a.k. jain ips disproportionate assests case judgement
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SPECIAL CASE 62 of 2005 1
IN THE SPECIAL COURT FOR GR. BOMBAY, AT BOMBAYEXHIBIT NO.389
SPECIAL CASE NO.62 OF 2005
The State(Anti-Corruption Bureau, Mumbai
vide C.R.No.54/2000) ..Complainant
VERSUS
1) Ajaykumar Gyanchand JainA-3, Maval Flat, Moledina Road,
Camp, Pune 411001.2) Anita Ajaykumar JainA-3, Maval Flat, Moledina Road,Camp, Pune 411001. ..Accused
Appearance :Ld. SPP Smt. Kalpana Chavan for the State.Ld. Advocate Shri. Shingnapurkar for the Accused.
CORAM : H.H.The Special Judge (Under P.C.Act)SHRI V.A.DAULATABADKAR(Court Room.No.46)
Dated : 11.07.2013
J U D G M E N T
1. Accused no. 1 being a public servant has been charged under
sections, 11, 13 (1) (e) r/w Sec. 13(2) of The Prevention of Corruption Act,
1988 for amassing wealth of Rs. 48,87,549.16 ps in his name and in the
names of his dependents which is disproportionate to the known sources of
his income and his family members whereas accused no. 2 who is a wife of
accused no. 1 has been charged under Section 109 of Indian Penal Code for
http://mamta/Room.No.37http://mamta/Room.No.37 -
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SPECIAL CASE 62 of 2005 2
aiding and abetting accused no. 1 for the commission of offence under
Section 13(1) (e) r/w Section 13 (2) of The Prevention of Corruption Act,
1988.
Case of the prosecution is as under ;
2. Accused no.1 was born on 07.08.1953. He is having three younger
brothers and one sister. In the year 1974, he obtained a Masters degree in
Zoology from Meerut University. His marriage was performed with accused
no. 2 on 28.02.1975 and from the said wedlock they have begotten elder
son Rahul on 19.11.1981 and another son Vipul on 07.08.1986. From
August 1974 to June 1981 he worked as a Associate professor in Degree
college, Mawana situated in Utter Pradesh. From July 1981 to August 1982
accused no. 1 served as a District Panchayat Raj Officer at Mujaffar Nagar,
Utter Pradesh. Thereafter, he was selected by Union Public Service
Commission as a IPS officer of Maharashtra cadre and he joined service as a
trainee IPS officer on 01.09.1982. From 01.09.1982 to 31.01.1984 he
undergone training at Hyderabad and Masoorie. Thereafter, he was posted
at various places in Maharashtra from the year 1984 to 1996.
3. On 05.11.1990 Joint Commissioner, Anti Corruption Bureau,
Maharashtra State, Mumbai was asked to keep a discreet watch on the
activities of accused no. 1 who then was working as a Deputy Commissioner
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SPECIAL CASE 62 of 2005 3
of Police, Zone IX in Mumbai. Thereafter, on 05.03.1992 Joint
Commissioner, Anti Corruption Bureau, Mumbai ordered a discreet inquiry
in to the assets of accused no. 1 and his family members which was
completed on 31.12.1992 and report was forwarded to Additional Chief
Secretary, Home Department, Maharashtra, Mumbai and permission was
sought to conduct an open enquiry in to the assets of accused no. 1 and his
family members and the said permission was given on 05.03.1994.
Accordingly open enquiry was conducted relating to the assets of accused
no. 1 and his family members and then report to that effect was forwarded
to the Competent Authority. During the enquiry it was found that accused
no. 1 has amassed wealth in his name and his family members which is
disproportionate to the known sources of his income and of his family
members. Therefore, Additional Deputy Commissioner of Police Shri.
Kamalakar Pandurang Sawant then attached to Anti Corruption Bureau,
Mumbai filed a First Information Report on 06.11.2000 against accused no.
1 & 2 for the offences under Sections 13 (1) (e) r/w Section 13(2) of The
Prevention of Corruption Act, 1988 r/w Sec. 109 of Indian Penal Code.
Accordingly, a crime bearing no. 54/2000 was registered against both the
accused by ACP Wable and investigation was commenced.
4. In the First Information Report it was alleged that from
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SPECIAL CASE 62 of 2005 4
01.09.1982 to 31.03.1995 accused no. 1 and 2, their two sons, A.K. Jain
(HUF) and Saralkanta Jain Family Trust of which the accused no. 2 is the
sole trustee have earned income of Rs. 23,53,499/- from known and legal
sources. It was also alleged that during the said period their expenses were
found to be of Rs. 9,64,560/- and after deducting these expenses from the
income, likely saving would be of Rs. 13,88,939/- but both the accused,
their sons, A.K. Jain (HUF) and Saralkanta Jain Family Trust have found in
possession of assets of Rs.45,36,956/- and as per these calculations accused
no. 1 found in possession of assets worth Rs. 31,48,017/- disproportionate
to his known sources of income. It was also stated in F.I.R. that certain
heads of income claimed by both the accused, their sons and their firms
have been rejected for cogent and valid reasons. Complainant had spelt out
description of all the heads relating to income, expenditure and assets of
both the accused and their dependents in F.I.R.
5. After registration of crime, Investigating officers ACP Wable
decided to carry out search of the house of accused as well as at his other
known addresses. Accordingly, he decided to carry out search at the house
of accused situated at Pune and instructed ACP Rane and ACP Sanghai to
conduct search at two other addresses of the accused.
6. On 07.11.2000 ACP Wable carried out search at Flat no. A-3,
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SPECIAL CASE 62 of 2005 5
Maval flats, Moledina Road, Camp, Pune which belongs to both the
accused. At the time of house search, accused no. 2 was present in the
house and search was carried out in her presence. At the time of search one
valuer namely Shivalkar was also called. Some gold and silver ornaments
were found during the said search. Inventories of all these articles were
separately prepared. Ornaments were got valued from the valuer.
Accordingly, panchanama Exh. 195 was completed by ACP Wable in
presence of two panchas. At the time of search ACP Wable seized one
receipt Exhibit 26 and valuation report Exh. 197 Colly. On that day ACP
Rane and ACP Sanghai have also carried out search at the residence of one
Rajesh Tripathi and at Deccan Queen Restaurant respectively and seized
some documents.
7. On 08.11.2000 both the search panchanamas along with seized
documents were forwarded to ACP Wable. Then ACP Wable gone through
the entire papers of enquiry handed over by complainant Sawant.
Thereafter, he called various witnesses relating to the transactions entered
into by the accused and recorded their statements. He also collected
documentary evidence from the witnesses as well as from various
authorities.
8. During investigation ACP Wable called upon both the accused to
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SPECIAL CASE 62 of 2005 6
file explanations in respect of material found to him relating to income,
expenditure and assets. In response to it accused no. 1 filed explanation on
some occasions in respect of some of the items. However, accused no. 2 did
not file any explanation instead of several opportunities.
9. After completion of investigation it was found to ACP Wable that
accused no. 1 is in possession of assets worth Rs. 46,80,144.90 ps. which
were disproportionate to his known sources of income. Accordingly, he
prepared a final report and through his superior a proposal was forwarded
to Government of Maharashtra to obtain sanction for the prosecution of
accused no. 1. Consequently, Government of Maharashtra forwarded
proposal to the Ministry of Home Affairs, Government of India. After
considering the material produced, Government of India initially accorded
sanction vide Exh. 217 dated 2.04.2004. However, it was found that some
correction is necessary and accordingly as per the request of Government of
Maharashtra, a corrected sanction order Exh. 219 was issued by
Government of India on 16.09.2004. Accordingly, ACP M.D. Pawar filed
chargesheet against both the accused in this court.
10. After filing of the chargesheet, my Ld. Predecessor issued
process against accused no.1 for the offences under section 11, 13(1) (e)
r/w Sec. 13 (2) of P.C. Act 1988 and also issued process under section 109
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SPECIAL CASE 62 of 2005 7
of IPC against accused no.2 on 08.12.2005. In response to it both the
accused have appeared before this court. Thereafter, my Ld. Predecessor
framed charge against accused no.1 u/s 11, 13(1) (e) r/w Sec. 13 (2) of
P.C. Act 1988 and u/s 109 of IPC against accused no.2 at Exhibit 6 on
04.10.2008. It was read over to both the accused in vernacular to which
they pleaded not guilty and claimed trial. Their pleas were recorded at
Exhibit 7 & 8 respectively. Thereafter, a notice was given by the prosecution
u/s 294 of Cr.P.C. to the defence side. Accused no. 1 and 2 have admitted
various documents and those were exhibited by my Ld. Predecessor.
Thereafter, matter was proceeded for trial.
