2015 (3) TMI 1426 - SC - Indian Laws

Bribe - possession of assets disproportionate to the known sources of income - High Court took the view that Rules 14, 17 and 19 of the M.P. Civil Services (Conduct) Rules, 1965 prohibit the public servant from accepting gifts or loan except in the manner prescribed therein - HELD THAT - The expression known sources of income in Section 13(1) (e) of the Act has two elements, first the income must be received from a lawful source and secondly the receipt of such income must have been intimated in accordance with the provisions of law, rules or orders for the time being applicable to the public servant. In N. Ramakrishnaiah 2008 (10) TMI 728 - SUPREME COURT , while dealing with said expression, it was observed that 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 (1) his property, or (b) his investment. In the instant case, every single amount received by the appellant has been proved on record through the testimony of the witnesses and is also supported by contemporaneous documents and intimations to the Government. It is not the case that the receipts so projected were bogus or was part of a calculated device. The fact that these amounts were actually received from the sources so named is not in dispute. Furthermore, these amounts are well reflected in the Income Tax Returns filed by the appellant. In similar circumstances, the acquisitions being reflected in Income Tax Returns weighed with this court in granting relief to the public servant. In D.S.P Chennai Vs. K. Ibasagarain 2005 (12) TMI 50 - SUPREME COURT , the fact that the money was treated in the hands of the wife of the public servant and that she was assessed by the Income Tax Department was taken note of while accepting the explanation given by the public servant. There is no violation of Section 13(1)(e) read with Section 13(2) of the Act. The judgment and order in appeal is set aside and the appellant is acquitted of the charges levelled against him - Appeal allowed.

Summary

Issues:
Challenge to judgment and order passed by High Court affirming conviction under Prevention of Corruption Act.
Interpretation of "known sources of income" under Section 13(1)(e) of the Act.
Compliance with M.P. Civil Services (Conduct) Rules, 1965 regarding acceptance of gifts and loans by public servants.
Consideration of receipts, intimation to authorities, and Income Tax Returns in determining disproportionate assets.
Applicability of previous court decisions in similar cases to grant relief to the appellant.

Analysis:
The appeal before the Supreme Court challenged the judgment of the High Court affirming the conviction of the appellant under the Prevention of Corruption Act. The appellant, a public servant in the Public Health Engineering Department of Madhya Pradesh, was found to possess assets disproportionate to his known sources of income. The prosecution alleged that the appellant had assets worth Rs.7,97,243, exceeding his total earnings of Rs.3,86,966 during a specific period. A case was registered under Section 13(1)(e) of the Act, leading to the appellant's conviction by the Trial Court.

The defense presented by the appellant included explanations for the assets, such as gifts received at his marriage, sums from family partition, bequest under a will, and loans for property purchase. The appellant contended that all receipts were duly intimated to the department and reflected in his Income Tax Returns. The Trial Court convicted the appellant based on the prosecution's case, which was upheld by the High Court, emphasizing compliance with the M.P. Civil Services Rules regarding acceptance of gifts and loans by public servants.

The Supreme Court analyzed the concept of "known sources of income" under Section 13(1)(e) of the Act, emphasizing that income must be lawful and intimated in accordance with applicable laws or rules. Referring to previous court decisions, the Court highlighted that receipts like share in partition, bequest, or loans from close relations could constitute known sources of income if duly intimated. The Court examined the M.P. Civil Services Rules, noting provisions related to gifts, loans, and property disclosure by government servants.

In the appellant's case, the Court found that every amount received was supported by evidence, documents, and intimation to the Government. The Court considered the Income Tax Returns reflecting the receipts and deductions made, reducing the alleged disproportionate assets to Rs.37,605, less than 10% of the appellant's income. Citing past judgments, the Court granted relief to the appellant, concluding that there was no violation of the Act. As a result, the Court set aside the High Court's judgment, acquitted the appellant of charges, and allowed the appeal, with the appellant already on bail.