali

26,060=00 Disclosedduringinvestigation

07 Stamp duty andregistration fee paid forplot No. 78. Aurangabad


08 Advance paid for flat atVile Parle

10,000=00 Disclosedfrom ITR's

09 Commission paid tobanks

255=00 Disclosedduring

investigationTotal : 27,153=00 77,011=75

EXPENDITURE OF MASTER VIPUL JAIN

01 Income tax paid 477=00 477=00

02 Expenditure for

education

9600=00 Nil Considered in

theexpenditureof Shri Jain

03 LIC premium 9,793=00 9,793=00


384=00 Notconsidered bycomplainant

05 Open land tax forKiradpura, Aurangabad

916=75 Disclosedduring


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plot investigation

06 Advanced paid for VileParle flat

10,000=00 Disclosedfrom ITRs.

07 Stamp Duty andRegistration fee for plotNo.79


Total : 19,870=00 32,133=75

EXPENDITURE OF SHRI AJAY KUMAR JAIN (HUF)

01 Income tax paid 1,619=00 1,619=00

02 Rent paid for KopargaonEstate Shed

7,548=00 Notconsidered bythecomplainant

Total : 1,619=00 9,167=00

EXPENDITURE OF SARAL KANTA JAIN FAMILY TRUST

01 Income tax paid 99,369=00 65,562=00


650=00 Disclosedduringinvestigation

03 Rent paid for KopargaonEstate Shed

5,148=00 Notconsidered by

thecomplainant.

04 Tax deducted at sourcefrom the account ofSahayog Exhibitors


05 Registration fee paid forWaladgaon Plot


06 Rent paid to R.C.C. Trust 44,316=00 Clubbed with


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for Rehem MansionProperty.

rejectedincome by thecomplainant.

Total : 99,369=00 1,36,160=00

REJECTED INCOME

01 Income from OtisElevator for R.C.C. Trustproperty.

19,01,570=00 18,44,500=00 Figures havechangedbecausecomplainantalsoconsideredthe rent paidin therejectedincome.

02 Income for relinquishingtenancy right in

Kopargaon Estate.

10,00,000=00 10,00,000=00

03 Profit on sale of Scooter 10,000=00 10,000=00

04 Sale of gold ornaments 40,000=00 40,000=00

05 Gifts 70,000=00 70,000=00


Aurangabad.

1,38,480=00 1,38,480=00

07 Tuition fees received by

Shri Jain

42,000=00 Not

considered bythecomplainant.

08 Amount received asExaminership fees byShri Jain


09 Income from Beauty Arts 17,000=00 Not


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Printing press. considered bythecomplainant.

10 Rent from House atJahangirbad.


11 Income from DeccanQueen Restaurant

96,000=00 96,000=00

12 Sale of Old T.V. 7,450=00 Not disclosedin ITRs.

13 Profit from sale of UshaRectifiers and Videoconshares.

1,16,600=00 This incomewas given bythecomplainant.

14 Profit on the surrenderof flat Nerul.

2,00,000=00 This incomewas given bythecomplainant.

15 Deposit for flat at AnsalVihar. 50,000=00 50,000=00

16 Income by way ofinterest fromK.E.Enterprises.

1,00,000=00 Notconsidered bythecomplainant.

17 Income by way ofinterest from SayahogExhibitors.

88,984=00

18 Sale of Saris and tuitionand coaching classes byMrs. Jain

3,67,750=00 Considered asincome by thecomplainant.

19 Rent from GayatriEngineering Companyfor Banglore at

Aurangabad.

15,789=00 Outside check period.

Total : 33,21,839=00 42,90,964=00


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34. It is the case of prosecution that in fact accused no. 2 who is the

wife of accused no. 1 and their two minor sons have no any independent

source of income during the check period and it was accused no. 1 who in

a clever manner invested his ill-gotten wealth in the name of his family

members in order to show that they have got independent sources of

income. To the contrary it is the case of accused no. 1 that accused no. 2,

his two minor sons, A.K.Jain (HUF) and S.K. Jain family trust have

independent sources of income during the check period and he is no way

related with the assets acquired by them and in fact those were acquired by

them out of their own income. Therefore, now first of all it is necessary to

decide as to whether or not accused no. 2, her two minor sons, A.K. Jain

(HUF) and S.K. Jain family trust were having their independent sources of

income.