11. In order to substantiate charge against both the accused,
prosecution has examined 19 witnesses. Thereafter, Ld. SPP filed evidence
close pursis on 08.02.2013 at Exh. 381. Thereafter, this court has recorded
statements of both the accused under section 313 of Code of Criminal
Procedure at Exh. 382 & 383 respectively on 20.02.2013. Defence of both
the accused is of total denial and of false implication. It is also defence of
accused no. 1 that calculations were not properly made and they have been
falsely implicated. However, none of the accused has chosen to adduce any
evidence in their defence. Therefore, this court heard arguments of both the
sides at length. Both the sides have also filed separate charts at Exh. 387 &
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SPECIAL CASE 62 of 2005 8
388 respectively in respect of income, expenditure and assets in support of
their case.
12. After considering the oral and documentary evidence available
on record and the submissions of both the sides, following points arise for
my determination and I am giving my findings to it in subsequent
paragraphs ;
Sr. Nos. Points Findings
1
Whether sanction order Exh. 290 accorded for the
prosecution of accused no.1 is legal and valid.
Affirmative
2
Whether prosecution has proved that accused no.1
being a public servant during a period from
01.09.1982 to 31.03.1995 amassed assets in his
name and in the name of accused no.2, their two
sons, A.K. Jain (HUF) And S.K. Jain Family Trust
through out India and which are found to be
disproportionate to his and his familys known
sources of income and they have also failed to
account it satisfactorily and thereby guilty of
criminal misconduct as contemplated under section
13 (1) (e) r/w sec. 13 (2) of P.C. act 1988.
Affirmative
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3
Whether prosecution has proved that accused no.2
being a wife of accused no. 1 had knowingly and
willing aided and abetted accused no. 1 for
acquiring assets in her name and in the name of
Saral Kanta Jain Family Trust of which she is the
sole trustee and thereby committed offence under
section 13 (1) (e) r/w sec. 13 (2) of P.C. act 1988
r/w sec. 109 of IPC.
Affirmative
4
Whether prosecution has proved that accused no.1
being a public servant between January 1990 to
November 1991 accepted a Maruti Van, a valuable
thing free of cost or for inadequate consideration
from a slumlord namely Birendrakumar
Muneshwarnath Shukla who then was active
within zone IX , Mumbai and connected with the
official functions of accused no.1 who then was
working as a Deputy Commissioner of Police of
that area and thereby committed an offence
punishable under section 11 of P.C. Act 1988.
Negative
5
What order ?. As per final
order
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SPECIAL CASE 62 of 2005 10
REASONS
AS TO POINT NO.1
13. Ld. SPP Smt. Kalpana Chavan submitted that in this case P.W. 14
who was then working as a Under Secretary in ministry of Home Affairs of
Government of India is examined by the prosecution in order to prove
sanction order Exh. 219. She further submitted that while deposing before
this court he stated that initially opinion was obtained by Government of
Maharashtra from its Law and Judiciary department and thereafter proposal
seeking sanction for the prosecution of accused no. 1 was forwarded to
Government of India. Thereafter, he obtained opinion of various authorities
i.e. of Director of Police, Joint Secretary, Police, Home Secretary, Deputy
Prime Minister and Home Minister, Vigilance Section attached to Ministry
of Home affairs, Deputy and Joint Secretary of Vigilance, Central Vigilance
Commission and lastly a proposal was submitted with Chief secretary of
home department. All these authorities have gone through the entire papers
of investigation and after being satisfied and with the approval of Home
Minister, Government of India sanction order for the prosecution of accused
no. 1 has been issued by Government of India. According to her P.W. 14 has
signed the sanction order on behalf of Government of India according to
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rules of business framed by Government of India. Therefore, in this case it is
immaterial as to whether P.W. 14 was competent to remove accused no. 1
from his service at the relevant time. The Government of India is competent
to remove accused no. 1 from his service. Perusal of sanction order also
shows application of mind on the part of Government of India. Nothing has
been brought during cross examination of P.W. 14 that sanction order Exh.
219 has been issued without application of mind. Therefore, she submitted
that prosecution has proved that a valid sanction has been given for the
prosecution of accused no. 1.
14. Per contra, Ld. Adv. Shri. Shingnapurkar appearing for both the
accused submitted that in sanction order Exh. 219 there is no reference that
opinion from Central Vigilance Commission was obtained. Sanction order
also shows that incorrect figures in respect of income, expenditure and
assets have been shown by the sanctioning authority. Sanctioning authority
while giving sanction for the prosecution of accused no.1 for the offence
under section 11 has not considered that no document was forwarded to
show that Virendrakumar Shukla is a slumlord. Even in absence of this
material sanction has been given wrongly for the offence under section 11
of P.C. Act, 1988. In sanction order there is no reference in respect of
intimation given by accused no. 1 to the Government about acquiring of
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SPECIAL CASE 62 of 2005 12
assets. Therefore, with these submissions he submitted that there is non
application of mind on the part of sanctioning authority and the material
available on record shows that sanction is accorded in mechanical manner.
Therefore, for this sole reason accused no. 1 is entitle for acquittal.
15. In order to prove that a legal and valid sanction order has been
issued for the prosecution of accused no. 1, prosecution has examined P.W.
14 Shri. Yashpal Dhinga who in the year 2004 was working as under
Secretary in the Ministry of Home Affairs of Government of India.
16. While deposing before this court this witness has stated that
along with proposal his ministry had received opinion Exh. 212 given by
Law and Judiciary department, Government of Maharashtra. He also
deposed that initially the proposal was verified by his department and then
forwarded to Law Ministry, Government of India. He further deposed that
thereafter proposal was forwarded to various authorities related with the
service matters of IPS officers and finally proposal was submitted to Home
Minister who after going through the papers gave his consent for issuance
of sanction order. In order to show that the consents were given by various
authorities, he has produced notesheets Exh. 213,214 , 215 & 216.
17. This witness also deposed that after receipt of consent from all
the concerns, he prepared sanction order and then signed it and issued on
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behalf of Government of India for the prosecution of accused no. 1 for the
offences under sections 11, 13( 1) (e) r/w Sec. 13 (2) of P.C. Act, 1988.
Though adv. for accused raised several grounds to show that sanction order
is illegal and invalid but during cross examination nothing has been
brought on record in order to show that it was issued in mechanical
manner. During cross examination competency of this witness to sign the
sanction order has not been challenged by accused no. 1. Only it was
suggested to this witness that no documents to show that Virendrakumar
Shukla is a slumlord were forwarded along with investigation papers.
However, merely because documents were not forwarded which is a
admitted fact, sanction order can not be termed as invalid. There was no
reason for sanctioning authority to disbelieve the allegations made by the
investigating officer in this regard.
18. It is settled position of law that giving sanction is a
administrative act and prima facia satisfaction of the authority in respect of
existence of a prima facia case is the only requirement to accord sanction.
From sanction order it appears that after going through the material,
authority was satisfied about the existence of prima facia case and therefore
sanction was accorded for the prosecution of accused no.1. It is also settled
position of law that sanctioning authority is not expected to sit in judgment
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chair and to analyse the material meticulously. Similarly while considering
the proposal in respect of case pertains to acquiring of disproportionate
assets by a public servant, authority is not expected to carry out
mathematical calculations and only to consider as to whether or not the
assets shown to be acquired by the public servant are disproportionate to
his known sources of income. Here in this case, perusal of sanction order
shows that authority had considered all the material aspects in proper
manner and then accorded sanction.
19. Ld. SPP in support of her contentions rightly placed her reliance
on one judgment of Honble Apex court delivered in the case of State by
Police Inspector, Appellant V/s T. Vanktesh Murthy, Respondent reported in
(2004) 7 S.C. 763 in which following ratio is laid down ;
Prevention of Corruption Act, 1988 Sc 19 (3) and (4)
Offences under the Prevention of Corruption Act Invalid sanction
Effect of Merely because there is any omission, error or irregularity in
the matter of according sanction that does not affect the validity of the
proceeding unless the court records the satisfaction that such error,
omission or irregularity has resulted in failure of justice The said logic
applies to the appellate or revisional court also- On facts, sanction
granted by the Superintending Engineer of the Karnataka Electricity
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Board was not sufficient to prosecute the accused Trial court
discharging accused, but granting liberty to prosecution to obtain fresh
sanction and file a fresh charge-sheet - Revision before High Court by
State - Dismissal of Held, courts below had not kept in view the
requirements of sub-ss. (3) and (4) relating to failure of justice -
Orders of the courts below set aside- Trial court directed to record
findings in terms of sub-ss. (3) (b) and (4) Service Law Karnataka
Electricity Board Employee (Classification, Disciplinary Control and
Appeal) Regulations 1987- Words and phrases - Failure of justice -
Criminal Procedure, 1973, Ss. 465 and 401.
20. Therefore, after considering the material available on record
and the law laid down by the Honble Apex Court in the above referred
judgment, this court is of the opinion that sanction accorded in the present
case for the prosecution of accused no. 1 is legal and valid. Hence, I answer
point no. 1 in the affirmative.
AS TO POINT TO NO. 2 & 3
21. As both these points are inter dependent, I am taking these
points together for discussion in order to arrive at proper conclusion.
22. Prior to marshaling evidence available on record, the law
relating to cases of disproportionate assets and particularly in respect of
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Sec. 13 (1) (e) of P.C. Act 1988 is required to be taken in to account. Sec.
