V.V.Nageswara Rao, Hyderabad., vs The State Of Ap.,Rep Spl.Pp For ...
2023 Latest Caselaw 315 AP

 THE HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH R0Y

                   Criminal Appeal No.324 of 2017

JUDGMENT:-

     Assailing the judgment of conviction and sentence imposed

against the appellant, who is the sole accused in C.C.No.78 of 2013

on the file of the Special Judge for trial of SPE and ACB Cases,

Kurnool, dated 13.03,2017, this appeal is preferred by the appellant.

2)   Facts of the prosecution case may, briefly, be stated as follows:

     (a)   The accused officer is a public servant working as Chief

Engineer, H&SC, Circle-2 of Anantapur District, as on the date of

registration of crime in Crime No.2/RCA-ATP/2010, Anantapur

Range, from 06.07.2009 to 06.03.2010.

     (b)   He     was   initially   appointed   as   Assistant   Executive

Engineer in State Government Service on 30.03.1977. He worked as

A.E.E. at various places in the State of Andhra Pradesh.          He was

promoted as Divisional Executive Engineer and worked as Divisional

Executive Engineer at Macherla and Panyam.            Thereafter, he was

promoted as Executive Engineer and worked in Nalgonda. He was

then promoted as Superintendant Engineer and he worked as

Superintendant Engineer in Hyderabad, Nandyal, Hanamkonda,

Yemmiganur, Anantapur and Kadapa and finally he was promoted as

Chief Engineer.     While he was working as Chief Engineer in
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Anantapur, at that time, it is alleged that the ACB police received

credible information that the accused officer acquired moveable and

immoveable assets, which are disproportionate to his known source

of income. So, a case in Crime No.2/RCA-ATP/2010 of Anantapur

Range, was registered against him on 05.03.2010 under Section

13(1)(e) r/w.Sec.13(2) of the Prevention of Corruption Act (for short,

"the P.C.Act"). Surprise checks were made in the house of the

accused officer and in other places by ACB police on 06.03.2010.

So, the check period was taken from 30.03.1977 to 06.03.2010 i.e.

from the date of entry of the accused officer into Government service

till the date of search is conducted in the residential houses of the

accused officer and his near relatives. According to the prosecution,

the investigation revealed that the accused officer acquired and was

in possession of the assets worth of Rs.1,06,51,122/- as shown in

Annexure-I. His income during the said period from all the known

sources was arrived at Rs.91,57,148/- as detailed in Annexure-II.

The total expenditure incurred by the accused officer during the

above check period was arrived to a tune of Rs.67,75,005/- as

detailed in Annexure-III. Thus, according to the prosecution, the

likely savings of the accused officer from his known source of income

is Rs.23,82,143/-. So, it is stated that the accused officer was in

possession of disproportionate assets in his name and in the name of

his family members i.e. his wife and son to an extent of

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Rs.82,68,979/- as on the terminal date of check period i.e.

06.03.2010 and he could not satisfactorily account for the same. It

is alleged that inspite of giving him an opportunity to explain as to

how he is in possession of the said assets disproportionate to his

known source of income that he failed to explain the same.

According to the prosecution, most of the immoveable assets are

acquired by the accused officer in the name of his wife and his son

and they are his benami transactions and he purchased the said

properties in the name of his wife and his son. Therefore, the

accused officer is liable for punishment for the offence punishable

under Section 13(1)(e) r/w.Sec.13(2) of the P.C.Act.

(c) After completion of the investigation, the charge-sheet

was filed and after the accused officer made his appearance in the

trial Court, he was examined under Section 239 Cr.P.C. and charge

under Section 13(1)(e) r/w.Sec.13(2) of the P.C. Act was framed

against him. The same was read over and explained to him and he

abjured the guilt and claimed to be tried.

(d) To substantiate the case of the prosecution, the

prosecution got examined PW.1 to PW.67 witnesses and got marked

Ex.P1 to Ex.P129 documents.

(e) In the examination held under Section 313 Cr.P.C, the

accused officer denied the incriminating evidence adduced against

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him by the prosecution. He has filed a written statement and also

got examined DW.1 and DW.2 witnesses, who are his wife and his

son and also got marked Ex.D1 to Ex.D37 documents in proof of his

defence.

(f) At the culmination of the trial, after considering the

evidence on record and after hearing both the prosecution and the

accused officer, the learned Judge found the accused officer guilty for

the aforesaid offences and accordingly, convicted him and sentenced

him to undergo rigorous imprisonment for a period of two years and

to pay a fine of Rs.5,000/- and in default of payment of fine amount,

to undergo simple imprisonment for a period of two months. The

remand period undergone by the accused officer at the pre-trial stage

is ordered to be set off under Section 428 Cr.P.C.

3) Aggrieved thereby, the instant appeal has been preferred by the

appellant questioning the legality and validity of the impugned

judgment of conviction and sentence.

4) Heard learned counsel for the appellant and learned Standing

Counsel for ACB and Special Public Prosecutor for the respondent.

5) Learned counsel for the appellant would submit that 20

immoveable properties and 8 moveable properties were shown by the

prosecution in Annexure-I and among the said 20 immoveable

properties, only two properties i.e. item No.1 property is in the name

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of the accused officer and his wife and item No.15 property is in the

name of the accused officer. He would submit that the other

properties i.e. item Nos.2 to 7, 9 to 14, 16 and 17 are in the name of

the wife of the accused officer and the properties shown in item

Nos.8, 18, 19 and 20 are in the name of the son of the accused

officer. He would submit that the wife of the accused officer, who is

examined as DW.1, was doing business in running a beauty clinic

and also doing sari business and other businesses and she was also

an income tax assessee and she is sufficiently earning and she

purchased the said properties with her own earnings and they are

not purchased by the accused officer benami in the name of his wife.

