State of Karnataka v. Selvi J. Jayalalitha & Ors.

8. The case of the prosecution is that, as on 1.7.1991, A[1] was found in possession of properties and pecuniary resources in her name and in the name of A[2] Smt. N. Sasikala, who was living with A[1] at No. 36, Poes Garden, Chennai to the extent of Page 7 Rs.2,01,83,957/- including the properties acquired in the name of M/s. Jaya Publications, M/s. Sasi Enterprises and Namadhu MGR, which had been floated by A[1] and A[2] with themselves as partners. But, after 1.7.1991, there was sudden spurt in the acquisition of assets and during this period, A[1] and A[2] floated several firms in the names of A[2], A[3] and A[4] viz., i. M/s. J. Farm Houses; ii. M/s. J.S. Housing Development; iii. M/s. Jay Real Estate; iv. M/s. Jaya Contractors and Builders; v. M/s. J.S. Leasing and Maintenance; vi. M/s. Green Farm Houses; vii. M/s. Metal King; viii. M/s. Super Duper TV (P) Ltd., ix. M/s. Anjaneya Printers Pvt. Ltd., x. M/s. Ramraj Agro Mills Ltd., xi. M/s. Signora Business Enterprises Pvt., Ltd., xii. M/s. Lex Property Development Pvt., Ltd., xiii. M/s. Riverway Agro Products Pvt., Ltd., xiv. M/s. Meadow Agro Farms Pvt., Ltd., xv. M/s. Indo Doha Chemicals & Pharmaceuticals Ltd., xvi. M/s. A.P. Advertising Services; xvii. M/s. Vigneswara Builders; xviii. M/s. Lakshmi Constructions; xix. M/s. Gopal Promoters; xx. M/s. Sakthi Constructions; xxi. M/s. Namasivaya Housing Development; xxii. M/s. Ayyappa Property Developments; xxiii. M/s. Sea Enclave; xxiv. M/s. Navasakthi Contractors and Builders; xxv. M/s. Oceanic Constructions; xxvi. M/s. Green Garden Apartments; xxvii. M/s. Marble Marvels; Page 8 xxviii. Vinod Video Vision; xxix. Fax Universal; xxx. Fresh Mushrooms; xxxi. M/s. Super Duper TV., and xxxii. M/s. Kodanadu Tea Estate;

9. The further case of the prosecution is that during the check period i.e. from 1.7.1991 to 30.4.1996, there were no business activities at all in respect of many of the above firms, and in respect of others, the activities were more in the nature of acquiring assets like lands, machinery, building etc., which were not production oriented. No income-tax returns were filed by these firms. No assessment for commercial tax has also been done with respect to the business of these firms. A[1] also did not file her Income-tax returns for the assessment years 1987-88 to 1992-93 till November, 1992 and when this issue was sought to be raised in Parliament, A[1] filed the income-tax returns for the above period in November, 1992. Subsequent to 1.7.1991, assets in the form of movable and immovable properties and pecuniary resources like bank deposits etc., were found acquired not only in the name of A[1], but also in the names of A[2], A[3] and A[4] and the firms floated in their names. Scrutiny of various bank accounts maintained in the Page 9 names of A[1] to A[4] and in the names of the above firms disclosed that huge credits in cash had been frequently made into various accounts which were not commensurate with the income of the individuals and of the firms concerned. There were frequent transfers of amounts between one account to the others to facilitate illegal acquisition of assets. The huge quantum of such assets, when viewed in the context that A[1] was holding the office of the Chief Minister and that A[2], A[3] and A[4] were living under the same roof with A[1] and not having sufficient means to acquire the assets in their names, established that the assets were actually acquired by A[1].

10. It is further alleged that, pursuant to the criminal conspiracy between A[1], a public servant and her associates viz., A[2], A[3] and A[4], to acquire and possess properties and pecuniary resources by A[1] in her name and in the names of A[2], A[3] and A[4] and in the names of various firms floated by them, they amassed properties and pecuniary resources to the tune of Rs.66,64,73,573/- (later corrected as Rs.66,65,20,395/-), which was grossly disproportionate to the known sources of income of A[1] and A[2] to A[4] during the check Page 10 period from 1.7.1991 to 30.4.1996. According to the prosecution, the income from the known sources of A[1] during this period, such as rental income, interest derived from various bank deposits and other deposits held by her in her name and in the names of A[2], A[3] and A[4], agricultural income, loans and the salary received by her as Chief Minister of Tamil Nadu, worked out to a total of Rs.9,34,26,054/-, whereas during this period the expenditure incurred by A[1] including repayment of principal amounts and interest on loan, and other outgoings were assessed at Rs.11,56,56,833/-. Thus, as on 30.4.1996, A[1] being a public servant was found to have acquired and possessed pecuniary resources and properties in her name and in the names of A[2], A[3] and A[4] and the firms floated by them, which were overwhelmingly disproportionate to her known sources of income to the extent of Rs.66,65,20,395/- (Rupees Sixty Six Crores Sixty Five Lakhs Twenty Thousand Three hundred and Ninety Five only) which is an offence of criminal misconduct within the definition of Sec.13(1)(e) punishable under Section 13(2) of 1988 Act and A[2], A[3], and A[4] conspired with A[1] and abetted the commission Page 11 of the above offence.

11. On 14.6.1996, Dr. Subramanian Swamy (PW-232), the then President of Janata Dal lodged a complaint against A[1] before the Principal Sessions/Special Judge, Madras, under Section 200 of Cr.P.C., alleging that A[1], after assuming the public office as Chief Minister of Tamil Nadu, had acquired properties and earned income disproportionate to her known sources of income. The said complaint was registered as Crl.M.P. No.3238 of 1996 and by order dated 21.06.1996, the Principal Sessions Judge/Special Judge directed investigation under Section 17 of 1988 Act and Section 202 of Cr.P.C. and further directed to collect necessary materials and submit a report before the Court within a period of two months. Pursuant to the said order, PW-240 - Smt. Letika Saran, a senior IPS Officer, took up the investigation, collected records and documents from various sources.

12. During the investigation, the said order passed by the Principal Sessions Judge/Special Judge was challenged before the High Court of Madras. The investigation was stayed for a brief period and thereafter the High Court was pleased to Page 12 direct the Director of Vigilance and Anti Corruption, Madras (hereinafter also referred to as “DVAC”) to take appropriate steps to investigate into the allegations made in the complaint and ultimately, an FIR was filed against A[1] on 18.9.1996 as per Ext.P-2266.

13. During investigation, after conducting search of the residential premises of A[1] and various other locations, the Investigating Officer found several incriminating materials and voluminous documents were seized and statements of a large number of witnesses were recorded. The incriminating evidence collected during such investigation disclosed the complicity of A[2] to A[4] in the alleged offence. Hence, an application was filed before the Special Judge on 22.01.1997 for addition of A[2], A[3] and A[4] as co-accused and for incorporation of additional offences under Section 120-B of IPC read with Sections 13(2) and 13(1)(e) of 1988 Act and Section 109 of IPC. On completion of such investigation, PW-259 (Shri Nallamma Naidu) laid the charges against all the accused on 4.6.1997 which was duly registered as Spl. C.C. No.7/97 on the file of the IX Additional Sessions Judge Page 13 (Special Court, I), Chennai.

14. The ball was set into motion and following charges were framed by the Special Judge, Chennai: Firstly:- That you A[1] to A[4] during the period between 1.7.1991 and 30.4.1996 in Chennai and other places in Tamil Nadu, you A[1] being a public servant, along with you A[2] to A[4], were parties to a criminal conspiracy with the object of acquiring and possession pecuniary resources of income to the extent of Rs.66,65,20,395/- in the names of you A[1] and in the names of you A[2] to A[4] and the thirty two (32) business enterprises floated in the names of A[2] to A[4], for which you (A[1]) could not satisfactorily account and you (A[2] to A[4]) abetted A[1] by holding a substantial portion of the pecuniary resources and property in your names (A[2] to A[4]) on behalf of you and thereby you A[1] to A[4] committed an offence punishable u/Sec.s 120-B I.P.C. r/w 13(2) r/w 13(1) (e) of Prevention of Corruption Act, 1988 and within the cognizance of this Court. Secondly:- That you A[1] in pursuance of the said criminal conspiracy, during the said period and the said places, being a public servant to wit the Chief Minister of the State of Tamil Nadu, acquired and possessed in your name and in the names of A[2] to A[4] and in the names of the business enterprises floated in the names of A[2] to A[4], pecuniary resources and property disproportionate to your known sources of income to the extent of Rs.66,65,20,395/- for which you could not satisfactorily account, and thereby you A[1] committed an offence punishable u/Sec. 13(2) r/w 13(1)(e) of Prevention of Corruption Act, 1988 and within the cognizance of this Court. Thirdly:- That you A[2] to A[4] in pursuance of the said Page 14 criminal conspiracy during the said period and the said places abetted A[1] who was a public servant, by intentionally aiding her in the possession of pecuniary resources and property disproportionate to her known sources of income and for which she could not satisfactorily account, by holding a substantial portion of the said pecuniary resources and property in your names and in the names of the business enterprises floated in your names, and thereby you A[2] to A[4] committed an offence punishable u/Sec. 109 I.P.C. r/w 13(2) r/w 13(1)(e) of Prevention of Corruption Act, 1988 and within the cognizance of this Court.

15. The charges were denied by the accused persons. During the pendency of the trial, the D.V. & A.C. was permitted further investigation under Section 173(8) of Cr.P.C. and was granted letters rogatory by the Designated Court for collecting evidence and materials relating to the alleged accumulation of disproportionate assets/wealth by A[1] in conspiracy with A[2] outside the country. On the basis of the evidence collected during further investigation, a separate FIR in Crime No.2/AC/2000 was filed by the prosecution on 2.9.2000 against A[1] and A[2] which culminated into a charge-sheet dated 23.3.2001 registered as Spl.C.C. No.2/2001.

16. Subsequent thereto evidence was recorded from time to time. Thereafter, steps were taken under Section 313 Cr.P.C. Page 15 So far as A[1] was concerned, she was permitted to answer a questionnaire which was delivered to her with a direction to answer it on 25.2.2003, which was adhered to by A[1]. A[2] to A[4] were also questioned as per Section 313 Cr.P.C. which was duly concluded on 26.2.2003. Thereafter, defence witnesses were examined. Thereafter, by its judgment dated 18.11.2003 in Transfer Petition (Criminal) Nos.77-78/2003, the Supreme Court transferred the said matter to the State of Karnataka and in terms of the said judgment, the Government of Karnataka by its order dated 27.12.2003 duly accorded sanction for establishment of the Special Curt at Bangalore and by Notification dated 19.02.2005, duly appointed Shri B.V. Acharya, Senior Advocate and former Advocate General of Karnataka as Public Prosecutor to conduct the said matter.

17. Thereafter, the said matter bearing Spl.C.C. No.7/1997 was renumbered as Spl.C.C. No.208/2004 and Spl.C.C. No.2/2001 was renumbered as Spl.C.C. No.209/2004 on the file of the Special Judge (i.e. 36th Addl. City Civil & Sessions Judge at Bangalore. Subsequent thereto certain steps were taken on behalf of the accused and the matter travelled up to this Page 16 Court/Supreme Court whereafter the trial was resumed before the Special Judge. The accused were called upon to examine their witnesses and subsequently 99 witnesses were produced before the Court and concluded their evidence. Narration of all eventful factual interventions has been avoided being not decisively essential for the adjudication.

18. It appears that the Trial Court after hearing the parties culled out the following points for determination: (a)Whether the prosecution proves beyond all reasonable doubt that A[1], being a public servant acquired and possessed in her name and in the names of A[2] to A[4] and in the names of business enterprises floated in their names, pecuniary resources and assets of the value of Rs.66,65,20,395/- disproportionate to her known source of income during the check period from 01.07.1991 and 30.04.1996, which she could not satisfactorily account? (b)Whether the prosecution further proves beyond reasonable doubt that A[1] to 4 were parties to a criminal conspiracy with the object of acquiring and possessing pecuniary resources and assets to the extent of Rs.66,65,20,395/- in the names of A[1] and in the names of A[2] to 4 and the 32 Page 17 business enterprises floated in the names of A[2] to 4 and thereby committed the offence punishable u/Sec. 120-B of Indian Penal Code R/w. Sec.13 (2) R/w. Sec. 13 (1) (e) of Prevention of Corruption Act, 1988?

(c) Whether the prosecution further proves beyond all reasonable doubt that A[2] to A[4] abetted the commission of the above offence by intentionally aiding A[1] in the acquisition and possession of pecuniary resources and properties disproportionate to her known source of income by holding substantial portion thereof in their names and in the names of 32 business enterprises floated in the names of A[2] to A[4], rendering them liable for conviction for the offence punishable u/Sec. 109 Indian Penal Code R/w. Sec. 13(2) R/w. Sec.13(1)(e) of Prevention of Corruption Act, 1988? (d)What order ?

19. The Trial Court appraised the evidence adduced in respect of the points formulated by it and duly dealt with the charges framed against the accused. The Trial Court elaborately dealt with the matter after considering the evidence, facts as well as the judgments cited before it, the Page 18 contentions raised and after dealing with all aspects of the matter, inter alia held that: “……There is no argument from any quarters that the choice of the check period has caused any prejudice or disadvantage to the accused in any manner. Hence, in my view, the period of 5 years selected by the prosecution is reasonably sufficient to give a fair and comprehensive picture of the known source of income and pecuniary resources and property in the possession of the accused so to arrive at a fair decision on the issues involved in this proceedings.”

20. From the facts it appears, the prosecution has listed the details of assets held by the accused at the beginning of the check period i.e. 1.7.1991 in Annexure-I (Ext.P-2327). The said Annexure is reproduced hereunder: ANNEXURE – I (ASSETS AS ON 1.7.1991)

┌────────────────────────────────────────────────────────────────────────────────────────────┐
│                                ANNEXURE – I                                                │
│                           (ASSETS AS ON 1.7.1991)                                          │
│

┌──────────────────────────────────────────────────────────────────────┐
│

┌──────────────────────────────────────────────────────────────────────────────┐
│                     30.04.1996                                               │
│                   ANNEXURE - IV (Ex.P.2330)                                  │
│

┌─────────────────────────────────────────────────────────────────────┐
│        Sl.   Particulars                         Amount             │
│        No.                                       (In Rupees)        │
├─────────────────────────────────────────────────────────────────────┤
│        1.    Loan as income                      18,17,46,000       │
│        2.    Income from grape Garden            46,71,600          │
│        3.    Gifts                               1,50,00,000        │
│        4.    Sasi Enterprises                    25,00,000          │
│        5.    Jaya Publications and Namadhu MGR   4,00,00,000        │
│        6.    Super Duper TV Pvt. Ltd.            1,00,00,000        │
│        7.    Rental Income                       3,22,000           │
│        8.    Income assessed by DVAC             9,34,26,054        │
│                     TOTAL INCOME                 34,76,65,654       │
│ DISPROPORTIONATE ASSETS:                                            │
│                                                           Page 70   │
│   Total Assets - Total Income                                       │
│   Rs.37,59,02,466 - Rs.34,76,65,654 = Rs.2,82,36,812                │
│   Percentage    =      Disproportionate assets x 100                │
│                               Income                                │
│                 =      Rs.2,82,36,812 x 100                         │
│                        _____________________                        │
│                         Rs.34,76,65,654                             │
│                 = 8.12%                                             │
└─────────────────────────────────────────────────────────────────────┘

250. A[1] thus claimed agricultural income of Rs.52,50,000 during the check period, on the basis of the above returns/orders of the income tax authorities/forums. The Trial Court duly evaluated the evidence adduced by the prosecution as well as by the defence in this regard in detail and concluded that the two versions were irreconcilable. It did not accept the evidence adduced by the prosecution in absence of the notes of inspection endorsing the report Ex. P-938. It also noticed the flaws in the evidence of PWs 165, 166 and 256 which revealed that the inspection of the grape garden had been made without reference to any revenue or survey records and that there was no clear and definite Page 302 evidence regarding the specific extent of land used for the cultivation of grapes and other crops. It doubted the basis on which the yield had been determined and the price calculated by the inspecting team and, therefore held that the report was unreliable.

251. The evidence of A[1] was also held to be vague and ambiguous being not supported by acceptable evidence. It was of the view that the income tax returns and the orders passed thereon were of minimal evidentiary value in determining the extent of cultivation, quantum of produce, cost of cultivation and the price fetched by A[1] during the relevant years. It held that though all these aspects were within the exclusive knowledge of A[1], she had failed to produce the best evidence available to her. The Trial Court was thus of the view that there was no worthwhile evidence to accept the claim of A[1]. The above conclusion notwithstanding, the Trial Court took note of the fact that A[1] had been holding 14½ acres of agricultural land and that she had been growing grapes thereon. It referred to copies of the pahanis Exb. P2251 to P2258 in support of her stand that grapes were being grown on the land involved. The Trial Court was of the view Page 303 that her entire claim cannot be rejected for her failure to produce convincing documentary evidence. It took note of the fact from the reports, that 10 acres of land were being used for cultivation of grapes at the relevant time. Having regard to the likely cost of cultivation and the fluctuating price prevalent during the check period, the Trial Court made a rough estimate of income from the grape garden at Rs.20,000/- per acre per annum and on the basis thereof, quantified the agricultural income for the check period of five years at Rs.10 lakhs during the check period, thus enhancing the income from Rs.5,78,340/- cited by the prosecution.

252. The High Court, on the other hand, readily accepted the income tax returns filed by the assessee and affirmed the claim of A[1] of agricultural income of Rs.52,50,000/-. It was of the view that though the income tax returns had been filed belatedly, the same per se could not be a ground to reject the same as a proof of the agricultural income of A[1] from grape garden. Thereby, the High Court enhanced the agricultural income of A[1] to Rs.52,50,000/- permitting an addition of Rs.46,71,600/-.

253. Apart from the fact that the approach of the High Court Page 304 on this aspect appears to be summary in nature without reference to the other evidence on record as had been exhaustively discussed and analysed by the Trial Court, in law the income tax returns/orders passed thereon qua the issue are not final and binding on a criminal court, and at best only are relevant and always subject to its independent appraisal on merits.

254. It has been urged on behalf of R1/A[1] that her claim of income of Rs.52,50,000/- under this head stands proved wholly on the basis of the relevant income tax returns and the orders passed thereon. Oral evidence of DW-64 and the documentary evidence by way of D-61 to D-64 have been relied upon. As observed hereinabove, the High Court had readily accepted this evidence and had thereby enhanced the income of A[1] under this head to Rs.52,50,000/- by adding Rs.46,71,600/- to the sum of Rs.5,78,340/- mentioned by the DVAC. In absence of any independent evidence in support of this claim, having regard to the state of law that income tax returns/orders are not automatically binding on a criminal court, in our view, the effortless acceptance thereof by the High Court is in disregard to this settled legal proposition. Page 305 Thereby the High Court has accorded unassailable primacy to such income tax returns/orders and have made those final and binding on the criminal court without any appreciation of the probative potential thereof.

255. The High Court thus had proceeded not only in disregard of the evidence as a whole but also being oblivious of the legal postulations enunciated by this Court that income tax returns/orders passed thereon are not binding on criminal court and that the facts involved are to be proved on the basis of independent evidence and that the income tax returns/orders are only relevant and nothing further. LOANS:

256. The second additional head of income involved by the respondents constitutes loans in addition to the bank loans cited by DVAC as taken note of by the High Court to add Rs.18,17,46,000 to the income of the respondents. This item of income significantly is suggestive of the collective orientation of the respondents qua the charge as one corporate unit. The tone and tenor of the contents of the applications for loan and the composition of the Page 306 firms/companies availing the benefit thereof, suggest that the respondents were in collaboration with each other in the transactions which demonstrate their combined involvement therein.

257. Here, according to the prosecution, there are two aspects, firstly there is a duplication as DVAC has included these loans in its chart which have been considered by the Trial Court and secondly, even otherwise, the High Court committed a mistake in adding up the loan amounts of these additional 10 heads to arrive at a figure of Rs.24,17,31,274 which on a correct calculation, ought to be Rs.10,67,31,224/-.

258. Noticeably, these additional loan amounts have been availed of by A[1], M/s Sasi Enterprise and other firms like M/s Jaya Publications, M/s Jay Real Estate, M/s J.S. Housing, M/s J. Farm House, M/s Ramraj Agro Mills Limited, M/s Mahalaxmi Kalyanmandpam (hereinafter for sake of brevity 'M/s' as prefix to the names & the firms referred to would be avoided). Apt it would be to deal with these loans in seriatim. Page 307 Indian Bank – OMTL – Jaya Publications: Rs.1,50,00,000/-

259. This head corresponds to item No. 1 of Annexure IV (Expenditure) - Exb. P-2330. This indicates that this loan account was closed on 25.6.1994. An amount of Rs.50,93,921/- was paid by way of interest on this loan which is evident from Exb. P-1027. This has been stated by PW 182. PW[6] also confirms the repayment of the loan. Thus, this head of income did not exist at the end of the check period i.e. 30.4.1996 and cannot be accounted for. The Trial Court did take note of this aspect in its judgment while dealing with these items of loan on the basis of the evidence adduced, more particularly while dealing with the heads of expenditure. In that view of the matter, the High Court was in error in including this item of loan in the income of the respondents. Indian Bank - Agricultural Loan - Rs.3,75,00,000:

260. This corresponds to item No. 8 of the Heads of Income Page 308 vide Exb. P-2329 as cited by the DVAC. The oral evidence to this effect has been adduced by PW 182 who has proved Exb. P-1101. The Trial Court dealt with the evidence both oral and documentary in this regard and by referring to the letter Exb. P-1001, addressed to the bank by the applicant for the loan thereof, had concluded that the liability to liquidate the loan had been taken over by A[2] to A[4]. The evidence on record, thus, demonstrates that the Trial Court had taken note of this item of loan and, therefore the High Court ought not to have added this figure by way of duplication. Indian Bank – A[1] – Rs.90,00,000/-

261. As would be apparent from the evidence of PW 182 who proved Exb. P-1114, this loan was taken after the check period i.e. in August 1996 and thus, the amount thereof could not have been taken into account by the High Court. This figure, therefore as a corollary has to be excluded. Indian Bank – Jay Real Estate – Rs.25,00,000/- Page 309

262. This corresponds to item No. 4 of the list of income cited by the DVAC and relatable to Exb. P-2329. PW 182 through Exb. P-1161 to P-1163 has proved this loan. Exb. P-1161 written by A[3] on behalf of Jay Real Estate is one seeking loan of Rs.29 lakhs providing the necessary particulars in the annexure appended thereto. Exb. P-1162 discloses that medium term loan of Rs.25 lakhs was sanctioned by the bank but as on 22.11.1995, an amount of Rs.[5] lakhs had been disbursed, as is evident by Exb. P-1163. The Trial Court has duly dealt with the evidence to this effect while quantifying the income as well as in noting the expenditure by way of interest against this loan. The plea of the prosecution that in the above premise, the High Court was wrong in adding a sum of Rs.25 lakhs towards the income of the respondents under this head, has to be accepted. Indian Bank – J.S. Housing – Rs.12,46,000/-:

263. This corresponds to item No. 3 of the heads of income cited by the DVAC vide Exb. P-2329. This loan has been Page 310 proved by PW 182 through Exb. P- 1171 to 1173.The Trial Court has referred to this evidence while quantifying the income and the expenditure by way of interest on the loan amount as had been listed in Annexure IV (Expenditure) cited by the DVAC.

264. The documents pertaining to this loan transaction authenticate that though an amount of Rs.12,46,000/- had been sanctioned by the bank, it had released only a sum of Rs.[7] lakhs and the principal amount and the interest had not been repaid by the firm. Thus, per se the High Court was not justified in adding a sum of Rs.12,46,000/- to the tally of income of the respondents under this head. Indian Bank – Jay Farm House – Rs. 50,00,000/-:

265. This corresponds to item No. 2 of the heads of income cited by the DVAC and has been proved by PW 182 through Ex P-1211. The records attest that though the full amount of Rs.50,00,000/- was sanctioned, a sum of Rs.28 lakhs was only disbursed and the principal amount with interest had not been repaid. Page 311 The Trial Court has considered the evidence, oral and documentary, to this effect. The addition of a further amount of Rs.50 lakhs by the High Court to the corpus of income of the respondents, therefore, is clearly erroneous. Indian Bank – Ms. Sasikala – Rs. 25,00,000/-:

266. This corresponds to item No. 1 of the items of income cited by the DVAC and in fact had been availed by Sasi Enterprise, as has been deposed by PW 182 through Ex. P-1260. The amount due and outstanding to the bank, at the relevant point of time, was Rs.13,55,023/-. The Trial Court noted that the application for loan had been made by Ms. Sasikala as the Managing Partner of the firm and had examined the relevant evidence including the statement of account pertaining to the loan. This head of income thus had been taken note by the Trial Court and, therefore the High Court was not justified to add a further sum of Rs.25 lakhs thereunder. Page 312 Indian Bank – Mr. Sudhakaran - Rs. 1,57,00,000/-:

267. This corresponds to item No. 7 of the heads of income cited by the DVAC and has been proved by PW 182 through Ex P-1330. The Trial Court has examined the evidence relating to this loan applied for by Mr. V.N. Sudhakaran on behalf of Lex Property Development (P) Limited for a loan of Rs.1,57,00,000/-. The oral and other documentary evidence with regard to the sanction of loan and the statement of account has been analysed as well. The Trial Court, thus, had taken note of this loan while computing the income of the respondents. The principal amount, due under this account at the relevant point of time, was Rs.83,00,000/-. The addition of an amount of Rs.1,57,00,000/- by the High Court towards income in the above backdrop is indefensible. Ramraj Agro Mills Limited - Rs.1,65,00,000/-:

268. This item is not included in the list of income furnished by the DVAC. PW 182 has deposed about this loan through Exb. P-1349 to P-1354. The statement of account of Ramraj Agro Mills Limited is Exb. P-1354. This has been corroborated Page 313 as well by PW 235 who has stated that an amount of Rs.1.65 crores had been sanctioned as loan. There is, however,no evidence with regard to the disbursement of any amount qua the loan sanctioned. In any case, the amount due to the bank at the relevant point of time in this account was Rs.39,10,781/-. Therefore, addition of amount of Rs.1.65 crores, by no means, as done by the High Court, can be said to be justified.

269. There is no discussion about this head of loan by the Trial Court presumably due to the absence of any evidence with regard to disbursement of any amount in connection therewith. The High Court, however, has added an amount of Rs.1.65 crores without even referring to the evidence to ascertain as to whether any amount out of the loan sanctioned, in fact had been released in favour of the firm involved. In any case, examination of Exb. P-1354, the statement of account of Ramaraj Agro Mills Private Limited pertaining to this loan, discloses that, at the relevant time, the outstanding amount due to the bank was Rs.39,10,781/- and thus, in any Page 314 view of the matter, the High Court could not have added Rs.1.65 crores against this item. Indian Bank – Maha Subbalakshmi Kalyana Mandapam - Rs.17,85,274/-:

270. This corresponds to item No. 6 of the heads of income cited by the DVAC and has been referred to by PW 182 who proved Ex P-1357 in connection therewith. The amount due under this account at the relevant time was Rs.19,81,802/-. The Trial Court has considered the evidence, oral and documentary, to this effect and thus had accounted for this component while quantifying the total income of the respondents. In this premise, the High Court was not right in adding the entire sum of Rs.17,85,274/-, as if the same had escaped the notice of DVAC or the Trial Court.

271. As the impugned judgment of the High Court would reveal, it referred to generally the testimony of PW 182 and PW 259 and had observed that the respondents had borrowed loans from the banks as well as from the private parties which however have not been taken into consideration. While noting Page 315 the loans availed by the respondents from different firms and companies, as named therein, the High Court did, however limit itself only to the loans borrowed from the nationalised banks, as referred to hereinabove, but wrongly totalled the amounts to inflate figure to Rs.24,17,31,274/- which in fact ought to have been Rs.10,67,31,224/- on a correct arithmetic. The High Court, thereafter, adjusting Rs.5,99,85,274/-, i.e. the income quantified by the DVAC added Rs.18,17,46,000/- (Rs.24,17,31,274 – Rs.5,99,85,274) to the income of the respondents.

272. In view of the above discussion, the High Court has not only erred in including the entire amount of loan encompassed in ten items, mentioned hereto before, but also premised its finding on income on an inflated and patently incorrect figure of Rs.24,17,31,274/-. This addition of Rs.18,17,46,000/- to the income of the respondents, as done by the High Court, is obviously erroneous and thus cannot be sustained. To reiterate, even the High Court though had referred to private loans, availed by the respondents from A[3], J. Farm House, Meadow Agro Farms Limited, Sasi Enterprises, Bharani Beach Resort, Lex Property Development Private Page 316 Limited, it did not include the same in the total income of the respondents. The plea of the respondents that the income from private sources had not been considered at all, is thus untenable, more particularly in absence of any challenge by them against the above exclusion by the High Court. GIFTS:

273. The next additional item of income indicated by the High Court is gifts offered to A[1]. The defence has introduced this item of income against receipts on the birthday of A 1 on 24.2.1992, claimed to have been celebrated on a grand scale as it was her first birth day as the Chief Minister of the State for the said term. Gifts by way of jewellery and cash in particular have been claimed to have been received. Foreign remittance also has been assimilated. The evidence adduced by the defence includes testimony of members of AIADMK party, of which at the relevant time, AI was the General Page 317 Secretary. The decipherable pattern of the evidence adduced by the members of the AIADMK, who claimed to have contributed along with about 300/350 donors is that their contributions were collected by the concerned office bearers of the party and thereafter the amount was converted into demand draft in the name of A[1]. It is, however, deducible from the evidence which is almost stereotype in nature that no individual receipt had been issued to the contributors against their donations. Record of the collectors, as office bearers of the party, has also not been produced. No account has been maintained with regard to such collection. A copy of the draft amount of Rs.2,15,000/- has been proved. No record with regard to the banking transactions resulting in the draft has also been proved. In other words, the source of the fund of the draft has remained obscure.

274. According to the prosecution, the gifts, as claimed by the respondents, do not constitute a lawful source of income under Section 11(1)(e) of the Act and, therefore had not been included by the DVAC in the list of known sources of income.