13 (1) (e) of P.C. Act 1988 reads as under ;
Criminal misconduct by a public servant (1) A public servant is said
to commit the offence of criminal misconduct-
(a) ---------------------------------------
(b) --------------------------------------
(c) --------------------------------------
(d) ----------------------------------------
(e) If he or any person on his behalf, is in possession or has, at
any time during the period of his office, been in possession for which the
public servant can not satisfactorily account, of pecuniary resources or
property disproportionate to his known sources of income.
Explanation For the purposes of this section, known sources of
income means income received from any lawful source and such
receipt has been intimated in accordance with the provisions of any
law, rules or orders for the time being applicable to a public servant.
23. So reading of this section shows that after a public servant
found to be in possession of assets disproportionate to known sources of
income, then it is for accused to satisfactorily account and to disclose
pecuniary resources available to him in order to show that he is not
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acquired any assets disproportionate to his known sources of income.
Secondly, as per the explanation to this section the sources from which the
income is received must be lawful sources and in addition to it, it also duty
of the public servant to intimate all the income and sources from which he
acquired assets and accordance with the provisions of law, rules or orders
applicable to a public servant.
24. Similarly, Hon'ble Apex court in the case of State of
Maharashtra. Appellant V/s Vasudeo Ramchandra Kaidalvar, Respondent
reported in AIR 1981 S.C. 1186 while dealing with sec. 5 (1) (e) of the old
Act, observed in para no. 12 & 13 as under;
Prevention of Corruption Act (2 of 1947 S. 5 (2) read with S. 5
(1) (e) Public Servant Possession of assets disproportionate to income
Failure to account satisfactorily for such possession Liable to be
convicted for offence under S. 5 (2) r/w S. 5 (1) (e) Prosecution nee d
not disprove all possible sources of his income. Decision of Bombay H.C.
Reversed (Evidence Act. 1872 ), Ss. 101 to 104 ; 114)
12. The term and expressions appearing in S. 5 (1) (e) of the Act
are the same as those used in the old Section 5 (3). Although the two
provisions operate in two different field, the meaning to be assigned to
them must be the same. The expression known sources of incomes
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means Sources known to the prosecution, so also, the same meaning
must be given to the words for which the public servant is unable to
satisfactorily account occurring in S. 5 (1) (e). No doubt, S. 4 (1)
provides for presumption of guilt in cases falling under S. 5 (1) (e)
therein. For, the reason is obvious. The provision contained in S. 5 (1)
(e) of the Act is a self- contained provision. The first part of the Section
casts a burden on the prosecution and the second on the accused. When
S. 5 (1) (e) uses the words for which the public servant is unable to
satisfactorily account, it is implied that the burden is on such public
servant to account for the sources for the acquisition of
disproportionate as sets. The High Court, therefore, was in error in
holding that a public servant charged for having disproportionate
assets in his possession for which he can not satisfactorily account
cannot be convicted of an offence under Section 5 (2) read with Section
5 (1) (e) of the Act unless the prosecution disproves all possible sources
of income.
13. That takes us to the difficult question as to the nature and
extent of the burden of proof under section 5 (1) (e) of the Act. The
expression burden of proof has two distinct meanings (1) the legal
burden, i.e. the burden of establishing the guilt, and (2) the evidential
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burden, i.e. the burden of leading evidence. In a criminal trial, the
burden of proving everything essential to establish the charge against
the accused lies upon the prosecution, and that burden never shifts.
Notwithstanding the general rule that the burden of proof lies
exclusively upon the prosecution, in the case of certain offences, the
burden of proving a particular fact in issue may be laid by law upon the
accused. The burden resting on the accused in such cases is, however, no
so onerous as that which lies on the prosecution and is discharged by
proof of a balance of probabilities. The ingredients of the offence of
criminal misconduct under S. 5 (2) read with S. 5 (1) (e) are the
possession of pecuniary resources or property disproportionate to the
known sources of income for which the public servant can not
satisfactorily account. To substantiate the charge, the prosecution must
prove the following facts before it can bring a case under S. 5(1) (E)
namely, (1) it must establish that the accused is a public servant (2) the
nature and extent of the pecuniary resources or property which were
found in his possession, (3) it must be proved as to what were his
known sources of income i.e. known to the prosecution, and (4) it must
prove, quite objectively, that such resources or property found in
possession of the accused were disproportionate to his known sources of
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income. Once these four ingredients are established, the offence of
criminal misconduct under S. 5(1) (e) is complete unless the accused is
able to account for such resources or property. The burden then shifts to
the accused to satisfactorily account for his possession of
disproportionate assets. The extent and nature of burden of proof
resting upon the public servant to be found in possession of
disproportionate assets under Section 5 (1) (e) cannot higher than the
test laid by the court in Jhagans case (AIR 1966 SC 1762)Supra, i.e. to
establish his case by a preponderance of probability. That test was laid
down by the court following the dictum of Viscount Sankey, L.C. in
Woolmington V. Director of Public Prosecutions (1935) AC 462. The
High Court has placed an impossible burden on the prosecution to
disprove all possible sources of income which were within the special
knowledge of the accused. As laid down in Swamys case (AIR 1960 SC
7) (Supra), the prosecution can not, in the very nature of things, be
expected to know the affairs of public servant found in possession of
resources or property disproportionate to his known sources of income,
i.e. his salary. Those will be matters specially within the knowledge of
the public servant within the meaning of S. 106 of the Evidence Act,
1872, Section 106 reads :
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Section 106, When any fact is especially within the knowledge of any
person, the burden of proving that fact is upon him.
In this connection, the phrase the burden of proof is clearly used in the
secondary sense, namely, the duty of introducing evidence. The nature
and extent of the burden cast on the accused is well settled. The accused
is not bound to prove his innocence beyond all reasonable doubt. All
that he need do is to bring out a preponderance of probability.
25. While dealing with scope of section 5 (1) (e) of the P.C. Act of
1964 which is almost identical to sec. 13 (1) (e) of the present Act,
constitution bench of the Hon'ble Apex court in the case of K.
Veeraswami, Appellant V/s Unions of India & Ors, Respondents observed
in para 72 to 74 as under ;
Prevention of Corruption Act, 1947 Section 5 & 6 Held (per
majority: Bverma J. contra), applicable to Judges of High Courts and
Supreme Court including Chief Justice of India.
72. the soundness of the reasoning in Wasudeo Ramchandra
Kaidlwar case has been doubted. Counsel for the appellant urged that
the view taken on Section 5 (3) can not be imported to clause (e) of
Section 5 (1) and the decision, therefore, requires reconsideration. But
we do not think that the decision requires reconsideration. It is
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significant to note that there is useful parallel found in Section 5(3)
and clause (e) of Section 5(1). Clause (e) creates a statutory offence
which must be proved by the prosecution. It is for the prosecution to
prove that the accused or any person on his behalf, has been in
possession of pecuniary resources or property disproportionate to his
known sources of income. When that onus is discharged by the
prosecution, it is for the accused to account satisfactorily for the
disproportionality of the properties possessed by him. The section
makes available statutory defence which must be proved by the accused.
It is a restricted defence that is accorded to the accused to account for
the disproportionality of the assets over the income. But the legal
burden of proof placed on the accused is not so onerous as that of the
prosecution. However, it is just not throwing some doubt on the
prosecution version. The legislature has advisedly used the expression
satisfactorily account. The emphasis must be on the word
satisfactorily. That means that accused has to satisfy the court that
his explanation is worthy of acceptance. The burden of proof placed on
the accused is an evidential burden though not a persuasive burden.
The accused however, could discharge that burden of proof on the
balance of probabilities either from the evidence of the prosecution
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SPECIAL CASE 62 of 2005 23
and/or/evidence from the defence.
73. This procedure may be contrary to the well-known principle
of criminal jurisprudence laid down in Woolmington v. Director of
Public Prosecutions that the burden of proof is always on the
prosecution and never shifts to the accused person. But parliament is
competent to place the burden on the certain aspects on the accused as
well and particularly in matter specially within his knowledge.
(Section 106 of the Evidence Act. ) Adroitly, as observed in Swamy case
(at p.469) and reiterated in Wasudeo case (at p. 683 : SCC p. 205), the
prosecution can not , in the very nature of thing, expected to know the
affairs of a public servant found in possession of resources or property
disproportionate to his known sources of income. It is for him to
explain. Such a statute placing burden on the accused can not be
regarded as unreasonable, unjust or unfair. Nor it can be regarded as
contrary to Article 21 of the Constitution as contended for the
appellant. It may be noted that the principle re affirmed in
Woolmington case is not a universal rule to be followed in every case.
The principle is applied only in the absence of statutory provision to the
contrary. (see the observations of Lord Templeman and Lord Griffiths in
Rig V. Hunt.)