He would also submit that similarly the son of the accused officer

has independently purchased the properties in his name with his

own earnings and they are not purchased by the accused officer

benami in the name of his son and the accused officer has clearly

explained the same in his explanation submitted to the ACB police

during the course of investigation under Exs.P123 and P124 and

they did not take the same into consideration and they have wrongly

shown that the said properties are acquired by the accused officer in

the name of his wife and his son. He would submit that if the said

properties, which are in the name of DW.1 and DW.2, are excluded

from consideration, the properties which are in the name of the

accused officer would be proportionate to his known source of

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income. He would submit that the prosecution has miserably failed

to prove that the accused officer acquired the said properties in the

name of his wife and his son i.e. DW.1 and DW.2 by adducing any

acceptable legal evidence and on the other hand, the accused officer

has examined his wife and his son as DW.1 and DW.2 and also got

marked abundant documentary evidence to prove that the said

properties were purchased by DW.1 and DW.2 with their own

earnings and that the accused officer has nothing to do with the

same. He would submit that even the trial Court did not properly

appreciate the evidence on record and arrived at an erroneous

conclusion and recorded a finding of guilt against the accused officer.

6) It is also contended that the investigating officer waited till the

accused officer retired from service and, thereafter, he filed the

charge-sheet and it is only to avoid obtaining sanction to prosecute

the accused officer that he filed the charge-sheet after the accused

officer retired from service. Therefore, he would submit that the

impugned judgment of conviction and sentence is legally

unsustainable and thereby prayed to set aside the impugned

judgment of conviction and sentence and acquit the accused officer.

7) The learned Standing Counsel for ACB and Special Public

Prosecutor appearing for the respondent would submit that although

the wife of the accused officer, who is examined as DW.1, was doing

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business and earning on it, the evidence on record proves that the

accused officer has acquired the properties in her name and they are

benami transactions and they are not the separate properties of

DW.1. He would also submit that even the properties, which are in

the name of his son, who is examined as DW.2, are purchased by the

accused officer and they are also benami transactions and the

accused officer has purchased the same in the name of his wife and

his son. So, he would submit that if the properties, which are in the

name of DW.1 and DW.2, are taken into consideration, they clearly

establish that the accused officer acquired assets disproportionate to

his known source of income with ill-gotten money. He would submit

that the accused officer did not obtain permission from competent

authority before purchasing the said properties and that the accused

officer also did not file the annual property statements. Therefore, he

would submit that the trial Court has arrived at a right conclusion

on proper appreciation of evidence on record and thereby found the

accused officer guilty of the charge levelled against him and

accordingly convicted and sentenced him to undergo imprisonment.

So, he would strongly support the impugned judgment of the trial

Court and thereby prayed to dismiss the appeal.

8) The accused officer was appointed as A.E.E. in the State

Government service on 30.03.1977. Thereafter, he got promotions

from time to time and as on date of registration of the present crime,

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he was working as Chief Engineer in the highest cadre in the

department in Anantapur. The case was registered on 05.03.2010

and the searches in his house and other places took place on

06.03.2010. The assets said to have been acquired by him during

the said period and the income of the accused officer during the said

period was taken into consideration to ascertain whether the accused

officer acquired assets disproportionate to his known source of

income or not.

9) About 20 immoveable and 8 moveable properties were

identified by the prosecution alleging that he has acquired the said

assets during the said check period and that they are

disproportionate to his known source of income. In this context, it is

relevant to note here that out of the said 20 immoveable properties,

most of the properties i.e. item Nos.2 to 7, 9 to 14, 16 and 17 are in

the name of the wife of the accused officer by name Satyavathi, who

was also examined as DW.1 in this case. The properties shown in

item Nos.8, 18, 19 and 20 are in the name of the son of the accused

officer by name V.Narayanadas, who was also examined as DW.2.

Therefore, only item Nos.1 and 15 are in the name of the accused

officer. The other properties are in the name of DW.1 and DW.2.

Now, the prosecution asserts that the said major part of the

properties i.e. item Nos.2 to 7, 9 to 14, 16 and 17 are acquired by the

accused officer benami in the name of his wife, who is examined as

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DW.1, and item Nos.8, 19, and 20 are acquired by the accused

officer benami in the name of his son, who is examined as DW.2. So,

when DW.1 and DW.2 are the ostensible owners of the aforesaid

properties, which admittedly stand in their name and when the

prosecution alleges that they are not the real owners and it is the

accused officer, who is the real owner, and that he purchased the

same in their names and they are benami transactions, the burden is

heavy on the prosecution to prove and establish that DW.1 and DW.2

are not the real owners of the said properties and that they are

purchased by the accused officer in their names and that they are

his benami transactions with legal, cogent and acceptable evidence,

more particularly, when the accused officer has taken a clear stand

that both his wife and his son, who are examined as DW.1 and

DW.2, got independent source of earnings, and that they have

purchased the said properties on their own in their respective names

and they are the real owners of the said properties.