275. A[1] through her letter dated 6.9.1993 claimed receipt of gifts of jewellery, cash, demand draft, silver items, silk sarees, Page 318 framed portraits etc. on the occasion of her birthday. There is also mention of receipt of similar gifts qua the relevant assessment years 1990-91, 1991-92, etc. In the concerned assessment order dated 21.3.1995, affidavits filed relating to gifts for the assessment years 1990-91, 1991-92, 1992-93 had also been considered. This assessment order would show that a total of Rs.1,26,32,657/- was taken to be the income against receipt of jewellery, silver articles and cash deposits in the bank.

276. Ex. P-2139 is the income tax return of A[1] for the Assessment Year 1991-92 which had been filed on 23.11.1992 and does not mention any gift as income from other sources. However, the assessment order for the assessment year 1992-93 passed on 21.3.1995 Ex. P-2140 discloses that on 7.12.1992, the assessee's representative filed the receipts and payments account Exp. 2140, profit and loss account and balance sheet, as on 31.3.1992 with a request to treat the same to be read with the total income statement. Thereunder, the head “Receipt and Payment” for the period 1.4.1991 to 31.3.1992, a sum of Rs.1,94,50,012/- has been mentioned to be “gifts received”. The said figure is also shown in the Page 319 balance sheet as at 31.3.1992. To this, a further amount of Rs.15,00,000/- also had been added as gifts receipt.

277. This order thus suggests that in the return of A[1] for the financial year 1991-92, a sum of Rs.1,94,50,012/- against gifts had not been originally shown but had been sought to be introduced on 7.12.1992 as a supplementary income statement. Be that as it may, this exhibit i.e. P-2140 also on the above reasoning, has taken note of this amount and this receipt as gift has been subjected to tax by taking the same to be income from undisclosed sources.

278. The attempt on the part of the defence to prove the income tax returns and the assessment orders, as above, is to show that receipts by way of cash, demand draft, jewellery, silverware etc. had been a normal feature on every birthday of A[1] in view of the respect and esteem earned by her as a political personality and an adorable leader.

279. Incidentally, the CBI, vis-a-vis the claim of receipt of Rs.1.[5] crores as income from gifts had filed a charge sheet against A[1] constituting the same to be an offence under Section 11 of the 1988 Act. The High Court, however, had quashed the proceedings on the ground of delay in the Page 320 investigation and the CBI has filed a Special Leave Petition before this Court, being SLP (Crl.) Nos. 1163-1168 of 2012 which is pending adjudication. This fact was not brought to the notice of the High Court, passing the impugned order herein. Noticeably again, as the prosecution asserts, in view of the 'Explanation' to Section 13(1)(e) of the PC Act, any gift received by the public servant, to be a lawful source of income should have been intimated to the authorities in accordance with law. Mentioning of such receipt in the income tax return, per se, according to the prosecution, is not enough.

280. The Trial Court, while dealing with this aspect, took note of the plea of the defence of making gift by way of cash and drafts amounting to Rs.2,15,00,012/- and foreign remittance of Rs.77,52,591/- to A[1], who had disclosed the same in her income tax return for the assessment year 1992-93 filed on 22.11.1992. That the income tax authorities had treated this amount to be an income of A[1] from undisclosed sources and had levied tax, which was paid by her, was also noticed by the Trial Court. The evidence of PW-259, the Investigating Officer in his cross-examination that in Tamil Nadu, party workers and ordinary people Page 321 generally present such gifts on the birthdays of political leaders and that from the witnesses examined, an amount of Rs.1,94,50,012/- had been received through demand drafts as birthday gift for A[1], was also taken on record. Cash receipts by way of gift amounting to Rs.15 lakhs for the same event, as stated by PW-259, was also considered. Receipts by way of gifts in the earlier years also did not miss the attention of the Trial Court. It noted as well, the receipt of gift of the substantial amount by way of foreign remittance in American dollars during 1992-93 from the testimony of this witness.

281. The defence evidence and the income tax returns/orders proved by the respondents, were also considered in details. The evidence in particular of DW-64 S. Shanmugam, Chartered Accountant in this regard also was analyzed. Noticeably, this witness was the auditor of A[1] during the period 1996-2000 but claimed to have dealt with her accounts for the assessment years 1991-92 to 1997-98. He generally reiterated the evidence with regard to the disclosure of the receipts by way of gifts by A[1] on the occasion of her birthday on 24.2.1992 amounting to Rs.2,15,00,012/- and foreign Page 322 remittance of Rs.77,52,591/-. He however admitted that the income tax returns for the assessment years 1991-92 to 1995-96 of A[1] were filed by her previous tax consultant and not by him.

282. The Trial Court, on an analysis of the evidence of this witness, however was of the opinion that he was not acquainted with the true facts of the case and was incompetent to speak about the gifts received by A[1] or the income tax returns said to have been filed by her, as he was not her auditor at the relevant point of time. The Trial Court examined as well the relevant returns and the orders passed by the concerned income tax authorities and rightly noted that there was no mention of the alleged presents/gifts in the return of A[1] for the assessment year 1992-93 at the first instance. However the factum of receipt of jewellery as gifts for the period of the wealth tax return of 1991 was taken note of. The letter dated 18.3.1994 of A[1] reiterating that she had received cash/DD/jewellery/silverwares in various years as personal gifts on her birthdays and that she had disclosed the same in her wealth tax returns and had paid the wealth tax, also was considered by the Trial Court. It however, took note Page 323 of the observation made in Ex. P-2145 that the returns claiming birth day presents were not filed in the respective assessment years but long after and that for the first four years, i.e. assessment years 1987-88 to 1990-91, there was no mention of cash presents and that it was limited to jewellery only.

283. That aggrieved by the finding of the Commissioner of Income Tax, PW-125 that the money and assets representing the presents and gifts did constitute applicant's income from undisclosed source within the meaning of Sections 69 and 69A of the income tax Act, A[1] had preferred an appeal before the Tribunal and that the same was pending, was recorded.

284. That the receipt of money or pecuniary resources in order to qualify as income within the meaning of Section 13(1) (e) of the Act, in case of a public servant should essentially be attached to his/her official post and that any windfall or gain of graft, crime or immoral secretions prima facie would not be a receipt from the known sources of his/her income as held by this Court in State of M.P. Vs. Awadh Kishore Gupta (supra), was noted. The Trial Court was of the view that though the receipt of birthday presents by themselves might Page 324 not amount to windfall or immoral secretions, the receipt of huge amount of Rs.[2] crores and foreign remittance as presents and gifts, as the Chief Minister of a State, was susceptible to serious doubts and suspicion about the nature of the receipts. The fact that the practice of offering such gifts had been discontinued after 1992 and the possibility of such offerings not being made if A 1 was not in office, was pondered over. The Trial Court discarded the evidence of the party workers and rejected the A1's claim of income from the gifts from a lawful source. The decision of this Court in A.R. Antulay Vs. R.S. Nayak & Anr., (1988) 2 SCC 602, was referred to emphasize upon the objectives of the 1947 Act to keep a public servant free from corruption and to ensure purity in public life. The Trial Court, thus, rejected the alleged gifts, said to have been received by A[1] to constitute a lawful source of income. On a reading of the discussion of the Trial Court on this issue, by no means, can it be repudiated to be one bereft of appreciation of the evidence on record or reasons or application of mind.

285. In contradistinction, the High Court quantified the Page 325 amount of gifts to be Rs.1.[5] crores principally referring to the income tax returns and the orders of the authorities passed thereon. It did notice that there had been a delay in the submission of the income tax returns but accepted the plea of the defence acting on the orders of the income tax authorities. It seems to have been convinced as well by the contention that there was a practice of offering gifts to political leaders on their birthdays in the State. Not only is the ultimate conclusion of the High Court, de hors any independent assessment of the evidence to overturn the categorical finding of the Trial Court to the contrary, no convincing or persuasive reason is also forthcoming. This assumes significance also in view of the state of law that the findings of the income tax authorities/forums are not binding on a criminal court to readily accept the legality or lawfulness of the source of income as mentioned in the income tax returns by an assessee without any semblance of inquisition into the inherent merit of the materials on record relatable thereto. Not only this aspect was totally missed by the High Court, no attempt seems to have been made by it to appraise the evidence adduced by the parties in this regard, to come to a self-contained and Page 326 consummate determination.

286. Exb. P-2145 is the order dated 25.3.1996 of the CIT (appeals) rejecting the explanation of A[1] with regard to the gifts said to have been received by her by way of cash, demand draft, jewellery, silverware for the assessment years 1987-88 to 1992-93. The order, amongst others, reveals that none of the income tax returns and wealth tax returns of A[1], was in time. Whereas those for the assessment years 1987-88 to 1991-92 were delayed by periods ranging between one year and five years and above, that of 1992-93 was also belated. The explanation provided by A[1] in her letters to this effect was taken note of and was not accepted by the Assessment Officer and the CIT (Appeals) also sustained this conclusion. Apart from other aspects, the appellate authority also noticed the unexplained delay in the submission of the income tax as well as wealth tax returns. The observation of the Assessment Officer that the income tax returns did not disclose the presents/gifts received by the assessee during the relevant time, was also noted. The appellate authority was of the view, taking the clue from the decision of this Court in The Commissioner of Expenditure Tax, Andhra Pradesh Vs. Page 327 P.V.G. Raju, (1976) 1 SCC 241, that politics is a profession and thus the collections in the form of presents/gifts cannot but were receipts from profession and, therefore were to be construed as professional income under Section 28. As would be evident from the order, the income tax authorities did limit their scrutiny only to decide as to whether the receipts by way of presents/gifts were to be treated as income or not for the purposes of Income Tax Act and not to verify the genuineness, authenticity and lawfulness of the source thereof or of the transactions relating thereto as required from the standpoint of a charge of criminal misconduct under the 1988 Act.

287. Apart from the fact that the oral testimony of PWs 215 and 259 as to the practice of entertainment of gifts and donations qua the political figures of the states on celebratory occasions is of no consequence to ascribe any legitimacy to such receipts as a lawful source of income under the 1988 Act, in view of the incorporation of Sections 161 to 165A IPC in their letter and spirit in the 1988 Act, gifts as claimed to have been made to A[1] were not only prohibited by law, having regard to her office and the role attached thereto, but also constitute an offence thereunder. By no means therefore, the Page 328 gifts in any form, as offered to A[1] during the relevant period, can be construed, having regard to the rationale and rigour of the underlying objectives of this lagislation be accepted as a lawful source of income. To reiterate, disclosure of such gifts in the income tax returns of A[1] and the orders of the income tax authorities on the basis thereof, do not validate the said receipts to elevate the same to lawful income to repel the charge under Section 13(1)(e) thereof. The reliance of the defence on the decisions of this Court in M. Krishna Reddy (supra) and Kedari Lal (supra), in the facts and circumstances of the case, is of no avail.

288. This Court while dilating on the permissibility of acceptance of presents by public servants, proclaimed in R.S. Nayak (supra), that if the same is allowed, it would facilitate circumvention of the prohibition of acceptance of bribe in the shape of present/gift. An analytical insight into the ingredients of Sections 161 to 165A of IPC, then on the statute book as a part of the Code was undertaken to propound that the ambit of Section 165 was wider than that of Sections 161,162 and 163 IPC and was intended to cover cases of corruption. It was elaborated that the difference between the acceptance of bribe Page 329 made punishable under Section 161 and 165 IPC was that under the former section, the present is taken as a motive or reward for abuse of office but under the latter, the question of motive or reward is wholly immaterial and the acceptance of a valuable thing without consideration or with inadequate consideration from a person who has or is likely to have any business to be transacted, is forbidden because though not taken as a motive or reward for showing any official favour, it is likely to influence the public servant to show official favour to a person giving such valuable thing. It was underlined that Sections 161 and 165 IPC as well as Section 5 of the PC Act are intended to keep the public servant free from corruption and thus ultimately to ensure purity in public life.

289. Gifts to A[1], a public servant in the context of Sections 161 to 165A IPC now integrated into the Act are visibly illegal and forbidden by law. The endeavour to strike a distinction between “legal” and “unlawful” as sought to be made to portray gifts to constitute a lawful source of income is thus wholly misconstrued.

290. With the advent of the 1988 Act, and inter alia consequent upon the expansion of the scope of definition of Page 330 the “public servant” and the integration of Section 161 to 165A IPC in the said statute, the claim of the defence to treat the gifts offered to A[1] on her birthday as lawful income, thus cannot receive judicial imprimatur.

INCOME OF SASI ENTERPRISES BY WAY OF RENTAL INCOME, AGRICULTURAL INCOME AND REPAYMENT OF LOAN.

291. This partly corresponds to the rental income of this firm, listed at item Nos. 59,60 and 61 in the Heads of income furnished by the DVAC, amounting to Rs.6,15,900/-. Whereas the Trial Court had rejected the claim of Sasi Enterprises of having earned Rs.95,92,776/- as income under the various heads i.e. profit from business, sale of scrap, agricultural income, rental income, recovery of loan, advance receipt for sale of property and had sustained the figure mentioned by the prosecution, the High Court assessed the same to be Rs.25,00,000/-.

292. As the evidence on record would reveal, in support of their claim, the respondents relied heavily on the income tax Page 331 returns and the orders passed thereon for the assessment years 1991-92 to 1996-97 and the oral testimony of DW-88. Ex. D-262 to D-275 were pressed into service. Qua the rental income of Sasi Enterprises, according to the respondents, against a sum of Rs.12,68,800/-, the DVAC had accepted only Rs.6,15,900/- as reflected against item Nos. 59, 61 and 62 of the schedule of income furnished by it.

293. DW-88 K. Soundravelan claimed to be a Chartered Accountant since 1992 had deposed to have handled the accounts of Jaya Publications and Sasi Enterprises and also the personal accounts of A[2] and the firms concerning her. He is stated to have been involved in the finalisation of accounts of the above assessees. He generally identified the various exhibits like income tax returns, profit and loss accounts, balance sheets and the orders of the income tax authorities in connection therewith. He also stated with regard to the business in which Sasi Enterprises was involved in the name of FAX Universal. He referred to a lease agreement of one TSR Vasudevan with Sasi Enterprises in the year 1990 for carrying out agricultural operations and also a copy of the certificate issued by the Tehsildar of Villupuram with regard to Page 332 the leasehold lands. He identified as well the documents produced by the firm indicating recovery of a part of the loan advanced to one Nagammal and Subramaniam. Noticeably, his testimony was based on the contents of the documents alone. He in the same vein, also referred to the agricultural income as reflected in the relevant income tax returns. He, however, admitted that Sasi Enterprises had not filed its return of income for the assessment years 1994-95, 1995-96 and 1996-97 in time for which notices had been issued under Section 148 of the Income Tax Act. This assumes importance in view of the prosecution launched against this firm for delayed submissions of the income tax returns.

294. The prosecution had examined PW-113 Mosin Bijapuri on this issue, who at the relevant time i.e. 1992-93, was the Managing Director in H.B.M. Foundation Limited. He stated about taking on rent by his company, a shop for which an advance of Rs.21,600/- was made. He also stated about the payment of rent till 1997 i.e. till vacation of the premises. He referred to a copy of the rent agreement with Sasi Enterprises but conceded that he did not know as to who had signed on behalf of the firm. Page 333

295. The Trial Court evaluated the oral as well as the documentary evidence in full. It analysed the contents of the documents individually so as to examine the tenability or otherwise of the claim of income under various heads for each assessment year during the check period. It recorded, amongst others, that in terms of Section 269 (SS) of the Income Tax Act, no one was permitted to take or accept from any other person, any amount of loan or deposit exceeding Rs.20,000/- except by way of account payee cheque or an account payee bank draft. It examined this aspect in the context of the definition of “known source of income” applied in Section 13(1)(e) of the Act. Reference to Section 269-D regarding repayment also through an account payee cheque or an account pay bank draft was made. Though it had been argued on behalf of the respondents that in view of the Direct Tax Laws (Amendment) Act of 1987, Section 276DD, which provided for prosecution and penalty for contravention of Section 269DD, had been repealed, non-compliance of Section 269SS, even assuming that such violation did not attract prosecution under the Act, the same cannot be ignored in Page 334 order to determine the veracity and/or the acceptability of the transactions involved. At least to this extent, the approach of the Trial Court and the application of Section 269SS merits acceptance.

296. The Trial Court was also of the view that vis-a-vis the plea of recovery of loan, the defence had mainly endeavoured to substantiate the claim of income under the aforementioned head on the basis of the profit and loss account, there being no other tangible proof either of grant of loan or the repayment thereof. That the defence had neither examined the loanee nor had produced any material in support of the transaction was recorded. It also discarded the profit and loss account in support of the plea of the defence that an amount of Rs.16,91,000/- had been recovered out of the loan advance to Nagammal and Subramanium.

297. The Trial Court rejected the lease agreement between TSR Vasudevan and Sasi Enterprises, amongst others, on the ground that the claimant's lease was for a period of 11 months which was impermissible under Section 107 of the Transfer of Property Act. Further there was no acceptable evidence that the land had been cultivated to claim Page 335 agricultural income. The letter of the Tehsildar, Vellupuram Ex. 259 certifying that A[2] was a lessee of the land involved from 1980 to 1988 was also rejected in absence of any evidence that the lease, the original term whereof had expired on 21.7.1992, had been extended thereafter. Additionally, the certificate dated 25.10.2001 was de hors any proof of any local inquiry or scrutiny of the relevant lease deeds, rendering the said document a suspect. According to the Trial Court, the income tax returns, the profit and loss accounts and the balance sheets as well as the orders of the income tax authorities did not prove the claim of income as made by the defence in absence of independent and persuasive evidence to that effect. The letter produced by the Housing Real Estate and Development Private Limited cited as a tenant of the firm in support of the plea of having paid to it an amount of Rs.10 lakhs as rent, was also rejected, the document being on a plain sheet of paper without any date of issuance thereof. The discrepancy in the name of the firm was also noticed to dismiss this claim as inauthentic. Ex. D-274 adduced by the defence as an excerpt from the confirmation of accounts, furnished by Housing and Real Estate Development Pvt. Page 336 Limited also did not find the approval of the Trial Court, the same not having been proved by the author thereof and in absence of the required particulars of the transaction, pertinent thereto. The Trial Court as a whole thus rejected the claim of Sasi Enterprises of the additional amount of income of Rs.95,92,776/- during the check period.

298. The High Court accepted wholly the documents produced by the defence as enumerated hereinabove and acted on the contents thereof. It is however noteworthy that the narration in relation thereto, does not reveal any analytical approach to the fathom probative value thereof on the touchstone of acceptability of the proof of the facts proposed thereby. Neither the oral nor the documentary evidence has been tested independent of the income tax returns, profit and loss accounts and the balance sheets to determine the intrinsic worth thereof. At the conclusion, however, against the claim of Rs.95,92,776/-, the High Court assessed the income of Sasi Enterprises to be Rs.25,00,000/-. No acceptable basis for this computation has also been disclosed.

299. We have examined the oral and documentary evidence referred to hereinabove to the extent warranted. Apart from Page 337 the fact that the contents of the income tax returns, the profit and loss account and the balance sheet for the relevant assessment years, as well as the determination made by the income tax authorities on the basis thereof, are not final and binding on the criminal court, the investigative approach of the Trial Court visibly has been relatively exhaustive and searching qua every piece of evidence adduced as expected. Though the orders of the income tax authorities on the various aspects of the issue under consideration, reveal examination of the materials considered to be relevant therefrom in the limited perspective of computation of taxable income alone, we are left with the impression that High Court has not made any endeavour to appraise the evidence available, independent of documents/records pertaining to income tax assessments and the decision of the tax authorities to arrive at its conclusions. The income tax returns and the appendices thereto as well as the orders of the income tax authorities, to reiterate are neither decisive nor binding on the criminal court and the facts narrated therein, if fall for scrutiny in a criminal proceeding, have to be essentially addressed by adducing evidence to prove or disprove the same, as the case may be. Page 338 Correspondingly, the court would be legally obliged to undertake an incised scrutiny thereof on its own to record its deduction therefrom.

300. The respondents having claimed the income of Rs.95,92,776/- as against Rs.6,15,900/- quantified by the DVAC, the onus was on them to prove the same. Even judged by the bench mark of balance of probabilities, in our view, the High Court in order to reverse the determination of the Trial Court, on the same set of evidence ought to have applied itself to examine and assess the evidence in this perspective.

301. The High Court, in our view, having regard to its approach has failed as an appellate forum and as a higher court of facts to appreciate the evidence in the correct legal context. The finding of the High Court, on this issue, thus, cannot be sustained. Rental Income of A[1]

302. Whereas the DVAC quoted Rs.40,01,127/- to be the income under this head as listed against Item Nos. 53 & 54 of the Heads of Income, according to the defence, the same ought Page 339 to have been Rs.43,75,132/-. The Trial Court considered the oral evidence of PW-102 Raghwan, who at the relevant time, was the Manager (Administration) of the firm Plant Construction Private Limited which had taken on rent from M/s Jaya Publications, vide lease deed Ex. P651, the building mentioned therein and owned by M/s Jaya Publications on a monthly rent of Rs.1,05,000/-. This witness also proved the agreements whereby the tenancy had been extended thereafter from time to time on enhancement of rent.

303. This witness testified as well with regard to the tenancy of another house also belonging to M/s Jaya Publications vide lease deed Ex. P655 initially at a monthly rent of Rs.10,000/-, which stood enhanced thereafter on renewal of the tenancy/lease. According to this witness, the rent was paid through cheques and in all for the period January, 1993 to April, 1996, an amount of Rs.43,75,132/- was paid to this effect to M/s Jaya Publications.

304. It has been urged on behalf of A[1] that she had received an amount of Rs.90000/- by way of monthly advance and Rs.2,32,000 by way of rental income during the check period. Reliance has been placed on Ex. P-936 (statement of Central Page 340 Bank of India of A[1]), P-2334 and P-2336 being her statements of account during the relevant period. The evidence of DW-64 S-Shanmugam, who claimed to be her Chartered Accountant, has also been referred to.

305. The learned Trial Court accepted this evidence and noted that though the total rent paid did sum up to Rs.43,75,132/-, the prosecution had taken this figure to be Rs.40,01,127/-. It however declined to interfere on the ground that rental income was taxable under the Income Tax Act. The High Court, on the other hand, without any discussion of the evidence added Rs.3,22,000/- to the rental income as the prosecution had omitted to do so.

306. In our view, as the evidence adduced by the defence did establish that Rs.43,75,132/- had been paid as rent for the two premises in question, as identified under item nos. 53 & 54 in the list of income provided by the DVAC, the High Court was justified in adding Rs.3,22,000/-. Income of Jaya Publications and Namadhu MGR:

307. The appellant-State has also taken exception to the Page 341 addition of an amount of Rs.[4] crores by the High Court towards income of Jaya Publications and Namadhu MGR in addition to the figure cited by the DVAC.

308. Jaya Publications is the proprietorship firm of which, at the relevant time, A[1] and A[2] were partners. As per the deed of partnership, it carried on business of all types of printing and publication of newspapers/magazines/ periodicals etc. and such other business or businesses to be mutually agreed upon between the partners. It, as per the records, purchased a factory shed with the factory building and had installed a printing press thereat and had commenced its business of printing and publication of news letter of AIADMK party namely; “Namadhu MGR” for circulation amongst the public and various other agencies.

309. It is claimed by the defence that a non-interest paying deposit scheme was started in the year 1990 to supply free copies of the newsletter against deposits of Rs.12,000, Rs.15000, Rs.18000 annually for which the subscribers could get 4, 5 or 6 copies of such newsletter per day, correspondingly. The provision for refund of the deposit by giving prior notice was made as well. Page 342

310. The defence examined DW-88 K. Soundravalan, a Chartered Accountant who claim to have handled the accounts of Jaya Publications and Sasi Enterprises and was involved in the finalisation of accounts of the said firms during the period 1992 to 1996. He referred to the aforementioned scheme and also the rates of subscription. He stated that Jaya Publications was an assessee of income tax from the year 1991. According to him, he had personally produced the books of account of the assessee before the special auditors for the assessment year 1994-95 which were certified to have been maintained properly. He identified the income tax returns of the firm for the assessment years 1991-92 to 1993-94 i.e. Exbs. D-218, D-219, D-220, submitted on 6.11.1988. He also identified the income tax returns of Jaya Publications for the assessment years 1994-95 to 1996-97 i.e. Exbs. D-221 submitted on 17.3.1998 and D-222, D-223 submitted on 17.3.1999. He deposed that along with the returns, statement of income tax, balance sheets, profit and loss accounts were furnished for the respective years. He however admitted that the balance sheets for the Page 343 assessment years 1994-95, 1995-96, 1996-97 were not available in the records produced in court by the income tax department and that he did produce the attested copies of the balance sheets and profit and loss accounts of the assessee for the years ending 31.3.1994, 31.3.1995 and 31.3.1996 i.e. Exb. D-224, D-225 and D-226 respectively. He also referred to the list of subscribers to the deposit scheme for the year 1992-93 i.e. Exb. D-228 and also mentioned about the scrutiny of the accounts for the years 1991 to 1996 by the income tax authorities. He stated that the assessing officer did not accept the claim of scheme deposit for the assessment year 1991-92 by his order dated 26.3.2001. But the concerned C.I.T. (Appeals), in the appeal filed by the assessee, accepted the claim of scheme deposit subscription. Similarly, the CIT (Appeals) did uphold the claim of the assessee for the assessment years 1992-93 and 1993-1994.

311. Qua the assessment years 1994-95 to 1996-97, according to this witness, the assessing officer partially allowed the claim which was upheld in the appeals by the CIT (Appeals). Eventually, the Income Tax Appellate Tribunal, B- Page 344 Bench, by a common order, accepted the claim of the assessee regarding the deposit scheme except in respect of 41 depositors, who denied to have made such deposits. The witness did disclose that the matter was remanded to the assessing officer with a direction to afford an opportunity to the assessee to cross-examine these 41 depositors. The witness admitted that such enquiry was pending. He, however, deposed that under the deposit scheme, Jaya Publications collected an amount of Rs.14,23,89,000/- over the period of six years.

312. The witness disclosed that the main source of income of Jaya Publications was sale of newspapers, advertisements and printing on job work basis and that as per its profit and loss statement, the net profit derived by it from the above sources, during the assessment years 1992-93 to 1996-97, was Rs.1,15,94,848.60/-. He also mentioned about agricultural operations being carried out by Jaya Publications in the name of Sapthagiri Farms which yielded agricultural income.

313. The Trial Court, took into account the particulars of income of Jaya Publications as claimed by the defence for the assessment years 1992-93 to 1996-97 sought to be proved Page 345 through the oral evidence of DW 88 and various documents Exh. D-217 to D-235. The break up of the income from various sources, as furnished by the firm, discloses that its income through scheme deposit over the above period was Rs.14,10,35,000/- and qua other sources including sales, job work, advertisements, interest, agricultural income, rentals etc. Rs.1,15,94,848/-. The Trial Court was conscious of the fact that the defence in support of its claim of the income aforementioned, had called in evidence the testimony of 31 witnesses, who did speak about the deposits made by them under the scheme, in addition to DW 88 and that further reliance had been placed on the special audit report obtained by the income tax authorities, Exb. P-217, orders of the commissioner of income Tax (Appeals) Exb. D-231 to D-234 as well as the balance sheets filed along with the returns Exb. D-218 to D-222.

314. The Trial Court rightly noticed that the returns for the assessment years 1991-92, 1992-93, 1993-94 had been filed much belatedly on 6.11.1998 and that in these returns, the nature of the business of the firm was shown as “printing, publishing and dealing in properties”. It also noted that in the Page 346 balance sheet, enclosed to the return of the year 1991-92, an amount of Rs.13,54,000/- was shown in the liability column. The amounts of Rs.82,14,000/- and Rs.3,05,40,000/-, being scheme deposit, were also shown in the liability column in the balance sheets enclosed with the returns for the assessment years 1992-93 and 1993-94. The Trial Court noticed as well that the return for the assessment year 1994-95 Exb. D-221 had been filed only on 17.3.1998 and that the balance sheet attached thereto, showed scheme deposit of Rs.51,31,50,00/in the liability column. That the return for the assessment year 1995-96 was also filed only on 17.3.1999 much belatedly, was noticed as well. The Trial Court mentioned and rightly that this return as well as the return for the assessment years 1996-97 i.e. Ex. D-222 and D-223 did not mention about the scheme deposit. That the defence, however, separately got marked the profit and loss accounts for the years ending 31.3.1994, 31.3.1995 and 31.3.1996 vide Exb. D-224, D-225 and D-226, was taken note of. The Trial Court, however, left out of consideration these documents i.e. profit and loss accounts, aforementioned firstly because those were only attested copies and secondly, as those did not disclose in any Page 347 manner, to have been filed with the corresponding return before the income tax authorities or produed before them at any point of time.

315. The evidence of the 31 witnesses with regard to the deposits made by them of amounts varying from Rs.12000/to Rs.18000/- is more or less of the same model and owing allegiance to the AIADMK party. Some of them also proved their application for becoming subscribers but though they stated to have been issued receipts for the deposits made, none produced the same.

316. The Trial Court, in assessing the evidence on record traced the proceedings before the income tax authorities on this count, beginning from the assessment year 1991-92. It marked as to how the claim of scheme deposit had been rejected by the assessing officer as the impounded books of accounts did not reflect the same, whereafter following the re-assessment proceedings, the Commissioner of Income Tax (Appeals) upheld the same. In this backdrop of the initial failure of the assessee to produce the necessary documents before the assessing officer supporting the scheme deposit and the unexplained delayed in submission of the income tax Page 348 returns for the assessment years 1991-92 to 1993-94 only on 6.11.1998, the Trial Court held the view that the defence had contrived the story of scheme deposit only in the year 1998 and in furtherance thereof, mentioned about it in the profit and loss account statement enclosed to such returns. The Trial Court, however, did not rest contended on that finding but scrutinised as well the applications of the subscribers brought on record. It, however, noted the explanation of the assessee before the income tax authorities for non-production of such application forms, counter-foils of receipts etc. on the ground that those had gone missing and that a complaint with regard thereto had been lodged. The Trial Court thus reflected on the credibility of the defence stand that such application forms had been obtained from the income tax department. It, however, appears that DW-88 did refer to the files containing the applications. In any view of the matter, these applications under Exb. D-230 had been produced at the trial by the defence.