35. It is not in dispute that two sons of accused no. 1 & 2 Vipul and

Rahul were the minors during the check period i.e. between 01.09.1982 to

31.03.1995. It is also not in dispute that during this period both of them

were taking education. Material available on record shows that both of

them have taken education at the places where accused no. 1 was posted.

It is not the case of accused no. 1 & 2 that their two sons were doing any

business independently during this period or any one on their behalf was


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conducting any business.

36. Prosecution has produced on record copies of I.T. Returns of

Rahul Jain submitted for the financial year 1990-91 and balancesheets

submitted by him on 31.03.1990, 31.03.1991, 31.03.1994 & 31.03.1995

with income tax department. Prosecution has also produced copies of

income tax return submitted by another son of accused namely Vipul Jain

for the financial year 1990-91 and the copies of balancesheets submitted by

him on 31.03.1990, 31.03.1991 and 31.03.1994 with income tax

department. These documents are the part of Exh.107. None of the accused

has disputed genuineness of these documents. According to investigating

officer, these documents were provided to him by income tax department.

On all these documents there is attestation of the concern income tax

officer. Perusal of acknowledgment sheet of both Rahul and Vipul shows

that in the year 1991-92 they have filed returns for the first time as it is

mentioned in first column which is in respect of PAN No. that these are

new cases. Therefore, admittedly prior to 1991-92 these two sons of

accused have not filed any returns with income tax department. Perusal of

their balance sheets also does not show that they were gaining profit from

any business.

37. From Sale Deed Exh. 15 it appears that a plot of land situated


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at Jaswantpura, (Kiradpura), Aurangabad was purchased on 02.07.1987 by

both the accused and their minor sons for a consideration of Rs. 40,000/-.

The sale deed also shows that at the time of its execution Rahul Jain and

Vipul Jain were minor sons. In sale deed it was demonstrated that this plot

has been purchased by A.K. Jain (HUF). It is pertinent to note that during

trial both the accused are not shown as to what were the sources of income

of A.K. Jain (HUF) and why it was formed. There is no material available

on record to show that A.K. Jain (HUF) was having any independent source

of income in order to invest the amount and therefore it appears that it was

accused no. 1 who was investing his income in the name of A.K. Jain

(HUF) and it also appears that A.K. Jain (HUF) was shown to be in

existence only for the purpose of availing tax benefits as it is a matter of

common knowledge that the concept of Hindu Undivided Family is

altogether different as far as the provisions of Income Tax Act, are

concerned.

38. Sale Deeds Exh. 16 & 17 show that in the year 1990 this A.K.

Jain (HUF) sold this plot for a consideration of Rs. 4 lacs. So this could be

the first income derived by two sons of accused. From IT returns it appears

that income derived from this transaction was equally distributed among

both the accused and their two minor sons. It is the claim of accused no. 1


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that each one of them incurred expenses for the development of this plot

for Rs. 54,620/- and they have earned net income of Rs 45,380/- each from

this sale proceed. So this appears to be the first income earned by Rahul

Jain and Vipul Jain. Balancesheet filed by them does not show that there

was any independent source of income to them. Sale Deeds Exh. 13 & 14

shows that both Vipul and Rahul have purchased one plot each within the

municipal limits of Aurangabad on 09.10.1990 by paying consideration of

Rs. 96,000/- each. Their balancesheets which are part of Exhibit 107 show

that from the profit earned through sell of plot at Aurangabad and by

raising some loan they have purchased this plot. So from this it appears

that in the year 1987 when a plot was purchased in the name of A.K Jain

(HUF), entire amount of consideration was paid by accused no. 1 and after

the sale of that plot, amount earned was distributed equally to all the

family members and by this way it is shown that Vipul and Rahul have

started earning money but in fact it was accused no. 1 who initially

invested amount in their names. As per these calculations, it appears that

in the year 1990 when Rahul and Vipul purchased one plot each at

Aurangabad for a consideration of Rs. 96,000/- each, accused no. 1 at that

time invested amount of Rs.40,000/- each in the name of Rahul and Vipul.

Therefore, it can be said that till the year 1990 accused no. 1 invested total


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amount of Rs. 1,20,000/- for the purchase of plots at Aurangabad.