10) In a similar case based on identical facts, where the

prosecution sought to prosecute a public servant on the ground

that the properties, which are in the name of wife and other family

members of the accused officer, are benami transactions, and that

they are purchased by the accused officer in their names, the

erstwhile High Court of Andhra Pradesh in the case of

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M.Sreeramulu v. State of A.P.1 held at para.4 of the judgment

as follows:

"4. The fact that the case relates to the alleged disproportionate assets said to have been held by the appellant during the check period i.e. 1-1-1971 to 26-10-1983. In the matters of this nature, the prosecution has to establish that the various items which it attributes to the public servant are held by him directly or even indirectly. Where the properties stand in the name of the public servant the same does not pose any problem. However, in cases where the properties are held in the names of persons other than the public servant, necessary evidence has to be adduced to establish that the public servant is the true owner of the said assets, though they stand ostensibly in the name of different persons. It is with this background that the case needs to be examined."

11) Further, the law is also well settled that when wife of a

public servant got independent source of income and when some

properties stand in her name, whether moveable or immoveable,

simply because she is living with her husband, who is a public

servant, it cannot be presumed that the said properties are

purchased by the public servant in the name of his wife and they

are his benami transactions. Husband is not the implied agent of

the wife to deal with her properties and wife is to be considered as

a lawful owner of the said properties which stand in her name

1 2003 (2) ALT (Cri) 142 = 2003 (1) ALD (Cri) 740 = MANU/AP/1100/2003

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unless contrary is proved with acceptable legal evidence. The

erstwhile High Court of Andhra Pradesh in the case of Jawaharilal

Daima & Co. v. Chinta Chittemma 2 after considering elaborately

the Law of Agency to decide whether husband is the implied agent of

the wife in respect of the properties standing in the name of the wife,

held at para.11 of the judgment as follows:

"....None of the aforesaid rulings or the views expressed by the authors support the proposition that a Hindu husband has implied authority to sell the property of his wife if they are living together and leading a harmonious family life. There is no such presumption in law. Pollock and Mulla in their Treatise on Indian Contract Act expressed the view at page 845:

"A husband has no authority by virtue of marriage to make a contract on behalf of his wife."

Further held that,

If the wife has her own property I think, the presumption is that she acts on her own authority. The ancient doctrine that the husband and wife are one person is not true in modern times. The wife cannot be reduced to a subordinate position in respect of her property matters by the application of the doctrine of implied agency. The obligation on the part of the husband to meet the requirements of his wife stems from the fact of cohabitation in a domestic establishment. By implied authority, the wife acts as the agent of the husband making the later liable for the expenditure incurred by her in respect of necessaries of life. There cannot be any such implied authority in a case where the wife owns separate properties. Marriage will not make the husband an agent of the wife to deal with her property matters without her authority. In Phuljari Devi v. Mithal Lal : (AIR 1971 All. 494), the

2 1989 (1) ALT 335 = 1989 (1) APLJ 333 = MANU/AP/0368/1988

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Allahabad High Court held that by virtue of marriage a husband has no authority to contract on behalf of his wife."

12) Thus, from the proposition of law laid down in the aforesaid

judgment, the legal position is clear that when wife owns her own

separate property, it shall be presumed that she acts on her own

authority and the husband is not her implied agent to deal with

her property. When that be the legal position as regards the

property owned by a wife, when the prosecution asserts that the

husband is the actual owner in respect of the properties, which

are standing in the name of his wife and which are being dealt by

her independently, the prosecution has to prove with strong legal

evidence that she is not the real owner and the husband is the

actual owner of the same.

13) As regards the proof of benami transactions also, the law is

very well settled that the party, who asserts that a particular

transaction relating to a property is benami transaction, the

burden is on the party who asserts it to be a benami transaction

to prove the same.

14) The question with regard to acquisition of property in

benami came up for consideration before various Courts in India

and the law has been set at rest stating that if a person claims any

transaction as benami transaction, then the law requires him to

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establish the said fact for the reason that the person in whose

name the property is purchased is presumed to be the real owner

of the property.

15) The question with regard to benami transaction has been

gone in detail by the Apex Court in the case of Jayadayal Poddar

v. Bibi Hazra3. The Apex Court held as follows:

"It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly proves the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of a benami is the intention of the party or parties concerned; and not unoften, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof. The reason is that a deed is a solemn document prepared and executed after considerable deliberation and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs. Though, the question whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formula or acid test, uniformly applicable in all situations, can be laid down; yet in weighing the probabilities and for gathering the relevant indicia, the Courts are usually guided by these circumstances:

3 AIR 1974 SC 171 = (1974) 1 SCC 3

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(1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any between the claimant and the alleged benamidar; (5) the custody of the title-deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale."

16) Again, in Bhim Singh v. Kan Singh4 the Apex Court

following the decision rendered in the case of Jaydayal Poddar3

(supra) reiterated the same principle and held as under (at page

734):

"The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct etc."

4 AIR 1980 SC 727

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17) In the ease of S. K. Devi v. J. P. Singh5, the question that

fell for consideration before the Apex Court was as to whether the

property standing in the name of the wife shall be accepted as

benami purchase by the husband in the name of his wife or not.

The Apex Court laid down the following principle of law in the said

judgment:

"The law with regard to benami transactions where the property is alleged to have been bought in another's name is well settled. The burden of proof is, to begin with, on the party pleading that a transaction is benami. A variety of circumstances are relevant in this connection like the source of the consideration for the acquisition of the property, the possession of the property, the conduct of the parties or their predecessors in relation to it, the custody of the title deeds and so on. The most important fact, however, is the source of the money, but the other facts also play varying parts. This burden does not rest in one place but shifts to the other side, and it increases if the original parties to the transaction are dead. Suspicious circumstances are not sufficient to prove the benami character of a transaction; but if evidence on the other side does not exist, even slight but forceful evidence on the part of the person alleging the benami nature of the transaction may be sufficient. It is from this angle that the case has to be judged, and at the very start, we arc constrained to say that, though the learned subordinate judge bore the correct law in mind, he seems to have placed the burden initially upon the plaintiff. The question of burden of proof at this late stage has become academic because when the parties have led all the evidence that they wish to lead, an inference must necessarily be drawn from the entire

5 1962 BLJR 314

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evidence, irrespective of the source from which it comes. In this case, each side has drawn support from the evidence brought into the case by the other. In view of the fact that the High Court went into all the evidence to draw its contrary conclusion, it becomes necessary to see whether the conclusion reached by the High Court or that reached by the Subordinate Judge is right in the light of the facts established."

