2006 (1) TMI 636 - SC - Indian Laws

Issues Involved:
1. Conviction under Section 5(1)(e) read with Section 5(2) of the Prevention of Corruption Act, 1947.
2. Disproportionate assets beyond known sources of income.
3. Legitimacy of loans claimed by the appellant.
4. Valuation of assets, including house at Salem.
5. Inclusion of Travelling Allowance and Bonus as income.
6. Reversal of trial court findings by the High Court in an appeal by the accused.

Detailed Analysis:

1. Conviction under Section 5(1)(e) read with Section 5(2) of the Prevention of Corruption Act, 1947:
The appellant was convicted and sentenced under Section 5(1)(e) read with Section 5(2) of the Prevention of Corruption Act, 1947, for possessing assets disproportionate to his known sources of income. The Special Judge, Madurai, found him guilty and sentenced him to one year of imprisonment and a fine of Rs. 1,000, with a default sentence of four months of rigorous imprisonment. The High Court of Madras confirmed this conviction and sentence.

2. Disproportionate assets beyond known sources of income:
The prosecution's case was that the appellant had amassed assets worth Rs. 6,69,852.78 during the check period from 1.5.1976 to 29.5.1986, while his total income was Rs. 2,81,497.93, and his total expenditure was Rs. 88,645.92. Thus, his maximum likely savings were Rs. 1,92,852.01. After deducting this amount from the total assets, the disproportionate assets were calculated to be Rs. 4,63,551.60. The special court concluded that even after accepting some of the appellant's explanations, assets worth Rs. 3,05,985.39 remained unaccounted and unexplained.

3. Legitimacy of loans claimed by the appellant:
The appellant claimed that he had received loans amounting to Rs. 2,50,000 from PW-11 and PW-15, and Rs. 40,000 from his brothers and brothers-in-law. However, the special court rejected the explanation regarding the loans from PW-11 and PW-15, as well as the borrowings from relatives. The High Court also did not accept the appellant's claim for these loans. PW-11 and PW-15 testified that they had not lent any money to the appellant and that the documents showing the loans were created to help the appellant explain the cash found in his possession.

4. Valuation of assets, including house at Salem:
The appellant contended that the value of the house at Salem was Rs. 80,000, but the prosecution had valued it at Rs. 1,13,042.79. The special court accepted the appellant's valuation, but the High Court did not. The High Court took the value of the house as Rs. 1,13,042, thereby increasing the assets by Rs. 28,740. The High Court also recalculated the value of unaccounted assets to be Rs. 4,13,802.16.

5. Inclusion of Travelling Allowance and Bonus as income:
The appellant argued that his Travelling Allowance (Rs. 22,922.60) and Bonus (Rs. 8,000) should be included in his income. The special court accepted this claim, but the High Court did not. The Supreme Court referred to the case of C.S.D. Swami v. The State, which held that Travelling Allowance is meant to compensate for out-of-pocket expenses and is not a source of income. The appellant did not provide specific evidence of savings from the Travelling Allowance, making his claim untenable.

6. Reversal of trial court findings by the High Court in an appeal by the accused:
The appellant contended that the High Court could not alter the findings of the trial court in his appeal against conviction. The Supreme Court clarified that while the High Court cannot set aside an acquittal in an appeal against conviction, it can recalculate the extent of disproportionate assets based on evidence. The High Court's recalculations were within its jurisdiction under Section 386(b)(ii) of Cr.P.C.

Conclusion:
The Supreme Court dismissed the appeal, upholding the conviction and sentence. The Court found no error in the concurrent findings of the trial court and the High Court regarding the appellant's unexplained assets and rejected the appellant's contentions about the loans, valuation of the house, and inclusion of Travelling Allowance and Bonus as income.

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