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74. Counsel for the appellant however, submitted that there is no
law prohibiting a public servant having in his possession assets
disproportionate to his known sources of income and such possession
becomes an offence of criminal misconduct only when the accused is
unable to account for it. Counsel seems to be focusing too much only on
one part of clause (e) of Section 5(1). The first part of clause (e) of
Section 5 (1) as seen earlier relates to the proof of assets possessed by
the public servant. When the prosecution proves that the public servant
possesses assets disproportionate to his known sources of income, the
offence of criminal misconduct is attributed to the public servant.
However, it is open to the public servant to satisfactorily account for
such disproportionality of assets. But that is not the same thing to state
that there is no offence till the public servant is able to account for the
excess of assets. If one possess assets beyond his legitimate means, it
goes without saying that the excess is out of ill-gotten gain. The assets
are not drawn like nitrogen from the air. It has to be acquired for
which means are necessary. It is for the public servant to prove the
source of income or the means by which he acquired the assets. That is
the substance of clause (e) of Section 5(1).
26. Similarly, while dealing with the term used in the explanation
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SPECIAL CASE 62 of 2005 25
to sec. 13 (1) (e) as known sources of income Hon'ble Apex court in the
case ofN. Ramkrishnaiah (Dead) through L.R. V/s State of A.P. Reported
in 2009 Cri. L.J. as observed in para 14 & 15 as under ;
14. Section 13 of Prevention of Corruption Act, 1988 (in short
the Act) deals with various situations when a public servant can be said
to have committed criminal misconduct. Clause (e) of Sub-Section (1) of
the Section is applicable when the public servant or any person on his
behalf , is in the possession or has, at any time during the period of his
office, been in possession for which the public servant can not
satisfactorily account of pecuniary resources of property
disproportionate to his known sources of income. Clause (e) of Sub-
Section (1) of Section 56 of the Old Act was in similar lines. But there
have been drastic amendments under the new clause, the earlier
concept of known source of income has under gone a radical change.
As per the explanation appended, the prosecution is relieved of the
burden of investigating into source of income of an accused to a large
extent, as it is stated in the explanation that known sources of income
of an accused to a large extent as it is stated in the explanation that
known sources of income means income received from any lawful
sources, the receipt of which has been intimated in accordance with the
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SPECIAL CASE 62 of 2005 26
provisions of any law, rules or orders for the time being applicable to a
public servant. The expression known source of income has reference
to sources known to the prosecution after thorough investigation of the
case. It is not and can not be contended that known sources of income
means sources known to the accused. The prosecution can not in
the very nature of things be expected to know the affairs of an accused
person. Those will be matters specially within the knowledge of the
accused withing the meaning of Section 106 of the Indian Evidence Act,
1872 (in short, the Evidence Act.
15. The emphasis of the phrase known sources of income in
section 13(1) (e) (old Section 5 (1) (e) is clearly on the word income.
It would be primary to observe that qua the public servant, the income
would be what is attached to his office or post commonly known as
remuneration or salary. The term income by itself, is classic and has a
wide connotation. Whatever comes in or is received is income. But,
however, wide the import and connotation of the term income , it is
incapable of being understood as meaning receipt having no nexus to
ones labour, expertise, or property, or investment, and being further a
source which may or may not yield a regular revenue. These essential
characteristics are vital in understanding the term Income.
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SPECIAL CASE 62 of 2005 27
Therefore,it can be said that though income in receipt in the hand of
its recipient, every receipt would not partake into the character of
income. 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 (a) his property, or (b) his investment. A receipt from
windfall, or gain of graft crime or immoral secretions by persons prima
facie would not be receipt for the known source of income of a public
servant.
27. So after going through these pronouncements and in the light
of section 13 (1) (e) the position which emerges is that once prosecution
has proved that a public servant is in the possession of assets
disproportionate to known sources of his income, then burden would shift
on the shoulders of public servant to account it satisfactorily and to show
that he acquired those assets from lawful sources.
28. As far as framing of charge of abatement against a person who
is not a public servant in a trial u/s 13 (1) (e) of P.C. Act is concerned, the
Hon'ble Apex court in the case of P. Nallammal and Anr, Appellants V/s
State represented by Inspector of Police, Respondent reported in (1999)
6 S.C. 559 has observed in para no. 12 to 15 as under ;
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SPECIAL CASE 62 of 2005 28
Prevention of Corruption Act, 1988 Ss. 13 (1) (e) , 4 , 3 (1), 10 and
12 Offence under S. 13 (1) (e) not unabettable- Trial of non-public
srevant for abetment of offence under S. 13 (1) (e) along with public
servant by Special Judge not barred Penal Code 1860, Ss. 107 & 109.
12. It is true that Section 11 deals with a case of abetment of
offences defined under Section 8 and Section 9 , and it is also true that
Section 12 specifically deals with the case of abetment of offences under
Section 7 and 11. But that is no ground to hold that the PC Act does not
contemplate abetment of any of the offences specified in Secton 13 of
the PC Act. Learned counsel focussed on Section 13 (1) (e) to elaborate
that by the very nature of that offence it pertains entirely to the public
servant concerned as there is no role for the co-accused for discharging
the burden of proof.
13 Section 13 (1) (e) reads thus :
13(1) A public servant is said to commit the offence of criminal
misconduct-
(a) ---------------------------------------
(b) --------------------------------------
(c) --------------------------------------
(d) ----------------------------------------
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SPECIAL CASE 62 of 2005 29
(e) If he or any person on his behalf, is in possession or has, at
any time during the period of his office, been in possession for which the
public servant can not satisfactorily account, of pecuniary resources or
property disproportionate to his known sources of income.
Explanation For the purposes of this section, known sources of
income means income received from any lawful source and such
receipt has been intimated in accordance with the provisions of any
law, rules or orders for the time being applicable to a public servant.
14 It may be remembered that this court has held in M. Krishna
Reddy V. State Dy. Supdt. of Police thus : (SCC p. 47, para 6)
6. An analysis of Section 5 (!) (e) of the Act, 1947 which
corresponds to Section 13(1) (e) of the new Act of 1988 shows that it is
not the mere acquisition of property that constitutes an offence under
the provisions of the Act but it is the failure of satisfactorily account for
such possession that makes the possession objectionable as offending the
law.
15. Thus, the two postulates must combine together for crystallization
into the offence, namely, possession of property or resources
disproportionate to the known sources of income of public servant and
the inability of the public servant to account for it. Burden of proof
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SPECIAL CASE 62 of 2005 30
regarding the first limb is on the prosecution whereas the onus is on the
public servant to prove the second limb. So it is contended that a non-
public servant has no role in the trial of the said offence and hence he
can not conceivably be tagged with the public servant for the offence
under Section 13(1) (e) of the PC Act.
29. After going through the judgment it can be said that a person
who possesses some assets on behalf of public servant which are found to
be disproportionate, can be charged for the offence of abatement under
sec. 109 of IPC.
30. Prior to appreciating evidence available on record it is also
necessary to take in to account certain admitted facts to both the sides
which are as under ;
31. During the trial accused no. 1 has not disputed that from
01.09.1982 to 31.03.1995 he was working as a officer of IPS cadre in the
state of Maharashtra. Therefore, it can be safely held that during the check
period accused no. 1 was working as a public servant within a meaning of
sec. 2 (c) of Prevention of Corruption Act 1988.
32. Accused no. 1 has not disputed that from 1974 to 1981 he was
working as a associate professor in a degree college situated at Mawana
(U.P.) and thereafter from 1981 to 1982 he worked as a District Panchayat
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SPECIAL CASE 62 of 2005 31
Raj officer in the state of Utter Pradesh. It is also not in dispute that on the
next day of registration of crime house of accused no. 1 was searched by
investigating officer Wable and articles were found and the inventory
prepared at that time. It is also not in dispute that during the check period
accused no. 2 from October 1991 to January 1992 invested amount of Rs. 5
lacs in Deccan Queen Restaurant, Juhu, Mumbai as a partner of the said
firm. It is also not in dispute that during the check period accused no. 2
received deposit from OTIS Elevators for subletting her rented premises. It
is also not in dispute that accused no. 1 constructed one house in CIDCO
area of Aurangabad. Besides these major items of the assets and income
acquired by accused no.1 & 2 they have admitted maximum part of the
income, expenditure and assets shown by the prosecution.
33. After completion of open enquiry, crime was registered on
06.11.2000 on the basis of complaint filed by ACP Sawant. In F.I.R. It was
alleged that during period from 01.08.1974 to 31.03.1995 accused no. 1
and his family members have acquired assets of Rs. 31,48,017/- which are
disproportionate to known sources of income. In F.I.R. the entire details in
respect of income, expenditure and assets of accused no. 1 & 2, their two
minor sons, A.K. Jain (HUF) and S.K. Jain family trust were given. After
filing of this F.I.R., detail investigation was carried out by ACP Wable and in
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SPECIAL CASE 62 of 2005 32
final report it is alleged that accused no. 1 and his family members are
found in possession of assets worth Rs. 46,76,933.45 ps. which are
disproportionate to their known sources of income. After completion of
investigation it was found to ACP Wable that cost of some assets is more as
shown in F.I.R., so also some figures of expenditures were not correctly
arrived at by the complainant. It was also found that some of the income
was wrongly accepted by the complainant. It would be convenient to spell
out a chart in respect of income, expenditure and assets of accused no. 1
and his family members and their two firms found at the time of FIR and at
the time of filing of chargesheet.