18) Again, in the case of Gapadibai v. State of Madhya

Pradesh6, the three-Judge Bench of the Apex Court held at

para.3 of the judgment as follows:

"3. It was suggested by the State that plaintiff was really a benamidar for Defendant No.5. Apart from the fact that there was no such plea taken by that State, no issue on this point was suggested by it before the trial Court. In order to prove the benami nature of the transaction the State could have led evidence to show (1) that defendant No.5 paid the consideration, (2) that he had the custody of the sale deed. (3) that he was in possession of the properly and (4) the motive for the transaction None of these factors has been proved by the State. The High Court appears to have misplaced the onus on the plaintiff to prove that she was the real owner of the house in question instead of finding whether or not Defendant No. 5 had any title to it. The evidence of Pws 1, 2, 3, and 6 clearly proved that the house was purchase by the plaintiff. The trial Court believed the evidence of these witnesses which was supported by the document including Exhibits P2 and P4 as also a revenue receipt The High Court made a serious attempt to examine the intrinsic merits of the testimony of these witnesses. Even if the evidence of these witnesses is excluded from consideration, the registered sale deed duly executed was sufficient to prove the title of

6 AIR 1980 SC 1040 = (1980) 2 SCC 327

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plaintiff in respect of the house in absence of any plea of benami or evidence by the state to show that Defendant No. 5 was the real purchaser......".

19) Thus, from the conspectus of law laid down in the above

judgments, in order to prove that the properties which are

ostensibly standing in the name of the wife i.e. DW.1 are actually

purchased by the accused officer and that they are benami

transactions, so also, in the name of DW.2, who is the son of the

accused officer, the prosecution has to prove and establish that

the actual sale consideration was paid by the accused officer and

that he obtained the registered sale deeds in the name of DW.1

and DW.2 and that the accused officer has been in actual

possession and enjoyment of the said properties and that he has

been dealing actually with the said properties and enjoying the

same.

20) If the evidence adduced by the prosecution is considered in

the light of the principles of law laid down in the aforesaid

judgments by the Apex Court, there is absolutely no legal evidence

on record forthcoming to prove that the accused officer paid the

sale consideration to purchase the properties i.e. item Nos.2 to 7,

9 to 14, 16 and 17, which are in the name of DW.1, and to purchase

the properties i.e. item Nos.8, 18, 19 and 20, which are in the name

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of DW.2. On the other hand, the evidence on record clinchingly

establishes that DW.1 has been doing business and she got

independent source of earning being an income tax assessee and she

purchased the said properties in her name with her own earnings

and that she has been dealing with the said properties personally

and enjoying the said properties and also the income derived from

the said properties. Similarly, the evidence on record also proves

that DW.2 got independent source of earnings and that he purchased

the properties, which are in his name and he has been dealing with

the said properties and enjoying the same. The said evidence clearly

proves that they are not benami transactions as alleged by the

prosecution.

21) In order to prove that the wife and the son of the accused

officer got independent source of earnings, he got them examined as

DW.1 and DW.2. DW.1 is the wife. She deposed in her evidence that

she has completed her graduation in commerce and that she has

been running a boutique - TIARAS in Hyderabad. She further

deposed that she also worked as Manager of a beauty clinic saloon in

London as "Beauty at Anjus" for one year and she was paid 2,000

pounds per month. She has also produced Ex.D11 photographs in

London shop, the place where she worked in London. She further

deposed that after her marriage, she was very active in doing

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business as lady entrepreneur during the year 1985-86 and that she

was also selected for entrepreneur development programme

conducted by the A.P. Government and APITICO at Guntur. She has

produced Ex.D12, seven photographs in proof of her selection and

conducting training programmes and in proof of the fact that she

used to run a sari printing unit at Syamala Nagar, Guntur. She

stated that she has done the said sari printing in Guntur from 1987

to 1991 and that she got income of Rs.50,000/- per annum after

deducting all expenses in the said sari business. She also deposed

that she also did business in running a beauty clinic under the name

and style "New Look Beauty Clinic" in Hyderabad during the year

1986-87 and thereafter, shifted to Guntur and also to Nalgonda and

then again to Hyderabad and that she ran the said beauty clinic

business from 1987 to 2007 and that she is a qualified beautician

and also trained by APITICO. Ex.D13 are the nine photographs

produced by her to prove that she ran New Look Beauty Clinic at

various places and that she gave training to number of students.