317. The Trial Court recorded that DW-88 had admitted that there was no mention in Exb. D-217, the report of the Chartered Accountant of Jaya Publications addressed to the Page 349 income tax authorities, that the books of accounts of the assessee had been produced before the special auditors. Further, it had been noted in the report Exb. D-217 that all payments through cash were not supported by any outside document or evidence and that they were only supported by internally made vouchers with proper payees signatures. The Trial Court also recorded that DW-88 had admitted that profit and loss accounts/balance sheets of the assessee as on 31.3.1994, 31.3.1995, 31.3.1996 i.e. Exb. D-224 to D-226 did not bear the date, seal and signatures of the income tax authorities. Further Exb. D-228, the claimed list of subscribers also did not contain the seal and signatures of Jaya Publications. That the original subscription applications contained in Exb. D-230(1) to Exb. 230(17) had not been produced before the income tax authorities but their xerox copies were only produced, was noted as well. The Trial Court was categorical in bringing on record the fact that it was only after the CIT (Appeals) had set-aside the assessment order i.e. 3.3.1988 rejecting the claim of scheme deposit of the assessee on 15.9.1998 that Jaya Publications filed its returns for the assessment years 1991-92, 1992-93, 1993-94 on 6.11.1998 Page 350 mentioning for the first time such deposits. That in the course of the scrutiny thereafter, in response to the notice issued by the assessing officer, Jaya Publications did not produce the originals of the applications and the counter-foils of deposits but only copies, was taken note of.

318. The Trial Court also analysed the evidence of PW 201 C.K.R.K. Vidya Sagar, an officer of the Canara Bank, Mylapore Branch disclosing the transactions of heavy amounts inter se the accounts of Jaya Publications, Namadhu MGR, Sasi Enterprises, Metal King Company of which A[2] was the proprietor and Vinod Video Vision to indicate, according to it, circulation of unaccounted and undisclosed funds in the names of various firms and companies of which A[1] to A[4] were either directors or partners at the relevant point of time. Referring to the amounts mentioned by PW-201 in the accounts of Jaya Publications, the Trial Court disbelieved the plea of credit of deposit of Rs.14,10,35,000/- as collection from subscription under the deposit scheme as claimed by the defence.

319. The Trial Court on an overall assessment of the evidence concluded that the story of scheme deposit had been Page 351 introduced by the defence only after the charge-sheet had been filed on 4.10.1997 i.e. through the income tax returns filed in the year 1998. That no evidence had been produced before the Court to show that the scheme had been floated in the year 1990, was recorded. While rejecting the claim of this head of income by the defence, the Trial Court sought to draw sustenance from the fact that the assessee had not produced the primary documents either before the special auditors or the assessing officers and also rejected the applications Exb. D-230 series as manufactured. The testimony of subscribers was dismissed also on the ground that they were hardened party workers.

320. The High Court, though had traversed the above facts in lesser detail, dealt with the oral and documentary evidence and noted that the defence claim of scheme deposit of Rs.13,89,19,475/-, as accepted by the concerned CIT (Appeals), was subjudice before the High Court, Madras. The High Court reiterated as well that the income tax returns for the relevant assessment years had been filed very belatedly and that no plausible explanation, therefor was forthcoming. That neither A[1] nor A[2] had examined themselves, was noted. Page 352 The High Court also did take into account the fact that at one point of time, the assesee had complained that the applications by the subscribers were missing and that complaint to that effect had been lodged, but subsequently those applications said to have been presented before the income tax department were marked in court. The High Court categorically held that delayed and unexplained submission of income tax returns did give rise to doubt of the genuineness thereof. This notwithstanding, the High Court only in the face of the oral evidence of the 31 witnesses claiming themselves to be the depositors/subscribers for the newsletter, returned a finding that the whole claim of the assessee could not be rejected only on the ground of delay in filing of the income tax returns. Acting solely on this consideration, the High Court, thus allowed addition of a sum of Rs.[4] crores as income of Jaya Publications.

321. Not only as referred to hereinabove, in our view, the Trial Court had been alive to the relevant materials bearing on this issue and had founded its conclusions on elaborate scrutiny thereof, its criticism by the defence that it had left out of consideration amongst others, the oral evidence of PWs 201, Page 353 PW-230 and DW[2] to DW67 and DW88 is not acceptable. The grievance with regard to non production of the report of the internal auditor of the DVAC about the affairs of Jaya Publications and the accounts of Namadhu MGR as adverted to by PW 259 in his testimony, is also not of any conclusive relevance. Not only the absence of the report does not prove the defence plea, significantly, no endeavour was made on behalf of the respondents to summon the said report. The contention that the omission on the part of the prosecution to examine the internal auditor and to produce his report warrants adverse inference against the prosecution, does not commend for acceptance.This is more so as the prosecution had not accepted the deposit under the Namadhu MGR scheme to be a lawful source of income. The respondents consequently in order to establish it to be one, ought to have discharged their burden to satisfactorily prove the same and for that matter, ought to have taken necessary steps, if such report was construed to be vitally essential.

322. Vis-a-vis the balance sheet and the profit and loss account for the relevant assessment years, rejected by the Trial Court, suffice it to record that mere marking of Page 354 documents without any objection from the prosecution ipso facto, in law is not an authentication or proof of contents thereof and the plea to the contrary, thus cannot be sustained. Further, reliance on the presumption based on clause (d) of the Explanation under Section 139(9) of the Income Tax Act, 1961, to suggest that the balance sheet and the profit and loss accounts must have been filed along with the corresponding income tax returns and that the failure on the part of the income tax department to produce the same, does not demolish the plea of the defence of submission of such balance sheets and profit and loss accounts along with the returns, in our estimate, is no answer to the inaction on the part of the respondents to prove by better evidence that the balance sheets and the profit and loss accounts supposed to accompany the income tax returns mandatorily, had infact been filed therewith, more particularly in view of the apparent discrepancies in the balance sheet and the profit and loss account for the assessment year 1994-95, proved at the trial.

323. The evidence of PW 201 on which great emphasis has been laid by the respondents, to start with, is contradictory on the date of opening of the current account of Namadhu Page 355 MGR. Though reference has been made by this witness vis-a-vis current account No. 1952 of Namadhu MGR about deposits made therein from 18.12.1991, significantly it is apparent from his testimony that sizeable amounts have been transferred therefrom to the accounts of A[1], A[2], A[3] and A[4], Jaya Publications, Sasi Enterprises, Anjaneya Printers Pvt. Ltd., Metal King, Green Farmhouse, Meadow Agro Farms and Fax Universal (unit of Sasi Enterprises) on various dates during the check period.

324. Having regard to the overall evidence with regard to the scheme deposit and the free flow of funds from the account of Namadhu MGR to the respondents and their firms, the concurrent conclusions of the Trial Court and the High Court against this source of income, as claimed by the defence, appear to be unexceptionable.

325. Significantly, though the High Court had rejected this source of income also on scrutiny of the materials on record albeit less exhaustively compared to the Trial Court and noticing as well the unexplained belated submission of the income tax returns of the relevant years, the said finding has remained unchallenged by the respondents. Page 356

326. At the cost of repetition, having regard to the conspectus of facts pertaining to this issue, the Trial Court was within its authority and being obliged in law, rightly scrutinised the evidence independently to assay the genuineness or otherwise of the claim of scheme deposit made by Jaya Publications. Considering the different phases of the process undertaken by the income tax authorities, the failure of the assessee to produce the primary documents in original before the auditors and the income tax authorities in support of such scheme deposit and more particularly the inordinate delay in submission of income tax returns much after the submission of the charge-sheet, along with the other attendant circumstances considered by the Trial Court, we are of the view that the High Court was not justified in allowing an additional sum of Rs.[4] crores as income of Jaya Publications on account of scheme deposit merely on the basis of the oral evidence of the 31 witnesses. This is more so when it was otherwise convinced on the appreciation of the evidence on record that the income tax returns, in particular for the relevant assessment years, incorporating the scheme deposit Page 357 were doubtful in view of the unexplained delay in submission thereof. In other words, though the High Court itself was left unconvinced about the acceptability of the claim of scheme deposit, due to largely delayed income tax returns, it benignly did award an income of Rs.[4] crores to the assessee only on the basis of the oral testimony of 31 witnesses who, as noted by the Trial Court, owed unstinted allegiance to AIADMK party with no legally acceptable documentary evidence to corroborate the same. The addition of this additional sum of Rs.[4] crores as income of Jaya Publications, having regard to the state of the evidence with regard thereto, cannot be upheld. Income of A[1] by way of interest on bank deposit:

327. A further sum of Rs.18,49,210/- has been claimed on behalf of R1/A[1] as her income by way of interest on bank deposits. Though the prosecution against the relevant items of income has accepted a sum of Rs.58,90,925/-, according to the R1/A[1], it ought to have been Rs.77,40,135/-. Thus the claim of the additional amount of Rs.18,49,210/-. To endorse Page 358 this claim, this respondent has again wholly relied on the income tax returns/orders for the assessment years 1992-93 to 1996-97, where various amounts were shown under the head “income from other sources”.

328. The Trial Court had dealt with these items elaborately. It examined the evidence of PWs 164, 173, 201 and 202, officers of the concerned banks with reference to the copies of the contemporaneous statements of accounts and had accepted the figures available thereunder. It, however, declined to accept the profit and loss account statements adduced on behalf of the said respondent in support of the enhanced claim of Rs.77,40,135/- as her income by way of interest in absence of any other reliable evidence to that effect. Even assuming that the contention on behalf of this respondent that profit and loss accounts were indeed part of the respective income tax returns and had, in any case, been separately tendered and marked in evidence at the trial, in law the same per se was not an unassailable authentication of the probative worth of the contents thereof, so much so to repudiate the approach of the Trial Court to be incurably erroneous. Further the High Court seems to have omitted to Page 359 adjudicate this issue.

329. To reiterate, as the scrutiny of the evidence on record in a trial on a charge under the 1988 Act, coupled with the imputation of conspiracy and abetment has to be essentially in the perspectives attuned to the ingredients of the offences involved and not divorced therefrom, unreserved reliance on the disclosures of income in the income tax returns and the orders passed thereon by the income tax authorities would be an approach not in accord with law. The omission on the part of the prosecution to object either to the admissibility of the income tax returns/orders or the mode of proof thereof, ipso facto would not endow the contents thereof with probative efficacy. The reliance on the decision of this Court in R.V.E. Venkatachala Gounder vs Arulmigu Viswesaraswami & V.P. Temple and another (2003) 8 SCC 752 on this aspect is thus of no avail to the respondents.

330. This decision dwell on the nature of objections as to the admissibility of documents e.g. an objection that it is by itself inadmissible in evidence or as to the mode of proof thereof alleging the same to be irregular or insufficient. It is not an authority on the proposition that if none of these objections is Page 360 taken, the contents of the document so introduced, would automatically have to be accepted as the unassailable proof of the facts conveyed thereby. Income of Super Duper T.V. Pvt. Ltd. – Rs.1,00,00,000/-.

331. Whereas the Trial Court has rejected this claim, the High Court has allowed it. This head of income was not included by the DVAC in its list and the defence plea has been that the same had been wrongly and deliberately excluded. This amount is claimed to be the legitimate income of A[3] from his business initially carried on as the proprietor of Super Duper T.V. and later incorporated as Super Duper T.V. Private Limited. The Trial Court did refer to the evidence of PW 259, the Investigating Officer, who deposed that the seized documents included 22 fee receipt books maintained by the firm, each of 100 leaves and that the counter-foils showed receipt of Rs.5000/- each. The witness, however, denied that the sum otherwise totalled at Rs.1,10,00,000/- was the income of Super Duper T.V. and that this amount was not included as income of A[3] as the same had been utilised in the Page 361 expenditure to run the company.

332. As referred to by the defence, the learned Trial Court did take note of the testimony of witnesses DW 65 to DW 73 about the deposits made by them with the company during the check period. The documents exhibited by DW 85, the Manager of the company to prove the receipt of Rs.1.10 crores was also considered. The Trial Court recorded that this company was one of those floated by A[2], A[3] and A[4] during the check period and that it had introduced a deposit scheme whereunder the cable operators made cash deposit of Rs.5000/- or multiples thereof and that in that process the company received deposit of Rs.1,06,10,100/-. In addition thereto, the Trial Court noted as well that the company did receive periodical lease rent of Rs.1500/- p.m. from other equipments given on hire. The lease agreements to this effect were also considered. The claim that the company had supplied equipments to Tamil Nadu Tourism Development Corporation Limited was recorded. The copies of the assessment orders exhibited were examined and the Trial Court concluded that there was no reason to doubt the business transactions carried on by A[2] and A[3] in the name of Page 362 Super Duper T.V. Private Limited. It, however, recorded with reference to the assessment orders relied on by the defence i.e. Ex. D-182, D-183 and D-184 that those were belatedly submitted after the charge sheet was filed on 4.10.1997.

333. Vis-a-vis the claim of the defence that the amount of Rs.1,06,10,100/- as business income was available with A[2] and A[3] in addition to other incomes, the Trial Court noted, amongst others, that as per the Cable Television Network Rules, 1994 enforced on and from 29.4.1994, only refundable security deposits was permissible and that though receipt books and counter-foils of the payee-in- slips to show that the amount of Rs.5000/- each collected from large number of subscribers were credited to account No. 1152, there was nothing on record to show how the investments were made for the purchase of equipments claimed to have been supplied by the company to various subscribers and that in any case, this amount could not have been available with the A[3] as the stable corpus of income for purchase of immovable properties, as claimed. Referring to the evidence of DW-85, PW-182 and PW 201 in details, the Trial Court recorded the huge cash inflow and outflow to and from the account of the company. Page 363 Noticeably, such deposits and withdrawals had been, vis-a-vis several accounts involving A[1] to A[4] and the firms and companies floated by them during the check period of which they were partners/directors, as the case may be. All these were noted by referring to the accounts and the individual transactions. The Trial Court having regard to the enormity of bank transactions inter se amongst the respondents and their firms/companies declined to sustain the contention of A[3] that they were possessed of independent source of income and the same was available with him and A[2] for acquisition of properties in their names.

334. As against this, the High Court chiefly relied on the evidence of DW-85, who introduced himself as the Manager/Administrator of the company during 1995-96 and the fee receipt books and the counter-foils pertaining to the claimed deposit of Rs.5000/- per member as non-refundable entrance fee.

335. Further, it accepted the investments/documents exhibited at the trial with regard to payments received by the company amongst others from the Tamil Nadu Tourism Development Corporation Ltd. and other public/public sector Page 364 undertakings in connection with the business transactions entered into. It, in the passing also, noticed the assessment of the returns of the company by the income tax authorities and assessed the same to be Rs.1,00,00,000/-.

336. In our considered view, the High Court in appreciating the evidence adduced missed the facets of the charges levelled against the respondents and confined itself seemingly to the statements of the claimed depositors and the deposit books and the counter-foils in connection therewith. The Trial Court in contradistinction, not only did analyse the oral and the documentary evidence adduced by the parties in proper details, it took pains to examine the trail of the income claimed by the company and the feasible investments thereof. It also took note of the huge inflow and outflow of cash to and from the accounts of the firms/companies of which the respondents were partners/directors during the check period so much so that the income claimed by A[3] under this head ceased to retain its independent identity so as to be accepted as the discernible earnings of the company for transacting its business activities as a distinctly separate institution. The revelation regarding the bank transactions are matters of Page 365 record gleanable from the oral and documentary evidence to this effect and, in our estimate, assume great significance in the backdrop of the charge of conspiracy and abetment imputed against the respondents. The summary treatment of the evidence on this issue by the High Court, in our comprehension, lacks the desired approach and insight and,therefore, cannot be sustained. The addition awarded by it of income of Rs.1,00,00,000/- to Super Duper T.V. Pvt. Limited, thus cannot be upheld. Refund of Wealth Tax to A[1]:

337. Respondent No.1/A[1] has pleaded addition of further amount of Rs.1,35,631/- by way of refund of wealth tax as on 22.4.1993 and to reinforce this claim, has placed reliance on Exh. P-2336 and P-1382 being her Statement of Affairs as on 31.3.1994 and the Statement of Account of Canara Bank, Mylapore, Madras, for the period 1.4.1993 to 30.4.1993 showing the receipt/deposit of the said sum. The testimony of DW64 has also been pressed into service.

338. Having regard to the concept of wealth tax and the Page 366 comprehension of assets and net wealth attracting such levy, this refund, though contemplated by the Wealth Tax Act, 1957, ipso facto does not certify the lawfulness of the wealth on which initially, a tax was charged and later refunded. In absence of any other evidence to satisfactorily prove the legitimate origin and status of the wealth relatable to the refund, in our view, the same cannot be accepted to be an income from the lawful source as envisaged in Section 13(1)(e) of the Act. More over there appears to be no discussion or analysis of this claim of income by the R1/A[1] either by the Trial Court or by the High Court. Income of A[1] from M/s Sasi Enterprises:

339. The next addition sought for is by way of income from M/s Sasi Enterprises. To bolster this claim, reliance has been placed on Ex. D-267, the balance sheet of Sasi Enterprises as on 31.3.1993 indicating payment of registration charges of Rs.2,86,569/- for 31A, Poes Garden and Ex. P-2334, the statement of account of A[1] for the assessment year 1996-97 showing receipt of an amount of Rs.3,42,000/- from M/s Fax Universal to her current account No.2018. It is in this Page 367 premise, A[1] asserted that under this head, she had an income of Rs.6,28,569/- from Sasi Enterprises, M/s Fax Universal being an unit of the said firm. Incidentally and indubitably, at the relevant time, A[1] and A[2] were the partners of Sasi Enterprises and A[2] was one of the partners of M/s Fax Universal as well. The exchanges of the reserves mentioned hereinabove are therefore for all practical purposes inter se A[1] and A[2]. The claim of the defence to accept the above amount to be lawful income in the attendant facts and circumstances, lacks persuasion. Loan by A[1] from A[2]:

340. Loan of an amount Rs.1,53,03,000/- from A[2] and her proprietary firms forms the next sequence of income claimed on behalf of A[1]. The oral testimony of PW-201, Manager, Canara Bank, Mylapore Branch and Ex. P-2332, 2334, 2335, 2336, statement of account of A[1] for the assessment year 1996-97, P-1382, P-1117 have been referred to for demonstrating the receipts/deposits of various amounts from A[2], Fresh Mushroom Limited and Vinod Video Vision. Page 368

341. Admittedly, A[2] was the sole proprietor of both, Fresh Mushroom and Vinod Video Vision at the relevant time and thus the deposits, though speciously are evidenced by bank transactions are visibly, inter se, A[1] and A[2] and her firms. These receipts essentially have to be tested in the backdrop of the charge of conspiracy and abetment so as to determine their genuine evidential worth.

342. As referred to hereinabove, this Court in Commissioner of Income Tax Vs. P. Mohanakala (supra), while examining the challenge to the addition made by the Assessing Officer in respect of receipts through foreign gifts, exhibited by bank transactions, held on an evaluation of the materials on record that the transactions of gift were not real, though apparent and concluded that the fact that money had come by way of bank cheques and had been paid through the process of banking transaction by themselves was no certificate of authenticity. While comprehending that a transaction though apparent may not be real, as may be demonstrated by contemporaneous factors, associated therewith, rejection of the genuineness of the gift by the Assessing Officer, was Page 369 sustained.

343. Having regard to the amalgam of the persons and the entities involved in the transactions, aforementioned, we are not inclined, in the absence of other convincing evidence, to accept the said receipts/deposits to be lawful income as envisioned in Section 13(1)(e) of the Act. A1’s Income from Jaya Publications, CANFIN Homes and Namadhu MGR:

344. The next unit of income of A[1] as per the respondents is receipts as a partner from Jaya Publications from three sources i.e. drawings from Jaya Publications, loan from CANFIN Homes which had been repaid by Jaya Publications on behalf of A[1] and withdrawals from Namadhu MGR. Vis-a-vis the first component referred to hereinabove, it has been endeavoured on behalf of A[1] to demonstrate on the basis of oral and documentary evidence which mostly constitute entries in the Current Account No. 2047 of Jaya Publications by way of withdrawals of various amounts therefrom in favour of A[1]. Such transfers as the relevant statement of account of A[1] and the entries in the aforementioned current account of Page 370 Jaya Publications would indicate are of 5.8.1991, 12.8.1991, 21.10.1992, 21.3.1995, 17.7.1995, 7.11.1995, each of an amount ranging from Rs.[2] lakhs to Rs.[5] lakhs. This is significant in the backdrop of the recorded facts that as disclosed in the income tax returns of Jaya Publications for the assessment years 1992-93 to 1996-97, its net income during the said period had been Rs.1,15,94,848/-. According to A[1], under this head, an amount of Rs.1,01,49,900/- had been withdrawn from the current account No. 2047 of Jaya Publications.

345. In addition to the above, it has been claimed on behalf of A[1] that she had availed loan of Rs.75 lakhs from CANFIN Homes on 29.9.1992 which was repaid by Jaya Publications on 27.3.1995. It is asserted by her that this amount was not refunded by her to Jaya Publications and has to be construed to be her drawings as a partner of the said firm. In other words, during the check period, Jaya Publications, apart from disbursing Rs.1,01,49,900/- in favour of A[1] did also repay her loan of Rs.75 lakhs. Noticeably, as has been recorded by the Trial Court, while discussing the aspect of loan taken by A[1] from CANFIN Homes, prior to such loan, she had deposited Page 371 Rs.[1] crore in the fixed deposit with the said financial institution on 6.3.1992. This, as the Trial Court has, brought on record is vide the testimony of PW-95 Veerappan, Regional Manager, CANFIN Homes. This witness has disclosed further that the above loan amount was taken on this fixed deposit. He stated that on 25.8.1995, A[1] again took loan of Rs.75 lakhs on this fixed deposit, however qua a different loan account.

346. In re the third head, admittedly Namadhu MGR is only a publication of Jaya Publications but has a separate bank account. A1's claim of having drawn Rs.94,33,000/- as well from Namadhu MGR is seemingly also in the capacity of a partner of Jaya Publications.

347. The deposits and withdrawals represented through the different entries in the bank accounts suggest multiplication of transactions stemming from the same corpus. The maze of financial exchanges in fragments involving different combinations hint at the attempt to inflate individual and collective income of the respondents. The banking transactions, though resorted to for proclaiming genuineness thereof, having regard to the overall factual conspectus do not Page 372 appear to be real. The claim of income of Rs.2,70,82,900/- of A[1] by way of receipts from Jaya Publications, therefore is unconvincing. In other words, A[1], in our estimate, has failed to satisfactorily prove this constituent of income. Additional Income Claimed by A[2] to A[4]:

348. Apropos, A[2] to A[4], their cavil is that the prosecution had omitted to take into account their actual income and had limited it to Rs.6,72,41,640/- in all. They claim that the prosecution had not taken into account Rs.26,50,57,478/being their individual income as well as that of their firms/companies Sasi Enterprises, Jaya Publications, Jay Farm House, Green Farm House, Super Duper T.V., Anjaneya Printers Private Limited, J.Jay T.V. Private Limited and Super Duper T.V. Private Limited. Break ups of income under different heads have been furnished in the form of a chart and after effecting deductions of amounts included by the prosecution and payments made to the outsiders/partners, they assert that their total income, during the check period, ought to have been recorded as Rs.28,23,16,656/- instead of Rs.6,72,41,640/-. Page 373

349. The compilation of the relevant facts and figures in endorsement of the above claim indicates the oral and documentary evidence in support of the different items of income, those which have not been considered by the Trial Court at all according to them but dwelt upon by the High Court as well as those examined by the Trial Court but not accepted by it. Qua certain items, it is not clear as to whether those had been taken note of by the Trial Court or not. There are instances as well of components of income, scrutinised by the Trial Court but not responded to by the High Court. The constituents of income referred to by A[2] to A[4] include those recorded in the income tax returns of A[2] during the relevant assessment years, loan payable/availed/received by her from the related firms in the capacity of a partner and otherwise, loan secured by such firms from the bank and the sister firms, rental advance, agricultural income of Sasi Enterprises, rental income, sale of capital assets, net profit of Jaya Publications and scheme deposits of the Namadhu MGR.

350. Further income of A[3] through his proprietorship firm, inter alia from Super Duper T.V. and loan availed from sister firms and income of A[4] through loans from the related firms, Page 374 rent receipts etc. has been cited. Earnings of Anjaneya Printers Private Limited and rental advance received by the firm have also been included. Loan availed by J. Jay T.V. Private Limited from Indian Bank, non-refundable deposits obtained from the subscribers by Super Duper T.V. Private Limited have been taken into account as well to compute the income claimed.

351. In reinforcement of the plea that an amount of Rs.26,50,57,478/- by way of income of A[2] to A[4] ought to be added, a collage of statistics qua the different heads of earnings/ receipts had been pressed into service. For the sake of convenience in scrutiny, these are proposed to be dealt with in cognates groups.

352. Vis-à-vis the item numbers 1 to 21, according to the respondents, the High Court had dealt therewith in the judgment but except for the item number 8, according to them, the Trial Court did not even consider the evidence relatable thereto. The sources of income against item numbers 1 to 5 are traceable to the income tax returns of A[2] for the assessment years 1992-93, 1993-94 and 1994-95. The income pertains amongst others to foreign remittance of Page 375 Rs.51,47,955/- and agricultural income of Rs.35,000/- of A[2]. Documentary evidence in particular by way of income tax returns and the orders of the income tax authorities have been relied upon. The oral testimony of DW-88 has also been referred to.

353. Per contra it has been contended on behalf of the prosecution that not only the income tax returns and the orders passed in connection therewith are not conclusive of the lawfulness of the income as referred to therein, the fact that M/s Sasi Enterprises along with A[1] and A[2] had been prosecuted for delayed submission of the returns for the assessment years involved cannot be lost sight of while judging the credibility of the defence based thereon. It has also been urged that receipt of such huge amount of foreign remittance by A[2] is plainly unacceptable more particularly in absence of any explanation by her justifying the same. According to the prosecution thus, not only this receipt has not been satisfactorily accounted for, it is strongly suggestive of a remittance in favour of A[1] in the name of A[2] thus attracting the presumption to that effect. The prosecution has pleaded that such a possibility is writ large in the face of the Page 376 charge of abetment and conspiracy levelled against the respondents.

354. Though a defence was sought to be taken on behalf of the assessee against the prosecution that as the accounts of the firm M/s Sasi Enterprises had not been finalized and therefore no returns had been filed and that as the assessment of the relevant returns had not attained finality, the indictment was premature, the contentions were rejected. It was held by this Court in Sasi Enterprises Vs. Assistant Commissioner of Income Tax, (2014) 5 SCC 139, that pendency of appellate income tax proceedings was not a relevant factor for not initiating prosecution under Section 276CC wherein an offence had been committed for non-filing of the return. It was recorded as well that mere allusion in the individual returns of the partners, that the account of their firm had not been finalized and therefore no return could be submitted was not an acceptable plea to absolve the firm of its obligation under the Income Tax Act to file the return within the prescribed period.

355. Noticeably, according to the compilation provided by the defence, the High Court had dealt with item numbers 1 to 21 Page 377 of the income of A[2] to A[4]. A plain perusal of the narration of that portion of the judgment reveals that the High Court therein had dealt exclusively with loans taken from the nationalized banks as income of the respondents. Though a reference has been made of loans availed by the respondents from various firms as named therein, the High Court had not taken into the account the same and had limited itself only to the loans availed by the respondents from the nationalized banks. In that view of the matter, the items of income under scrutiny, had also been left out of consideration by the High Court. Thus the grievance of the respondents that the evidence with regard to these items of income had not been considered by the Trial Court, is not of decisive significance more particularly in absence of any challenge made by the them to the omission as well of the High Court in this regard.

356. In course of the arguments, attention of this Court had been drawn to the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991. This is a statute to provide for certain immunities to persons receiving remittances in foreign Page 378 exchange and to persons owning foreign exchange bond and for certain exemptions for direct taxes in relation to such remittances and bonds and for matters connected therewith or incidental thereto. Section 3 of the Act, which deals with immunities, however makes it clear in sub section (2) that such immunity would not apply in relation to prosecution for any offence punishable under Chapter IX or Chapter XVIII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances 1985, The Terrorists and Disruptive Activities, (Prevention) Act 1987, The Prevention of Corruption Act 1988 or for the purpose of enforcement of any civil liability.

357. The assertion of the respondents qua item Nos. 6 and 7 refers to loan availed by A[2] for herself and for the business purposes of her firm Metal King, from Housing and Real Estate Development Private Limited, Chennai by two transactions amounting in all to Rs.60,00,000/-. To demonstrate this receipt, reliance has been placed amongst others on the oral testimony of DW 88, the statement of account of M/s Metal King and also of Housing and Real Estate Development Private Limited, the lender.

358. The prosecution has refuted this claim contending that Page 379 though credit entries by way of clearance have been sought to be brought on record, there is no satisfactory evidence to prove convincingly the transactions of loan. It is pleaded that no one has been examined on behalf of the lender and the documents relied upon by the respondents per se are not enough to satisfactorily account for this receipt. According to the prosecution, the documents relied upon by the respondents have not been proved and the transactions referred to have been introduced with the help of the so called lender to somehow boost the income of the respondents.

359. Noticeably, the High Court, to reiterate, did not as well accept these items of income referring to them as private loans. This assumes significance in the face of the grievance of the respondents that the Trial Court had not adverted thereto and there being no cavil on their part with regard to the omission of the High Court as well in this regard.

360. The next batch of income as claimed by the respondents is comprised of advances received by A[2] from Bharani Beach Resorts, Riverway Agro Products (P) Limited and M/s Meadow Agro Farms (P) Limited by cheques amounting to Rs.22 lakhs, Rs.52 lakhs and Rs.32,90,000/- respectively. Reliance has Page 380 been placed on the oral and documentary evidence including the balance sheet of the companies involved, the income tax returns for the relevant years and also the corresponding assessment orders. It has been contended as well that the Trial Court had wrongly left out of consideration the evidence adduced. It has been pleaded that the Trial Court had erred in discarding the transactions by referring to Sections 269SS and 276DD of the Income Tax Act. According to the respondents, the transactions having been effected through cheques, Section 269SS of the Act had no application and further Section 276DD having been deleted by the Direct Tax Laws (Amendment) Act 1987 w.e.f. 1.4.1989, reference thereto, the transactions being undertaken thereafter, was wholly misplaced.

361. Per contra, according to the prosecution, the agreement for sale of property Ex. D-300 against which, it is claimed that an amount of Rs.22 lakhs had been received by way of advance from Bharani Beach Resorts, has not been proved in law. DW88 being neither the executant nor a witness to the document, the prosecution has pleaded, he could not have proved this document. Alluding to the advances said to have Page 381 been received by A[2] from Riverway Agro Products (P) Limited and M./s. Meadow Agro Farms (P) Limited, the prosecution has underlined that A[3] and A[4] are the directors of both these companies and the transactions presented are really transfers of deposits from one account to the other. According to the prosecution, these deposits and withdrawals inter se the accounts are disguised exchanges involving the circulation of the money of A[1] and cannot be said to be income from lawful source in the backdrop of the charge of abetment and conspiracy.

