2015 (5) TMI 463 - HC - Indian Laws

Possession of disproportionate assets / surplus income - known source of income - offence punishable under Section 13(1)(e) read with Section 13(2) of Prevention of Corruption Actand under Section 120-B of Indian Penal Code - Held that - It is well settled law that according to Krishnanand Agnihotri s case 1976 (12) TMI 187 - SUPREME COURT OF INDIA , when there is disproportionate asset to the extent of 10% the accused are entitled for acquittal. A circular has been issued by the Government of Andhra Pradesh that disproportionate asset to the extent of 20% can also be considered as a permissible limit. The margin of 10% to 20% of the disproportionate assets has been taken as a permissible limit, taking into consideration the inflatory measures. Since the value of apparels and slippers etc., are of insignificant value, I did not deduct this amount from the assets of DV & AC. The Prosecution has mixed up assets of Accused, firms and companies and also added the cost of construction i.e., ₹ 27,79,88,945/- and marriage expenses at ₹ 6,45,04,222/- and valued the assets at ₹ 66,44,73,573/-. If we remove the exaggerated value of cost of construction and marriage expenses, the assets will workout at ₹ 37,59,02,466/-.The total income of the Accused, firms and companies is ₹ 34,76,65,654/-. Lack of proportion amount is ₹ 2,82,36,812/-. The percentage of disproportionate assets is 8.12%. It is relatively small. In the instant case, the disproportionate asset is less than 10% and it is within permissible limit. Therefore, Accused are entitled for acquittal. When the principal Accused has been acquitted, the other Accused, who have played a lesser role are also entitled for acquittal. Decision in the case of KRISHNANAND AGNIHOTRI V/S. STATE OF M.P 1976 (12) TMI 187 - SUPREME COURT OF INDIA followed. In this case, the Trial Court has ignored the Income Tax proceedings as minimum evidentiary value. The Trial Court has not appreciated the evidence in a proper perspective. Though the Trial Court in its judgment mentioned that the accused availed loan by the Indian Bank, but it has not considered the same as income. Therefore, the Trial Court has erred in not considering the loans as income. Even the valuation though disputed by the defence the Trial Court has failed to examine the evidence relating to cost of construction at that relevant time and simply arrived at a conclusion that 20% of the cost has to be reduced without appreciating the evidence placed on record. This 20% reduction is calculated on surmises and conjectures. - Decided in favor of appellant.

Summary

Issues:
1. Disproportionate assets and income calculation.
2. Application of Krishnanand Agnihotri's case principle.
3. Evaluation of evidence by the Trial Court.
4. Rejection of claims by the accused.
5. Witness credibility and cross-examination.

Disproportionate assets and income calculation:
The judgment analyzed the assets and income of accused individuals, firms, and companies. The total assets were calculated at Rs. 37,59,02,466, while the total income was determined to be Rs. 34,76,65,654. The difference of Rs. 2,82,36,812 resulted in a percentage of disproportionate assets at 8.12%. Referring to Krishnanand Agnihotri's case, it was noted that disproportionate assets below 10% were considered permissible, leading to the entitlement of the accused for acquittal.

Application of Krishnanand Agnihotri's case principle:
The judgment highlighted the precedent set by Krishnanand Agnihotri's case, emphasizing that when disproportionate assets are below 10%, the accused are entitled to acquittal. It also mentioned a circular by the Government of Andhra Pradesh, which considered a permissible limit of 20% for disproportionate assets. The judgment applied these principles to the case at hand, where the disproportionate assets were found to be 8.12%, within the permissible limit for acquittal.

Evaluation of evidence by the Trial Court:
The judgment critiqued the Trial Court's evaluation of evidence, noting errors in considering loans as income and making arbitrary deductions for cost of construction and marriage expenses. The Trial Court was faulted for not appreciating the evidence properly, especially in relation to income tax proceedings and the valuation of assets. The judgment concluded that the Trial Court's findings were erroneous and not sustainable in law.

Rejection of claims by the accused:
The judgment addressed the rejection of claims by the accused, particularly in relation to marriage expenses and other expenditures. It found that the Trial Court had made unsubstantiated estimations and failed to consider relevant evidence presented by the defense. The judgment criticized the Trial Court for fixing liabilities without proper justification and for ignoring witness credibility in assessing claims.

Witness credibility and cross-examination:
The judgment discussed witness credibility and the cross-examination process, highlighting concerns about witness statements being inconsistent and unreliable. It emphasized that reliance on witnesses giving different statements at different stages could be unsafe. The judgment concluded that the Trial Court's failure to treat witnesses as hostile and its handling of cross-examination contributed to the infirmity of the judgment.

In the final order, the judgment allowed certain criminal appeals, acquitted accused individuals, discharged bail bonds, and set aside orders related to confiscation of properties based on the analysis of disproportionate assets, evaluation of evidence, rejection of claims, and witness credibility.