Ex.D14, three photographs are produced in proof of inauguration of

various branches by Ms.Vani Viswanath, a film star. Ex.D15, twelve

photographs are produced to show that she was felicitated on

various occasions and received awards from the then Hon'ble Chief

Ministers and Hon'ble Governors and Hon'ble Speakers for the

excellent work done by her in New Look Beauty Clinic as deposed by

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her in her evidence. Ex.D16 three photographs are also produced to

show that she was felicitated by the cine actors. She further deposed

that she was running electronic software company in the name and

style "Priya Software Company" during the year 2005-2006 and that

she used to get PDF files to software programme files by engaging 15

software engineers and that she got work from Karvy Consultency,

Ananya Software Company and Response Info Tech etc. She also

stated that the electronic gadgets etc. that were seized by the ACB

were gifted to her by her son, sister, brother and uncle, who are

residing abroad and that the gold ornaments shown in the inventory

were given to her by her parents and parents-in-law as Sthreedhana

at the time of the marriage. She finally stated that item Nos.1 to 7, 9

to 14, 16, 17, 26 and 27 immoveable properties shown in Annexure-I

are acquired by her with her earnings derived from various

businesses and by availing bank loans. She also stated that item

Nos.8, 18 to 20 immoveable properties shown in Annexure-I are

acquired by her son with his earnings. She has also produced

Ex.D18 registration certificate issued by various small scale

industries to run Krishna Sai Sari Printers and Ex.D19 diploma of

Wonder International Beauty School, which is pertaining to beauty

and hair dress. She has produced Ex.D21 diploma issued by

P.V.Ramesh Babu of Madras relating to make-up. Ex.D22 is the

beauty therapy course certificate issued by Gehini Beauty Clinic to

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DW.1. Ex.D24 is the High Technology Beauty Therapy with herbal

treatment certificate issued by EVS Academy, Visakhapatnam and

Ex.D25 is the certificate issued by A.P. Labour Department for New

Look Beauty Clinic, Hyderabad, for the year, 1995. Ex.D26 is the

document relating to registration of M/s.Priya Soft, Yusufguda,

Hyderabad, and Ex.D27 are two cheques issued in favour of Priya

Soft by Ananya Soft Tech Pvt. Ltd., for Rs.3.5 Lakhs during the year

2002. She stated that as Ananya Soft Tech Pvt. Ltd. paid cash of

Rs.3.5 Lakhs subsequently, that she did not encash Ex.D27

cheques. Ex.D28 is the document showing appointing her as

Peerless Agent in Peerless Company on 18.10.1984. Ex.D1 to Ex.D9

are the copies of income tax returns filed by her showing the income

derived from the aforesaid businesses and she stated that she got

income of Rs.13.00 lakhs and that she obtained loan from LIC and

Indus Bank and purchased two vehicles in her name. She stated

that the total loan amount availed by her was Rs.27,04,000/- and

that she has discharged the same. She also stated that she has

obtained loan of Rs.4,14,000/- from Sharbuja Money Lenders,

Hyderabad, and as she could not discharge the said loan amount

that the gold ornaments pledged by her were sold away by the money

lenders. She then deposed that she was subscriber of Jayabharathi

Chit Fund and another two private chit funds and she obtained loan

of Rs.2,20,000/- from Jayabharathi Chit Fund and she has

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discharged the same. She also stated that she got income of

Rs.42,70,000/- out of her business transactions, loans, chits and

gold pledges, and that she has purchased four house plots of 200 sq.

yards each in her name and three plots in the name of her son on

monthly installments and that she has purchased a house plot in

Happy Homes with her earnings and that the accused officer is no

way concerned with the said moveable and immoveable properties,

which are in her name.

22) Nothing was elicited in her cross-examination to discredit the

testimony given by her regarding the source of her earnings and the

businesses done by her and regarding the authenticity of the

aforesaid documents that were produced by her in proof of her

earnings. It is significant to note here that the fact that DW.1 has

done the aforesaid businesses and earned on it is not specifically

denied by the prosecution. Therefore, the aforesaid oral and

abundant documentary evidence on record proves that DW.1 got

independent source of earning and that she has purchased both

moveable and immoveable properties in her name with her own

earnings. The evidence on record also proves that she has paid the

sale consideration in respect of the said properties, which are in her

name and that she has been independently dealing with the said

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properties and she has been in possession and enjoyment of the

same.

23) The evidence adduced by the prosecution itself proves that she

paid the sale consideration in respect of the properties that are

purchased in her name. PW.7 is the Sub-Registrar of Banjara Hills,

Hyderabad and he deposed that Ex.P15 certified copy of the

registered sale deed was executed by GPA M.Yadi Reddy in favour of

V.Satyavathi i.e. DW.1 on 02.02.1996 relating to a flat in Ganapathi

Commercial Complex, Yellareddyguda, Hyderabad and he deposed

that the vendee paid Rs.2,55,000/- towards sale consideration and

stamp duty and registration fee. Similarly, he deposed that Ex.P16

certified copy of the sale deed was also executed by GPA M.Yadi

Reddy in favour of DW.1 relating to a shop in the said Ganapathi

Commercial Complex, Yellareddyguda, Hyderabad and that the

vendee paid Rs.2,54,000/- towards sale consideration, stamp duty

and registration expenses. He then deposed that Ex.P17 and Ex.P18

certified copies of registered sale deeds were executed in favour of

DW.2, the son of the accused officer, and that the said vendee paid

Rs.4,69,500/- and Rs.15,48,000/- towards sale considerations and

also the stamp duty and registration expenses. Thus, the said

evidence of PW.7 proves that DW.1 and DW.2 paid the sale

considerations in respect of the said properties purchased by them.