39. The charts referred to above show that thereafter several

properties were acquired in the name of Rahul & Vipul but it can not be

said that these investments were made by them from the income derived

from any independent source and these are to be termed as the

investments made by accused no. 1. Having regard to this discussion this

court is of the opinion that two minor sons of accused namely Rahul and

Vipul did not have any independent source of income during the check

period. Accused no. 1 at the time of his statement under section 313 of

Cr.P.C. filed copy of his one of the explanation given to investigating officer

on 14.08.2000 along with list Exh. 367. This explanation also shows that

accused no. 1 admitted that Rahul and Vipul have no any independent

source of income and they are earning amount as a interest on deposits

kept in the bank and profit from the transaction of immovable properties. It

has also been stated in the said statement that Rahul and Vipul have filed

their IT returns for the first time in the year 1991. Similarly, in this

explanation accused no.1 has not claimed that there is any independent

source of income available to A.K. Jain (HUF). Therefore, it has been duly

proved that the transactions entered into by Rahul, Vipul and A.K.Jain

(HUF) were in fact of accused no. 1.


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40. Prosecution has also came with the case that in the year 1991

Rahul and Vipul have booked one flat each bearing nos. D-1 & D-2 in

Mangalam Apartment, Mumbai which was the project of potential builders

and paid amount of Rs. 3,63,000/- and Rs. 3,45,000/- respectively till the

year 1993. Thereafter, in the month of September 1993 prior to taking

possession of these flats, they have sold it through potential builders and

got returned amount paid by them as referred to above vide Exh. 63 and

63 A. There is no material on record to show that these amounts were

earned by them from any transaction entered into prior to this transaction.

It is not the case of accused no. 1 that plots purchased in the year 1990

were sold out by Rahul and Vipul prior to booking of these flats. Therefore,

it is necessary to held that amount of Rs. 7,08,000/- was paid by accused

no. 1 for booking of these two flats. Accused no. 1 & 2 have admitted

documents Exh. 63 & 63 A which relates to these transactions.

41. Prosecution has also filed on record copies of agreement

marked as Exh. 47 & 49 which are admitted by the accused. Contents of

these agreements show that Rahul and Vipul have booked flat no. 102 &

103 respectively with Anmol Developer, Mumbai and they have paid

amount of Rs. 2 lacs each for booking of these flats on 25.11.1993 and

28.01.1994. However, subsequently in the month of November 1994 they


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have cancelled these bookings and got returned amount of Rs. 2 lacs each.

However, this amount could have been invested by accused no. 1 from the

amount received from potential builders. Therefore, these transactions

have no bearing on the matter.

42. Prosecution has also produced copy of agreement Exh. 60

which is admitted by the accused. Contents of this agreement shows that

one flat was sold by Rahul Jain to one Mehta in the month of July 1995

which is admittedly a transaction entered into after the check period i.e

31.03.1995. However, its contents shows that this flat was purchased by

Rahul Jain and the consideration amount of Rs. 6,41,250/- was paid by

accused no. 1 on 06.02.1995 i.e. during check period. However, this

payment could have been made from the amount of Rs. 7,08,000/-

received from potential builders. Therefore, this transaction is material

while calculating the income, expenditure and assets of accused no. 1 & 2.

43. Prosecution has also relied on Exh. 100 which is admitted by

the accused. This is a agreement for sale entered in between VGP Agro

Limited and Rahul and Vipul Jain. As per this agreement Rahul and Vipul

Jain have purchased on piece of land at Abidghar village, Taluka Wada,

Dist. Thane on 01.03.1995 for a consideration of Rs. 2 lacs. As a guardian

of Rahul and Vipul accused no. 1 must have paid this amount. None of the


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accused has taken the responsibility for this payment. At the time of this

transaction only amount of Rs.66,750/- was with accused no. 1 out of

amount of Rs. 7,08,000/- received from potential builders and after

purchase of flat at Ansal Vihar on 06.02.1995. Therefore, it appears that at

the time of this transaction accused no. 1 invested amount of Rs.

1,33,250/- in the name of Rahul and Vipul. So the sum and substance is

that from the year 1987 till the year 1995 accused no.1 invested amount of

Rs. 9,61,250/- in the name of his two minors sons namely Rahul Jain and

Vipul Jain for purchase of various properties.

44. Apart from this investigating officer has also collected

documents from the respective banks in order to show that Rahul and Vipul

have earned interest on deposits of Rs. 13,554.30 ps. and Rs. 11,863.50 ps

respectively. This fact has not been disputed by both the accused.