COMPARATIVE STATEMENT OF INCOME, EXPENDITURE AND ASSETS
DISCLOSED DURING THE COURSE OF INVESTIGATION
AS COMPARED TO F.I.R.
Sr.No.
Head As F.I.R. Proved Remarks
ASSETS SHRI AJAY KUMAR JAIN
01 House at Jehangirabad 01,80,000=00 1,80,000=0002 Bungalow at N-5,
CIDCO, Aurangabad06,93,826=00 8,05,510=00 Cost of the
plot added tothe total
value.
03 Plot,K.P.C.L.E.Hsg.Society,Bangalore
01,59,200=00 1,59,200=00
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SPECIAL CASE 62 of 2005 33
04 Orson make B & W TV 2,100=00 2,100=00
05 Videocon WashingMachine
6,000=00 6,000=00
06 Sanyo music system 20,000=00 20,000=00
07 Onida Colour TV 19,550=00 16,460=00 Amountactually spenttaken intoconsideration.
08 Vacuum Cleaner 3,990=00 3,990=00
09 Videocon air cooler 2,660=00 2,660=00
10 Nicky Tasha Kitchenette 2,323=00 2,323=0011 National Savings
Certificates1,10,000=00 1,10,000=00
12 Fixed deposit in bank 25,000=00 25,000=00
13 Bank balance inB.M.C.Bank, ColabaBranch
22,882=00 22,882=43
14 Bank Balance in State
Bank of India, WodeHouse Road Branch
11,022=00 11,022=00
15 Bank balance inB.M.C.Bank AurangabadBranch
53,053=00 53,053=90
16 Bank balance in VyasyaBank, Nanded Branch
29,698=00 29,698=00
17 Godrej refrigerator 10,800=00 Wrongly
shown asasset of MrsJain.
18 Clothes of Shri Jainfound during housesearch
32,200=00 Notconsidered inF.I.R.
19 Books found duringhouse search
1,571=00 Notconsidered inF.I.R.
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SPECIAL CASE 62 of 2005 34
20 Furniture in the house 15,000=00 Disclosedfrom ITRS
21 Audio cassettes found in
the house
2,426=00 Disclosed
during housesearch
22 President make suitcase 3,000=00 Disclosedduring housesearch
23 Cash in hand as on31.03.1995
16,376=70 Disclosedfrom ITRS
24 Music System 10,000=00 Disclosed
from ITRS ofAY 1991-92
25 Portable Typewriter 1,200=00 Disclosedfrom ITRs of
26 Maruti Van MH-01-1136 40,000=00 Notconsidered bythecomplainant
Total 13,41,304=00 15,82,473=03
ASSETS MRS ANITA JAIN
01 Godrej refrigerator 9,600=00 5,150=00 Proved figurenowconsidered
02 VCR, National Make 10,800=00 10,800=0003 Investment in Shares 1,14,750=00 2,10,100=00 Recalculated
from ITRs
04 Balance in B.M.C. Bank,Byculla Branch a/c13183
1,18,845=00 70,843=28 Wronglyaccepted bythecomplainant
05 Onida colour TV 15,800=00 15,800=00
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06 Investment in DeccanQueen Restaurant
5,00,000=00 5,00,000=00
07 Investment in Associate
Business Technology
20,000=00 20,000=00
08 Gold and Silverornaments found in thehouse
1,33,059=00 Disclosedduring housesearch
09 Nicky Tasha TV 9,600=00 Disclosedfrom ITRs
10 Clothes of Mrs. Jain 4,200=00 Disclosedduring house
search
11 Cash in hand as on31.03.95
48,002=00 Disclosedfrom ITRs
12 Two Air conditioners 10,000=00 Disclosedfrom ITRs
13 Sony make Music System 19,550=00 Disclosedfrom ITRs
Total 7,89,795=00 10,57,104=28
ASSETS OF MASTER RAHUL JAIN
01 Balance in a/c. No.13184 in B.M.C. Bank,Byculla Branch
22,784-00 40,493=20 Wronglyaccepted bythecomplainant
02 Plot No. 78, Aurangabad 01,07,843=00 96,000=00 Amount spentforregistrationetc.treated asexpenditure
03 Flat no. 402, Lotus Co-op.Housing Society,Shimpoli Rd, Boriwali(W)
7,35,110=00 7,35,110=00
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04 Plot at Abitghar,Tal:Wada, Dist. Thane
2,00,000=00 2,00,000=00
05 Flat No. 17, Anand
Mangal Building, Nerul,New Mumbai
3,00,000=00 3,00,000=00
06 Shares in the name ofRahul Jain
25,000=00 Disclosedfrom ITRs
Total 13,65,737=00 13,96,603=20
ASSETS OF MASTER VIPUL JAIN
01 Plot no. 79, Aurangabad 1,07,843=00 96,000=00 Amount paidforregistrationetc.considered asexpenditure
02 Investment in shares 37,300=00 26,000=00 Disclosedfrom PropertyReturns
03 Balance in a/c. No.13183 in B.M.C. Bank,Byculla Branch
2,42,079=00 2,32,634=00 Actualbalance takenintoconsideration
Total 3,87,222=00 3,54,634-=20
ASSETS OF SARAL KANTA JAIN FAMILY TRUST
01 Open plot at Erangal,Mumbai
25,000=00 25,000=00
02 Investment in ShriSahayog Exhibitors,
Aurangabad
4,65,397=00 2,40,000=00 Income byway ofinterest
wronglytreated as
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SPECIAL CASE 62 of 2005 37
asset.
03 Investment in Shares 20,0000=00 20,0000=00
04 Balance in a/c.no. 13394in BMC Bank, Bycullabranch
1,27,215=00 28,719=10 Actualbalance takenintoconsideration
05 Plot at Waladgaon,Aurangabad
68,500=00 N.A. hadsuppressedthisinformationduring
enquiry06 Cash in hand 1,06,996=10 Disclosed
from ITRs
Total 6,37,612=00 4,89,215=10
ASSETS OF SHRI AJAY KUMAR JAIN (HUF)
01 Balance in a/c. no.13185 in BMC Bank,Byculla Branch
15,286=00 7,519=35 Wronglyaccepted bythecomplainant.
Total 15,286=00 7,519=35
INCOME OF SHRI AJAY KUMAR JAIN
01 Salary from August-74 toJune-81
01,31,916=00 6,38,840=80 Actual salaryas per detailsreceived fromthe concerned
02 Salary fromSeptember-82 toMarch-95
05,63,650=00
03 Profit from sale Mavanaplot
34,000=00 9,700=00 Amountactuallyshown in
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ITRs onlytaken intoconsideration.
04 Salary asD.P.R.O.Muzaffarnagar
13,829=00
05 Interest on N.S.Cs. 46,175=00 86,175=00 Actuallycalculatedand thenconsidered.
06 Surrender of LIC policy 17,307=00 17,307=00
07 Deposit for Bungalow at
CIDCO Aurangabad
50,000=00 50,000=00
08 Interest on bankaccounts
28,149=00 20,294=87 Actual figuresreceived frombanks.
09 Sale of gold 45,140=00 45,140=00
10 Income from Beauty Art,Printing Press, Mavana
17,000=00 Nil This incomeis notpermissible
by law.
11 Income from House rentand deposit atJehangirbad
95,200=00 Nil This incomenot declaredto Income Taxand hencerejected.
12 Sale of old refrigerator 7,000=00 Disclosedfrom ITRs.
Total : 10,42,366=00 08,74,457=67
INCOME OF MRS ANITA JAIN
01 Dividend on Shares 30,830=00 24,302=00 Actualamountdisclosed inITRs.only
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SPECIAL CASE 62 of 2005 39
considered.
02 Survival benefit onL.I.C. Policy
35,000=00 35,000=00
03 Sale of Silver Ornaments 10,915=00 10,915=00
04 Sale of Gold Ornaments 40,021=00 40,021=00
05 Income from sale ofSaries, tuitions andCoaching Classes
03,67,750=00 Nil Rejected asMrs. Jaincould notproduce anyevidence insupport.
06 Profit from sale of sharesof Videocon and UshaRectifiers
01,16,600=00 Nil Rejected asnot disclosedin ITRs.
07 Profit from sale ofKiradpura, Aurangabadplot.
45,380=00 45,380=00
08 Interest of Bank Savings 4,686=00 4,695=67 Actualfigures.
Total : 06,51,182=00 01,60,313=67
INCOME OF MASTER RAHUL JAIN
01 Profit on surrendering offlat no.102, at Nerul
01,000,00=00 Nil This incomefalselyclaimed by
N.A.02 Profit on sale of
Kiradpura plot atAurangabad
45,380=00 45,380=00
03 Profit on surrenderingflat no. D-1, Mangalam
Apartments, ThakurComplex, Kandivali.