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Similarly, PW.8 another Sub-Registrar of Ranga Reddy District also

deposed that the properties under Exs.P24, P25, P26, P27 and P29

certified copies of the sale deeds relating various plots in Sri Sai

Partha Real Estate Pvt. Ltd., were purchased by DW.1 on various

dates and the vendee paid sale considerations and also the stamp

duty and registration expenses. He also deposed that DW.2

purchased plots from the same Sri Sai Partha Real Estate Pvt. Ltd.,

under Exs.P28 and P30 certified copies of the sale deeds and the

vendee paid the sale considerations, stamp duty and registration

expenses. Exs.P31 to P37 are the original registered sale deeds of

Exs.P24 to P30 certified copies. PW.9 is another Sub-Registrar of

Mudinepalli in Krishna District and he deposed that under Exs.P38,

P39, P40, P41 and P42 certified copies of registered sale deeds that

DW.1 purchased the said properties and that the vendee paid the

sale considerations, stamp duty and registration expenses. PW.10

another Sub-Registrar of Nallapadu in Guntur District, stated that

under Exs.P47, P48 and P49, DW.1 purchased the properties in her

name and in the cross-examination, he deposed that as per Ex.P47

and Ex.P48, DW.1 paid the sale consideration.

24) Although, PW.14, who sold certain house sites under Exs.P39

and P42 to DW.1 initially stated in his evidence that they were sold

to the accused officer and he obtained the registered sale deeds in

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the name of DW.1, it is relevant to note that in the cross-examination

he deposed that he never met the accused officer and talked with

him and that the sale transactions under Exs.P43 and P46 were

taken under the supervision of two persons by name Kiran and

Narayana Rao and that they paid the sale consideration to him. So,

the said evidence given by him in the cross-examination proves that

the earlier evidence given by him in his examination-in-chief that the

accused officer obtained sale deeds in the name of his wife is false.

When it is established in the cross-examination that he never met

the accused officer and he did not talk to him, it cannot be said that

the accused officer obtained the sale deeds from him in the name of

DW.1.

25) The evidence of PW.16, who sold properties in Ganapathi

Commercial Complex under Exs.P19 and P20 to DW.1 shows that

DW.1 paid the sale consideration to him, as he clearly deposed that

he received sale considered from her. PW.22, who sold a flat in the

apartment to DW.1 under Ex.P54, also stated that he received the

sale consideration from the uncle of DW.1 on various occasions and

on four or five occasions DW.1 also accompanied him. In the cross-

examination, he deposed that DW.1 and her uncle Veera Raghava

Swamy approached him and finalized the sale price and that he has

not seen the accused officer at any time. Thus, the evidence on

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record proves that DW.1 got independent source of earning by doing

various businesses as discussed supra and that she also availed

loans both from the bank and the money lenders and purchased the

said properties in her name by paying sale consideration to the

vendors. It also shows that she has been independently dealing with

her properties and enjoying the same.

26) Although PW.23, who is the tenant in respect of a shop room

initially deposed that he took the said shop room for rent from the

accused officer, he deposed in his cross-examination that he did not

receive any receipts relating to payment of rent from the accused

officer and it is important to note that he has admitted in his cross-

examination that he has entered into agreement with DW.1 and that

she was looking after collection of the rent and maintenance of the

shop. Most importantly, it is to be noted that in the cross-

examination of the Special Public Prosecutor, he has stated that he

paid the advance rent and monthly rent to DW.1 and not to the

accused officer. So, this evidence of PW.23, the tenant, also shows

that DW.1 has let out the said shop room to him and she has

collected the rents from him, which shows that she has been dealing

with the property independently. Even the evidence of PW.19 also

shows that DW.1 after closing her beauty parlor has let out the same

to third party.

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27) Similarly, the evidence on record also shows that as regards

the properties, which are in the name of DW.2 is concerned, that he

got independent source of earning and that he has purchased the

said properties by paying sale consideration to the vendors and that

he has been independently doing the said business. The evidence on

record also shows that both DW.1 and DW.2 availed loans for the

said purpose. The evidence of PW.18 shows that the flat was

purchased by DW.2 through his GPA, who is DW.1, and DW.1 paid

sale consideration relating to the said flat. DW.2 also clearly

deposed in his evidence as to how he got source of income stating

that he studied in USA and also got job in USA and as to how he

earned money in USA and purchased the property, which are in his

name in India.

28) The evidence of PW.27, who is the Senior Assistant in LIC

Housing Finance Limited shows that both the accused officer and his

wife DW.1 availed loan of Rs.12.00 Lakhs to purchase the property

under Ex.P50 and that they have subsequently discharged the said

loan amount with interest. The evidence of PW.29 Senior Manager of

UCO Bank shows that the accused officer availed the education loan

for the education of his son, who is DW.2, and that he has

discharged the same. Similarly, the evidence of other bank officials

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also shows that the accused officer, his wife DW.1 and his son DW.2

availed loans to purchase the properties.

29) Thus, the evidence on record clinchingly establishes that the

accused officer has purchased only two immovable properties in his

name and he has properly accounted for it as the same were

purchased with his earnings and by availing loan from the Bank,

which is evident from the testimony of PW.26 Assistant Manager of

State Bank of Hyderabad and PW.27. So, it cannot be said that he

has purchased the said properties with ill-gotten money and in fact

the evidence on record shows that the same were purchased by him

with his earnings and the loan availed by him. Similarly, the other

properties, which are acquired by DW.1 and DW.2, were also

purchased with their own earnings and they are not purchased by

the accused officer in their names and they are not his benami

transactions. The prosecution has miserably failed to prove that the

said properties, which are standing in the name of DW.1 and DW.2,

were purchased by the accused officer on their behalf and that he

paid the sale consideration and that he has been enjoying the said

properties. There is absolutely no evidence whatsoever on record to

show that they are the benami transactions made by the accused

officer in their names. So, they are to be considered as the own and

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separate properties of DW.1 and DW.2 and they cannot be treated

and considered as the properties of the accused officer.