Therefore, this amount is required to be excluded from the amount of

investment made by accused no. 1 in the name of his two minor sons.

Therefore, after deducting this amount, it can be said that accused no. 1

acquired assets of Rs. 9,35,832.20 ps in the name of his two minor sons.

45. It is the case of prosecution that on 31.03.1995 there was

balance of Rs. 40,493.20 ps. and Rs. 2,32,634.20 ps. lying in the accounts

of Rahul and Vipul Jain respectively in Bombay Mercantile Cooperative


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Bank, branch Byculla, Mumbai and this fact has been admitted by both the

accused. It is not the case of any of the accused that Rahul and Vipul have

earned this amount from any independent source. Similarly, prosecution

has also claimed that accused no. 1 purchased shares of Rs. 25,000/- and

of Rs. 26,000/- in the name of Rahul and Vipul Jain respectively and

informed this fact in his property return submitted for the year 1993. This

has also not been disputed by accused no.1. Therefore, it is necessary to

held that these amounts were invested by accused no. 1 and its total comes

to Rs. 3,24,127.40 ps. Therefore, in totality accused no. 1 invested amount

of Rs. 12,59,959.60 ps. in the name of his two minor sons.

46. Now it is also necessary to take into account expenditure

incurred by Rahul and Vipul Jain. When it is an admitted position to

accused no. 1 & 2 that Rahul and Vipul did not have any independent

source of income and as this court has already deducted the income earned

from the reinvestment in the property, the expenditure incurred by Rahul

and Vipul is to be considered as the expenditure made by accused no. 1

and it is to be included in the amount which was invested by accused no. 1

in the name of Rahul and Vipul.

47. During investigation it was found that accused no. 1 spent

following amount for Rahul and Vipul Jain.


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Rahul Jain

1. Income tax paid for the financial year

1991-92 Rs. 605/-

2. Premium for two LIC policies Rs. 21,748/-

3. Stamp Duty and Registration fee

for registration of flat no. 402, Ansal

Vihar, Mumbai Rs. 26,060/-

4. Stamp duty and registration fee

for the plot purchased at Aurangabad

in the year 1990 Rs. 10,563/-

--------------------------------------------------------------------------------

Total Rs. 58,976/------------------------------------------------------------------------------------

Vipul Jain

1. Income tax paid for the financial year

1991-92 Rs. 477/-

2. Premium for LIC policy Rs. 9793/-

3. Commission paid to Bombay

Mercantile Co-Op. Bank, Mumbai Rs. 384/-

4. Stamp duty and registration fee

for the plot purchased at Aurangabad


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in the year 1990 Rs. 10,563/-

--------------------------------------------------------------------------------

Total Rs. 21,217/----------------------------------------------------------------------------------

48. Thus, total expenditure incurred by accused no.1 for Rahul and

Vipul Jain comes to Rs. 80,193/-. If this is included in the amount of

investment of Rs. 12,59,959.60 ps. then its total comes to Rs.13,40,152.60

ps. So this is the total amount invested by accused no. 1 in the name of his

two minor sons and A.K. Jain(HUF). Both the accused have not denied this

part of expenditure.

49. Now it is necessary to decide as to whether accused no. 2 who

is the wife of accused no. 1 had any independent source of income prior to

and during the check period. It is pertinent to note that during

investigation though accused no. 2 was called upon to submit her

explanation and details regarding her claim of income but she has not filed

any explanation in support of her claim. During trial also, accused no. 2

has not produced any material in support of her claim nor examine any

witness.

50. Initially it was claimed by accused no.2 that she had earned

income of Rs. 3,67,750/- from the sale of Saree business, tuitions and

coaching classes. However, accused no. 2 has not furnished any details in


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respect of this income. There is absolutely no document available on record

in order to support this claim nor any witness is examined by accused no.

2. Admittedly for running cloth business a licence under the provisions of

Shops and Establishment Act has to be obtained from the concern

authority. Similarly, returns are to be submitted with sales tax authorities in

respect of purchase and sale of the goods. It is also necessary to preserve

the purchase and sale vouchers by the businessmen. Not only that, income

tax return also required to be submitted in respect of profit earned.