362. Whereas, the High Court did not take into account these receipts of A[2], the Trial Court, apart from being of the view that cognizance of such transfers of fund by way of lawful transactions cannot be taken in the face of Section 269SS of the Income Tax Act and the provisions of the Companies Act, rejected these also on the ground that the respondents had failed to adduce acceptable evidence with regard to the resources of these two companies to advance such huge amounts.

363. In the opinion of this court, even without reference to Sections 269SS and 276DD of the Income Tax Act, the plea Page 382 that Ex. D-300 i.e. the agreement for sale of property against which Bharani Beach Resorts had advanced Rs 22 lakhs to A[2], had not been proved, cannot be lightly brushed aside. Be that as it may, vis-a-vis the other evidence on record, as adduced by the respondents in support of the advances received, in absence of evaluation thereof by the High Court, in the face of rejection of this item of income by the Trial Court, this Court is disinclined to sustain the claim of the respondents.

364. The next item of income cited on behalf of A[2] to A[4], is by way of earnings of A[2] to the tune of Rs.2.[2] crores as a partner of several firms. According to the respondents, all these payments have been made by cheques and the related transactions are reflected in the corresponding bank accounts of A[2] and the entities involved. The bank account in particular and the oral testimony of PW-209 have been relied upon in support of this source of income.

365. As against this, the prosecution has urged that in absence of any evidence to establish the required income of the firms, which supposed to have advanced amounts ranging from Rs.20 to 25 lakhs each, these transactions are really Page 383 sham and made up for the purpose of defence. It has been asserted that no tax returns (income/commercial/sales) of these firms had been brought on record to authenticate the extent of their business and earnings to make such payments feasible. Further, the statements of accounts produced show that all these accounts had been opened on the same day i.e. 20.3.1995 with cash deposit of Rs.501 and that there had been a credit entry of Rs.20,99,980/- and a debit entry in favour of A[2] on 20.8.1995. Apart from this common feature in all these nine accounts, at the relevant time, A[2] to A[4] and Lex Property Developers (P) Limited were the partners thereof. It has also been urged that A[3] and A[4] were the directors of Lex Property Developers (P) Limited and all the nine firms were registered on the same day i.e. 15.2.1995 with the common address of No. 21, Wellington Plaza.

366. The opposition registered by the prosecution in view of the recorded facts which bear out unusual striking features of similarity of the nine firms and their constitution can by no means be lightly disregarded by construing the same to be a mere co-incident.

367. To reiterate, whereas the remonstration of the Page 384 respondents is that the Trial Court did leave out of consideration the evidence in support of this source of income, the High Court as well did not refer thereto.

368. Vis-a-vis the income by way of Rs.2,90,000/-by A[2] from the sale of her properties to Meadow Agro Farms (P.) Ltd., the High Court as well, according to the compilation furnished by the respondents, did not account therefor. In absence of any demurral before this Court, vis-a-vis such omission of High Court, we are not disposed to evaluate the facts as a court of first instance. With regard to the claim of Rs.4,35,622/- as cash balance available with A[2] as on 1.7.1991, on her own showing, as per Ex. P-2191, this amount was in deposit as on 31.3.1991. In absence of better evidence, it is not possible to accept that the same amount was also available at her disposal as on 1.7.1991, the date of commencement of the check period.

369. With regard to item Nos. 46 and 47 of the compilation offered by A[2] to A[4], the claim that an amount of Rs.50 lakhs in all had been availed by J. Farm House and Green Farm House @ Rs.25 lakhs each from the Housing Real Estate and Development (P) Ltd. during the financial year 1995-96, these Page 385 transactions have been sought to be proved on the basis of the bank statements of the lender and its written acknowledgment to that effect. The genuineness of these transactions is sought to be refuted by the prosecution by asserting that there is no satisfactory evidence in support thereof and not only none on behalf of the lender has been examined to prove the same, the documents adduced also do not convincingly vouchsafe this source of income. Noticeably, though it is the complaint of the respondents that the Trial Court did not at all consider this evidence, the High Court as well has not dealt therewith.

370. Item numbers 50 and 51 next referred to on behalf of A[2] to A[4] represent loans advanced by Bharani Beach Resorts and Vigneshwara Builders in favour of A[3] on 18.3.1995 and 29.4.1995 respectively, totalling Rs.27 lakhs. The prosecution has branded these operations as mere transfer of money from one account to another under the cloak of loans which otherwise have not been proved in law.

371. The Trial Court did refer to the bank account of Bharani Beach Resorts i.e. CA-9006 while dealing with the broader aspect of opening of more than 50 accounts apart from the Page 386 loan accounts during the check period. It did note that at the commencement of the check period, there were hardly 10 to 12 bank accounts standing in the names of A[1] and A[2]. It marked the particulars of 52 accounts in all which were opened during the check period in the names of the firms/companies of which A[1], A[2], A[3] and A[4] were partners/directors as would appear from the table referred to. The bank account of Bharani Beach Resorts i.e. C.A. 9006 was opened 6.2.1995 and noticeably, as claimed by A[2] to A[4], as per the compilation relied upon, loan was advanced by the said firm on 18.3.1995 to A[3]. To reiterate, the High Court did not at all advert to the oral and documentary evidence sought to be relied upon by A[2] to A[4] in this regard.

372. Qua item numbers 52 to 54, which are loans availed by A[4] from Iyyeppa Property Development, Bharani Beach Resorts (P) Ltd and Housing and Real Estate Development (P) Ltd. during the financial year 1995-96 to the tune of Rs.62 lakhs, the prosecution in response to the oral and documentary evidence sought to be relied upon by A[2] to A[4], has sought to dismiss these transactions as mere exchange of funds, inter se accounts of A[2] to A[4] and their firms by giving Page 387 the same a colour of loan transactions. These items as well have been left out of consideration by the High Court as is evident from the impugned decision.

373. With regard to the item of income by way of hire charges at

┌─────────────────────────────────────────────────────────────────────────────┐
│ Sl.   ERROR              CORRECTIONS                                        │
│ No.                                                                         │
├─────────────────────────────────────────────────────────────────────────────┤
│ 1.    CALCULATION       The method of calculating D.A. is wrong. If all     │
│       ERROR             the findings of the high court is accepted in       │
│                         toto    then     the   amount     of  D.A.    is    │
│                         Rs.14,38,93,645      i.e.   41.3%      &    not     │
│                         Rs.2,82,36,36,812 i.e. 8.12% as held by the         │
│                         High Court – (The previous two charts have          │
│                         details of the same)                                │
│ 2.    ARITHMETIC        While totalling loans as income at (Pg.939 Vol      │
│       ERROR             IV), the High Court has committed an                │
│                         arithmetic error to the tune of 13.50 Crores. If    │
│                         this arithmetic error is alone corrected then       │
│                         the     Disproportionate    Asset    come    to     │
│                         Rs.16,32,36,812/- i.e. 76.7%                        │
│                         This is fully covered in Pg 1028-1030 – SLP         │
│                         Vol.IV                                              │
│ 3.    ADMISION       OF Under Expenditure:                                  │
│       ACCUSED           Cost of Construction : The accused have             │
│                         admitted that the cost of construction incurred     │
│                         is Rs.8,60,59,261 – Pg 2350 Vol IX. However         │
│                         the High Court values the same at                   │
│                         Rs.5,10,55,060 – Pg 979 Vol IV, which is            │
│                         Rs.3,50,05,210 lesser than the admitted             │
│                         amount.                                             │
│                         Under income:                                       │
│                         Business income of Jaya Publication: The            │
│                         accused have admitted that the income of Jaya       │
│                         Publication was Rs.1,15,94,849/- (As per            │
│                         written submission of A-2 –Extracted in Pg          │
│                         1034 SLP Vol IV). The High Court calculated         │
│                                                            Page 75          │
│                            this at Rs.4 Crores – Pg 946-960 Vol IV, which   │
│                            is Rs.2,84,05,151/- more than the admitted       │
│                            amount.                                          │
│ 4.      GIFTS AS INCOME    Gifts as income is subject matter of SLP         │
│                            Nos.1163-1167 of 2012 – Pg 1032-1033             │
│                            Present SLP Vol IV. Therefore although Trial     │
│                            Court has held that gifts received cannot be     │
│                            held to be a lawful source of income – Pg        │
│                            1283-1296 Vol V, the High Court has added        │
└─────────────────────────────────────────────────────────────────────────────┘

374. Qua item number 56, A[4] claims that though she had received an amount of Rs.1,11,231/- by way of gratuity, the prosecution has recorded this receipt to be of Rs.1,01,231/-. The Trial Court, while dealing with this item of income at

┌─────────────────────────────────────────────────────────────────────┐
│

┌──────────────────────────────────────────────────────────────────────────────────────────────────┐
│ SL.                                                                             Respondents      │
│                             Rs.              Rs.              Rs                                 │
│                                                                                 Rs.              │
├──────────────────────────────────────────────────────────────────────────────────────────────────┤
│ 1     Immovable Property 22,83,99,174.70 20,07,80,246         6,24,09,120/-     16,19,03,301     │
│       (Consideration, cost                                                                       │
│       of registration)                                                                           │
│ 2     Cash paid over and 2,53,80,619/-       1,58,30,619      nil               NIL              │
│       above          sale                                                                        │
│       consideration                                                                              │
│ 3     New or additional 28,17,40,430         22,53,92,344/-   5,10,54,060/-     8,60,59,261/-    │
│       construction   of                                                                          │
│       buildings                                                                                  │
│ 4     Gold and Diamond 5,53,02,334.75        2,51,59,144/-    As          per NIL                │
│       jewellery                                               prosecution                        │
│ 5     Silverwares           48,80,800/-      20,80,000/-      As          per NIL                │
│                                                               prosecution                        │
│ 6     F.Ds. and shares      3,42,62,728/-    3,42,62,728      As          per 2,30,00,000        │
│                                                               prosecution                        │
│ 7     Cash   balance     in 97,47,751.32     97,47,751.32     As          per 97,47,751.32       │
│       bank accounts                                           prosecution                        │
│ 8     Vehicles              1,29,94,033.05   1,29,94,033.05   As          per 81,35,106          │
│                                                               prosecution                        │
│ 9      Machinery            2,24,11,000      2,24,11,000      As            per 94,25,835        │
│                                                                             Page 404             │
│                                                                 prosecution                      │
│ 10     Footwears             2,00,902.45        Nil.            Nil.             NIL             │
│ 11     Sarees                92,44,290.00       Nil.            Nil.             NIL             │
│ 12     Wrist watches         15,90,350.00       15,90,350       As          per Nil.             │
│                                                                 prosecution                      │
│        TOTAL                 68,61,54,413.27 55,02,48,215/-     25,46,52,177/- 29,82,71,254.32   │
└──────────────────────────────────────────────────────────────────────────────────────────────────┘

375. The next item of income sought to be included by A[2] to A[4] is by way of rentals of Mahasubhalakshami Kalyana Page 388 Mandapam. It is claimed that the actual amount received under this head was Rs.17,85,023/- but the prosecution had quantified it to Rs.14,50,097/- and thus a further sum of Rs.3,34,926/- ought to be added to the income of A[4]. Oral evidence by way of the testimony of DW90 and documentary evidence has been relied upon. Both the Trial Court and the High Court have not referred to this head of income or the evidence pertaining thereto.

376. Vis-a-vis item numbers 58 and 59, which represent the net income of Anjaneya Printers Pvt. Ltd for the years ending 31.3.1994, 31.3.1995 and 31.3.1996 and rental advance received by this firm during the check period, totalling Rs.55,07,715/-, there seems to be no consideration of the oral and documentary evidence in support thereof by the High Court. The Trial Court however, exhaustively examined all relevant aspects with regard to the business activities of Anjaneya Printers Pvt. Ltd since its incorporation on 14.7.1993 with A[2] and A[3] as its directors. It noted that the company had filed its income tax return on 29.8.1997 declaring undisclosed income for the block period 1.4.1986 to 24.9.1996 of an amount of Rs.10,81,478/-. It referred to Ex. Page 389 D-278 relating to the assessment year 1994-1995 that a sum of Rs 747/- had been declared as income from business operations but during the year of accounting, an aggregate sum of Rs.30 lakhs had been credited as share application money received from Jaya Publications in three installments on 29.9.1993, 23.1.1994 and 23.2.1994. Apart from noticing the fact that M/s Jaya publications had not filed the income tax returns for the relevant years, the Trial Court noted as well that in the confirmation letter Ex. D-278, the sources of funds available with Jaya Publications for making such advances to Anjaneya Printers had not been disclosed. Referring to this document, further, the Trial Court recorded that during the search operations of the premises of Anjaneya Printers, no regular books of accounts was found and that consequently the assessing authority had held that the computerized copy of the accounts produced by the authorised representative of the assessee company would have to be construed as not written in the normal course of business. The Trial Court thus in this backdrop entertained a doubt with regard to the business operations of this company as claimed by it so as to render its claim of income under these Page 390 items to be unacceptable in law. To reiterate, the High Court did not deal with the oral and documentary evidence in this regard.

377. So far as item number 60 is concerned, which according to A[2] to A[4] is income of Rs.[1] crore by way of loan availed from Indian Bank by M/s J. Jay T.V. Private Limited, reliance has been placed on the bank statement of this firm. As per the prosecution, this firm is not one of those involved in the case and therefore its transactions had been left out from the purview of investigation culminating in the charges. Whereas the High Court has not dwelt upon this item, it is likely that for the reasons cited by the prosecution, there is no reference of this loan in the decision of the Trial Court as well.

378. As the principal grievance of the respondents is that such evidence though available on record, the Trial Court did not advert thereto, the respondents ought to have assailed the omission on the part of the High Court before this Court in the manner as contemplated in law. In arguments as well, no reservation was expressed in this regard.

379. The item of income at

┌─────────────────────────────────────────────────────────────────────────┐
│   Sl.No. A/C No.         Name     of Account Holder        Date of      │
│                          the Bank                          Opening of   │
│                                                            A/c          │
├─────────────────────────────────────────────────────────────────────────┤
│        1    C.A.No.792   Indian Bank Jaya Publications     18.09.1991   │
│                                                          Page 492       │
└─────────────────────────────────────────────────────────────────────────┘

380. According to the respondents, Sasi Enterprises had availed loan of Rs.10 lakhs from Housing Real Estate and Development (P) Limited and Rs.[2] lakhs on 18.10.1995 from Lex Properties, both by cheques. These transactions are sought to be authenticated by the respondents on the basis amongst others, of the bank statements, their grievance being that the Trial Court had erroneously excluded these amounts by overlooking the evidence to that effect.

381. The prosecution has refuted the genuineness of these transactions of loan contending that the bank statements and the letters of confirmation from the lenders concerned, as sought to be relied upon by the respondents, do not per se prove the loan.

382. Though the Trial Court did refer to the documents, relied upon by the respondents, it rejected the same as unreliable. Page 392 In doing so, it made reference in particular to letter of confirmation of Housing Real Estate and Development (P) Ltd..

383. The High Court, on the other hand, did accept these transactions by making passing reference to the documents called in evidence by the respondents in this regard. The High Court readily acted upon the letter of confirmation of accounts issued by M/s Housing Real Estate Development (P) Limited and also the balance sheet of Sasi Enterprises indicating that an amount of Rs.[2] lakhs had been received by way of unsecured loan from Lex Properties Development Private Limited. No attempt was made to examine the credibility of the documents in the context of the charges levelled.

384. The respondents have next claimed income of Rs.75 lakhs by way of capital introduction in Sasi Enterprises by A[1] on 29.9.1992. According to them, this amount was contributed by way of capital by A[1] which she had availed as loan from CANFIN Homes Limited against her fixed deposit of Rs.[1] crore. Reliance had been placed on the bank accounts of Sasi Enterprises showing the receipt of Rs.75 lakhs as capital contribution by A[1] as its partner during the check period. Page 393

385. The prosecution has dismissed this transaction as inter se transfer between the accounts of A[1], the partner of Sasi Enterprises and the said firm, so much so that it could not be construed to be a genuine income. The High Court did not deal with the oral and documentary evidence to this effect in details. The Trial Court was however of the view that this receipt by Sasi Enterprises was in fact diversion of unexplained wealth of A[1] to its account.

386. Next in the que of income claimed by A[2] to A[4] is by way of dues repaid to Sasi Enterprises by M. Ramachandran Nagammal and Subramaniuim during 1992-93. The balance sheets of Sasi Enterprises as on 31.3.1991 and 31.3.1992 along with the relevant orders of Commissioner of Income Tax (Appeals) have been pressed into service in support of this assertion. According to A[2] to A[4], under this head an amount of Rs.61,91,000/- has been received by Sasi Enterprises by way of repayment of advances made by it to these persons. The prosecution has repudiated this claim contending that the balance sheets for the years in question have been belatedly prepared to conjure this plea and thus cannot be relied upon. Page 394

387. The Trial Court indeed did deal with this document and took note of the fact as well that the claim of repayment of loan had been accepted by the income tax authorities. It however declined to accept the transaction of loan and repayment thereof to Sasi Enterprises by holding principally that the statement of profit and loss account submitted before the income tax authorities and proof thereof was not reliable and authentic. This is more so according to the Trial Court as neither the loanee of the firm had been examined nor there was any other material to show that these transactions had been disclosed before the income tax authorities at any point of time before the registration of the case.

388. The High Court, however, accepted on its face value the relevant balance sheet, the profit and loss account as well as of the orders of the income tax authorities to this effect without embarking upon any independent verification of the contents thereof to ascertain the correctness or genuineness of the same, in the teeth of the finding of the Trial Court, contrary thereto.

389. Against item Nos. 28, 30, 32, 34, 38 and 41 of the compilation, A[2] to A[4] have claimed rental income of Page 395 Rs.16,47,800/- during the check period. The breakups of the different amounts of income have been set out as well. They have mainly relied upon the returns of the respective assessment years and have contended that as the income tax authorities had accepted the said returns disclosing their rental income, the sum of Rs.16,47,800/- ought to be included in their total tally of income.

390. Per contra, the prosecution has refuted this claim on the ground that the balance sheets adduced before the income tax authorities were all belatedly prepared as had been admitted by DW-88 and thus cannot be accepted to be authentic to sustain this item of income of A[2] to A[4].

391. The Trial Court rejected this claim inter alia on the ground that the respondents had failed to produce any lease deed or rent receipt as acceptable proof of such income and has analysed the oral and documentary evidence offered by A[2] to A[4] in this regard. The High Court however relied principally on the income tax returns and the statement of income and the balance sheet of the concerned years to accept this claim.

392. A[2] to A[4] have next claimed a sum of Rs.9,72,550/- as the agricultural income of M/s Sasi Enterprises during the Page 396 assessment years 1992-93 to 1996-97. Whereas according to the concerned respondents, the income tax returns as accepted by the income tax authorities adequately demonstrate the agricultural income of the firm, the prosecution has dismissed this claim contending that the income tax returns, the statement of income and the balance sheet to this effect are all prepared subsequently and cannot be accepted to be genuine.

393. The Trial Court noticed the reliance of the respondents on the relevant income tax returns and the orders of the income tax authorities accepting the same rather than on any independent and acceptable evidence of lease involved and in fact rejected the copy of the lease deed produced in one of such instances by recording cogent reasons. It did take note of the fact that neither the lessor in any case nor any person who had purposely carried on the agricultural operations had been examined and discarded the materials produced by the respondents in support of this head of income.

394. Apropos the next segment of income, i.e. from sale of capital assets of Sasi Enterprises, the respondents have claimed it to be Rs.10,20,000/- during the assessment year Page 397 1994-95. Reliance has been placed on the related income tax return which had been accepted by the concerned authorities. The prosecution has repudiated this claim contending that the same being based on belated balance sheet prepared and produced through DW-88, the same is per se unacceptable in law. The Trial Court did take note of this income and while considering the same along with other heads of income i.e. agricultural income, rental income, repayment of loan etc. dismissed the same principally on the ground of want of reliable evidence. It discarded the statement of income, balance sheet and profit and loss account for the relevant year in support of this item of income

395. To reiterate, the High Court however acted on the income tax return and on a overall consideration of the evidence, mostly the income tax returns and the orders of the authorities together with the related balance sheet and the profit and loss account accepted the income of Sasi Enterprises collectively to be Rs.25 lakhs during the check period.

396. Vis-a-vis the income from business operations of Sasi Enterprises as enumerated against item numbers 36 and 39 Page 398 of the compilation, which according to the respondents, was in all Rs.2,39,701/- by way of income from business operations for the year ending on 31.3.1994 and profit of business operations for the year ending 31.3.1995, they again wholly relied on the income tax returns for the assessment years 1994-95 and 1995-96, which as a matter of record, had been submitted on 1.1.1997 and 26.9.1997 respectively. Whereas the respondents assert that the income tax authorities having accepted these returns, this amount of Rs.2,39,701/- ought to be added to the income of Sasi Enterprises during the check period, the prosecution has rejected the claim on the ground that the belated income tax returns and the corresponding balance sheets lack in credibility and thus cannot be accepted as evidence in support thereof.

397. The Trial Court duly noted this head of income along with the other sources of income of the firm. It dealt with amongst others the oral testimony of DW-88 and on a comprehensive scrutiny of the evidence adduced, declined to accept the same in absence of any authenticated proof in support thereof. While dealing with the other sources of income as well, the Trial Court refused to rely on the income Page 399 tax return, the statement of income, the balance sheet and the profit and loss account for the concerned assessment years doubting the genuineness of these documents/records. This was more so, according to the Trial Court, in absence of any other independent and cogent evidence in support of the claim of income made by the firm.

398. The High Court generally referred to the evidence adduced by the respondents and without any endeavour to evaluate the same to ascertain its probative worth, readily acted thereon to return a finding that the income of the firm, cumulatively having regard to the various sources claimed by it, was assessable at Rs.25 lakhs.

399. Qua the claim of A[2] to A[4] that they earned Rs.[6] lakhs during the assessment year 1996-97 from the proceeds of sale of building materials pertaining to industrial estate, Gundy and Rs.23,80,000/- as advance received towards sale of property by it during the assessment year 1995-96 based too on the relevant income tax returns, the prosecution has adhered to the same stand i.e. unreliability of such returns as valid and absolute proof of such claim. The Trial Court took note of the fact that the claim of total income of Sasi Page 400 Enterprises during the check period was Rs.95,92,776/which included these two items. On an analogy of reasonings, rejecting the income tax returns and the records associated therewith, it declined to take cognizance thereof.

400. Item number 44 of the compilation deals with the net profit earned by Jaya Publications for the assessment years 1992-93 to 1996-97 amounting to Rs.1,15,94,849/-. The respondents contend that the above income by way of profit stands duly proved by the income tax returns for these years and are supplemented by the profit and loss accounts. Their grievance is that the Trial Court had rejected this head of income by dismissing the income tax returns and the profit and loss accounts as unreliable, the same having been filed after the registration of the case. The prosecution has endorsed this approach of the Trial Court.

401. The High Court, while dealing with this aspect did notice as well that the income tax returns for the relevant years of Jaya Publications had been filed much belatedly and had expressed its reservation qua this claim. The High Court, while dwelling on this segment of income, did elaborate its appraisal mainly on the scheme deposit but concluded that in Page 401 view of the belated submission of the income tax returns, the assessee stood disentitled to any relief based thereon. While recording that the Namadhu MGR newspaper was one of the publications of Jaya Publications and that none of the two accused persons i.e. A[1] or A[2] who then were the partners had examined themselves in support of the claim of income from the deposits made by the subscribers under the scheme, the High Court, however did not reject the claim of the respondents as a whole and awarded a sum of Rs.[4] crores as income earned by Jaya Publications acting solely on the evidence of the ardent party workers de hors any independent corroboration.

402. The Trial Court noted the different sources of income of Jaya Publications with the corresponding figures and exhaustively assayed the evidence, oral and documentary in connection therewith. It analysed the oral evidence of the depositors under the scheme as well as the income tax returns, the profit and loss accounts of the corresponding assessment year, the orders passed by the income tax authorities and eventually rejected the claim wholly, taking the view that the evidence adduced in support thereof did not Page 402 commend for acceptance. It noticed as well the fact that the income tax returns of the firm had been submitted much beyond the time statutorily prescribed and in particular, after the case had been registered against the respondents. In this context, it noticed the inflow and outflow of funds from and to the current account of Jaya Publications vis-a-vis the Namadhu MGR's current account and that of the account of A[1], Sasi Enterprises, Vinod Video etc. of which either A[1] and A[2] together or A[2], A[3], A[4] were the partners/proprietor thereof. While rejecting the scheme deposit as sham and frivolous and designed after the filing of the charge sheet, the Trial Court concluded that the evidence in support thereof had been devised only for the purpose of defence against the charge levelled.

403. Regarding the other heads of income of Jaya Publications during the relevant assessment years, the Trial Court also referred to the evidence adduced in support of agricultural income in the form of testimony of DW-88 and the orders passed by the concerned income tax authorities and rejected the same as lacking in probative worth, the income tax returns of the assessment years 1991-92, Page 403 1992-93, 1993-94 having been filed on 6.11.1998 and those of 1994-95, 1995-96 and 1996-97 on 17.3.1999 much after the registration of the case against the respondents. That no witness in support of the factum of cultivation and the nature of crops grown was examined, was noted.

404. With regard to income from sales/works, the Trial Court observed that the profit and loss account statement for the relevant years, at the first place, had not been enclosed with the returns, but were produced after the year 1999. Moreover, those lacked in veracity and therefore, were wanting in credence.

405. The earnings by way of rental income were also rejected being based on the profit and loss accounts of the respective years which the Trial Court discarded as untrustworthy.

ASSETS

406. The items of assets of the respondents as on 1.7.1991 (i.e. at the beginning of the check period) have been set out in Annexure I to the charge-sheet and comprise of 52 heads valued at Rs.2,01,83,956.53. (Annexure P-2327). Annexure II, according to the DVAC, lists 306 items of assets at the end of Page 404 the check period i.e. 30.4.1996, valued at Rs.66,44,73,573.27 (Annexure P-2328). Thus, according to the prosecution, the value of assets acquired during the check period by the respondents is Rs.64,42,89,616/-.

407. The prosecution has distributed these assets in 12 categories. For ready reference, the figures cited/arrived at by the prosecution, defence, Trial Court and the High Court have been furnished in the table below: SL. Categories As per DVAC Rs. As per T.C. Rs. As per H.C. Rs As per Respondents Rs.

1 Immovable Property (Consideration, cost of registration) 22,83,99,174.70 20,07,80,246 6,24,09,120/- 16,19,03,301 2 Cash paid over and above sale consideration 2,53,80,619/- 1,58,30,619 nil NIL 3 New or additional construction of buildings 28,17,40,430 22,53,92,344/- 5,10,54,060/- 8,60,59,261/- 4 Gold and Diamond jewellery 5,53,02,334.75 2,51,59,144/- As per prosecution NIL 5 Silverwares 48,80,800/- 20,80,000/- As per prosecution NIL 6 F.Ds. and shares 3,42,62,728/- 3,42,62,728 As per prosecution 2,30,00,000

7 Cash balance in bank accounts 97,47,751.32 97,47,751.32 As per prosecution 97,47,751.32

8 Vehicles 1,29,94,033.05 1,29,94,033.05 As per prosecution 81,35,106

9 Machinery 2,24,11,000 2,24,11,000 As per 94,25,835 Page 405 prosecution

10 Footwears 2,00,902.45 Nil. Nil. NIL 11 Sarees 92,44,290.00 Nil. Nil. NIL

12 Wrist watches 15,90,350.00 15,90,350 As per prosecution Nil.

TOTAL 68,61,54,413.27 55,02,48,215/- 25,46,52,177/- 29,82,71,254.32

408. The judgment of the High Court at page 966 reveals that it has for the purposes of computation, accepted the value of the assets of the respondents at the end of the check period to be Rs.66,44,73,537/- as noted by the prosecution. Further, though it has reduced the value of the assets vis-a-vis item Nos.1, 2, 3, 10 and 11 out of the 12 categories aforementioned, it essentially caused modification, in quantifying the value of assets, with regard to item number 3, pertaining to new or additional construction of buildings. As would be evident from its rendering, it assessed the value of this item of assets, to be Rs.5,10,54,060/- compared to Rs.28,17,40,430/- as mentioned by the prosecution. It thus reduced the value of the assets by Rs.23,06,86,370/-. While making the calculations, however the High Court took the value of the cost of construction as cited by the prosecution to Page 406 be Rs.27,79,88.945 and on the basis of its assessment of the value of the new or additional construction of buildings at Rs.5,10,54,060/-, it effected a reduction of Rs.22,69,34,885/-. According to the prosecution even if this valuation of the new or additional construction of buildings as made by the High Court is accepted, the other items remaining intact, the total value of assets of the respondents at the end of the check period, would be Rs.66,44,73,573/- minus Rs.22,69,34,885/- = Rs.43,75,38,688.

409. According to it, thus while computing the percentage of disproportionate assets qua the income of the respondents, this figure ought to have been applied in the relevant formula.

410. Noticeably, the valuation of the assets except as cited by the prosecution at serial numbers 1, 2, 3, 10 and 11 has been accepted by the High Court. Nevertheless, while computing the value of the assets finally, it did not take into account as well its evaluation in respect of item numbers 1, 2, 10 and 11 and limited its consideration only to item number 3 which it had valued at Rs.5,10,54,060/-.

411. Thus in the above revealing perspective, it is not considered essential to scrutinise the evidence on the assets Page 407 pertaining to all items thereof and it would be adequate enough to limit the audit only qua item number 3 i.e. new or additional construction of buildings, more particularly because of its decisive bearing on the adjudication.

412. In the above premise, being of crucial relevance, evidence with regard to the item number three namely; new or additional construction of buildings in the list of assets demands scrutiny. As mentioned hereinabove, though the High Court had altered the value of five out of twelve items, in the ultimate quantification, it did focus only on the item of new or additional construction of buildings and computed the worth thereof to be Rs.5,10,54,060/- against Rs.22,53,92,344/- adjudged by the Trial Court. According to the prosecution, however, the investment on this count had been Rs.28,17,40,430/-. Significantly, the respondents had valued this item of their assets at Rs.8,60,59,261/- which is about Rs.3.[5] crores above the valuation made by the High Court.