24,500=00 24,500=00
04 Interest on Bank Savings 13,554=00 13,554=00
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Total : 01,83,434=00 83,434=30
INCOME OF MASTER VIPUL JAIN
01 Profit on surrendering offlat no-D-2 in Mangalam
Apts. Thakur Complex.
30,000=00 30,000=00
02 Profit from sale of flatno. 401 in Lotus Co-op.Hsg. Society, Borivali(W)
59,851=00 59,851=00
03 Profit from surrenderingflat no. 103- in Nerul.
1,00,000=00 Nil Falselyclaimedincome byN.A.
04 Profit from sale ofKiradpura plot at
Aurangabad
45,380=00 45,380=00
5 Interest on bank savings 11,863=00 11,863.50 Actual figure.
Total : 02,47,094=00 01,47,094=50
INCOME OF SHRI AJAY KUMAR JAIN (HUF)
01 Profit from sale ofKiradpura plot at
Aurangabad
45,380=00 45,380=00
02 Interest on bank Savings 09,240=00 08,735=85 Actual figureconsidered.
Total : 54,620=00 54,115=85
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INCOME OF SARAL KANTA JAIN FAMILY TRUST
01 Interest on bank Savings 18,844=00 18,844=10
02 Interest received fromSahayog Exhibitors Pvt.No.
01,55,959=00 Nil Income notpermissibleand hencerejected.
Total : 01,74,803=00 18,844=10
EXPENDITURE OF SHRI AJAY KUMAR JAIN
01 33% of gross Salary 2,71,156=00 2,61,353=33 due todecrease inactual grosssalary.
02 premium paid for LICpolicies.
1,97,124=00 1,97,124=00
03 Income Tax paid 13,420=00 7,390=00 actual figuresconsidered.
04 Expenditure for clubs 66,454=00 68,233=00 actual figurestaken intoconsideration.
05 Visit to Singapore andMauritius
17,453=00 17,453=00
06 House rent paid inMavana
5000=00 5000=00
07 Maintenance of Scooter 3000=00 3000=0008 Maintenance of Car 2900=00 16800=00 Proved from
statements
09 Rent and deposit forHouse at Jehangirbad
95,200=00 This wasaccepted asIncome andExpendituretoo in theF.I.R.
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10 Income from beauty ArtsPrinter, Mawana
17,000=00 This wasaccepted asIncome and
Expendituretoo in theF.I.R.
11 Expenditure foreducation of Children
25,687=00 Wronglyshownagainst thenames of theminorchildren
12 Expenditure for L.P.G. 3,627=00 Notconsideredduringenquiry.
13 Transfer fee of R.T.O.Mumbai
1,005=00 Notconsidered bythecomplainant.
14 Municipal TaxAurangabad
916=75 Notconsidered bythecomplainant.
15 Stamp duty andregistration fee forErangal, Mumbai plot.
2,810=00 Notconsidered bythecomplainant.
16 Amount paid to CIDCO,Aurangabad as fine andother fees.
42,755=00 Notconsidered bythecomplainant.
17 Chief Minister ReliefFunds
516=00 Disclosedfrom ITRs.
18 Transfer charges paid forMavana Plot
3,310=00 Disclosedduring
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investigation.
19 Amount spent by usingDiners Cards
15,802=00 Disclosedduring
investigation
20 Commission paid toBanks
953=50
Total : 06,88,707=00 06,78,420=58
EXPENDITURE OF MRS ANITA JAIN
01 10% of gross income 36,775=00 Notapplicable
02 LIC Premium 87,601=00 87,601=00
03 Income Tax Paid 3,466=00 5,977=00 Verified figure
04 Rent for KopargaonEstate Shed
7,548=00 Notconsidered bythe complaint
05 Open Land Tax paid forKiradpura plot at
Aurangabad
916=75 Disclosedduringinvestigation.
06 Amount withdrawn forpersonal Expenditure
84,635=00 Disclosedfrom ITRs.
Total : 01,27,842=00 01,97,962=75
EXPENDITURE OF MASTER RAHUL JAIN
01 Income Tax paid 605=00 605=00 Verified fromITRs
02 Expenditure foreducation
4,800=00 Nil Thisexpenditurehas beenattributed toShri Jain
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03 LIC Premium 21,748=00 21,748=00
04 Rent paid for shed inKopargaon Estate
6,864=00 Notconsidered by
thecomplainant
05 Open land tax paid forKiradpura plot,
Aurangabad
916=75 Disclosedduringinvestigation
06 Stamp duty andregistration fee paid forflat No. 402, Ansal Vihar,
Boriwali
26,060=00 Disclosedduringinvestigation
07 Stamp duty andregistration fee paid forplot No. 78. Aurangabad
10,563=00 Disclosedduringinvestigation
08 Advance paid for flat atVile Parle
10,000=00 Disclosedfrom ITR's
09 Commission paid tobanks
255=00 Disclosedduring
investigationTotal : 27,153=00 77,011=75
EXPENDITURE OF MASTER VIPUL JAIN
01 Income tax paid 477=00 477=00
02 Expenditure for
education
9600=00 Nil Considered in
theexpenditureof Shri Jain
03 LIC premium 9,793=00 9,793=00
04 Commission paid toBanks
384=00 Notconsidered bycomplainant
05 Open land tax forKiradpura, Aurangabad
916=75 Disclosedduring
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plot investigation
06 Advanced paid for VileParle flat
10,000=00 Disclosedfrom ITRs.
07 Stamp Duty andRegistration fee for plotNo.79
10,563=00 Disclosedduringinvestigation
Total : 19,870=00 32,133=75
EXPENDITURE OF SHRI AJAY KUMAR JAIN (HUF)
01 Income tax paid 1,619=00 1,619=00
02 Rent paid for KopargaonEstate Shed
7,548=00 Notconsidered bythecomplainant
Total : 1,619=00 9,167=00
EXPENDITURE OF SARAL KANTA JAIN FAMILY TRUST
01 Income tax paid 99,369=00 65,562=00
02 Commission paid toBanks
650=00 Disclosedduringinvestigation
03 Rent paid for KopargaonEstate Shed
5,148=00 Notconsidered by
thecomplainant.
04 Tax deducted at sourcefrom the account ofSahayog Exhibitors
17,744=00 Disclosedduringinvestigation
05 Registration fee paid forWaladgaon Plot
2,740=00 Disclosedduringinvestigation
06 Rent paid to R.C.C. Trust 44,316=00 Clubbed with
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SPECIAL CASE 62 of 2005 46
for Rehem MansionProperty.
rejectedincome by thecomplainant.
Total : 99,369=00 1,36,160=00
REJECTED INCOME
01 Income from OtisElevator for R.C.C. Trustproperty.
19,01,570=00 18,44,500=00 Figures havechangedbecausecomplainantalsoconsideredthe rent paidin therejectedincome.
02 Income for relinquishingtenancy right in
Kopargaon Estate.
10,00,000=00 10,00,000=00
03 Profit on sale of Scooter 10,000=00 10,000=00
04 Sale of gold ornaments 40,000=00 40,000=00
05 Gifts 70,000=00 70,000=00
06 Profit from sale ofKiradpura plot at
Aurangabad.
1,38,480=00 1,38,480=00
07 Tuition fees received by
Shri Jain
42,000=00 Not
considered bythecomplainant.
08 Amount received asExaminership fees byShri Jain
7,000=00 Notconsidered bythecomplainant.
09 Income from Beauty Arts 17,000=00 Not
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SPECIAL CASE 62 of 2005 47
Printing press. considered bythecomplainant.
10 Rent from House atJahangirbad.
95,200=00 Notconsidered bythecomplainant.
11 Income from DeccanQueen Restaurant
96,000=00 96,000=00
12 Sale of Old T.V. 7,450=00 Not disclosedin ITRs.
13 Profit from sale of UshaRectifiers and Videoconshares.
1,16,600=00 This incomewas given bythecomplainant.
14 Profit on the surrenderof flat Nerul.
2,00,000=00 This incomewas given bythecomplainant.
15 Deposit for flat at AnsalVihar. 50,000=00 50,000=00
16 Income by way ofinterest fromK.E.Enterprises.
1,00,000=00 Notconsidered bythecomplainant.
17 Income by way ofinterest from SayahogExhibitors.
88,984=00
18 Sale of Saris and tuitionand coaching classes byMrs. Jain
3,67,750=00 Considered asincome by thecomplainant.
19 Rent from GayatriEngineering Companyfor Banglore at
Aurangabad.
15,789=00 Outside check period.
Total : 33,21,839=00 42,90,964=00
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SPECIAL CASE 62 of 2005 48
34. It is the case of prosecution that in fact accused no. 2 who is the
wife of accused no. 1 and their two minor sons have no any independent
source of income during the check period and it was accused no. 1 who in
a clever manner invested his ill-gotten wealth in the name of his family
members in order to show that they have got independent sources of
income. To the contrary it is the case of accused no. 1 that accused no. 2,
his two minor sons, A.K.Jain (HUF) and S.K. Jain family trust have
independent sources of income during the check period and he is no way
related with the assets acquired by them and in fact those were acquired by
them out of their own income. Therefore, now first of all it is necessary to
decide as to whether or not accused no. 2, her two minor sons, A.K. Jain
(HUF) and S.K. Jain family trust were having their independent sources of
income.