30) If the said properties i.e., item Nos.2 to 7. 9 to 14. 16 and 17

standing in the name of DW.1 and item Nos.8, 18, 19 and 20

standing in the name of DW.2 are excluded from the consideration,

as they are the separate and own properties of DW.1 and DW.2, only

two immoveable properties belong to the accused officer. As he has

accounted for the same, as discussed supra, it cannot be said that

he has acquired the properties disproportionate to his known source

of income. They are well within the permissible limits of his income.

31) Even though it is the case of the prosecution that the house

document of the accused officer was found in the house of

Smt.M.Haritha, in the searches made during the course of

investigation, the same is not proved to the satisfaction of the Court.

The said M.Haritha or her husband Giridhar, in whose house it is

alleged that the said documents are found during search, were not

examined in this case to prove the said fact. Only PW.3, who is the

alleged mediator, was examined to show that certain house

documents were recovered from the house of said M.Haritha. But, it

is significant to note that he did not depose in his evidence that they

are the documents standing in the name of the accused officer or his

family members. So, it is not proved in this case that documents in

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the name of the accused officer or DW.1 and DW.2 were found in the

house of Smt.M.Haritha.

32) It is also significant to note that PW.67, the Investigating

Officer, admitted in his evidence that his investigation disclosed that

the wife of the accused officer i.e. DW.1 maintained beauty clinic and

generated income, as shown in Ex.P109 and Ex.P110 income tax

returns. He also admitted that as per the information furnished to

him by the money lender that DW.1 pledged gold ornaments worth of

Rs.5,89,248/- and availed loan of Rs.4,14,000/-. He also admitted

in his cross-examination that DW.1 has run beauty clinic in

Hyderabad. He further admitted in his cross-examination that while

dealing with each item of the said 20 immovable assets that the

accused officer was not present at the time of registration of the sale

deeds. It is also in his evidence that there is no evidence collected by

him to show that the accused officer has paid the sale consideration

and to show that he purchased the said properties in the name of

DW.1 and DW.2. He admitted that the son of the accused officer,

who was working in USA, was sending money through Western

Union money transactions and that his investigation revealed that a

sum of Rs.2,63,264.94 ps. was received by DW.1 on seven occasions

and a sum of Rs.30,078.04 ps. was received by the accused officer on

two occasions from DW.2. He also admitted that item No.15 property

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was purchased by the accused officer for Rs.14,13,975/- and he

availed bank loan of Rs.13,30,000/- for the said purpose. He

admitted that no bills were found in the house to show that gold

articles were purchased by the accused officer. He further admitted

that the accused officer purchased the Hyundai Accent car by

availing bank loan. He also admitted that the Jayabharath chit

transactions are in the name of DW.1 and that there is no evidence

to show that the accused officer paid the installments of the said

three chits.

33) Although it is the case of the prosecution that the accused

officer did not obtain permission from the concerned in the

department before purchasing the properties by his wife and son and

that he did not disclose the acquisition of properties by them in his

annual property statements, it is relevant to note that PW.51 D.E.E.

working in the administrative wing of the department deposed in his

cross-examination that if the family members are not dependants on

the employee and if they have independent source of income and

they are income tax assessees, that the employee need not obtain

permission or to intimate to the department. Therefore, as DW.1 and

DW.2 got independent source of income and they are income-tax

assesses and as DW.2 is also living separately with his family and

they are not dependants on the accused officer, as per the evidence

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of PW.51, the accused officer need not obtain permission to acquire

properties by them or intimate about the acquisition of properties by

them to the department. So, it is not an adverse circumstance

against the accused officer.

34) In the case of Ashok Tshering Bhutia v. State of Sikkim7,

the Apex Court held at para.36 as follows:

"Not filling up the form under the mandatory requirement of Rule 19 of the 1981 Rules may render the appellant liable for disciplinary proceedings under service jurisprudence, but that itself cannot be a ground for rejection of the said documents in toto without examining the contents thereof. In this regard, we are of the considered view that the courts below have committed a grave error and the contents thereof should have been examined."

35) Then at para.40, it is held as follows:

"40. The contention of the respondents regarding non- compliance with the 1981 Rules adversely affecting the evidentiary value of Ext.D-4 must be rejected for at least two reasons:

(i) The 1981 Rules are not rules of evidence. The admissibility and probative value of evidence is determined under the provisions of the Indian Evidence Act, 1872. These Rules are merely service rules by which government servants in Sikkim are expected to abide.

Consequently, the respondent has not been able to provide any cogent reason why the contents of Ext.D-4 should be disregarded; and

7 (2011) 4 SCC 402

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(ii) Rule 19(i)(a) of the 1981 Rules does undoubtedly require government servants to, on first appointment to any service or post and thereafter at the close of every financial year, submit to the Government the return of their assets and liabilities. However, it is to be noted that the said Rule envisages that public servants will submit such returns in a prescribed form. Despite being repeatedly questioned by this Court, the respondents were unable to produce such form. Thus, it cannot be said that the appellant did not comply with the said Rule as in the absence of such a form it was impossible for him to have done so (through no fault of his own). In any event, failing to submit such returns even if there had been no such a form, would make the appellant liable to face disciplinary proceedings under the service rules applicable at the relevant time. The provisions of the 1981 Rules cannot by any stretch of imagination be said to have the effect of rendering evidence inadmissible in criminal proceedings under the PC Act, 1988.

Thus, in such a fact situation, the appellant could not be fastened with criminal liability for want of compliance with the said requirement of the Rules."