413. Be that as it may, whereas the prosecution had listed out twenty one items under the head new or additional construction of buildings, the Trial Court took note of Page 408 eighteen items and the High Court of seventeen items as would be adverted to in details hereafter. The total construction area of these twenty one items, according to the prosecution is 23,076.84 sq. meters which is equivalent to 2483.97 squares. The area of four items left out by the High Court when deducted from the total area of 2483.97 squares calculate to 2174.69 squares. However, the High Court computed the value by adopting the area of the 17 items selected by it to be 1668.39 squares instead of 2174.69 squares and thus reduced the actual area under consideration by 506.[3] squares. Ergo, according to the prosecution, not only did the High Court exclude four out of twenty one items in assessing the value of the assets under examination, it erred as well on the resultant area corresponding to the seventeen items chosen by it. This did also impact upon the value eventually arrived at.

414. In course of the arguments before this Court, emphasis has been laid on item numbers 179, 180 and 181 of annexure II i.e. buildings/construction on which investments had been made to sum up the total to the figure of Rs.29,35,68,982/according to the prosecution. According to the respondent No. Page 409 1, as against the figure of Rs.24,29,40,490/- being the value of her assets during the check period, as computed by the prosecution, her assertion is of Rs.6,52,34,410/-. It has been urged on her behalf that she had acquired only one property during the entire check period i.e. the item at serial number 18 in anneuxre II worth Rs.10 lakhs and in addition thereto, she had made two constructions i.e. of a farm house at Jeedimetla Village near Hyderabad and at 31-A, Poes Garden, besides renovating her residential building at 36, Poes Garden. Against item numbers 179 and 181 referred to hereinabove, it has been asserted that as against Rs.13,65,31,901/- assessed by the prosecution, the value of her assets corresponding thereto and as accepted by the income tax authorities is Rs.3,62,47,700/- and thus an amount of Rs.10,02,84,201/needs to be deducted. The break up of expenditure on the relevant counts towards these items has been provided as hereinbelow: a) Renovation of 36 Poes Garden: Rs.76,74,900 b) Construction at 31-A, Poes Garden: Rs.1,35,10,500 c) Hyderabad Grape Garden Farm House: Rs.1,39,62,300 Page 410 d) Compound wall for Hyderabad Farm House: Rs.11,00,000 Total Rs.3,62,47,700/-

415. While endeavouring to authenticate the above figure, the deficiencies in the evidence of the prosecution relating to the valuation of the constructions have been highlighted in quite some details. Broadly, the denunciation qua the process related thereto, refers to the non-verifiable measurements in absence of essential datas and want of supporting particulars in the reports rendering them sterile and worthless being of no probative worth, absence of any scientific or laboratory tests convincingly demonstrating the age of the buildings to correctly appreciate the value thereof, absence of any basis for calculating the price of non-scheduled items etc. Vis-a-vis the price of non-scheduled items in particular, it has been asseverated that though the valuers had deposed that with regard thereto, market enquires had been made and the inputs had been recorded in a paper or a note book, the same had not been retained but destroyed and were not enclosed with the corresponding reports. The assessment of the price of the non-scheduled items has thus been dismissed to be not Page 411 only as being bereft of any foundation but also as mere hearsay.

416. The oral evidence of the prosecution witnesses namely; PW-98, PW-116 and PW-220, amongst others, has been referred to and analysed apart from the reports submitted by the inspection team which as adverted to hereinabove, have been repudiated to be lacking in indispensable datas. Other documentary evidence adduced by the prosecution has also been dealt with. Evidence of defence witnesses, amongst others of DW-64, S. Shanmugham, Chartered Accountant of R1/A[1], DW-76 who was a part of the inspection team and DW-78 who was one of the signatories to the report Ex. P-671 has been highlighted. Considerable emphasis has also been laid on the orders of the income tax authorities by way of corroboration of the quantum of expenditure cited by the defence. This is more particularly as the income tax authorities had accepted the figure cited by the respondent No.1/A[1] on the basis of independent enquiries conducted by the department specifically in respect of the market rates/price of the marbles/granites during the relevant period i.e. 1994-95 to 1996-97. The corresponding invoices have also Page 412 been referred to in the course of arguments. According to the defence, the expenditure as shown by respondent No.1/A[1] was supported by bank documents, bills, contemporaneous vouchers proved through defence witnesses, which inter alia, establish that the price of the marble per square meter at the relevant time was between Rs.100 to Rs.180 per sq. meter as against Rs.5000 per sq. meter to Rs.21000 per sq. meter cited by the prosecution. While dismissing the valuation offered by the prosecution to be arbitrarily exaggerated and inflated, it has been asserted that though the Trial Court was right in observing that the prosecution had not been able to establish the cost of construction in respect of special items like marble, it erred in accepting the valuation made by it after granting only 20% deduction in the overall quantum. It was pointed out as well that the Trial Court's rejection of the documents i.e.. D-210 series pertaining to the price of marbles prevailing during 1995-96 by construing the same erroneously to be of subsequent years, was patently flawed. It has been urged that the prosecution had failed to prove beyond reasonable doubt, the expenditure towards the construction of the items under the head, new or additional construction of buildings and thus Page 413 no burden lay on the defence to explain the amount spent towards the same. According to the defence, the valuation made by the High Court of the expenditure on such construction is correct and does not merit any interference.

417. Per contra, it has been insisted on behalf of the prosecution that though its computation of the expenditure against twenty one items comprising the investments in new or additional construction of buildings did sum up to Rs.29,35,68,982/-, the Trial Court taking note of eighteen such items, did quantify the expenditure at Rs.22,53,92,344/-. As sample instances, the prosecution highlighted the expenditure towards item numbers 179,180 and 181 of annexure II i.e. the list of items of assets acquired during the check period and referring to the oral testimony of PW-98,107 and 166 as well as the reports prepared and submitted by the inspection team i.e. Ex. P-645, P-661 and P-671 maintained that the sum total of expenditure on the basis thereof was Rs.19,05,84,199/-. Understandably, this figure was included in the total expenditure of Rs.29,35,68,982/- and had been highlighted as these three items accounted for the major portion of the investments. Page 414

418. According to the prosecution, the High Court not only limited its analysis to seventeen out of twenty one items, it also erred in the measurement of the built up area of these items so much so that instead of 2174.69 squares, it proceeded to make the computation on the basis of an area of 1668.39 squares i.e. yielding a short fall of 506.30 squares. In addition thereto, it has been urged on behalf of the prosecution that the High Court appraised the expenditure towards new and additional construction by taking only the cost expended for a sentry shed by totally overlooking the additional and highly expensive enhancements and fixtures of the main buildings. According to the prosecution, whereas as per the evidence adduced by it, the cost of construction of the new/additional buildings was Rs.4037 per sq. feet, the High Court on the basis of the cost of construction of the sentry shed III adopted the rate of Rs.680 per sq. feet, as a result whereof the actual cost of construction of the new/additional building stood reduced by 83%. The prosecution has thus insisted that in quantifying the expenditure towards the construction of the new/additional building, the High Court Page 415 thus patently erred not only on the actual built up area but also on the basic rate of cost by drawing an analogy of a sentry shed with the new/additional buildings, though these two classes of structures with the inherent characteristics thereof were not comparable by any means.

419. As referred to hereinabove, the Trial Court scrutinized the oral and documentary evidence of both sides relating to 18 items of new/additional constructions out of 21 cited by the prosecution. It exhaustively evaluated the evidence item wise and weighed the merits and demerits thereof in details. It took note of the reports submitted by the inspection team qua every new/additional building involved and also took cognizance of the denunciation by the defence thereof primarily on the ground that those lacked in details and further were not accompanied by supporting documents. The Trial Court appreciated the evidence of the prosecution witnesses who were participants in the exercise of the valuation of the buildings, the ancillary structures, accessories, fixtures and furnishings. The members of the inspection team, who were Civil Engineers drawn from the Public Works Department, in addition to Electrical Engineers from Electricity Department, Page 416 as their evidence noticed by the Trial Court, would demonstrate did take into account all the essential aspects of the subject matter of survey including the make and age of the structures and also duly discounted the value thereof on depreciation. A common feature of the evidence is that the price of the electrical appliances mostly was assessed on the basis of their age and the expertise of the officers undertaking the inspection. Qua the non-scheduled items, according to the prosecution witnesses, the price was ascertained from the market. The demur of the defence that such evaluation was not decisive in absence of the notes of the relevant inputs was however noticed by the Trial Court. For the general items, the contemporaneous PWD schedule of rates prevailing in the districts involved were applied. The defence witnesses who mostly were the members of the same team did not radically differ from the substance of the version of the prosecution witnesses. A marked attribute of the prosecution witnesses, as noted by the Trial Court, was that when examined on their first recall, they seemed to vacillate in their disclosures in the examination-in-chief but reaffirmed the same narration on their second recall. The defence however noticing this Page 417 demeanour has endeavoured to discredit them as prevaricating and unfaithful witnesses.

420. As had been elaborately appraised by the Trial Court, the evidence of the prosecution witnesses disclose that the members of the inspection team did minutely notice all the salient characteristics of the new/additional buildings under surveillance together with their exquisite and expensive structural attachments, trappings, fineries and adornments having formidable potential of enhancing their overall worth.

421. The Trial Court while taking note of the income tax returns disclosing the expenditure statements and the orders accepting the same after the departmental inquiries however accepted the expenditure towards the new/additional buildings to be Rs.22,53,92,344/- by discounting the figure furnished by the prosecution by 20% as according to it, the prosecution had not produced convincing evidence in support of the value fixed by the Public Works Department engineers in respect of price of the special items and as there was some dispute regarding the payments of the architects’ fees. In arriving at this conclusion, the Trial Court did take note of every objection of the defence to the evaluation of the Page 418 new/additional buildings and rejected the same. In particular, the defence plea that the valuation on plinth rate area ought not to have been adopted, was also dismissed. It took note of the evidence of DW-78 that building valuation could be done on the basis of plinth area of the building or the detailed method. It was of the firm view that the engineers involved in the process of the evaluation of the new/additional buildings were competent for the assignment entrusted and that the defence had not disputed the measurement of the buildings and the nature of the constructions as well as the quality of the materials used. It however observed that the prosecution could not produce any direct evidence in proof of the cost of the special items used and had relied on the oral testimony of its witnesses who had stated that they had ascertained the price of marbles and other special items from the market.

422. The defence has tried to demonstrate that the rejection by the Trial Court of the invoices Ex.D210 series pertaining to marbles as proved by DW96 construing the same to be the year 1999 was patently erroneous as the said document disclosed that those related to the period between 1994 and

1996. Be that as it may, the Trial Court however while Page 419 rejecting the objections of the defence on the valuation of the new/additional buildings, effected a reduction of 20% of the total estimate furnished by the prosecution witnesses for want of persuasive evidence in support of the recorded value fixed by the PWD Engineers in respect of the special items and the dispute regarding payments of architects fees and quantified the amount of expenditure to be Rs.22,53,92,344/-.

423. Noticeably, the exercise undertaken by the inspection team was a massive one chancing minor shortcomings and from the Trial Court’s comprehensive narrative of the evidence on record, in our view, its estimate on the basis thereof cannot be said to be perverse. As it is, having regard to the nature and size of the survey, insistence on proof beyond reasonable doubt with mathematical exactitude would be both unwarranted, inexpedient and un-pragmatic.

424. In our comprehension, the appreciation made by the Trial Court of the evidence on record and the final determination of the extent of expenditure incurred cannot be discarded as absurd or implausible.

425. The High Court on the other hand noted the reservations expressed by the defence to the valuation made by the Page 420 prosecution. It noted the denouncement that the valuation made was highly inflated and that the cost of marbles and granites have been assessed on a very exorbitant measure. The remonstrance that neither any sample of marble or granite had been taken nor tenders had been called for to ascertain the rates thereof was recorded. The objection that forests officers have not been examined to price the cost of the wood and that nobody had certified that the teakwood had been used, was accounted for. The High Court did take cognizance of the reference to the inquiries made by the Income Tax Department to ascertain the prevailing rates of marble and marble slabs during the relevant period. Defence evidence to that effect was also marked.

426. The High Court in the ultimate analysis adopted the “per square foot method” in evaluating the value of the new/additional buildings. According to it, the Public Works Department rates were supposedly higher, taking into consideration the delayed payment and other miscellaneous expenses. The High Court accepted the cost of construction of the new/additional buildings to be Rs.28,000/- per square basing on the rate of construction of the Sentry Shed-III. Page 421 Referring to the estimate for construction of such sentry shed, the High Court deduced that, it was valued for one square at Rs.31,580/- and therefrom as a measure of cost of construction for new/additional building, it applied Rs.28,000/- per square for the said purpose. It accounted for the other investments towards super structures, windows, doors, internal painting, electrification, flooring, water supply etc. The total constructed area, according to the High Court, was 1,66,839.68 sq.ft. i.e. 1668.39 squares. It accepted an area of 25662.22 sq.ft. i.e. 256.62 squares as area on which granites had been used. It added an amount of Rs.9,65,060/towards expenditure for sanction of plan and architect fees.

427. Qua the prosecution evidence, the High Court observed that though reports had been prepared by the inspection team for the new/additional buildings involved, all the members of inspection team did not subscribe their signatures thereto. Further in course of the testimony, they did not speak anything about the measurement of the floor area where marbles and granites had been used. It held the view that the valuation reports by themselves did not prove the estimate of granites and marble stones and that the appreciation thereof Page 422 was more or less on guess work. By adopting the valuation on square feet method and by applying the rate of Rs.28,000/per square, the High Court computed the value of new/additional building with all its accessories and furnishings to be Rs.5,10,54,060/-.

428. Prima facie thus the plea of the prosecution that in assessing the expenditure of new/additional buildings, the High Court had not only taken a reduced constructed area of 1668.39 sqs. instead of 2174.69 sqs. (for the 17 items considered by it), thereby introducing a shortfall of 506.[3] sqs., it also applied the rate of Rs.28,000/- per square based on the construction cost of a sentry shed, as the base value to work out the amount of investments made towards the new/additional buildings/constructions is borne out by the records.

429. The approach of the High Court on both counts in the face of the evidence on record does not commend for acceptance. By no means, in our estimate, the High Court could have applied the base value of Rs.28,000/- per square for quantifying the expenditure incurred towards the new/additional buildings/ constructions involved. The Page 423 adoption of Rs.28,000/- per square as the base value, which is the cost of construction of a sentry shed, per se is erroneous, having regard to the fact that a sentry shed and the new/additional constructions/buildings are incomparable on many counts. Even if it is assumed, as has been pleaded by the defence that the base value so applied was only for appreciating the expenditure towards the skeletal framework of the constructions, the method adopted by the High Court in the final computation of the investments by making lump sum additions towards cost of marbles, granites/interior decorations, staircase, overhead tank and other furnishings, having regard to the description of the constructions/buildings does not appear to be either realistic or rational and does not merit affirmation.

430. In any case however even assuming that the arithmetic undertaken by the High Court is correct, it having accepted the value of assets to be Rs.66,44,73,573/-, the remainder would still value at Rs.43,75,38,688/-. In other words, in calculating the disproportionate assets, the amount of Rs.43,75,38,688/- has to be applied even if there is a reduction in value of assets by Rs.22,69,34,885/ i.e. Page 424 (Rs.29,82,71,254.32 – Rs.5,10,54,060).

431. According to A[2] to A[4], the valuation of their assets at the beginning of the check period as per the prosecution was Rs.59,29,168/- and according to them Rs.63,64,790.60. At the end of the check period, the figure swelled, as per the prosecution to Rs.37,55,10,354.38, which in their computation became Rs.25,03,36,963.40/-. Thus, whereas the prosecution case is that the valuation of their assets acquired by A[2] to A[4] during the check period was Rs.36,95,81,186.38, it had been only Rs.24,39,72,172.80 as per the estimate of these respondents.

432. A[2] to A[4] have not disputed the prosecution's figure of Rs.59,29,168/- and in fact had added Rs.4,35,622/- being the cash balance available with A[2] at that point of time making the tally according to the respondents at Rs.63,64,790.60. While commenting on the prosecution's valuation of their assets at the end of the check period at Rs.37,55,10,354.38, A[2] to A[4] have asserted that the properties of six companies; Signora Business Enterprises (Private) Limited, Meadow Agro Farms (Private) Limited, Ram Raj Agro Mills (Private) Limited, Riverway Agro Products (Private) Limited, Lex Property Page 425 Development (P) Limited and Indo Doha Chemicals and Pharmaceutical Limited being separate legal entities and not arraigned as accused in the case ought to have been excluded from the corpus of assets, more particularly in absence of any evidence that their acquisitions had been made with the funds provided by the respondents.

433. In course of the arguments on their behalf, several disputed items of assets have been highlighted, accompanied by emphatic assertion that either the value attached thereto ought to be excluded wholly or to the extent reduced on the basis of the oral and documentary evidence relied upon by them.

434. A plain perusal of the compilation to this effect reveals that broadly these disputed items can be categorized as “land and building, shares, acquisition of Indo Doha Chemicals and Pharmaceutical Ltd., new/additional constructions, renovation, vehicles, fixed deposits, jewellery and machinery.

435. As has been hinted hereinabove, these assets had been classified under 12 components. The High Court, though had altered the valuations in five of these items, it did ultimately limit its consideration to item No. III (i.e. new/additional Page 426 construction of buildings) and reduced the cost thereof by Rs.22,69,34,885. As a corollary, for the purpose of the eventual quantification of the disproportionate assets, the High Court did not consider it essential to invoke its findings vis-a-vis the remaining four items on which it had differed from the Trial Court. As would be evident from the chart adduced by the defence, out of Part-B containing the disputed items in Annexure-II appended to the charge-sheet, ten items thereof i.e. item numbers 6,7,8,9,12,13,14,15,16,17 are claimed to have been acquired prior to the check period. Vis-a-vis the other disputed items, to reiterate, referring to the oral and documentary evidence, it has been urged that either the full value as cited by the prosecution or to the extent, highlighted by them, ought to have been excluded. Qua the items pertaining to “new/additional constructions”, the eventual plea is that the Trial Court though had concluded that the prosecution had failed to prove the cost of construction, as cited by it, it erroneously accepted the valuation by granting 20% reduction in the overall cost. According to A[2] to A[4], in view of the failure of the prosecution to prove the cost of construction, the entire valuation made by Page 427 it to this effect ought to have been discarded and the evidence adduced by it should have been rejected in its entirety.

436. In course of the elaboration of this salient feature of the disputation, it has been underlined that there has been non-application of mind by the Trial Court to the evidence on record in arriving at its findings. Apart from referring to the oral and documentary evidence adduced by both the parties, reliance has also been placed amongst others on the income tax returns and the orders passed in connection therewith. The valuation reports of the buildings submitted by the inspection team, comprised of civil engineers of the Public Works Department and others, have been seriously repudiated on the ground of being laconical, incredible, inchoate and deficient in material particulars. The respondents have been particularly critical about the valuation of electrical installations and other items as in their perception, those were wholly unfounded in absence of standard rates and corroborative proof based on market survey. Even the expertise and competence of the members of the inspection team offered by the prosecution as witnesses of valuation has been questioned. The respondents have sought Page 428 to buttress this plea by examining as defence witnesses, members of the same inspection team. It has been urged as well that the prosecution could not prove that all new/additional constructions had been built during the check period. It has been contended that the valuation of the special items i.e. marbles, granites, sanitary ware, decorative tiles, teakwood etc. in absence of any schedule of rates had been highly inflated without any contemporaneous documents or authenticated proof in support thereof. According to the respondents, the defence witnesses who were members of the inspection team did not support the conclusions recorded in the reports rendering those wholly unacceptable. On smaller items, like vehicles, fixed deposits, jewellery and machinery, the respondents have dismissed the valuations made by the prosecution either on the ground that those had been wrongly exaggerated or had been acquired before the check period.

437. Apropos the above impeachment, the prosecution has reiterated its valuation of the assets and has reconciled to the quantification made by the Trial Court. It has reiterated that the valuation of the constructions had been made by the qualified PWD engineers and that the findings are elaborately Page 429 contained in the valuation reports, based on exhaustive inspection of all necessary components of the buildings surveyed. It has stoutly refuted the defence plea that the Trial Court had rejected the evidence adduced and has maintained that the discount of 20% accorded by the Trial Court had been due to the several imponderables attendant on the massive exercise undertaken. It has insisted that in view of the superior quality of marbles and granite used in the buildings as well as the prevalent price of the various special items availed by way of ornate enhancements, the cost appreciation made by the Trial Court was justified. That the High Court had wrongly assessed the cost of new/additional buildings at Rs.5,10,54,060 compared to the admitted computation by the respondents at Rs.8,60,59,261 has been underscored as well.

438. Qua the other segments of the assets, the prosecution has underlined that the Trial Court had totally excluded the valuation of sarees and footwear and that had effected considerable reduction in the value of the jewellery and silverwares. In all, according to the prosecution, though it had cited higher value of the assets, it has accepted the Page 430 determination thereof as made by the Trial Court.

439. The prosecution has jettisoned the disclosures in the income tax returns and the orders/opinions expressed thereon by the departmental authorities as wholly inconsequential. It has been insisted that enquiries made by the income tax authorities even if conducted, those had been ex-parte in which the investigating agency had not been associated. In any view of the matter, according to the prosecution, the findings of the income tax or wealth tax authorities on the valuation of the assets, neither bind the prosecution nor is of any conclusive relevance for the case and is far less final for the criminal court trying the same. The cavil of the respondents that the civil engineers of the inspection team were incompetent to undertake the valuation work has been emphatically refuted by the prosecution. That the High Court in adopting the plinth area of the new/additional buildings had erroneously reduced the same by 50,630 sq. feet, has been reiterated. It has been asserted as well that the High Court had erred in taking into account only five special items by excluding the other expensive furnishings/attachments in computing the cost of construction. In specific terms, the Page 431 prosecution has been critical of the valuation of the Otis lift at Rs.15,000/- and the cost of construction of staircase, pump and overhead tanks at Rs.40,000/- to be much on the lower side. That the untenable attempt of the defence to represent that ordinary marble and granite had been issued against expensive versions thereof, has been highlighted as well.

440. As indicated hereinabove, the only item apart from the new or additional construction of buildings forming a major component of assets is immovable properties which the prosecution valued at Rs.19,77,18,164.70 whereas the Trial Court assessed the same Rs.20,07,80,246/-. According to the High Court, it computed the value to be Rs.6,24,09,120/-. Noticeably the respondents had indicated the value of this item as Rs.16,19,03,301/-. Significantly though in all, 146 sale deeds were involved qua the immovable properties figuring therein, the High Court limited its attention only to 97 such deeds and thus left out from its consideration, the remaining 49 sale deeds, while arriving at its quantification of this item of the asset to be Rs.6,24,09,120/-.

441. To reiterate however the High Court though did accept the valuation of the assets for the purpose of computation to Page 432 be Rs.66,44,73,573/- as valued by the prosecution, for the purpose of ascertaining the disproportionate assets, it took into account only the cost of new or additional construction of buildings as assessed by it at Rs. 5,10,54,060/- thus reducing the value thereof as made by the prosecution by a sum of Rs.22,69,34,885/-. The omission on the part of the High Court to exclude the other four items of assets, on which as well it had scaled down the value, in working out the extent of disproportionate assets however had not been questioned by the respondents before this Court. The judgment of the Trial Court does not demonstrate as well, the alleged total non-consideration of the evidence adduced on behalf of the respondents. On an overall appraisal of the materials on record, the reduction of the cost of new or additional construction of buildings to Rs.5,10,54,060/- as effected by the High Court has to be held as patently erroneous. Consequently the quantification of the disproportionate assets is also visibly wrong. Expenditure

442. Annexure IV to the charge-sheet enumerates 244 items Page 433 of expenditure cited by the prosecution. This sums up to Rs.11,56,56,833.41 out of which the major segment being Rs.6,45,04,222/- is towards the expenditure incurred in connection with the marriage of Tr. V.N. Sudhakaran, (A[3]) on 07.09.1995. Incidentally, the High Court did accept the expenditure assessed by the prosecution in respect of all items except item nos. 2 to 6 i.e. the marriage of A[3] and reduced the sum of Rs.6,45,04,222/- as fixed by the DVAC to Rs.28,68,000/-, thus occasioning a drop of Rs.6,16,36,222/-. The Trial Court however had also lessened the amount cited by the prosecution by Rs.7,50,000/- against item No. 235 and also the marriage item by Rs.3,45,04,222/-, thereby reducing the total expenditure incurred to Rs.8,49,06,833/-. The Trial Court had assessed Rs.3,00,00,000/- towards marriage expenses.

443. In this factual premise, it would thus be enough, for the present adjudication vis-à-vis this facet of the debate, to confine the appraisal of the evidence, oral and documentary pertaining only to the expenditure towards the marriage of A[3]. As the Trial Court’s appreciation of the materials on record would reveal, it analyzed the evidence under the following Page 434 heads: a) Expenditure incurred towards the erection of marriage pandals. b) Expenditure incurred towards the cost of food, mineral water and tamboolam. c) Cost of 34 Titan watches - Rs.1,34,565/d) Cost of stitching charges of wedding dress - Rs.1,26,000/e) Cost of 100 silver plates - Rs.4,00,000/f) Postal Expenses - Rs.2,24,000/-

444. In re the erection of marriage pandals, the Trial Court did assess the oral and documentary evidence adduced by the parties. It took note, amongst others, of the testimony of PW-181 Shri Thangarajan, who was the Assistant Engineer, PWD at the relevant point of time and to whom, according to the witness, the work of estimating the expenses incurred towards the pandals, both at the marriage and reception venues was entrusted. He referred to the measurements of these pandals including amongst others those for VIPs with iron-sheet roof in his report Ex. P-1019 mentioning the estimated cost towards the same and also with regard to the incidental decorative trappings and furnishings. He mentioned as well about the air conditioners used and the Page 435 chairs with the dining tables arranged at the two venues and assessed the expenditure towards all these at Rs.5,91,00,000/-. The Trial Court did take note of the cross-examination of this witness, branding him to be partisan and without any personal knowledge or information about the event or the expenses in connection therewith and alleged to have been set up by the prosecution with a view to inflate the expenditure by creating the document Ex P-1019. The said document in any case was denounced as not being contemporaneous, having been prepared after 2 ½ years of the marriage without any acceptable foundation therefor.

445. The Trial Court to start with did not endorse this criticism of the witness and instead proceeded to evaluate the merit of his testimony by co-relating the same with the version of the other witnesses. In doing so, the Trial Court traversed the evidence of PW-200 Shri, K.P. Muthuswami, Chief Engineer, PWD, Tamil Nadu, who, as stated by this witness, had been entrusted to complete the pandals' work by A[2] in a proper manner. This witness testified to have consulted a plan given to him by the architect involved whereafter he amongst others levelled the land and put up the Page 436 pandals as specified. This witness affirmed that several pandals had been erected amongst others for serving food to the VIPs, kitchen and cooking sheds together with marriage platform, bathroom, rooms for the bride and bridegroom. He further stated that the expenses towards this construction work were made on behalf of A[1]. This witness clarified that the pandal work at the reception venue was undertaken by Kumarason Nader which too he had to oversee on the instructions of the Assistant Secretary of the secretariat of A[1]. According to this witness, an amount of Rs.14 lakhs in four installments was also paid by the bride’s father Mr. Narayan Swamy. Incidentally PW-181 had also referred to the same architect and the contractors as named by PW-200 in his evidence.

446. The Trial Court after taking note of the cross-examination of this witness, accepted his version being satisfied that he had a first-hand information about the arrangements made at the marriage venue and concluded that the same corroborated the testimony of PW-181 sufficiently.

447. The Trial Court assessed the evidence of PW-183 Mr. Ramesh, Managing Director, Moulis Advertising Services (P) Page 437 Ltd., who deposed to have printed 65,000 cards for marriage invitation as instructed by Tr. Jawahar, Assistant Secretary to A[1]. This witness also claimed to have printed 5000 car passes for which on the basis of his bill submitted, he had received payment of Rs.11 lakhs through cheque issued by A[1]. Though this witness resiled from these statements in his cross-examination, when recalled and was confronted with this inconsistency, he affirmed his version in the examination-in-chief to be correct.

448. PW-184 Mr. Vincent claimed to have lent out ten cars on hire and had received Rs.27,502/- through cheque signed by A[1]. This witness too recoiled from this statement in his cross-examination but reverted thereto in his re-examination.

449. PW-185 Prem Kumar did state to have, on the requisition of the Tamil Nadu Guest House lent six cars for rent for four days against which he was paid Rs.19,211/through cheque 23.09.1995 issued by A[1].

450. The Trial Court next also took note of the evidence of PW-186 Chalapathy Rao who had supplied chairs, tables, cooking wares, vessels etc. for the event as ordered by A[3] and Sachitnanandam, PRO of A[1] and received payment of Rs Page 438 1,30,000/- by cheque as advance. He also received a further amount of Rs.57,250/- by cheque issued by A[1] and according to him, Rs.2,65,000/- was still outstanding. This witness too vacillated in his cross-examination only to affirm the correctness of the statement in his examination-in-chief after he was recalled for re-examination.

451. The endeavour on the part of the defence that the payment received by this witness by way of cheque of Rs.1,30,000/- was in fact towards supply made to the AIADMK Party was dismissed by the Trial Court in absence of any evidence to that effect.

452. The Trial Court also examined the evidence of PW-188, Sundareshan, who was the Senior Advertisement Manager of a local daily in which a thanks giving message of A[1] had been published in its issue dated 10.09.1995. According to this witness, such an advertisement was published in all other editions of the daily on 11.09.1995 as well and that he had raised a bill of Rs. 2,47,660/- therefor.

453. The evidence of PW-199 A.G. Krishnamurti of A.G.K. Travels, Chennai is that he had arranged two Ambassador AC cars from 06.09.1995 to 08.09.1995 on rent, raised bills in Page 439 the name of A[1] and received payment of Rs.15,814/- through cheque issued by her.

454. PW228 Shri Rajasekharan, Chartered Accountant claimed to have filed Income Tax and Property Tax returns of A[1] for year 1984-85 to 1996-97 and stated about seizures amongst others of a file Ex. P-2218 containing the expenditure bills, receipts etc. in connection with the marriage. This witness was not cross-examined at the first instance on behalf of the respondents and thereafter he failed to appear in spite of issuance of summons. Though the defence raised a plea that in absence of cross-examination of this witness, his untested testimony ought to be eschewed, the Trial Court noted that neither the respondents-accused had cross-examined this witness when the opportunity was available nor had thereafter, when as many as 145 witnesses have been recalled for cross-examination, did they seek the assistance of the court to secure his presence, if necessary by applying coercive legal process. Even otherwise, according to the Trial Court the testimony of this witness pertained mainly to the seizure of the documents from his office which included amongst others, the file containing vouchers, receipts etc. Page 440 relating to the expenditure incurred in the marriage of A[3]. This is more so as some of these documents had also been relied upon by the respondents-accused.