Therefore, there could be availability of various documents to show that

she had carried out saree business at a particular point of time. However,

accused no.2 has not produced anything on record. Similarly, while

running private coaching classes a licence is required to be obtained and

record has to be maintained in respect of names of students and payment

received by them as tuition fees. So also, returns are to be submitted in

respect of profit earned from it with income tax authorities. However,

accused no. 1 has also not produced any document in support of this claim.

Moreover, no evidence has been adduced by her that she had not

maintained any such record or preserved it.

51. P.W. 15 investigating officer Shri. Wable while deposing before

this court has stated that as accused no. 2 failed to furnish any document to


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prove this income, he has rejected this part of her income. The reason

given by investigating officer is appears to be proper for rejection of this

part of income.

52. It is also claimed by accused no. 2 that she had earned income

of Rs. 1,16,600/- from the sale of share of Videocon and Usha limited.

Copies of her IT returns and balance sheet produced by her for the period

from 1990 to 1993 are part of exhibit 107. Perusal of these copies of

returns does not show that she had ever sold shares and debentures during

this period. So also she has not filed any thing on record in support of this

claim. Obviously a document has to be prepared after sale of shares and a

receipt is to be issued but accused no. 2 has even not given any details of

this transaction. Therefore, investigating officer has rightly rejected this

part of income claimed by accused no.2.

53. Prosecution has placed on record copy of one unregistered

partnership deed Exh.12 on record which has been admitted by accused

no. 2. As per this agreement accused no. 2 was inducted as a partner in

Deccan Queen Restaurant, Juhu, Mumbai and her share was fixed to the

extent of 33%. As per the said agreement accused no. 2 agreed to invest

amount of Rs. 5 lacs as her share from October 1991 to 25.01.1992. It is

the case of prosecution that accused no. 2 claimed that she had invested


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this amount in the said Restaurant as a partner of it and accused no.2 has

also not disputed this fact. Perusal of balance sheet filed along with IT

returns show that only amount of Rs. 1 lac was invested by her in the

financial year 1991-1992. It is not her case that she had not shown

remaining investment of Rs. 4 lacs in her returns. Nothing has been

explained by accused no.2 as to from where she invested remaining

amount of Rs. 4 lacs in the said Restaurant. Therefore, it appears that the

remaining amount of Rs. 4 lacs was invested by accused no. 1 in the name

of accused no.2 and a attempt was made to convert his ill-gotten wealth as

a wealth of accused no. 2. Accused no. 2 claimed that she earned Rs.

96,000/- as her share of profit from Deccan Queen Restaurant which has

been rejected by the investigating officer on the ground that structure of

Deccan Queen Restaurant is a illegal structure and therefore income

derived from the said Restaurant can not said to be the income earned

from lawful sources. However, the reason given by the investigating officer

appears to be improper for several reasons. In the first place the term

lawful sources of income used in section 13 (1) (e) relates with the income

earned by a public servant and not by a non public servant. Moreover, even

if the structure of the said Restaurant is said to be a illegal structure, it does

not reason to mind that profit earned from the sale of food items from that


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place amounts to an illegality. At the most Municipal Corporation can take

action for it by way of recovery of fine amount or by adopting some other

measures. Therefore, this part of income of accused no. 2 is required to be

accepted. Therefore, sum and substance of the discussion would be that

accused no. 1 invested amount of Rs. 4 lacs in the name of accused no. 2 in

the said Restaurant and she earned profit of Rs. 96,000/- towards her

share.

54. I have already pointed out that in the year 1987 and as per Exh.

15 accused no. 1 while purchasing a plot at Aurangabad for Rs. 40,000/-

invested amount of Rs. 10,000/- in the name of accused no.2. It is also

claimed by accused no. 2 that she incurred expenses of Rs. 54,620/- for the

development of the said plot alongwith accused no. 1 and her two minor

sons who have also spent this much amount. As per exhibit 16 & 17 this

plot was sold in the year 1990 and for Rs. 4 lacs and the said amount was

equally distributed amongst both the accused and their two sons. So after

deducting expenses it can be said that accused no.2 earned a profit of Rs.

45,380/- from the said plot.

55. P.W. 15 investigating officer stated before this court that accused

no. 2 claimed income of Rs. 28,000/- from 07.06.1990 to 04.06.1994

towards gifts from accused no.1 and his family members. However, she has


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Documents

A.K. Jain IPS Disproportionate Assests Case Judgement