35. It is not in dispute that two sons of accused no. 1 & 2 Vipul and
Rahul were the minors during the check period i.e. between 01.09.1982 to
31.03.1995. It is also not in dispute that during this period both of them
were taking education. Material available on record shows that both of
them have taken education at the places where accused no. 1 was posted.
It is not the case of accused no. 1 & 2 that their two sons were doing any
business independently during this period or any one on their behalf was
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SPECIAL CASE 62 of 2005 49
conducting any business.
36. Prosecution has produced on record copies of I.T. Returns of
Rahul Jain submitted for the financial year 1990-91 and balancesheets
submitted by him on 31.03.1990, 31.03.1991, 31.03.1994 & 31.03.1995
with income tax department. Prosecution has also produced copies of
income tax return submitted by another son of accused namely Vipul Jain
for the financial year 1990-91 and the copies of balancesheets submitted by
him on 31.03.1990, 31.03.1991 and 31.03.1994 with income tax
department. These documents are the part of Exh.107. None of the accused
has disputed genuineness of these documents. According to investigating
officer, these documents were provided to him by income tax department.
On all these documents there is attestation of the concern income tax
officer. Perusal of acknowledgment sheet of both Rahul and Vipul shows
that in the year 1991-92 they have filed returns for the first time as it is
mentioned in first column which is in respect of PAN No. that these are
new cases. Therefore, admittedly prior to 1991-92 these two sons of
accused have not filed any returns with income tax department. Perusal of
their balance sheets also does not show that they were gaining profit from
any business.
37. From Sale Deed Exh. 15 it appears that a plot of land situated
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SPECIAL CASE 62 of 2005 50
at Jaswantpura, (Kiradpura), Aurangabad was purchased on 02.07.1987 by
both the accused and their minor sons for a consideration of Rs. 40,000/-.
The sale deed also shows that at the time of its execution Rahul Jain and
Vipul Jain were minor sons. In sale deed it was demonstrated that this plot
has been purchased by A.K. Jain (HUF). It is pertinent to note that during
trial both the accused are not shown as to what were the sources of income
of A.K. Jain (HUF) and why it was formed. There is no material available
on record to show that A.K. Jain (HUF) was having any independent source
of income in order to invest the amount and therefore it appears that it was
accused no. 1 who was investing his income in the name of A.K. Jain
(HUF) and it also appears that A.K. Jain (HUF) was shown to be in
existence only for the purpose of availing tax benefits as it is a matter of
common knowledge that the concept of Hindu Undivided Family is
altogether different as far as the provisions of Income Tax Act, are
concerned.
38. Sale Deeds Exh. 16 & 17 show that in the year 1990 this A.K.
Jain (HUF) sold this plot for a consideration of Rs. 4 lacs. So this could be
the first income derived by two sons of accused. From IT returns it appears
that income derived from this transaction was equally distributed among
both the accused and their two minor sons. It is the claim of accused no. 1
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SPECIAL CASE 62 of 2005 51
that each one of them incurred expenses for the development of this plot
for Rs. 54,620/- and they have earned net income of Rs 45,380/- each from
this sale proceed. So this appears to be the first income earned by Rahul
Jain and Vipul Jain. Balancesheet filed by them does not show that there
was any independent source of income to them. Sale Deeds Exh. 13 & 14
shows that both Vipul and Rahul have purchased one plot each within the
municipal limits of Aurangabad on 09.10.1990 by paying consideration of
Rs. 96,000/- each. Their balancesheets which are part of Exhibit 107 show
that from the profit earned through sell of plot at Aurangabad and by
raising some loan they have purchased this plot. So from this it appears
that in the year 1987 when a plot was purchased in the name of A.K Jain
(HUF), entire amount of consideration was paid by accused no. 1 and after
the sale of that plot, amount earned was distributed equally to all the
family members and by this way it is shown that Vipul and Rahul have
started earning money but in fact it was accused no. 1 who initially
invested amount in their names. As per these calculations, it appears that
in the year 1990 when Rahul and Vipul purchased one plot each at
Aurangabad for a consideration of Rs. 96,000/- each, accused no. 1 at that
time invested amount of Rs.40,000/- each in the name of Rahul and Vipul.
Therefore, it can be said that till the year 1990 accused no. 1 invested total
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SPECIAL CASE 62 of 2005 52
amount of Rs. 1,20,000/- for the purchase of plots at Aurangabad.
39. The charts referred to above show that thereafter several
properties were acquired in the name of Rahul & Vipul but it can not be
said that these investments were made by them from the income derived
from any independent source and these are to be termed as the
investments made by accused no. 1. Having regard to this discussion this
court is of the opinion that two minor sons of accused namely Rahul and
Vipul did not have any independent source of income during the check
period. Accused no. 1 at the time of his statement under section 313 of
Cr.P.C. filed copy of his one of the explanation given to investigating officer
on 14.08.2000 along with list Exh. 367. This explanation also shows that
accused no. 1 admitted that Rahul and Vipul have no any independent
source of income and they are earning amount as a interest on deposits
kept in the bank and profit from the transaction of immovable properties. It
has also been stated in the said statement that Rahul and Vipul have filed
their IT returns for the first time in the year 1991. Similarly, in this
explanation accused no.1 has not claimed that there is any independent
source of income available to A.K. Jain (HUF). Therefore, it has been duly
proved that the transactions entered into by Rahul, Vipul and A.K.Jain
(HUF) were in fact of accused no. 1.
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SPECIAL CASE 62 of 2005 53
40. Prosecution has also came with the case that in the year 1991
Rahul and Vipul have booked one flat each bearing nos. D-1 & D-2 in
Mangalam Apartment, Mumbai which was the project of potential builders
and paid amount of Rs. 3,63,000/- and Rs. 3,45,000/- respectively till the
year 1993. Thereafter, in the month of September 1993 prior to taking
possession of these flats, they have sold it through potential builders and
got returned amount paid by them as referred to above vide Exh. 63 and
63 A. There is no material on record to show that these amounts were
earned by them from any transaction entered into prior to this transaction.
It is not the case of accused no. 1 that plots purchased in the year 1990
were sold out by Rahul and Vipul prior to booking of these flats. Therefore,
it is necessary to held that amount of Rs. 7,08,000/- was paid by accused
no. 1 for booking of these two flats. Accused no. 1 & 2 have admitted
documents Exh. 63 & 63 A which relates to these transactions.
41. Prosecution has also filed on record copies of agreement
marked as Exh. 47 & 49 which are admitted by the accused. Contents of
these agreements show that Rahul and Vipul have booked flat no. 102 &
103 respectively with Anmol Developer, Mumbai and they have paid
amount of Rs. 2 lacs each for booking of these flats on 25.11.1993 and
28.01.1994. However, subsequently in the month of November 1994 they
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SPECIAL CASE 62 of 2005 54
have cancelled these bookings and got returned amount of Rs. 2 lacs each.
However, this amount could have been invested by accused no. 1 from the
amount received from potential builders. Therefore, these transactions
have no bearing on the matter.
42. Prosecution has also produced copy of agreement Exh. 60
which is admitted by the accused. Contents of this agreement shows that
one flat was sold by Rahul Jain to one Mehta in the month of July 1995
which is admittedly a transaction entered into after the check period i.e
31.03.1995. However, its contents shows that this flat was purchased by
Rahul Jain and the consideration amount of Rs. 6,41,250/- was paid by
accused no. 1 on 06.02.1995 i.e. during check period. However, this
payment could have been made from the amount of Rs. 7,08,000/-
received from potential builders. Therefore, this transaction is material
while calculating the income, expenditure and assets of accused no. 1 & 2.
43. Prosecution has also relied on Exh. 100 which is admitted by
the accused. This is a agreement for sale entered in between VGP Agro
Limited and Rahul and Vipul Jain. As per this agreement Rahul and Vipul
Jain have purchased on piece of land at Abidghar village, Taluka Wada,
Dist. Thane on 01.03.1995 for a consideration of Rs. 2 lacs. As a guardian
of Rahul and Vipul accused no. 1 must have paid this amount. None of the
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SPECIAL CASE 62 of 2005 55
accused has taken the responsibility for this payment. At the time of this
transaction only amount of Rs.66,750/- was with accused no. 1 out of
amount of Rs. 7,08,000/- received from potential builders and after
purchase of flat at Ansal Vihar on 06.02.1995. Therefore, it appears that at
the time of this transaction accused no. 1 invested amount of Rs.
1,33,250/- in the name of Rahul and Vipul. So the sum and substance is
that from the year 1987 till the year 1995 accused no.1 invested amount of
Rs. 9,61,250/- in the name of his two minors sons namely Rahul Jain and
Vipul Jain for purchase of various properties.