455. Vis-a-vis the expenditure incurred towards cost of food, mineral water and thamboolam, the Trial Court did assess the evidence of PW-237, Jawahar, who at the relevant time, was working as Assistant Secretary to A[1] and his office functioned amongst others from her house at No.36, Poes Garden. This witness stated about musical concerts presented by Mr. Srinivas and Mr. A.R. Rahman whom he had met for such arrangement on the direction of A[1]. He deposed about the printing of invitation cards for the VIPs. He also stated generally about the other features of the marriage including the supervision of the pandal works by Mr. K.P. Muthuswamy, a retired Engineer. This witness too had resiled from the above, in his cross-examination but reiterated, in his re-examination, his testimony in his examination-in-chief.

456. The defence plea that the afore-mentioned witnesses in view of their contradictory orientations ought to be discarded as a whole did not meet the approval of the Trial Court. It recorded that not only the evidence of such witnesses does not Page 441 deserve to be discredited as a whole and instead can be acted upon on the same analogy as of a hostile witness, the circumstances under which 76 prosecution witnesses were recalled by the respondents/accused after A[1] had assumed the office of the Chief Minister of the State and the way, 64 of them had casually resiled from their earlier version, could not be lightly brushed aside. The Trial Court observed that as most of these witnesses who were in service in the Government Departments, were likely to be influenced by the status of A[1], it being one of the considerations for which the trial of the case had been transferred out of Tamil Nadu to Karnataka, it concluded that the temporary retraction of these witnesses in cross-examination from their testimony in their examination-in-chief ipso facto did not warrant rejection of their version in toto.

457. The Trial Court noted the evidence of PW-192 Mr. Sanjay Jain, Proprietor of Titan Show Room, Chennai to the effect that he had delivered 34 watches amounting to Rs.1,34,565/for which he was paid the amount in cash.

458. PW-196 Mr. Sayad Bawker, claimed to have done the stitching work of suits, shirts, sherwanis etc. for the Page 442 bridegroom-A[3] for which he received Rs.1,41,025/- as the charges therefor. The witness conceded that the payment was made by Ram Kumar, the maternal uncle of the bride. The Trial Court however disbelieved the statement that the uncle of the bride had made the payment.

459. On the expenditure of 100 silver plates, the prosecution had examined PW-191, Mr. Srinivas and PW-214 Mr. A.R. Rehman who had conducted music concerts. Both of them stated to have made the performances on the request made on behalf of A[1] and that they had not charged therefor. They however admitted to have been offered silver plate, silk saree and a small kumkum box at the time of their invitation for the event. They deposed that on being requisitioned by the investigating agency, those items had been handed over to the concerned officers.

460. Acting on the evidence of these witnesses, the Trial Court concluded that on the occasion of the marriage, silver plates, silk saree/dhoti and kumkum box were presented to the VIPs.

461. Regarding postal expenses, the prosecution relied on the evidence of PW-189 Office Administrator, Head Office of Page 443 AIADMK who confirmed to have sent 56,000 invitations, expending therefor, Rs.2,24,000/-. He stated to have received the said amount from Mr. Jawahar, Assistant/Joint Secretary of A[1].

462. In response, the respondents had examined several witnesses with documents to butress and consolidate the oral testimony. DW[1] Ram Kumar, the maternal uncle of the bride in his deposition claimed to have met the entire expenses of the marriage and for that purpose, had opened an account in State Bank of India being Account No. 95071 in Gopal Puram Branch, State Bank of India and had remitted a sum of Rs.92 lakhs which was spent on the occasion. He also proved Ex. D15, the photocopy of the pass book of the said account and stated that the deposit had been arranged through the brides' family. In cross-examination, he disclosed that the account was opened on 14.8.1995 but did not disclose the details of the expenditure therefrom. He also did not produce the counter-foils of the cheques issued in that account. His statement in cross-examination also revealed that he had not produced a copy of the passbook earlier in course of the investigation. He however affirmed that the total expenditure Page 444 in the marriage did sum up to Rs.92 lakhs only.

463. Apart from this witness, the respondents examined a host of party workers who, at the relevant time, held various positions at the district level and elsewhere. These witnesses, as the tenor of their testimony demonstrates, in essence asserted that they had collected various sums of money from the party workers and others and had utilized the same for various purposes relating to the marriage like decorating the pandals erected by the bride party, crackers, music, food for the party workers, chairs in the pandals, reception on the visit of A[1] to areas in connection with the event etc. All these witnesses, however, did admit that there was no instruction from the party to raise such fund and incur the expenditure but insisted that they had given their statements before the income tax department in course of the enquiry made in this regard. The witnesses also did concede that accounts/receipts in connection with the collection and expenditures had not been retained/maintained.

464. In addition to the above, the respondents examined DW64 S. Shanmugam, Chartered Accountant who claimed to be the auditor of A[1] from 1996 to 2000 and had dealt with Page 445 her accounts/assessment for the assessment years 1991-92 to 1997-98. He referred to the query made by the income tax department in the year 1995 about the amounts spent by her in the marriage and also the reply given by A[1] in response thereto. He also deposed that on necessary enquries being made, the income tax authorities eventually did write off the expenditure of Rs.94 lakhs, which earlier, it had observed, had been spent by A[1] on the event. Reference was also made to the assessment made by the income tax authorities with regard to food expenses to the tune of Rs.[3] lakhs which also stood deleted in appeal.

465. DW24 T. Tharani, who was a painter and also Art Director of the films, was examined to affirm that in connection with the marriage, people from AIADMK party had approached him for designing the facade of the entrance of the marriage hall and that he had entrusted the work to one of his assistants Mr. Ramesh. He also added that he did not charge any remuneration for the work.

466. DW54 Gopi Kant, at the relevant time, was working as Cine Art Director and stated that on being requested by the bride's family, he met DW[1] Ram Kumar, maternal uncle of the Page 446 bride who introduced him to PW 200, Muthu Swamy. This witness stated that PW 200 asked him to prepare a pandal at the place of reception/public procession of the bride and the bridegroom and to erect two arches and sets at the designated locations. According to him, the cost of the work was Rs.12,98,000/- which was paid by cheque in the name of G.K. Arts by DW[1] Ram Kumar. That a further cheque of Rs.[4] lakhs was also issued by DW[1] towards some items of additional work, was also stated by this witness. The witness confirmed that he was the proprietor of G.K. Arts.

467. The respondents also examined DW80, B. Vasudevan who, at the relevant time, was working as Junior Engineer, PWD, Madras. The witness deposed that the investigating officer of the case on 17.4.1997 had orally instructed him to value the marriage pandal and other works. This witness identified his signature in the report Ex. P1019 but maintained that the drawings pertaining to the pandals and the stage had not been given by Vijay Shankar, Architect and that he did not know where the said panals had been put up. He stated that the measurements mentioned in the report were based on the instructions of the I.O. and that the said Page 447 report had been prepared in the office without carrying out any inspection. He also disputed the measurements mentioned in the report.

468. In cross-examination, however, this witness admitted that he along with PW 181 Thangrajan were the members of the valuation team and also conceded that the report contained the signatures of the Architect, Vijay Shankar.

469. DW-85, as offered by the respondents, was the Manager (Administration & Accounts) in Super Duper TV Private Limited, who conducted the TV coverage of the wedding for which, according to this witness, a sum of Rs.[2] lakhs was paid by DW[1]. In cross-examination, this witness admitted that at that time, the bridegroom- A3- Sudhakaran and A2- Sasikala were the directors of Super Duper T.V. Pvt. Limited and that A[3] was its Managing Director. DW-97 A. Vijay Kumar, Assistant Commissioner of Income Tax, Central Circle-II, Chennai produced documents containing 10 volumes and exhibited Ex. D325 to D364, referred to by the other witnesses for the defence. This witness however admitted that the assessment for the year 1993-94 pertaining to the concerned respondents was sub judice before Page 448 the High Court in appeal and that the assessment orders relating to them had not been finalised and were pending before various authorities.

470. It has been emphatically urged that the evidence of PW181 ought to have been summarily rejected being hearsay and besides speculative, arbitrary and based on no verifiable data and that this witness is wholly untrustworthy even otherwise. It was insisted on behalf of the respondents that the learned Trial Court had also rejected the evidence of PW181 to be hearsay in character and thus in absence of any other admissible evidence, its computation of the expenditure at Rs.[3] crores is also without any tangible basis and is wholly inferential. The testimony of PW181 being clearly hearsay in nature, in terms of Section 60 of the Evidence Act, the same could not have been accepted as substantive evidence and thus the Trial Court's approach of seeking corroboration thereto had also been flawed. According to the respondents, the version of PW200 supports the case of the accused in view of his admission that Rs.16 lakhs was paid by the bride’s father towards the expenses for the construction of the pandals. It has been urged that his evidence as well is Page 449 rejectable as hearsay in nature, as this witness did not personally know about the expenses, if any made by A[1] and that he had only been informed of the contribution of A[1] by some unnamed pandal contractors. In absence of any evidence to show that A[1] had incurred the expenditure, as claimed by the prosecution, towards the construction of the marriage pandal or towards the actual cost thereof, the entire amount of Rs.5.21 crores, as cited by the prosecution, ought to be deducted. Qua the expenses on the other heads including food, mineral water, presentations, stitching charges, etc., it has been argued that not only the Trial Court had wrongly accepted the evidence forthcoming from the prosecution that the expenditure on Titan watches and stitching charges had been incurred by the respondents, it grossly erred in holding that on a rough estimate, an amount of Rs.[3] crores had been spent by the respondents on the event. It has been canvassed that in doing so, the Trial Court left out of consideration amongst others, the evidence adduced by the defence through DW[1] Ram Kumar, the maternal uncle of the bride, the party workers and most importantly the income tax proceedings, which after thorough enquiries and Page 450 scrutiny at different levels did finally record that only an amount of Rs.29,66,552/-, as mentioned by A[1] in her reply dated 19.09.2005, had been spent and that too by cheques except for a sum of Rs.[3] lakhs. In all, having regard to the entire gamut of the evidence, it has been argued that considering the different segments of expenditures incurred by the bride’s family and the party workers, the same is Rs.1,85,17,000/-, to which Rs.29,66,552/- only could be added on account of A[1]. In this premise, the respondents have maintained that the High Court’s computation of the expenses of Rs.28,68,000/- only by A[1] by way of expenditure incurred by the respondents is unassailably correct being based on a logical analysis of the materials on record.

471. The High Court however readily discarded the testimony of PW181 and the report Ex.P1019 primarily on the ground that this witness had no personal knowledge or idea of the structures raised at the venue of the marriage and of the reception and that his version with regard thereto was on the basis of derived inputs though it mentioned that the witness, as attested by him, did consult the architect, the Art Director, the electrician etc. who accompanied him to the site and that Page 451 he had been given as well a drawing of the wedding choultry and the measurements of the pandal along with the sketch of the decorative arches etc. It held the view that the witness had prepared the report on the basis of what the witness had heard and seen from the drawings and the sketches and was not personally aware of the authenticity thereof and that he did not ask for quotations or confirm the sketches. That his report Ex.P1019 was deficient and scanty in essential particulars to inspire confidence for its acceptance was recorded. On this aspect, the High Court also referred to the evidence of PW200 K.P. Muthuswamy, who claimed to have been entrusted to oversee the works related to the pandals by A[2]. This witness, to reiterate had confirmed that he visited both the venues and that a plan for the pandals as well as stage arrangements, as prepared by architect Vijay Shankar had been handed over to him. He narrated in details about the specifications of the structures and the payments therefor. He also admitted to have received a sum of Rs.16 lakhs from the father of the bride in this regard. The High Court, however observed that this witness, amongst others, did neither tell the police about the expenses of leveling nor disclose the Page 452 particulars about the number of air conditioner machines used. The High Court further commented that he did not supervise the work of Art Director Gopi Nath and that this witness could not remember as to how much money was spent for the marriage. The High Court touched upon the evidence of other witnesses and in particular elaborated on the testimony of PW228 R. Rajshekheran from whom the file containing the original vouchers, bills, invoices in connection with the marriage i.e. Ex. P2218 had been seized. It also analyzed the queries made by the Income Tax Department and the reply given thereto by A[1] by her letter dated 19.09.1995 wherein, she provided the breakup of the expenditure incurred by her. The testimony of DW[1] Ram Kumar, the maternal uncle of the bride, more specifically to the effect that the entire expenses had been borne by the bride’s family to the tune of Rs.92 lakhs by remittances through the bank account opened on 14.08.1995 was taken note of. The evidence of the party workers claiming their contribution in the expenditure through collection was also recorded and eventually the High Court accepted the statement of A[1] furnished to the Income Tax Department disclosing the expenditure by her of Page 453 Rs.28,67,520/- towards marriage and rounded up the said figure to Rs.28,68,000/- to be her share of expenses.

472. In reaching this conclusion, apart from rejecting the testimony of PW181 being second hand in nature, the High Court seemingly accepted in substance the version of the defence witnesses observing that at the relevant time A[1] was the Chief Minister of the State and was incidentally then the General Secretary of AIADMK party as well. It recorded further that the bride was none else than the grand-daughter of famous cine actor Shivaji Ganeshan. It observed that the prosecution for no reason forthcoming, had omitted to examine the bride’s father who would have been the best person to state about the actual expenses on the marriage. The High Court as well seem to have accepted that it was the customary practice for the bride’s family to bear the expenses of the marriage normally and though it was of the view that such expenditure was comprised of verifiable and non-verifiable components, it was difficult to ascertain the non-verifiable segment while verifiable expenditure could be assessed through investigation. Et al, the High Court eventually accepted the figure of Rs.28,67,520/-, as cited by Page 454 the A[1] to be the amount expended by her in the marriage and limited the liability of the respondent- accused, as stated above, to Rs.28,68,000/-. Thereby the High Court reduced the expenditure of Rs.6,45,04,222/- towards marriage expenditure by the R1/A[1], as mentioned by the prosecution, to Rs.28,68,000/-.

473. A[2] to A[4] also have positioned themselves to question the expenditure of Rs.2,38,89,609/- attributed to them by the prosecution. This amount, as is apparent from annexure IV to the charge sheet, includes sums expended not only by A[2], A[3] and A[4] but also by nine companies/firms as named therein. In the compilation referred to in course of the arguments, the break up of the expenditures incurred by A[2], A[3], A[4] and the firms aforementioned have been provided. It is however the contention of A[2] to A[4] that an amount of Rs.1,63,06,897.16 is liable to be deducted on the grounds as enumerated in the compilation so much so that the total admitted expenditure by them and their firms as named by the prosecution was Rs.75,82,712.17. Qua the disputed items, it has been urged on behalf of these respondents that the Trial Court had overlooked the defence evidence and instead had received the Page 455 version of the prosecution witnesses though on the face of the records, the corresponding expenditures had not been proved. According to the respondents, apart from these infirmities, the Trial Court also ignored, amongst others, the aspect that on several items of expenditure by way of payment of interest, these respondents had been subjected to double jeopardy inasmuch as though these sums had been accounted for in computing their net profits, these amounts were shown separately again as expenditures. Not only sums not expended in fact had been deliberately shown to be so, the attempt on the part of the prosecution to make double and inflated additions in respect of purchase of machineries in some items has been overlooked. It has been argued as well that the Trial Court erroneously also relied on the evidence of prevaricating prosecution witnesses against the respondents.

474. Per contra, the prosecution has insisted that the challenge to the so called flaws in the assessment of the evidence by Trial Court on items other than the one pertaining to marriage expenditure is wholly misplaced and unmerited as the High Court had also endorsed the amounts corresponding thereto. This is more so in absence of any challenge to the Page 456 conclusions of the High court in this regard by the respondents. According to the prosecution, the High Court scaled down the marriage expenditure from Rs.6,45,04,222/-, as quantified by the prosecution to Rs.28,68,000/-, though the Trial Court had computed the same to be Rs.[3] crores. Arithmetically thus, the High Court endorsed the total expenditure to be Rs.5,40,20,611/- instead of Rs.11,56,56,833.41 quoted by the prosecution. It has been argued that the analysis of the evidence on record as a whole by the Trial Court and its computation of the marriage expenditure of Rs.[3] crores is correct and did not call for any interference. According to the prosecution, the Trial Court did not reject the evidence adduced by it, but on a rational appraisal thereof, had moderated the marriage expenditure to be Rs.[3] crores. It has been urged as well that the Trial Court had rightly disbelieved the evidence of the defence witnesses and more particularly the party workers who claimed to have collected funds to spend the same on the event. That A[2] had failed to account for the expenditures, referred to by A[1] in her reply to the notice to the Income Tax Department had been underlined too. Page 457

475. The break-up of expenditure of Rs.6,45,04,222/- on the marriage has been furnished by the prosecution as hereunder. a) Expenses towards the erection of marriage pendal over and above the admitted/recorded payments Rs.5,21,23,532/b) Expenditure incurred towards cost of food, mineral water and tamboolam Rs.1,14,96,125/c) Cost of 34 Titan Watches Rs.1,34,565/d) Amount paid to Tr. Syed Bawkar towards stitching of wedding dress for A-3 Rs.1,26,000/e) Amount paid for purchase of 100 silver plates (paid by N. Sasikala) Rs.4,00,000/f) Postal expenses for dispatch of 56000 wedding invitations Rs.2,24,000/- TOTAL Rs.6,45,04,222/-

476. In our comprehension, though PW181 had neither visited the venues on the dates of the event nor was then in-charge of the construction of pandals and other arrangements auxiliary thereto, his evidence is not liable to be excluded as a whole. On being entrusted with the Page 458 responsibility of making an estimate of the expenses incurred in the construction of the pandals and other arrangements, it is discernible from his testimony that he did consult the Architect Vijay Shankar, the Art Director Thotha Theerani and others, who were in fact actually involved in the said works at the relevant point of time. This witness visited the venues and stated on oath that the Architect Vijay Shankar had given him the drawing of the choultry and the measurements of the pandals on the basis of which those had been constructed. He also referred to the plans and sketches provided to him by the Art Director, based whereupon, the fixtures and ancillary structures were raised. In the report Ex.P1019 prepared by PW181, he did mention, inter alia, the areas of the various pandals together with the decorative attachments and after accounting for the cost thereof and the price of the furniture used and the amenities provided, estimated the expenditure to be Rs.5,91,00,000/- towards the pandals and other arrangements to secure the intended facilities for the couple, guests and other participants. True it is, that PW181 was not an eye-witness to the marriage arrangements and had not personally undertaken the works pertaining to the pandals Page 459 and other associated arrangements, yet as has been observed by the Trial Court, his findings as recorded in the report Ex. P1019 could be construed to be of an expert witness and further could be used as corroboration for the testimony of PW200 who indeed had supervised the same works himself and as claimed by the prosecution on the instructions/advise of A[2]. The evidence of PW181, that the Architect Vijayshankar and the Art Director Thotha Tharani had provided him with the plan and the sketch map on which the pandals and other structures at the venues had been constructed, cannot be discarded as hearsay. In this view of the matter, the approach of the Trial Court to weigh the probative worth of the testimony of PW181 in conjunction with PW200 cannot be repudiated to be impermissible in law or outrageously fallacious.

477. PW200 K.P. Muttuswamy, Chief Engineer, Public Works Department, Tamil Nadu did assert on oath that he was instructed by A[2] to complete the pandal works as early as possible. He also referred to a plan to that effect furnished by the Architect Vijay Shankar in presence of the contractors entrusted for the execution thereof. The witness claimed to Page 460 have arranged land at the identified sites to be levelled and also provided in details of the number, size and specification of the pandals together with the purposes thereof. The witness was candid to state that the father of the bride had paid Rs.14 lakhs towards the expenditure and that therefrom, he disbursed payments. He deposed as well that A[1] and A[2] had inspected the work by visiting the site about a week prior to the marriage. He claimed to have signed the applications for securing temporary electric connections for the pandals for which payments were made by cheques on behalf of A[1]. In this patent premise, the conclusion of the Trial Court that the evidence of PW200 was direct and of first hand in nature with regard to the arrangements at the pandals cannot be faulted with. Its finding that his testimony thus lent sufficient corroboration to that of PW181 also cannot be dismissed as preposterous.

478. The testimony of DW-80, who was also a signatory to the report Ex. P-1019, to the effect that the same had been prepared without any inspection and that the measurements mentioned therein were not real had not been rightly preferred to the otherwise consistent versions of PW181 and PW200. Page 461 The evaluation of the evidence of the other witnesses touching upon the remaining aspects of the expenditure incurred on the marriage, as conducted by the Trial Court, also does not merit rejection in toto. Noticeably, the Trial Court did not accept the expenditure quoted by the prosecution on the cost of Titan watches as the evidence to that effect was construed to be inadequate to lay the same in the account of the respondents. The rejection of the evidence of the party workers claiming collection of various amounts from its cadres and utilization thereof towards the purposes and arrangements mentioned by them also in absence of any persuasive corroborative evidence does not merit any repudiation. In the face of the evidence in particular of the elaborate arrangements at the venues and the expenses incurred on other items associated with the event, we are of the opinion that the Trial Court did not err in not accepting the figure of Rs.28,68,000/-, as the expenditure incurred by A[1] on the basis of her reply to the queries made by the Income Tax Department. Though it has been urged on behalf of the defence that this figure had been finally accepted after the necessary enquiries undertaken by the income tax authorities, the result of such enquiries even if made, being Page 462 not binding on the Trial Court, it was not obliged to accept the same by ignoring the evidence adduced before it. The treatment of the evidence by the High Court, on the other hand, in our assessment, had been summary and sketchy and it in a way promptly accepted the expenditure mentioned by A[1] in her reply to the notice of the income tax department without independently appraising the evidence adduced by the parties at the trial.

479. Though it is not unknown, that very often the bride's family shares or bears the expenditure of marriage, dependent on the practice prevalent, it is not an invariable phenomenon and permits of exception in varying fact situations and therefore no rigid assumption either way is tenable. In any case, necessary deductions would have to be drawn on the basis of the evidence adduced. As the investigation into the expenditure on the marriage had to be conducted more than two years after the event, it is logical that the exercise involved was expected to be informed with some assumptions, which if realistic and logical, would not as such vitiate the assessment as incurably infirm or non-est.

480. On an overall consideration of the evidence adduced by Page 463 the parties, we are inclined to hold that the computation of the expenditure incurred by A[1] in the marriage as made by the High Court is unacceptable in the teeth of the materials on record to the contrary. There being concurrent findings of the two forums on the rest of the items of expenditure, we construe it to be inessential to undertake a fresh exercise with regard thereto in the present proceedings.

CONSPIRACY AND ABETEMENT

481. The prosecution asserts that the respondents i.e. A[1] to A[4] had entered into a conspiracy and in furtherance thereof, A[1] who was a public servant, had come to possess assets to the tune of Rs.66.65 crores, disproportionate to her known sources of income, during the period 1991 to 1996 when she held the office of the Chief Minister of the State of Tamil Nadu. The prosecution has alleged as well that A[2] to A[4] had abetted her i.e. A[1] in the commission of offence. To reiterate, the check period is from 1.7.1991 to 30.4.1996. To buttress this imputation, the prosecution has relied on the fact that A[1], who was the Chief Minister of Tamil Nadu from 24.6.1991 to Page 464 13.5.1996 and A[2] who was her close friend and associate, were amongst others partners together in Jaya Publications and Sasi Enterprises from before the check period. A[2], who was the wife of Tr. M. Natarajan, a government servant with the Information and Public Relations Department, initially was a occasional visitor to the residence of A[1] till 1988 whereafter she was permanently assimilated in the household. The prosecution case as well is that A[3] who is proclaimed to be the foster son of A[1] is the biological son of A2's elder sister Tmt. Vanamani and T. Vivekanandan. He too had come to reside in the residence of A[1] during the year 1992 while pursuing studies at Chennai and remained there till 1997. It is in evidence that A[1] had solemnized his marriage on 7.9.1995, claiming him to be her foster son with noticeable pamp and grandeur. A[4], according to the prosecution, is the wife of the elder brother of A[2] and had been residing in the house of A[1] from the beginning of 1992.

482. The above noticeable integration of A[1] to A[4] and their joint residence has been highlighted by the prosecution as a formindable indicator to attest the imputation of conspiracy and abetment. Apart from maintaining that A[2], A[3] and A[4] at Page 465 the time of joining the household of A[1] were not possessed of properties significant enough in their names nor did have any independent source of income as such, it has insisted that the properties acquired during the check period in the names of the 34 firms and companies were with the unaccounted funds and resources of A[1]. It has been underlined that only few of the companies/firms which were formed with A[2], A[3] and A[4] and Lex Property Development (Pvt). Ltd. in different combinations were registered under the Companies Act. Noticeably, the properties of these companies/firms had been acquired during the check period and significantly about 50 bank accounts were opened with the Indian Bank, Abhirampuram and Canara Bank, Mylapore in the names of the respondents and their firms/companies during that time. The prosecution has also brought on record the fact that out of these firms/companies, six firms namely; Jay Farm House,

483. In refutation on behalf of A[1], it has been broadly urged that though conspiracy can be inferred from circumstances, the same has to be essentially proved and that the mere fact that A[2] to A[4] had been residing in the house of A[1], per se cannot be a decisive circumstance to prove conspiracy. It has been argued that from much prior to the check period, A[1] and A[2] had been partners in the firms namely; M/s Jaya Publication and Sasi Enterprises and their business connection ipso fact also cannot be construed to be an incriminating circumstance. It has been maintained that A[2] to A[4] have purchased properties with their own resources and efforts and that the prosecution has failed to establish even a single instance to demonstrate that the funds for such acquisitions had been doled out by A[1]. Contending that starting of a firm by a non-public servant by itself cannot be an irrefutable determinant to assume conspiracy with a public servant more particularly when A[1] had never been a partner in any of the firms started during the check period, it has been pleaded that the finding of the Trial Court that the evidence available did prove issuance of cheques by A[1] in Page 469 favour of the co-accused and the applications by her for availing loan for the firms involved is factually incorrect. It has been argued that the prosecution has failed to cite even one instance where A[1] had transferred any fund to A[3] and A[4] and for that matter to any of the six companies in particular which allegedly have acquired properties therewith. It has been underlined as well that A[1] had neither received any dividend from these companies nor been either a shareholder or a director thereof. In this context, the finding of the Trial Court that A[2] to A[4] had acquired defunct companies with a sinister motive has been dismissed as unfounded and patently erroneous. It has been maintained that a circumstance to admit any inference of an illegal act must be one incapable of any other reasonable explanation and the prosecution having failed to offer any, by furnishing either direct or indirect evidence, the charge of conspiracy has remained unproved.

484. Elaborating further the refutation of the imputation that the six companies namely; Meadow Agro Farms Pvt. Limited, Riverway Agro Products Limited, Lex Property Development (Pvt.) Limited, Signora Business Enterprises, Ramraj Agro Products Limited and Indo Doha Chemical and Page 470 Pharmaceutical Pvt. Limited had no resources of their own and that with the induction of A[2], A[3] and A[4] in particular, a tide of funds had flowed into their accounts generated from the coffers of A[1], it has been urged with reference to the testimony of DW86 Vaidyanathan and DW87 Srikant as well as the income tax returns for the period ending 31.3.1996 and 1996-97 as well as the balance sheets of the companies that so far as Meadow Agro Farm Pvt. Limited, and Riverway Agro Products Limited are concerned, at the relevant time, the respondents were not the shareholders thereof and their share capital was formed of the contribution of the shareholders of these entities. According to the respondents, all these companies had sufficient funds of their own where from acquisition of properties and expenditures were made. That huge amount of loans were also advanced by these companies, to name in particular, Meadow Agro Farms Pvt. Limited, Riverway Agro Products Limited and Lex Property Development (Pvt.) Limited have been highlighted. The loans, noticeable were more prominently to A[2], A[3] and the firms/companies formed by them in different combinations including Sasi Enterprises and Jaya Publications. The amount Page 471 of loans range from Rs.[2] lakhs to Rs.62,52,000/-. Vis-a-vis Lex Property Development (Pvt.) Limited, it has been contended that from its balance sheet for the assessment year 1996-97, it was patent that it had received share application money to the tune of Rs.46,00,000 and that it had borrowed a sum of Rs.84,07,172 from the Indian Bank. Further, it had a receipt of Rs.2,04,98,350 from sundry creditors. In addition to the above, it has been pleaded that the company also received an inter-corporate deposit (ICD) from Kalyani Constructions Pvt. Ltd. of an amount of Rs. 1,56,67,000 during the year ending 31.3.1996 and Rs. 45,00,000 from Altaf Constructions Private Ltd. That this company did make an investment of Rs.2,63,49,857/- in immovable property apart from granting loans to A[3] and three other firms including Sasi Enterprises, has been mentioned. According to the respondents, thus the total expenditure of this company including advances did sum up to Rs.3,03,48,357/- which was met from its own corpus, as had been accepted by the income tax authorities.

485. It has been insisted in particular that the properties acquired by Signora Business Enterprises Private Limited were prior to A[3] and A[4] becoming the additional directors of the Page 472 company and therefore the finding to the contrary as recorded by the Trial Court was apparently erroneous.

486. With regard to Ram Raj Agro Products Limited, it has been argued that the balance sheet of the company for the year 1994-95 disclosed that it had made investment of Rs.14,39,446/- in the purchase of land. Referring to the balance-sheet of this company for the assessment year 1995-96, it has been maintained that it had secured loans from banks to the tune of Rs.1,43,87,336 and unsecured loans of Rs.75,30,561. It has been urged as well that during the said period, this company had received a sum of Rs.[1] crore also from Mangutta Investment Pvt. Limited. That the company had received back from the government a refund of Rs.40,00,000 has also been urged to contend that it thus had funds to the tune of Rs.2,59,17,897 wherefrom it spent Rs.62,57,000 towards constructions at Thanjavour during 1994-95 and 1995-96.