36) In the case of Man Singh v. Delhi Administration8, it is

held as follows:

"While dealing with the question of presumption under Section 4 of the Act it has been laid down that the accused is not required to prove his defence by the strict standard of proof beyond reasonable doubt but it is sufficient if he offers an

8 AIR 1979 SC 1455

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explanation or defence which is probable and once this was done presumption under Section 4 stands rebutted."

37) In the instant case, the accused officer has satisfactorily

rebutted the said presumption under Section 4 of the Act by showing

the preponderance of probabilities to prove his defence, as discussed

in detail supra.

38) In the case of DSP, Chennai v. K.Inbasagaran9, the Apex

Court held that when accused satisfactorily established that the

monies and assets recovered belong to his wife, which she amassed

from the businesses run by her separately, in the absence of any

evidence that the assets belonged to the accused, he cannot be held

liable under the P.C. Act for such assets.

39)    In   the       case   of   State        of   Andhra   Pradesh     v.     J.

Satyanarayana10,         the three-Judge Bench of the Apex Court held

that evidence of income tax returns and orders thereon can be relied

on as it has been corroborated by other reliable and independent

evidence and that the said tax returns by accused's wife had been

filed much prior to registration of case against the accused and as

such, the plea of the accused that his wife has borrowed money for

construction of the alleged house is rightly accepted.

9 (2006) 1 SCC 420 10 (2017) 6 SCC 628

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40) In the case of Vasant Rao Guhe v. State of Madhya

Pradesh11, it is held that a person cannot be subjected to a criminal

prosecution either for a charge, which is amorphous and transitory

and on evidence that it is conjectural or hypothetical. It is held that

as the accused was subjected to a trial, in which both charges and

evidence on aspects with vital bearing thereon lacked certitude,

precision and unambiguity, prosecution failed to prove the charges

beyond all reasonable doubt and conviction stands reversed.

41) The judgments relied on by the learned Standing Counsel for

ACB and Special Public Prosecutor are not applicable to the present

facts of the case. As regards the case in N.P. Jharia v. State of

Madhya Pradesh12 is concerned, that was a case where, as the claim

made by the accused officer that DW.1 used to cultivate the land was

found to be totally unacceptable, the contention that Rs.32,000/-

was acquired from the said source was rejected. Similarly, the

contention that the accused officer got Rs.80,000/- under a Will was

not found to be proved as the Will was not produced, the said plea

was also rejected and as the plea relating to availing loans from the

relatives was also not proved, it was rejected. So, the accused officer

was found guilty in the said case. In the instant case, as discussed

11 (2017) 14 SCC442 12 (2007) 7 SCC 358

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supra, it is established that DW.1 and DW.2 got their independent

source of income.

42) As regards the case in Hindustan Petroleum Corporation

Limited v. Sarvesh Berry13 is concerned, it was a case relating to

the legal issue whether criminal prosecution and departmental

proceedings can be simultaneously taken up or not. So, it has no

application to the facts of the present case.

43) The other judgment of the erstwhile High Court of Andhra

Pradesh, in the case of M.Kishan v. State14, that was a case where

the accused officer failed to prove that his wife got any source of

income and as the wife was not examined to prove her source of

income, the Court held that the properties are purchased in her

name by the husband. In the instant case, there is abundant

evidence on record to prove that the wife of accused officer got

independent source of income and she was also examined in this

case as DW.1 to prove the same. So, the aforesaid judgment is also

not applicable to the present facts of the case.

44) The trial Court erroneously disbelieved the version of the

accused officer that DW.1 got independent source of income on the

13 (2005) 10 SCC 471 14 2005 (1) ALD (Cri) 462 = 2005 Cri.L.J. 2103

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sole ground that in some of her sale deeds that it is mentioned in the

calling particulars that she is a house wife. It is an inadvertent

recital made in the said sale deeds. When there is abundant oral

and documentary evidence on record to prove that DW.1 was doing

business and got income source and when the same is also admitted

by the investigating officer, the said stray and inadvertent entry

made in the sale deeds pales into insignificance. The trial Court did

not properly appreciate the evidence on record and did not at all

consider the vital admissions elicited by the defence in the cross-

examination of the witnesses and also in the testimony of the

witnesses, which prove that DW.1 and DW.2 got independent source

of income and that they have purchased the properties in their own

name with their own earnings, which ultimately led the trial Court to

arrive at an erroneous conclusion.

45) Upon reappraisal of the evidence on record and when the same

is subjected to judicial scrutiny, this Court found that the properties

which are in the name of DW.1 and DW.2 are acquired by them

independently with their own source of earnings and that they are

not benami transactions of the accused officer. This Court found

that the properties, which are in the name of the accused officer, are

not disproportionate to his known source of income. Therefore, the

prosecution failed to prove the charge leveled against the accused

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officer with acceptable legal, cogent and convincing evidence. The

guilt of the accused is not proved beyond all reasonable doubt.

46) Therefore, the impugned judgment of conviction of the trial

Court is legally unsustainable and the same is liable to be set

aside.

47) Resultantly, the Criminal Appeal is allowed setting aside the

impugned judgment of conviction and sentence imposed against

the accused officer in C.C.No.78 of 2013 on the file of the Special

Judge for trial of SPE and ACB Cases, Kurnool. The accused officer

is found not guilty of the charge leveled against him and he is

acquitted of the said charge. His bail bonds shall stand cancelled.

The attachment of properties also stands raised.

As a sequel, miscellaneous applications, pending if any,

shall also stand closed.

________________________________________________ JUSTICE CHEEKATI MANAVENDRANATH ROY Date:24-01-2023.

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