2022 (3) TMI 857 - HC - Indian Laws

Source of Income of Public Servant or Ostensible Owner - Addl. CIT - Abuse of official position, as public servant - possession of disproportionate assets - It is argued that the prosecution has to prove its case beyond reasonable doubt and once the prosecution succeeds in doing so, the appellants may discharge the onus merely by the standard of preponderance of probabilities - prosecution of public servants with non-public servants - offences punishable under section 13 (2) read with 13(e) of the Act - HELD THAT - It is settled law that in the case of circumstantial evidence based on some foundational facts, the court draws inferences. When such inferences may be called legal inferences and when it falls in the realm of conjectures and surmises, the line may at times be blurred or dim. But in view of the settled law, it is bright and distinct - In view of the provisions of the Evidence Act and the law as laid down in the case of K. Ponnuswamy 2001 (7) TMI 1325 - SUPREME COURT , the natural presumptions considering the common course of natural events and human conduct has a big role to play to make inferences by the court. It helps the court to believe existence or non-existence of any fact or to consider its existence so probable that a prudent man ought to act upon the situation that it exists. Source of Income of Public Servant or Ostensible Owner - HELD THAT - In the absence of direct financial links, the source of income of ostensible owner is not to be examined, it would defeat the very purpose of enacting the Act. If a public servant by any means avoids any direct financial link and acquires property in the name of others, in such cases, if the source of income of ostensible owner is not examined, the matter cannot be investigated any further. Therefore, in such cases, where the public servant is charged with disproportionate assets along with non public servant and it is alleged that the properties were acquired in the name of non public servant, the court must examine the source of purchase money. It means as to how the ostensible owner acquired the money to purchase the property. The court below did not adopt any erroneous approach. The court below while examining the source of income of ostensible owner did proceed in accordance with law. Devolution of interest of the coparcenary property - whether A-1 was ever part of any HUF? - HELD THAT - In the instant case the partition has been effected by way of a Mutation Case as revealed in Ex. A-193. It is a public document. Such partition cannot be brushed aside on the ground that it is for the convenience and not actual partition - This Court is of the view that the court below rightly observed that agricultural income of A-2 was ₹ 45,000/- per year. For eight years, which is the check period, the total income has rightly been assessed as ₹ 3,60,000/-. ₹ 45,000/- rent from Rajpur Road house has also been added to it and the court below concluded that the income from agriculture as well as rent of A-2 for the check period is ₹ 4,05,000/-. This finding is based on evidence. It does not warrant any interference. This Court is of the view that the prosecution has been able to prove beyond reasonable doubt that A-1 had been in possession for which A-1 could not satisfactorily account, of pecuniary resources or properties disproportionate to his known source of income. A-1 purchased various properties in the name of A-2, A-3 and A-4 and others. Those properties are benami properties of A-1 - the prosecution has also been able to prove beyond reasonable doubt that A-1 attempted to obtain gratification other than legal remuneration from PW 6 I.K. Batta, for the purposes as disclosed in the earlier part of this judgment. This Court is of the view that the prosecution has been able to prove beyond reasonable doubt the offence punishable under Section 13(2) read with Section 13(1)(e) of the Act and Section 7 of the Act against A-1 - the court below has sentenced A-1 under Section 13(2) read with Section 13(1)(e) of the Act. The sentence is in accordance with law. It is also liable to be confirmed. This Court is of the view that interest of justice would be served if A-1 is sentenced to rigorous imprisonment for a period of 5 years with a fine of ₹ 10,000/- under Section 7 of the Act - this Court is also of the view that the prosecution has been able to prove beyond reasonable doubt that A-3 and A-4 abetted A-1, in the commission of offence punishable under Section 13(2) read with Section 13(1) (e) and Section 7 of the Act. The conviction of the appellant Swetabh Suman for the offence punishable under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988 is upheld and confirmed. The sentence imposed on the appellant Swetabh Suman under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988 is also upheld and confirmed - the appellant Swetabh Suman is convicted under Section 7 of the Prevention of Corruption Act, 1988 and is sentenced to rigorous imprisonment for a period of five years with a fine of ₹ 10,000/-. In default of payment of fine, the appellant Swetabh Suman shall undergo simple imprisonment for a further period of two months. Appeal disposed off.

Summary

Issues Involved:
1. Disproportionate assets of A-1.
2. Ownership and source of various properties.
3. Conviction under Section 11 of the Prevention of Corruption Act, 1988.
4. Confiscation of properties.

Detailed Analysis:

1. Disproportionate Assets of A-1:
The court found that A-1 had assets amounting to ?23,26,480/- more than his known sources of income. The court reviewed the statements of assets at the beginning and end of the check period, income during the check period, and expenditures. The court rejected A-1’s objections regarding the valuation of household goods, the car, cash in hand, and gold jewelry, finding the prosecution’s evidence credible and based on detailed analysis.

2. Ownership and Source of Various Properties:
- Rajpur Road House: The court concluded that A-1 constructed the house in the name of A-2. The valuation by CPWD was accepted over the defense’s valuation. The court found that A-1 procured building materials through associates and controlled the construction.
- Flat No. B-122, Panchvati Apartment, Noida: The court found that A-1, through a series of financial transactions and relationships, purchased the flat in the name of A-4. A-4 did not have the financial resources to buy the flat, and the draft for the purchase was arranged through a chain of Chartered Accountants connected to A-1.
- Hotel Uruvela International, Bodhgaya: The court accepted the prosecution’s valuation and found that A-1 constructed the hotel in A-3's name. A-3 did not have sufficient income to finance the hotel, and A-1 managed the hotel through close associates.
- Agricultural Land at Village Pondha, Dehradun: The court found that A-1 purchased the land in the names of Abhay Kumar Singh and Vinay Kumar. The vendors were pressured, and the buyers were not present at the execution of sale deeds. The financial transactions were controlled by A-1.
- Plot No. 10, Block C, Sector 50, Noida: The court found that A-1 purchased the plot in the name of A-2. The financial transactions and involvement of intermediaries like Sanjay Kumar Jain indicated A-1’s control.
- Flat No. 303, IRS Officers Society, Lucknow: The court found that A-1 purchased the flat in the name of A-2. The financial transactions and affidavits filled by A-1 indicated his control.
- Plot No. 12-A, USHA, Dehradun: The court found that A-1 managed the transactions and loan for the plot, which was allotted in his name but later transferred to A-2.
- Honda City Car: The court found that A-1 purchased the car in the name of A-2, using a forged ration card for registration and obtaining a fancy number.

3. Conviction under Section 11 of the Prevention of Corruption Act, 1988:
The court found that A-1 demanded gratification other than legal remuneration from PW 6 I.K. Batta, related to official acts. The court concluded that the prosecution proved beyond reasonable doubt that A-1 attempted to obtain such gratification, which falls under Section 7 of the Act. The court modified the conviction from Section 11 to Section 7 of the Act.

4. Confiscation of Properties:
The court upheld the confiscation of properties under the provisions of the Criminal Law Amendment Ordinance (No. 38) of 1944, read with Section 5(6) of the Prevention of Corruption Act, 1988. The properties included cash, houses, plots, cars, and other assets registered in the names of A-2, A-3, A-4, and others, which were found to be benami properties of A-1.

Conclusion:
The court upheld the conviction and sentences of A-1, A-3, and A-4, with modifications in the conviction under Section 11 to Section 7 of the Act. The appeals filed by A-2 abated due to her death. The confiscation of properties was confirmed. The detailed analysis of financial transactions, property ownership, and the roles of associates led to the conclusion that A-1 acquired disproportionate assets and managed properties through benami transactions.