487. Vis-a-vis, Indo Doha Chemicals and Pharmaceutical Pvt. Limited, it has been asserted that on 31.3.1995, it had paid up share capital of Rs.97,00,000/- as disclosed by its balance-sheet. Referring to the order passed by the Page 473 Commissioner of Income Tax (Appeals) in ITA NO. 144/1999-2000, it is submitted that 9,69,400 shares of face value of Rs.10 each had been purchased by A[2] at Rs.[6] per share and the remaining 600 shares had been purchased by six other persons. That the price of the 9,69,400 shares @ Rs.[6] per share amounting to Rs.58,16,400/- and registered in the name of A[2] had been paid by A[3] is however admitted. Contending thus that the prosecution version that Indo Doha Chemicals and Pharmaceutical Pvt. Limited during the check period had a total income of Rs.30,40,000 to be wrong, it has been urged that after the purchase of the shares, the whole factory was leased out to Southern Petrochemical Company Limited (SPIC), in return whereof the company received an amount of Rs.1,39,08,584/-. It has however been admitted that out of such receipt, Rs.25,00,000/- had been lent to Meadow Agro Farm (Private) Limited. Further, an amount of Rs.20,00,000/- had been paid to James Frederic and Rs.72,00,000/- to SIPCOT by way of repayment of loan availed earlier leaving a balance of Rs.57,08,584/- in deposit. This is to contradict the prosecution's claim that the income of Indo Doha Chemicals and Pharmaceutical Private Limited during Page 474 the check period was Rs.30,40,000/-. It has thus been urged that all the properties acquired and constructions raised by the six companies have been from their own funds and therefore, the amount of Rs.4,70,24,439/- towards the same is not liable to be integrated while adjudging the assets of A[1] to A[4].

488. In consolidation of the above, it has been urged on behalf of A[2] to A[4] that they along with the six companies whose assets, income and expenditure have been combined by the prosecution to lay the charge, being not public servants, cannot, in law, be called upon to explain their source of income or the manner of acquisition of their assets or the mode and extent of their expenditures.

489. Referring to Section 13(1)(e) of the 1988 Act, it has been asserted that the same does not cast any obligation on a non-public servant even if arraigned as a co-accused with the public servant, to furnish explanation as otherwise contemplated therein. It has been maintained that though the clear mandate of this legal provision is that for the charge to succeed, the prosecution must establish that the public servant, had been during the term of his/her office holding Page 475 his/her assets through some other person or to put it differently, some other person had been holding the assets on behalf of the public servant, the Trial Court had grossly erred in absence of any evidence to that effect, to proceed on the basis of surmises and conjectures to return a finding against A[2] to A[4] and the above referred six companies. The prosecution having utterly failed to adduce any evidence to demonstrate that A[2] to A[4] or these companies had received any money from A[1], her financial involvement in their affairs remained unproved, more particularly as she was neither a director nor a shareholder of these companies. Underlining the fact that no charge of benami transaction had been framed against the respondents, it has been insisted that even otherwise the prosecution has failed to discharge its burden to prove this fact. It has been argued that it having been established that A[2] to A[4] and the six companies at all relevant times, had their independent sources of income and individual business, the 1988 Act did not cast any burden on them to prove that they did not hold any assets on behalf of A[1]. Elaborating on this aspect, it has been contended that from much before the commencement of the check period, A[2] had Page 476 been carrying on business in her own right as the proprietor of Vinod Vision and she had been filing her income tax returns in connection therewith. Reference of the income tax returns and wealth tax returns of A[2] for the assessment years 1985-86 to 1992-93 have been referred to. All these returns as the dates thereof would indicate had been submitted much belatedly and noticeably on same dates i.e. 23.2.1993 and 25.2.1993 for income tax and wealth tax returns respectively. No explanation for such delayed submission of returns had been furnished.

490. Though A[2] had been a partner in Jaya Publications and Sasi Enterprises which did exist as well from before the check period, it has been pleaded that the Trial Court completely disregarded the evidence with regard to her income and assets of these firms as disclosed more particularly in the income tax returns and accepted by the income tax authorities, in holding that the transactions involved were really of A[1] catalysed by her finances. Similarly the income tax returns of A[3], A[4] and the six companies had also been left out of consideration by the Trial Court.

491. Reiterating that there is no evidence on record even to Page 477 indicate that A[1] had been the director or a shareholder of any of the six companies, it has been emphasized that these companies had been floated prior to the check period. Apart form contending that there is no evidence to suggest that A[1] had either given loan to the six companies or had made any investment therein, it has been urged as well that these companies not having been arraigned as accused, their income and assets could not have been attributed to any of the respondents, being impermissible in law. In a way, thus it has been argued that the assimilation of the assets of these companies with those of the respondents and the eventual confiscation thereof amounts to condemning these entities unheard. The prosecution as well has been severely criticized to be unfair in withholding the audit report prepared by Mr. Chokkalingam in respect of Jaya Publications and Namadhu MGR. That several other documents seized in course of the investigation were also endeavoured to be withheld and that it was on the intervention of this Court that the respondents could secure an opportunity to traverse the same, has also been mentioned. In reiteration of their plea made with regard to the deficiencies in the assessment of the valuation of the Page 478 construction made by the engineers deputed by the prosecution, it has been insisted that they could by no means be accepted as experts, the appraisals and the reports based thereon being wholly incomplete, faulty and conjectural in absence of any contemporaneous document in support thereof. The approach of the Trial Court in accepting the valuation furnished by the prosecution through such witnesses by allowing a discount of 20% has also been castigated as absurd and perverse. According to the respondents, the Trial Court readily accepted the evidence of the prosecution on many issues without analysing the same in the correct perspective which patently exhibits its non application of mind.

492. Aside impeaching the failure of the Trial Court in omitting to lay before the A[2], all the incriminating circumstances under Section 313 Cr.P.C., its acceptance of the charge of conspiracy and abetment on the consideration of the joint residence of A[1] to A[4], execution of general power of attorney by A[1] in favour of A[2], constitution of various firms and companies during the check period and inference of cash flow from one account to another has been branded as visibly Page 479 flawed. It has been argued on behalf of the respondents that the deed of power of attorney was executed by A 1 in favour of A[2] only for the purpose of bank transactions of Indian Bank and not for all purposes as assumed by the Trial Court. Further, as A[1] was neither a partner in any of the firms/companies constituted during the check period and as the six companies, the properties whereof had been confiscated, had been incorporated prior to the check period with third party promoters/directors, this factor also did not merit acceptance to reinforce the charge of conspiracy.

493. It has been assiduously pleaded that having regard to the fact that A[1] is a spinster and that she and A[2] were partners in M/s Jaya Publications and M/s Sasi Enterprises from before the check period and thus did share a close relationship, A2's accommodation with A[1] per se cannot suggest conspiracy as alleged. Similarly, A[3] being the nephew of A[2] and A[4], the widowed sister-in-law of A[2], their residence with A[1] also ipso facto was not an unmistakable circumstance to deduce conspiracy, in absence of any evidence direct or indirect or a single instance evidencing flow of cash or finance either from any source of A[1] or her account to that of the Page 480 other accused persons or the six companies. Such a factor was really non est but presumed and acted upon by the Trial Court to infer conspiracy and abetment. It has been emphatically contended that the Trial Court ignored as well the fact that M/s Jaya Publications and M/s Sasi Enterprises along with A[2] to A[4] and six companies had secured substantial amounts of loan from banks and other private sources which they rolled in their respective business to assume their inter dependence and sustenance through circulation of unaccounted reserves of A[1] in their accounts.

494. On the aspects of abetment and conspiracy, the High Court dwelt upon the evidence in general without undertaking any minute analysis of the testimony of the individual witnesses or the documents/ transactions related thereto. It in particular, while dealing with the charge of accumulation of unaccounted wealth by A[1] and diversion thereof to A[2] to A[4] to acquire immovable properties and administer the firms/companies involved, noted that the respondents along with the firms and companies had borrowed loans of Rs.24,17,31,274/- from banks. The High Court therefore concluded that this amount having been utilised for the Page 481 purchase of immovable properties and administration of the firms and companies involved, there was no foundation for the charge of abetment. Qua the imputation of conspiracy, the High Court ruled that the joint residence of A[2] to A[4] did not warrant an inference thereof and though as this offence contemplates an agreement between two or more persons to commit an unlawful act, a court to be satisfied with regard thereto ought to have at its disposal prima facie evidence. It observed that where evidence is only circumstantial, it must be complete, continuous and unimpeachable to be consistent with the guilt of the accused so much so to exclude any possible hypothesis of his innocence. The High Court concluded that the evidence disclosed that A[2] to A[4] had borrowed huge amounts from the banks and other sources and had therefrom acquired the immovable properties and the six companies. It thus ruled, that not only the source of income was lawful, the object was also legal. The charges of abetment and conspiracy against the respondents have thus been dismissed by the High Court on these considerations.

495. The Trial Court, while examining these charges, did address at the outset the imputation of the prosecution that Page 482 the pecuniary resources and the properties of A[2] to A[4] as well as the six afore-named companies were really held for and on behalf of A[1], thus attracting the offence under Section 13(1)(e) of the Act. The Trial Court recounted in this context, the plea of A[2] to A[4] that the cash deposits in their accounts and their assets had been acquired out of their own funds and that A[1] had no association therewith or contribution therefor in any manner whatsoever. This, is in the face of the accusation of the prosecution that the financial resources as well as the assets of A[2] to A[4] and the six companies were in fact those of A[1], as A[2] to A[4] and the said companies did not have, at all relevant times, any income, or wherewithal to acquire the same. The Trial Court was thus alive to the assertion of the prosecution that the pecuniary resources and the properties of A[2] to A[4] and of the six companies as endeavoured to have been acquired from their funds were held in benami for and on behalf of A[1]. It proceeded to analyse the evidence adduced by the prosecution on the touchstone of the accepted legal formulation that benami transactions admitted of direct or circumstantial evidence leading to such inference and embarked on the process of scrutinizing the facts and Page 483 circumstances attendant on the various transactions pertaining to acquisition of properties of the six companies of which A[2] to A[4], in different combinations, were the directors, as well as the cash flow inter se in their bank accounts.

496. As the narration outlined by the Trial Court would reveal, it dealt with in minutest details the oral and documentary evidence available on record. Without resorting to a dialectical appraisal of the evidence of the individual witnesses and the documents brought on record, it would be suffice in our comprehension to notice the salient features discernible therefrom and strikingly common to the transactions.

497. The evidence on record demonstrates that these companies though were in existence from before the commencement of the check period and of which A[3] and A[4] were not the directors then, did neither have any significant business activity nor transaction nor any profit earning pursuit to their credit. This the Trial Court rightly noticed was apparent from the relevant returns and balance sheets. The contemporaneous evidence also evinced that these companies were not possessed of sufficient resources to acquire Page 484 properties to the extent amassed during the check period. Neither did these companies have fixed assets nor did they avail or give loans to evince financial soundness or stability permitting acquisition of the assets and properties as made during the check period. In all, in these six companies, A[3] and A[4] were nominated as additional directors/directors in the year 1994 and soon thereafter their registered office stood shifted to Shop No. 21, First Floor, Wellington Plaza No. 19, Annasalai, Madras. The original directors resigned leaving the reins of the companies wholly with A[3] and A[4] in particular. Noticeably, soon after A[3] and A[4] were inducted as additional directors/directors, bank accounts were opened. Simultaneously A[2] to A[4] formed several partnership firms with the principal place of business thereof also at the above address. Co-incidentally the dates of registration of most of these firms were common in batches and the duration of their existence were mentioned to be at will. Significantly, A[3] and A[4] resigned from the above six companies markedly on the eve of the expiry of the check period.

498. The Trial Court, in details, took notice of the testimony of the witnesses examined as well as the documents on the Page 485 aspect of acquisition of properties by these six companies. The witnesses included erstwhile directors of these companies, bank officials who stated about the opening of their accounts as well as advancement of loans, the concerned sub-registrars, who registered the sale deeds of lands purchased by these companies, officials from the office of the Company Registrar and Mr. Shiva, Real Estate Agent, who acted as the agent/attorney of the vendors, whose lands were purchased by these companies. The materials examined by the Trial Court evidenced heavy deposits/withdrawals of cash and transfers thereof hitherto absent before A[3], A[4] had taken over the companies. The amounts varied very often in the range of Rs.10 lakhs and above. The pay-in-slips for the deposits amongst others showed address of 36 Poes Garden, Chennai. Transfers of heavy amounts to and from other accounts of A[2] to A[4] and their firms also surfaced. The income-tax returns/balance sheets belatedly filed also demonstrated exchanges of deposits inter se the accounts of A[2] to A[4] and their firms as well as these companies.

499. In respect of the acquisition of the immovable properties, the evidence attested that soon after A[3] and A[4] had become Page 486 directors of these companies, they got involved in the negotiations and survey of lands intended to be purchased. The sales were got executed through the attorneys of the owners of the lands for which deeds of power of attorney were obtained from such owners. Not only uneven bargains but also inadequate consideration/price by undervaluing the properties was noticeable in the transactions. Evidence on record disclosed that instructions were issued from the higher authorities to the Registrars/Sub-Registrars to respond to the directions issued from the office of A[1] for documentation and registration of the deeds involving such purchases and as a matter of fact, on various occasions, such precepts did come and were readily complied with. Several registrations were executed in the house of the vendors and at times, also in the concerned office of the Registrar/Sub-Registrar. The sale deeds executed, which are not disputed so far as those relate to these companies, did not indicate that the purchases had been made from their assets existing prior thereto. The evidence of the witnesses did suggest as well that the registration norms were flexed and that resultant irregularities in the process were ignored and cast aside to oblige the Page 487 respondents. Evidence of direct involvement of A[3] and A[4] in the purchase of shares and properties on behalf of Ramraj Agro Mills (Private) Limited and that of A[3] in the purchase of property for Meadow Agro Farms (Private) Limited is discernible from the evidence adduced. In some cases, A[2] was also present at the time of negotiations for such purchases. The active role of Mr. Shiva, the attorney of the owners, is apparent on the face of the records.

500. The Trial Court also noticed the evidence that the companies had been transferred to A[3] and A[4] at paltry sums. On a totality of the scrutiny of the evidence on record which significantly is adequately exhaustive, the Trial Court held that at the relevant time of acquisition of the properties, as above, all the six companies were exclusively in the control and management of A[2] to A[4]. The statement of the erstwhile directors/promoters of the companies that they did not purchase any property in their names either before or after the formation of such companies was also taken note of. The Trial Court noted as well that A[2] to A[4] had taken over the management of the companies even without buying the requisite shares and concluded that these entities in fact did Page 488 not have the trappings of a company. It was determined as well that none of these companies had any account in their names before A[3] and A[4] had taken over the charge thereof and that there was no evidence to demonstrate that the funds of these companies had been utilised to purchase properties in their names. It recorded as well, that the funds were transferred to the accounts of these companies either from the accounts held in the names of Namadhu MGR, M/s Jaya Publications or other firms of the respondents which unassailably proved that the resources for the acquisition of the properties of these companies had in fact been availed from A[1] or the accounts maintained in the joint accounts of A[1] and A[2]. That admittedly none of the companies had filed returns either before the Registrar of the Companies or before the income tax authorities declaring the funds for the purchase of properties or acquisitions made in the names of the companies was noted. The Trial Court also recorded the non-compliance of the various provisions namely, i.e. Sections 209, 210, 211, 215 and 220 of the Companies Act in particular to conclude that as required by these provisions, no proper books of accounts had been maintained, no returns Page 489 had been filed by these companies from the date of incorporation till the date of attachment of their properties pursuant to the notifications issued by the Government of Tamil Nadu under the provisions of Section 3 of the Criminal Law Amendment Ordinance 1944 as per GOMS No. 120 dated 29.1.1997 and GOMS No. 1183 dated 25.9.1997. That the balance sheet and profit and loss account of the companies were not maintained and processed as mandated by Sections 213 and 220 of the Companies Act was also underlined. It was of the view as well that there was nothing on record to show that A[2] to A[4] had convened any general meeting of the companies during the relevant time or that regular returns were filed before the Registrar as required under the law. It also noted that the companies did not have their own auditors appointed under Section 234 of the Companies Act and that the auditors of A[1] to A[4] themselves submitted the returns after the properties of the companies were attached. The Trial Court thus deduced that all the circumstances conjointly substantiated that the acquisition of these companies were never intended to be the assets thereof and were also not treated to be their properties at any point of time. According Page 490 to the Trial Court, it was only after the attachment of the properties that the respondents raised the contention that the ownership thereof did vest in the companies and thus could not be said to have been held benami for A[1]. The Trial Court also, with reference to the certified copies of the orders in Misc. Petition No. 768/2014 dated 18.6.2014 and Misc. Petition 289/2014 dated 26.6.2004 passed under Section 5(3) of the Criminal Law Amendment Ordinance recorded that after the resignation of A[3] and A[4], there was no appointment of directors and that seemingly for that reason, the order of attachment passed in 1997 was not assailed for nearly two years. It thus rejected on a comprehensive analysis of the evidence on record, the contention of the respondents that the properties acquired in the name of the companies did belong to these entities and could not have been assimilated in the assets of A[1].

501. Qua 'the respondents’ plea that the companies incorporated under the Companies Act cannot hold property benami for another person, it entered a finding that none of the documents of title registered in the names of the companies did bear the seal thereof. That in 90% of the Page 491 registered deeds, the companies were not represented by their secretary or director and that the address of the companies were not recorded in such deeds, was noted. The Trial Court concluded that the registrar who registered these properties and PW 181 who negotiated with the purchasers, distorted the rules to help A[1] and they went out of his way to oblige her. That in some of the deeds, the names of the purchasers were not included and that the properties were undervalued was reiterated. The admission of the District Registrar that he proceeded with the registration solely because the properties were purchased by A[1] was taken cognizance of. It was thus of the view that the intention of the respondents in taking over the companies was for acquiring large number of properties in their names for diverting the funds unlawfully amassed by A[1] during her tenure as Chief Minister of the State. It thus concluded that the properties registered in the names of these companies and which formed the subject matter of GOMs No. 1183 dated 25.9.1997 and GOMs No. 120 dated 12.1.1997 issued by the State of Tamil Nadu were really the properties acquired and held by A[2] to A[4] for and on behalf of A[1]. Page 492

502. The evidence on record thus propel several conspicuous and singular features as noted comprehensively by the Trial Court. Apart from the fact that the properties aforementioned had been acquired during the check period, the general phenomenon decipherable is that the acquisitions had been made in the names of the newly formed or acquired firms/companies with their directorial composition, as noticed hereinabove and the two existing firms i.e. M.s. Jaya Publications and Sasi Enterprises of which A[1] and A[2] were partners.

503. Evidently about 50 banks accounts were opened with the Indian Bank, Abhaypuram and Carana Bank, Mylapore in the names of accused persons and the firms/companies as has been stated by PW182 and PW201, details of which are as under: Sl.No. A/C No. Name of the Bank Account Holder Date of Opening of A/c 1 C.A.No.792 Indian Bank Jaya Publications 18.09.1991 Page 493 2 C.A.No.1152 Indian Bank Super Duper T.V. Pvt. Ltd. 21.01.1995 3 C.A.No.1104 Indian Bank Super Duper T.V. Pvt. Ltd. 27.08.1994 4 C.A.No.1179 Indian Bank Jaya Finance Pvt.Ltd. 05.05.1995 5 C.A.No.1171 Indian Bank Accused No.4 28.03.1995 6 C.A.No.1068 Indian Bank Accused No.3 30.03.1994 7 C.A.No.1071 Indian Bank Fresh Mushrooms 11.03.1994 8 C.A.No.1059 Indian Bank J.J. Leasing and Maintenance 27.01.1994 9 C.A.No.4110 Indian Bank Minor Vivek through guardian mother A.[4] 12.09.1994 10 C.A.No.1050 Indian Bank J. Real Estate 27.01.1994 11 C.A.No.1062 Indian Bank J.S. Housing Development 27.01.1994 12 C.A.No.1058 Indian Bank Green Farm House 27.01.1994 13 C.A.No.1054 Indian Bank J. Farm House 27.01.1994 14 C.A.No.1053 Indian Bank Anjaneya Printers 23.01.1994 15 C.A.No.1049 Indian Bank Jaya Contractors and Builders 27.01.1994 16 C.A.No.1044 Indian Bank Sasi Enterprises 14.12.1993 17 C.A.No.1113 Indian Bank Meadow Agro Farms Pvt. Ltd. 13.03.1994 18 C.A.No.1095 Indian Bank River Way Agro Products Pvt. Ltd. 06.08.1994 19 C.A.No.1134 Indian Bank Signora Business Enterprises Pvt. Ltd. 23.11.1994 20 C.A.No.1107 Indian Bank Lex Property Developments Pvt. Ltd. 31.08.1994 21 C.A.No.1143 Indian Bank Ramraj Agro Mills 23.12.1994 Page 494 22 S.B.No.3832 Canara Bank Mylapore Branch Ms. Jayalalitha Accused No.1 16.04.1991 23 C.A.No.2018 Canara Bank Mylapore Branch Ms. Jayalalitha Accused No.1 12.10.1990 24 S.B.No.2321 Canara Bank Mylapore Branch Accused No.2 23.09.1990 25 S.B.No.5158 Bank of Madhura, Anna Nagar Branch, Chennai Accused No.1 (Ms. Jayalalitha) 28.02.1990 26 C.A.A/c Canara Bank, Annanagar Branch Mahasubbu Lakshmi Kalyan Mantap (Accused No.3, A[4] and Shrilatha Devi) 27.08.1993 27 C.A.No.1173 Indian Bank, Abhirampur am Branch, Chennai Smt. V. Gunabooshani 05.05.1995 28 C.A.No.1179 -do- Jaya Finance Pvt. Ltd. 29 C.A.No.1171 -do- Accused No.4 (Elavarasi) 28.03.1995 30 C.A.No.1068 -do- Accused No.3 30.03.1994 31 C.A.No.1071 -do- Fresh Mushrooms (A.2) 11.03.1994 32 C.A.No.1059 -do- J.J. Leasing and Maintenance 27.01.1994 33 S.B.No.4110 -do- J. Vivek 12.09.1994 Page 495 34 C.A.No.1050 -do- J. Real Estate 27.01.1994 35 C.A.No.1062 -do- J.S. Housing Developments 27.01.1994 36 C.A.No.1058 -do- Green Farm House 37 C.A.No.1054 -do- J. Farm House 38 C.A.No.1053 -do- Anjaneya Printers Pvt. Ltd. 23.01.1994 39 C.A.No.1049 -do- Jaya Contractors and Builders 27.01.1994 40 C.A.No.1044 -do- Sasi Enterprises 15.12.1993 41 O.C.C. No.1143 -do- Ramraj Agro Mills Ltd. 23.12.1994 42 C.A.No.1146 -do- Gopla Promoters (A.2,[3] and 4) 23.03.1995 43 C.A.No.1140 -do- Lakshmi Constructions (A.2,[3] and 4) 23.03.1995 44 C.A.No.1137 -do- Vigneswara Printers (A.2,[3] and 4) 23.03.1995 45 C.A.No.1164 -do- Navshakti Contractors and Builders 23.03.1995 46 C.A.No.1161 -do- M/s. Sea Enclave Enterprises (A.2,[3] and 4) 23.03.1995 47 C.A.No.1158 -do- Ayyappa Property Development (A.2,[3] and 4) 02.03.1995 48 C.A.No.1155 -do- Namo Sivaya Housing Development (A.2,[3] and 4) 23.03.1995 49 C.A.No.1149 -do- Sakthi Constructions (A.2,[3] and 4) 23.03.1995 50 C.A.No.1167 -do- Oceanic 23.03.1995 Page 496 Constructions (A.2,[3] and 4) 51 CA No. 1170 -do- Golden Green Apartments (A[2],[3] and 4) 23.3.1995 52 C.A.No.9006 -do- Bharani Beach Resorts 06.02.1995 The accused persons also availed the services of common auditors/accountants.

504. As conspiracy cannot be proved by direct evidence and has to be essentially inferred from proven circumstances, the ultimate conclusion with regard thereto has to be deduced from the attendant state of affairs cumulatively taken. It is a trite proposition that in the case of conspiracy, each member thereof becomes the agent of the other and in law is bound by their actions inter se. So far as A[1] and A[2] are concerned, one is the agent for other as partners of the two firms and additionally A[2] is the attorney of A[1] and is a co-conspirator, as imputed. As testified by PW198, a blanket instruction had been issued by A[1] that the directions as made by A[2] from time to time ought to be followed and consequently the latter was to decide in which account the huge cash deposits were to be made. The numerous inter accounts transfers would only Page 497 corroborate massive unaccounted cash deposits being made, the origin whereof had been number 36, Poes Garden, Chennai. For all intents and purposes, these accounts were construed to be one.

505. The evidence of PW47, PW 71 and PW 159 taken together attest that officials were used to locate and purchase lands at various places. In terms of the testimony of PW159, in most of the sales, it was A[2] who had directed as to the names of the firms/individuals to be mentioned in the sale deeds and in whose names the sales were to be registered. The amounts had been paid from amongst various accounts of the accused/firms/companies. In many cases, the sale transactions had taken place below the guideline value as has been deposed by PW159 and PW 221.

506. The testimony of PW 15, PW 40, PW43, PW 56, PW 76, PW 89, PW 160, PW 77 and PW237 is amongst others to the effect that the vendors were kept unaware of the purchasers’ identity and in some cases were also put under duress to agree to the transactions. Their statements also divulge that not only was A[1] aware of these transactions but on several occasions, the registrations thereof were performed at her Page 498 residence.

507. Dealing with the plea that the companies incorporated under the Companies Act cannot hold properties in benami for another, the Trial Court recorded that a company is a legal entity with perpetual succession and a common seal and has to essentially act through its agents and all contracts entered into by them must be under the seal thereof. It observed that in the case in hand there was hardly any document of title registered in the name of above companies bearing their seal. It concluded on this premise that the properties purchased in the names of the companies thus never acquired the status of the assets thereof. It noticed, as well, to reiterate, that in 90% of the registered deeds, the companies were not represented either by the Secretary or the Director and the documents also did not contain the address of the companies which was a clear indication of the shady and murky deals undertaken in their names with a view to screen the properties acquired through illegal means. The fact that evidence had disclosed that on many occasions, the concerned Registrar/District was adverted to in this context. Referring to the decision of Page 499 Aron Salomon (Pauper) Vs. A. Salomon and Company Limited (supra), in which a company, as a legal entity, is held to be distinct from its members, the court propounded that though as a corollary, its corporate veil normally is impervious, but when its corporate identity is applied to circumvent law, to defeat public policy, perpetuate fraud or illegality or is sought to be used as a cover or a facade to justify a wrong, defend crime, to lend a name to private dealing, law would cease to acknowledge it to be a corporate entity and afford such protection otherwise entitled to under the Companies Law. It concluded that when camouflaged transactions are carried on behind the legal front, the court may lift the veil and look behind the artificial personality of the company and identify the real personalities or natural persons operating behind the screen. According to the Trial Court, the proved facts and circumstance of the case, did establish that respondents had adopted an ingenious ploy or device in furtherance of their criminal conspiracy to shield the properties acquired through perpetration of a series of offences and had illegally amassed wealth totaling 300 acres of land, in the name of the above shell companies which they had Page 500 strategically taken over to present as a smoke screen to mask such large scale transactions. The Trial Court thus concluded that the acquisition of properties in such a colossal measure along with the attendant manoeuvres, did manifest the criminal motive and intention of the accused persons attracting the ingredients of the offence under Section 13(1)(e) of the Act read with Section 120B IPC. It thus held that the properties registered in the names of these six companies and which were the subject matter of GOMS No. 1183 dated 25.9.1997 and GOMS No. 120 dated 12.1.1997 were in reality acquired and held by A[2] to A[4] for and on behalf of A[1]. In reaching this conclusion, the Trial Court also did allude to the above-referred decision of this Court that property held in the name of an income tax assessee per se did not signify that it actually belonged to the assessee and that there was no embargo in getting the same registered in the name of one person though the real beneficiary was another.

508. In re the charge of abetment and conspiracy in general, the Trial Court, while dealing with the defence plea that a non public servant could not be prosecuted for the offence under Section 109 IPC in a trial constituted under the Act, relied on Page 501 the decision of this Court in P. Nallammal (supra) to the effect that the acquisition and possession of any property by a public servant is capable of being abetted and that there is neither an express nor implied exclusion of the 1988 Act to deal with such a situation. The Trial Court noted that under Section 3 of the 1988 Act, the Special Judge had the power to try not only an offence punishable under the said statute but also one for conspiracy to commit or attempt to commit or abetment of any offence thereunder. The Trial Court thus held that private individuals could be prosecuted by the Special Court under the Act on the ground that they had conspired with and abetted the act of criminal misconduct committed by a public servant within the meaning of Section 13(1)(e) of the 1988 Act.

509. Turning to the charge of criminal conspiracy, the Trial Court, noticing the ingredients of the offence as enumerated in Section 120A IPC, recorded that agreement is the gist of the offence and that mere passive cognizance of a conspiracy is not sufficient. While acknowledging that to constitute an offence of criminal conspiracy, there ought to be active cooperation in furtherance of a joint evil intent, it underlined Page 502 the rule of evidence relating to such offence that anything said or done by anyone of the conspirators, with regard thereto, is under certain circumstances evidence against the other, the logic being that within the realm of conspiracy, the position of the conspirators is analogous to that of partners, one being considered as the agent of the other. Negating the assertion made on behalf of the respondents that the prosecution had failed to produce any material to demonstrate that A[2], A[3] and A[4] had engaged in any criminal conspiracy with A[1] in order to acquire properties on her behalf by utilising her un-accounted finances, as they had business activities and income independent therefrom totally unconnected with her, the Trial Court recounted the entire gamut of the prosecution evidence to the effect that at the relevant time, A[2], A[3] and A[4] did not possess any source of income proportionate to the value of the assets purchased and held in their names and in the name of the six companies in particular. It traced the testimony, amongst others of PW128 Balakrishnan, PW169 R. Krishnamoorthy, PW170 R. Jayaraman and the corresponding documentary evidence to hold that A[2], A[3] and A[4] indeed had neither the source of Page 503 income, means or the wherewithal to be capable of making the huge acquisitions in their names or for their firms/companies during the check period. Referring, in particular, to the properties acquired by A[3] either in his name or in the name of firms/companies involved, compared to his income and the expenditure made, the Trial Court reverted to the evidence of PW 201, the officer of the Canara Bank, Mylapore who, inter alia, had disclosed that in the application filed by this respondent for opening of his saving bank account No. 24621, he had given his address as No. 36, Poes Garden, Chennai-86. This witness testified by adverting to the ledger for this account which on 30.4.1996, showed a balance of Rs.61,430/-. Prior thereto, on 17.7.1992, A[3] had remitted cash through signed pay-in-slip for an amount of Rs.[5] lakh to this account. He clarified further that in this saving bank account, many receipts were made through clearance. He referred to a withdrawal of Rs.[5] lakh by this respondent on 7.12.1992 from this account, who deposited the sum in a fixed deposit account No. 1401/1992 which on maturity was credited to his current account No. 2220. This witness disclosed further that the application submitted by A[3] to open Page 504 this current account carried an introduction by A[2] and the address here as well was mentioned as 36, Poes Garden, Chennai. Though this account was opened on 7.4.1993 by remitting an amount of Rs.501 by A[3], on 24.9.1994, a sum of Rs.4,10,000 was received in deposit in the account by way of cash. The Trial Court made an itemised reference to various deposits made in this account of heavy sums varying from Rs.26000 to Rs.11 lakhs from other accounts standing inter alia in the name of A[2] and several other firms of which A[1], A[2] and A[3] in particular were partners. That huge amounts were credited through clearance and were similarly withdrawn were referred to by this witness.