44. Apart from this investigating officer has also collected
documents from the respective banks in order to show that Rahul and Vipul
have earned interest on deposits of Rs. 13,554.30 ps. and Rs. 11,863.50 ps
respectively. This fact has not been disputed by both the accused.
Therefore, this amount is required to be excluded from the amount of
investment made by accused no. 1 in the name of his two minor sons.
Therefore, after deducting this amount, it can be said that accused no. 1
acquired assets of Rs. 9,35,832.20 ps in the name of his two minor sons.
45. It is the case of prosecution that on 31.03.1995 there was
balance of Rs. 40,493.20 ps. and Rs. 2,32,634.20 ps. lying in the accounts
of Rahul and Vipul Jain respectively in Bombay Mercantile Cooperative
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SPECIAL CASE 62 of 2005 56
Bank, branch Byculla, Mumbai and this fact has been admitted by both the
accused. It is not the case of any of the accused that Rahul and Vipul have
earned this amount from any independent source. Similarly, prosecution
has also claimed that accused no. 1 purchased shares of Rs. 25,000/- and
of Rs. 26,000/- in the name of Rahul and Vipul Jain respectively and
informed this fact in his property return submitted for the year 1993. This
has also not been disputed by accused no.1. Therefore, it is necessary to
held that these amounts were invested by accused no. 1 and its total comes
to Rs. 3,24,127.40 ps. Therefore, in totality accused no. 1 invested amount
of Rs. 12,59,959.60 ps. in the name of his two minor sons.
46. Now it is also necessary to take into account expenditure
incurred by Rahul and Vipul Jain. When it is an admitted position to
accused no. 1 & 2 that Rahul and Vipul did not have any independent
source of income and as this court has already deducted the income earned
from the reinvestment in the property, the expenditure incurred by Rahul
and Vipul is to be considered as the expenditure made by accused no. 1
and it is to be included in the amount which was invested by accused no. 1
in the name of Rahul and Vipul.
47. During investigation it was found that accused no. 1 spent
following amount for Rahul and Vipul Jain.
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SPECIAL CASE 62 of 2005 57
Rahul Jain
1. Income tax paid for the financial year
1991-92 Rs. 605/-
2. Premium for two LIC policies Rs. 21,748/-
3. Stamp Duty and Registration fee
for registration of flat no. 402, Ansal
Vihar, Mumbai Rs. 26,060/-
4. Stamp duty and registration fee
for the plot purchased at Aurangabad
in the year 1990 Rs. 10,563/-
--------------------------------------------------------------------------------
Total Rs. 58,976/------------------------------------------------------------------------------------
Vipul Jain
1. Income tax paid for the financial year
1991-92 Rs. 477/-
2. Premium for LIC policy Rs. 9793/-
3. Commission paid to Bombay
Mercantile Co-Op. Bank, Mumbai Rs. 384/-
4. Stamp duty and registration fee
for the plot purchased at Aurangabad
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SPECIAL CASE 62 of 2005 58
in the year 1990 Rs. 10,563/-
--------------------------------------------------------------------------------
Total Rs. 21,217/----------------------------------------------------------------------------------
48. Thus, total expenditure incurred by accused no.1 for Rahul and
Vipul Jain comes to Rs. 80,193/-. If this is included in the amount of
investment of Rs. 12,59,959.60 ps. then its total comes to Rs.13,40,152.60
ps. So this is the total amount invested by accused no. 1 in the name of his
two minor sons and A.K. Jain(HUF). Both the accused have not denied this
part of expenditure.
49. Now it is necessary to decide as to whether accused no. 2 who
is the wife of accused no. 1 had any independent source of income prior to
and during the check period. It is pertinent to note that during
investigation though accused no. 2 was called upon to submit her
explanation and details regarding her claim of income but she has not filed
any explanation in support of her claim. During trial also, accused no. 2
has not produced any material in support of her claim nor examine any
witness.
50. Initially it was claimed by accused no.2 that she had earned
income of Rs. 3,67,750/- from the sale of Saree business, tuitions and
coaching classes. However, accused no. 2 has not furnished any details in
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SPECIAL CASE 62 of 2005 59
respect of this income. There is absolutely no document available on record
in order to support this claim nor any witness is examined by accused no.
2. Admittedly for running cloth business a licence under the provisions of
Shops and Establishment Act has to be obtained from the concern
authority. Similarly, returns are to be submitted with sales tax authorities in
respect of purchase and sale of the goods. It is also necessary to preserve
the purchase and sale vouchers by the businessmen. Not only that, income
tax return also required to be submitted in respect of profit earned.
Therefore, there could be availability of various documents to show that
she had carried out saree business at a particular point of time. However,
accused no.2 has not produced anything on record. Similarly, while
running private coaching classes a licence is required to be obtained and
record has to be maintained in respect of names of students and payment
received by them as tuition fees. So also, returns are to be submitted in
respect of profit earned from it with income tax authorities. However,
accused no. 1 has also not produced any document in support of this claim.
Moreover, no evidence has been adduced by her that she had not
maintained any such record or preserved it.
51. P.W. 15 investigating officer Shri. Wable while deposing before
this court has stated that as accused no. 2 failed to furnish any document to
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SPECIAL CASE 62 of 2005 60
prove this income, he has rejected this part of her income. The reason
given by investigating officer is appears to be proper for rejection of this
part of income.
52. It is also claimed by accused no. 2 that she had earned income
of Rs. 1,16,600/- from the sale of share of Videocon and Usha limited.
Copies of her IT returns and balance sheet produced by her for the period
from 1990 to 1993 are part of exhibit 107. Perusal of these copies of
returns does not show that she had ever sold shares and debentures during
this period. So also she has not filed any thing on record in support of this
claim. Obviously a document has to be prepared after sale of shares and a
receipt is to be issued but accused no. 2 has even not given any details of
this transaction. Therefore, investigating officer has rightly rejected this
part of income claimed by accused no.2.
53. Prosecution has placed on record copy of one unregistered
partnership deed Exh.12 on record which has been admitted by accused
no. 2. As per this agreement accused no. 2 was inducted as a partner in
Deccan Queen Restaurant, Juhu, Mumbai and her share was fixed to the
extent of 33%. As per the said agreement accused no. 2 agreed to invest
amount of Rs. 5 lacs as her share from October 1991 to 25.01.1992. It is
the case of prosecution that accused no. 2 claimed that she had invested
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SPECIAL CASE 62 of 2005 61
this amount in the said Restaurant as a partner of it and accused no.2 has
also not disputed this fact. Perusal of balance sheet filed along with IT
returns show that only amount of Rs. 1 lac was invested by her in the
financial year 1991-1992. It is not her case that she had not shown
remaining investment of Rs. 4 lacs in her returns. Nothing has been
explained by accused no.2 as to from where she invested remaining
amount of Rs. 4 lacs in the said Restaurant. Therefore, it appears that the
remaining amount of Rs. 4 lacs was invested by accused no. 1 in the name
of accused no.2 and a attempt was made to convert his ill-gotten wealth as
a wealth of accused no. 2. Accused no. 2 claimed that she earned Rs.
96,000/- as her share of profit from Deccan Queen Restaurant which has
been rejected by the investigating officer on the ground that structure of
Deccan Queen Restaurant is a illegal structure and therefore income
derived from the said Restaurant can not said to be the income earned
from lawful sources. However, the reason given by the investigating officer
appears to be improper for several reasons. In the first place the term
lawful sources of income used in section 13 (1) (e) relates with the income
earned by a public servant and not by a non public servant. Moreover, even
if the structure of the said Restaurant is said to be a illegal structure, it does
not reason to mind that profit earned from the sale of food items from that
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SPECIAL CASE 62 of 2005 62
place amounts to an illegality. At the most Municipal Corporation can take
action for it by way of recovery of fine amount or by adopting some other
measures. Therefore, this part of income of accused no. 2 is required to be
accepted. Therefore, sum and substance of the discussion would be that
accused no. 1 invested amount of Rs. 4 lacs in the name of accused no. 2 in
the said Restaurant and she earned profit of Rs. 96,000/- towards her
share.
54. I have already pointed out that in the year 1987 and as per Exh.
15 accused no. 1 while purchasing a plot at Aurangabad for Rs. 40,000/-
invested amount of Rs. 10,000/- in the name of accused no.2. It is also
claimed by accused no. 2 that she incurred expenses of Rs. 54,620/- for the
development of the said plot alongwith accused no. 1 and her two minor
sons who have also spent this much amount. As per exhibit 16 & 17 this
plot was sold in the year 1990 and for Rs. 4 lacs and the said amount was
equally distributed amongst both the accused and their two sons. So after
deducting expenses it can be said that accused no.2 earned a profit of Rs.
45,380/- from the said plot.
55. P.W. 15 investigating officer stated before this court that accused
no. 2 claimed income of Rs. 28,000/- from 07.06.1990 to 04.06.1994
towards gifts from accused no.1 and his family members. However, she has
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