510. The Trial Court, thus deduced that the acquisitions of the properties made by A[3] were out of the funds diverted from the accounts either of A[1] or A[2] and A[3] and A[4] did not invest any fund with regard thereto.

511. While dwelling on the charge of conspiracy and abetment, the Trial Court took cognizance of the formation of large number of firms in the names of A[2] to A[4] during the relevant period to be a circumstance establishing the said imputation. That A[1] and A[2] had commenced partnership Page 505 business by constituting two partnership firms by the name Jaya Publications and Sasi Enterprises and though Jaya Publications was registered under the Sales Tax Act, 1988 on 29.9.1988, it did not file returns up to 1998 as per the Sales Tax Act, was noted. The disclosure of PW[3] Thangavelu, District Registrar, who at the relevant time was serving as Assistant Chief in the Registration Department, South District, Chennai and that he had registered eight firms out of which six namely; J.J. Leasing and Maintenance, J.S. Housing Development, Green Farm House, Jaya Farm Houses, J. Real Estate and Jay Contractors and Builders were registered on the same date i.e. 25.1.1994, taken note of. The Trial Court also took cognizance of the testimony of PW132, Prakashoon Epen Leelavati, District Registrar, Central Chennai District Registration Office, who claimed to have proved the certified copies of Form No. 1 relating to the registration of ten firms with A[2], A[3], A[4] and Lex Property Development Private Limited as partners, all registered incidentally on the same date i.e. 15.2.1995. Reference to the statement of PW 230 Balaji on oath that he had been appointed as the Auditor by A[2] to A[4] and that the firms referred to by him did not buy any property Page 506 or invest in any other business but received money as loans and further that ten of such firms had closed their bank accounts in 1995 was taken note of. According to the Trial Court, the overall evidence as considered by it disclosed that the business activities in the names of A[2], A[3] and A[4] started only during the check period and that they did not invest any funds on their own for that purpose and in fact utilised these as a front to enable A[1] and A[2] to transfer huge unaccounted money through the bank accounts thereof.

512. The Trial Court noted that at the commencement of the check period, there were hardly 10 to 12 bank accounts standing in the names of A[1] and A[2] but thereafter 50 accounts mushroomed during the check period as deposed by PWs 182, 201, 207,209 and 239. The particulars of the bank accounts, the names of the banks, the dates of opening thereof, and the corresponding exhibits along with the names of the account holders were marked in details.

513. Referring to the evidence of PW-201 in particular, the remittances inter se the accounts of A[1] to A[4] and their firms also were set out which would demonstrate that the exchanges during the check period were not only noticeably Page 507 frequent and numerous but also did sum up to figures fluctuating from Rs.12000/- to Rs.25,00,000/- as would be evident from the particulars of such transfers involving the accounts of A[1], A[2], A[3], A[4], Namadhu MGR, Fax Universal, Anjaneya Printers, Green Farm House and Meadow Agro Farm.

514. Oral evidence in the form of testimony of M. Jayaraman (PW-198), Mani, Ram Vijayan & Balakrishnan and the documents adduced by the prosecution through the witnesses prove that an amount of Rs.13,55,28,685.50 in all, had been deposited by cash through pay-in-slips in the current accounts of A[2] to A[4] and the firms by these witnesses and others. These deposits significantly had been made during the check period and apart from heavy amounts on every occasion, varying from above Rs.50,000/- to Rs.33,70,000/-, there is a noticeable frequency thereof in close proximity with each other. The pay-in-slips proved in support of such cash deposits and exhibited by the witnesses concerned even disclose deposits of various amounts in different accounts on the very same date. As many as 184 deposits between 17.9.1992 and 8.3.1996 have been made in current account Page 508 No. 1952 of Namadhu MGR. As many as 267 deposits have been made by Ram Vijayan himself only, totalling Rs.8,96,52,623.30 out of the total amount of Rs.13,55,28,685/- indicated hereinabove, apart from M. Jayaraman (PW-198), Mani, Ram Vijayan & Balakrishnan through whom deposits had been made. A[2] and A[3] as well have through pay-in-slips made such deposits of a sum of Rs.28,74,000/-. The noteworthy feature of these deposits is that the same had not been in the account of A[1]. Not only the cash deposits of such a huge amount is out of the ordinary, the mode thereof i.e. by pay-in-slips through a selected few and the frequency thereof render an overwhelming phenomenon, highly redolent and admitting of a logical and persuasive inference of laundering of gigantic unaccounted cash. The absence of deposits in the account of A[1] in the multitude of such operations admits of reasonable and unimpeachable conclusion that the wealth in circulation had its origin in her coffers. On a rational analysis of such mammoth inflow of cash in the accounts of A[2] to A[4] and the firms/companies involved during the check period, the conclusion of the Trial Court that these resources were at all Page 509 relevant times held by A[2] to A[4] and their firms/companies on behalf of A[1] in order to veil her otherwise unexplained disproportionate assets is unassailable.

515. The Trial Court next probed into the credit entries of the relevant bank accounts of the respondents to seek the trail of the fund flow and thus examined the deposits of cash into their bank accounts and also in those of the firms/companies floated by them spanning from Rs.10,000/- to Rs.33,70,000/. On an audit of the current and saving bank accounts of the respondents and the firms involved, the Trial Court identified unexplained cash credits of huge sums therein varying from Rs.2684.90 to Rs.1,26,00,000/- involving the respondents, Namadhu MGR, Sasi Enterprises, Vinod Video Vision, Jaya Publications, J. Farm House, Maha Subalaxmi Kalayana Mandapam, Anjaneya Printers Private Limited, Fresh Mushroom, Metal King, Super Duper T.V. Private Limited, Lex Property Development Pvt.Ltd., Riverway Agro Production Private Limited, Fax Universal, Meadow Agro Farm Pvt. Limited, Namay Shivaya Housing Development, Vigneshwara Builders, Laxmi Constructions, Sea Enclave, Ayyappa Property Development Private Limited, Ocean Construction, Gopal Page 510 Promoters, Green Garden Apartments, Shakti Constructions,

J. S. Housing Development, Ramraj Agro Mills Private Limited. Noticeably except Jaya Publications and Sasi Enterprises, A[2] to A[4] and Lex Property Development Private Limited were the partners of the other firms named above.

516. In this context, the Trial Court inter alia referred to the decision of this Court in Kale Khan Mohammad Hanif Vs. C.I.T., (1963) 50 ITR 1 (SC), wherein it was expounded that the onus was on the assessee to explain the nature and source of cash credits as to whether those stood in the assessee's account or in the account of a third party and that the assessee had a legal obligation to explain the nature and source of such credit by proving prima facie the transaction(s) that had yielded such accruals in his books of account.

517. The Trial Court held the view that the respondents in the case in hand had failed to offer any satisfactory explanation with regard to the enormous unexplained credit/accumulations in their bank accounts. It rejected the confirmatory letter offered by the respondents as false and bogus and further held that the identity of the person who disclosed the source, had also not been proved. Further the Page 511 transactions which generated such cash credits were also not established. It rejected as well the balance sheet and the profit and loss statement claimed to have been filed before the income tax authorities and on which the respondents primarily relied as their defence, as not proved in accordance with law besides being not in conformity with the statutory prescriptions. It discarded as well the evidence of the auditors examined by the respondents who, as the evidence on record testified, were not conversant with the true facts and had not handled their accounts during the check period. The Trial Court returned the finding that the evidence on record cumulatively substantiated that the returns, the balance sheet and the profit and loss accounts were framed and fashioned to offer an explanation to the otherwise titanic unexplained credits in their respective bank accounts. The Trial Court thus held that the respondents had failed to prove their defence, when tested on the evidence adduced even by the standard of preponderance of probability.

518. While observing that mere declaration of property in the income tax returns does not ipso facto connote that the same had been acquired from the known lawful sources of income, Page 512 the Trial Court held the view that the prosecution could successfully establish that the respondents and their firms/companies, who posed to be income tax assessees, had no independent or real source of income and that it was the finance of A[1] that was really in circulation and thus it could prove beyond reasonable doubt that the only source of money the acquisition of large assets was that of hers.

519. The evidence of PW198 M. Jayaraman, a member of staff with A[1] in her house at Poes Garden, at the relevant point of time, admitting remittances into various bank accounts through Mr. Vijayan on the instructions of A[2] was referred to in particular. That this witness had stated that A[2] used to instruct him about the details of the bank to which the deposit ought to be credited and that the amounts used to be dispatched in suit cases and bags through domestic servants was taken note of. The Trial Court took into consideration his testimony that he used to fill the challans as directed by A[2] which he identified in the course of his examination. He identified too, the signatures of Mr. Vijayan on the challans. The Trial Court also took note of the evidence of PW 182 and Page 513 PW 201, the bank officers who identified/proved large numbers of pay-in-slips and also affirmed that those bore the name of Mr. Vijayan as the person remitting the amounts mentioned. These witnesses had stated further, as noted by the Trial Court, that the pay orders and the demand drafts issued by them for the purpose of acquisition of the assets as involved were at the instance of the respondents. That these demand drafts or the pay orders could be directly related to the cheques or pay orders mentioned in the various sales deeds was recorded as well. This too, as held by the Trial Court, did establish the nexus of the funds of A[1] with the investments made for the acquisition of such assets. The Trial Court thus sustained the charge levelled by the prosecution that all the assets and pecuniary resources found to be possessed by A[2] to A[4] and in the names of various firms/companies actually belonged to A[1] and thus she in fact possessed the assets and pecuniary resources of the total value of Rs.55,02,48,215 in her name and in the names of A[2] to A[4] and of the firms/companies, thus establishing the ingredients of the offence under Section 13(1)(e) of the P. C. Act. It held the view that A[2] to A[4] as the evidence Page 514 substantiated had conspired with A[1] and had actively abetted in collaboration with each other with the sole object of acquiring and holding properties and assets disproportionate to the known sources of income of A[1].

520. This according to the Trial Court stood corroborated by the large number of accounts opened in the names of the respondents or of firms/companies and the disbursements to these accounts only by the staff of A[1] on the instructions of A[2] who was in-charge of her financial affairs. The Trial Court also took cognizance of the fact that the evidence on record established that except Super Duper T.V. Private Limited, neither the respondents nor their firms did credit any amount to the various accounts standing in their names. Rather, all these firms had gained deposits transferred to their accounts either from that of Namadhu MGR or Jaya Publications. Reiterating the rejection of the plea of the respondents, that large deposits collected from various subscribers of Namadhu MGR totalling Rs.15 crores had been credited in the accounts of Namadhu MGR and Jaya Publications, the Trial Court reaffirmed that these deposits in Page 515 fact represented the un-explained wealth accumulated by A[1].

521. The Trial Court in the ultimate analysis summed up the circumstances gleaned from the evidence on record to conclusively hold that the prosecution could prove beyond reasonable doubt, the charges levelled against the respondents as framed. While enumerating finally the facets substantiating this determination, the Trial Court took note of the fact that A[1] had executed a general power of attorney (Ex. P-995) in favour of A[2] in respect of Jaya Publications as A[1], at all relevant time, was the partner of the said firm. That such a power of attorney was otherwise not necessary and that this authority was thus endowed on A[2] so as to lend her a free hand in the management of Jaya Publications so as to facilitate the defence of A[1] that she used to be a dormant partner and was unaware of the transactions carried on by A[2] was recorded. The Trial Court however held the view that by the execution of such power of attorney, in law, A[1] rendered herself liable for all acts and deeds of A[2] pursuant to the powers so conferred. It correlated the flow of funds accumulated by A[1] to the account of Jaya Publications and thereafter to branch out the same to other accounts to be Page 516 eventually appropriated for the acquisition of huge assets. The Trial Court thus rejected the stand of A[1] that she was unaware of the activities of A[2], her agent with regard to the transfer of the funds and the mode of utilization thereof.

522. The constitution of various firms during the check period was cited as well to be another circumstance to prove the conspiracy amongst the respondents. The Trial Court re-counted that at the commencement of the check period, A[1] and A[2] were involved in the two concerns namely M/s Jaya Publication and M/s Sasi Enterprises but during the check period as many as 18/21 firms did come into existence. The Trial Court reiterated that the evidence on record however proved that none of these firms either carried on business during the check period or contributed any share capital to or receive any profit from these firms. The fact that in a single day, ten of such firms have been constituted with identical features was reiterated. The Trial Court did recall as well that not only A[2] and A[3] did start independent concerns in their names, even defunct companies were purchased/taken over by the respondents. However, none of these firms or companies did actually carry on any business except acquiring Page 517 huge properties. Referring to the fact that at the time of opening of the bank accounts of these firms/companies, none of these entities had any independent resources, the Trial Court deduced that these firms/companies were nothing but extensions of Namadhu MGR and Jaya Publications and owed their existence to the benevolence of A[1] and A[2] for continued sustenance. It reiterated that the proved fact that large amount of funds were diverted to these accounts was a clear attestation of the fact that these firms were constituted to only siphon off the unlawful resources amassed by A[1]. The fact that these firms/companies did operate from the residence of A[1] belied the feigned ignorance of A[1] about their activities, was noted. The joint residence of all the accused persons also could not be ignored as a factor contributing to the charge of conspiracy and abetment when assessed together with the attendant facts and circumstances reinforcing the said imputations. This also belied, according to the Trial Court, the specious plea of A[2] to A[4] that each one of them had independent business and own source of income. The fact that A[2] to A[4] did combine to constitute the firms to acquire huge tracts of land out of the funds provided by A[1] also was a Page 518 clear index that their assemblage in the house of A[1] was not engendered by any philanthropic urge for friends and their relations in need, rather to frame and further the criminal conspiracy to hold the assets of A[1]. The fact that the materials on record did evince that A[1] had not only advanced Rs.[1] crore to Shasi Enterprises as a contribution to its share capital for which she availed loan, but also that she did issue several cheques in favour of other accused persons and filed application for availing loan for the benefit of the firms involved, did buttress the charge that she was wholly aware of the dealings of the co-accused and the firms in their minutest details. The free flow of money from one account to the other of the respondents, the firms/companies also proved beyond reasonable doubt that all the accused persons had actively participated in the conspiracy to launder the ill-gotten wealth of A[1] for purchasing properties in their names. The fact that the assets and properties of the six companies were attached pursuant to the provisions of the Criminal Law Amendment Ordinance and that the applications for vacating the attachments were not filed for more than two years therefrom did make it apparent that no other person except the accused Page 519 were interested therein. The Trial Court rightly did mark as well, referring in particular to the evidence of PW159 Sub-Registrar, North Beach, Sub Registrar’s Office and PW71 Radha Krishnan, Horticulture Officer that they were called to Poes Garden and on the instructions of higher officers, they did oblige A[1] even by relaxing the rules in the registration of large number of documents by taking personal interest and even overlooking that the properties were undervalued to hold a deep seated involvement of A[1] in these transactions. That the registering authorities had gone to the extent of permitting registration of six documents even without incorporating the names of the purchasers, was referred to. The Trial Court in its conclusion, on an exhaustive analysis of the evidence as a whole, held the following facts to have been proved by the prosecution beyond all reasonable doubt. I) Total assets found in possession of A-1 as on 30.4.1996 Rs.55,02,48,215 II) Total expenditure incurred by the accused during the check period Rs. 8,49,06,833/- III) Total of (I) and (II) Rs. 63,51,55,048/- IV) Total income of accused from all sources as determined above Rs. 9,91,05,094/- Page 520 V) Value of disproportionate assets and pecuniary resources found in possession of accused as on 30.04.1996 which has not been satisfactorily accounted. Rs. 53,60,49,55,954/-

523. In view of this, the Trial Court convicted A[1] for the offences under Section 13(1)(e) r/w Section 13(2) of the PC Act. Further A[1] to A[4] were convicted under Section 120-B IPC r/w Section 13(1)(e) r/w Section 13(2) of the PC Act as well. A[2] to A[4] were additionally convicted under Sections 109 IPC r/w 13(1)(e) r/w 13(2) of the PC Act and sentenced them accordingly as heretobefore mentioned.

524. The Trial Court further ordered that necessary directions be issued to the concerned banks to remit the proceeds of the fixed deposits and the cash balance standing to the credit of the respective accused persons in their bank accounts to be appropriated and adjusted towards the fine amounts. It was directed as well that if even after such adjustment, the amount fell short of the quantum of fine, the gold and diamond ornaments, seized and produced before the court (after setting apart 7040 gms. of gold with proportionate diamond jewellery) be sold to RBI or SBI or by public auction so as to meet the Page 521 deficit. The rest of the gold and diamond jewellery was directed to be confiscated to the Government.

525. It further ordered that all immovable properties registered in the names of Lex Property Developments Pvt. Ltd., Meadow Agro Firms Pvt. Ltd., Rama Raj Agro Mills (P) Ltd., Signora Business Enterprises Pvt. Ltd., Riverway Agro Production (P) Ltd. and Indo Doha Chemicals and Pharmaceutical Ltd. which were under attachment pursuant to GO Nos. MS 120 and 1183, above referred to be confiscated to the State Government. It ordered as well that out of the fine amount recovered, a sum of Rs.[5] crores be made over to the State of Karnataka towards reimbursement of expenses for the trial conducted thereat.

526. As many as 34 companies/firms fell for scrutiny in the course of adjudication. Out of these Jaya Publications, Sasi Enterprises, Signora Business Enterprises Private Limited, Lex Property Development Pvt. Limited, Riverway Agro Production Private Limited, Meadow Agro Firm Pvt. Limited, Indo Doha Chemical and Pharmaceutical Limited, Ram Raj Agro Mills Limited did exist from before the check period. The others were registered during the check period and notably, the date Page 522 of registration of six of these had been 25.1.1994 and three bank accounts of five of them had been opened on the same date i.e. 27.1.1994. Further ten of such firms had been registered on 15.2.1995 and their bank accounts had been opened on 23.3.1995. To say the least, in the context of the charge levelled, this co-incidence also is conspicuously abnormal and irreconcilable. Another note worthy feature is that in most of these firms, A[2], A[3] and A[4] are the partners with Lex Property Development Pvt. Limited, joining them in some. There are firms as well where either A[2] or A[3] is the proprietor and others are with the combination of A[2], A[3] and A[4]. As the evidence with regard to the affairs of the six firms in whose names large tracts of properties had been purchased and deposits made, has been dilated upon hereto before, the same does not warrant further elaboration.

527. The unimpeded, frequent and spontaneous inflow of funds from the account of A[1] to those of the other co-accused and the firms/companies involved, overwhelmingly demonstrate the collective culpable involvement of the respondents in the transactions in the face of their overall orientations so as to render the same to be masked banking Page 523 exchanges though involving several accounts but mostly of the same bank. No other view is possible.

528. Apart from the above, the demurral of unfairness in investigation and trial also cannot be sustained in the overall factual conspectus. True that in course of the investigation, some documents had been seized which were not adduced in evidence being construed to be irrelevant for substantiating the charge, but it did not certainly tantamount to suppression thereof so as to afflict the trial with the vice of unfairness and non-transparency as alleged. Additionally, the courts did intervene as permissible in law wherever merited to ensure against any prejudice qua the parties. The fact that the documents seized but not brought on evidence by the prosecution had not been destroyed and were available to the respondents for their inspection, at all relevant times, is, per se, an index of fair and impartial trial. The defence as a matter of record did at some point of time close its side of evidence by examining only two witnesses, whereafter following the inspection of the documents, as desired by the respondents, after A[1] had returned to power, examined as many as 99 witnesses. Prior thereto, 76 prosecution witnesses Page 524 were permitted to be recalled for further cross-examination. The remonstrance that the Trial Court did not take into consideration the defence evidence is also not borne out by the records. As would be evident from its judgment, the testimony of several witnesses examined by the respondents received in-depth appreciation by the Trial Court wherever relevant. The contention that the Trial Court had conducted the trial in a manner prejudicial to the respondents in the overall context, both factual and legal, thus cannot be sustained.

529. That the Trial Court was meticulous, sensitive, vigilant and judicious in appraisal, stands authenticated by the fact that in valuing the assets, as warranted, it excluded a sum of Rs.32 lakhs towards the price of sarees and further reduced the value of gold and diamond to the extent of Rs.[2] crores. It also allowed reduction in the marriage expenses by more than 50% and further discounted the value of constructions by permitting a depreciation of 20%.

530. Apropos the off repeated grievance, of the defence that the Trial Court had left out of consideration material pieces of evidence adduced by it, suffice it to state that the decision rendered by it proclaim to the contrary. In all the aspects Page 525 amongst others income, expenditure and assets, the judgment of the Trial Court reveals on a plain reading that the evidence adduced by the defence as construed to be relevant had not only been taken note of but also analysed and applied for arriving at the conclusions on the issues pertaining to the adjudication. Whereas qua income, reference of the testimony of the defence witnesses is decipherable amongst others pertaining to the scrutiny involving Namadhu MGR, Super Duper T.V., gifts offered to A[1], rental income and income tax returns, the Trial Court did also assess the defence evidence while judging the case on the issues of marriage of A[3], expenditure and as well as valuation of buildings. The cavil to the contrary thus cannot be entertained. Further this plea though elaborated in details in course of the arguments in the present proceedings was not taken very specifically before the High Court by the respondents while challenging their conviction. Significantly, such a grievance has also not been made by them by laying a formal challenge to such purported omissions on the part of the Trial Court, before this Court, as contemplated in law. In this persuasive backdrop, we are thus disinclined to sustain Page 526 this contention. This is more so as in view of the appraisal of the relevant evidence as a whole, we are of the unhesitant opinion that the impugned judgment and order of the High Court suffers from manifest errors on the face of the record, both on facts and in law and is liable to be set-aside.

531. The Criminal Law Amendment Ordinance, 1944 (referred to as the “Ordinance” as well), which was enforced w.e.f. 23.8.1944 is an yield of the exercise of powers under Section 72 of the Government of India Act, 1935 and is directed to prevent the disposal or concealment of property procured by means of the offences enlisted in the Schedule thereto. To iterate, for the instant adjudication, paragraphs 4A and 5 of the Schedule are extracted hereinbelow for immediate reference: 4-A: an offence punishable under the Prevention of Corruption Act, 1988; 5: Any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in item 2,[3] and 4 and 4-A. As the present appraisal does not involve the other offences enumerated in the Schedule, those are not being dwelt upon. Page 527

532. Clause 3 of the Ordinance provides that where the State Government or as the case may be, the Central Government has reason to believe that any person has committed, whether after the commencement of the Ordinance or not, any scheduled offence and whether or not any court has taken cognizance thereof, it may authorise the making of an application to the District Judge within the local limits of whose jurisdiction, the said person ordinarily resides or carries on business, for attachment of any money or other property, believed to have been procured by means of such offence. It also permits that if such money or property cannot for any reason be attached, the prayer in the application may be extended to other property of the said person of the value as nearly as may be equivalent thereto. The provisions did make applicable Order XXVII of the First Schedule to the Code of Civil Procedure, 1908 to the proceedings for an order of attachment under the Ordinance as they did apply to the suits by the Government.

533. Section 4 contemplates ad interim attachment by the jurisdictional District Judge, in the eventualities as mentioned therein and while doing so, he is required to issue to the Page 528 person whose money or other property was being attached, a notice accompanied by copies of the order, the application and affidavits and of the evidence, if recorded, asking him to show cause on a date to be specified in the notice as to why the order of attachment should not be made absolute. Clause 5 empowers the District Judge to make the ad interim order of attachment absolute, if either no objection is filed by the person affected or not varied after necessary enquiry on a consideration of the objection if filed, and the evidence is adduced. In terms of clause 10 of the Ordinance, an order of attachment of property made shall unless it is withdrawn, continue to be in force, in a contingency where a court has taken cognizance of the alleged schedule offence whether, before or after the time when the order was applied for, until orders are passed by the District Judge in accordance with the provisions of the Ordinance after the termination of the criminal proceedings. Clause 11 provides for appeals against the order(s) of the District Judge, in the matter of attachment before the jurisdictional High Court. Whereas clause 12 makes it incumbent on the court trying a scheduled offence, when apprised of an order of attachment of the property Page 529 involved under the Ordinance, to record a finding, in case of conviction, as to the amount of money or value of other property procured by the accused by means of the offence, Clause 13 mandates the manner of disposal of such attached property upon termination of the criminal proceedings. Thereunder, when the final judgment or order of the criminal court is one of conviction, the District Judge shall order that from the property of the convicted person attached under the Ordinance or out of the security given in lieu of such attachment, there shall be forfeited to Government such amount or value as is found in the final judgment or order of the criminal court, to have been procured by the convicted person, by means of the offence together with the costs of attachment as determined by the District Judge. Sub-clause 4 deals with a situation where the amounts ordered to be forfeited or recovered exceed the value of the property of the convicted person attached, thus permitting in that eventuality, the steps to follow. Sub-clause (6) ordains that every sum ordered to be forfeited in connection with any scheduled offence other than one specified in item 1 of the schedule, would after deduction of the cost of attachment as determined Page 530 by the District Judge, be credited to the Government or the local authority to which the offence has caused loss or where there is more than one such government or local authority, to be distributed amongst them in the proportion to the loss sustained by each.

534. Noticeably “termination of criminal proceedings”, as per clause 2(2), as relevant for our present purpose, would be where this Court would pass its final order in the present appeals.

535. In the appeals, filed by the State of Karnataka pertaining to the release of the properties recorded in the name of the six companies involved, consequent upon the acquittal of the respondents, the parties are essentially at issue on the applicability or otherwise of Section 452 of the Code of Criminal Procedure, 1973 invoked by the Trial Court to order confiscation/forfeiture of the properties otherwise attached under the Ordinance. The other facets of the competing assertions being largely common and already addressed, are inessential for a fresh scrutiny. Whereas it is urged on behalf of the State that having regard to the scheme of the Act and the mode of attachment Page 531 of the property involved in a scheduled offence, the operation of Section 452 of the Code is not excluded, the plea on behalf of the respondents is that the Ordinance being a complete code by itself, the Trial Court was patently wrong in assuming to itself the power of disposal of the property under attachment by invoking the said provision of the Code. It has been urged in essence on behalf of the respondents that at the most, the Trial Court could have valued the property under attachment following its conclusion of guilt against them, leaving it thereafter to the forum under the Ordinance to comply with the procedure prescribed therein and further the process to its logical end. This is more so, as has been urged for the respondents, that the appeals against the orders making the ad interim attachment absolute are pending before the High Court as permissible under the Ordinance. Principally, reliance, amongst others has been placed by the respondents on the decision of a Constitution Bench of this Court in State of West Bengal Vs. S.K. Ghosh, AIR 1963 SC 255.

536. In our comprehension, the course adopted by the Trial Court cannot be faulted with. To reiterate, in terms of Section Page 532 5(6) of the Act, it was authorised to exercise all powers and functions exercisable by a District Judge under the Ordinance. The offences at the trial were under Sections 13(1)(e), 13(2) of the Act, Sections 109 and 120B of the Indian Penal Code encompassed within paragraphs 4A and 5 of the Schedule to the Ordinance. These offences were unimpeachably within the contours of the Act and triable by a special Judge thereunder. Having regard to the frame and content of the Act and the limited modifications to the provisions of the Code of Criminal Procedure, in their applicability as occasioned thereby and the authorisation of the special Judge trying the offences thereunder to exercise all the powers and functions invocable by a District Judge under the Ordinance, we are of the opinion that the order of confiscation/forfeiture of the properties standing in the name of six companies, as involved, made by the Trial Court is unexceptionable. In any view of the matter, with the peremptory termination of the criminal proceedings resultant on this pronouncement, the direction of the Trial Court towards confiscation/forfeiture of the attached property, as mentioned therein, is hereby restored and would be construed to be an order by this court as well. The Page 533 decisions cited on behalf of the respondents on this issue, are distinguishable on facts and are of no avail to them.

537. In Mirza Iqbal Hussain through Askari Begum Vs. State of Uttar Pradesh, (1982) 3 SCC 516, two fixed deposit receipts and the cash amount of Rs.5200/- seized from the house of the appellant and proved to be the subject-matter of charge under Section 5(1)(e) of the 1947 ACt, were ordered to be confiscated to the State. Responding to the plea of want of jurisdiction of the Special Court to order confiscation, this Court referring to Section 4(2) of Cr.P.C., held that in terms thereof, all offences under any law other than the Indian Penal Code have to be investigated, inquired into, tried and otherwise dealt with according to the provisions contained in the Code but subject to any enactment for the time being in force regulating the manner or place of investigation, enquiry, trial or otherwise dealing with such offences. It was observed that none of the provisions of the Prevention of Corruption Act provided for confiscation or prescribed the mode by which an order of confiscation could be passed and thus, it was ruled that the order of confiscation in the facts of the case could not be held to be de hors jurisdiction. The invocation of Section Page 534 452 of the Code, in absence of any provision in the Prevention of Corruption Act, excluding its operations to effect confiscation of the property involved in any offence thereunder, was thus affirmed.

538. After analyzing the facts and circumstances of this case and after taking into consideration all the evidence placed before us and the arguments put forward by all the parties, we are of the unhesitant opinion that the impugned judgment and order rendered by the High Court is untenable and is thus set aside. We have considered the facts of this case and in our opinion, the percentage of disproportionate assets as 8.12% as computed by the High Court is based on completely wrong reading of the evidence on record compounded by incorrect arithmetical calculations, as referred to herinabove. In view of the regnant evidence on record, unassailably proving the disproportionateness of the assets, as contemplated in Section 13(1)(e) of 1988 Act, it is inessential as well to resort to any arithmetic to compute the percentage thereof. In any view of this matter, the decision of this Court in Krishnanand Agnihotri (supra) has no application in the facts of this case and therefore, the respondents cannot avail any benefit Page 535 therefrom.

539. Both the Courts have construed all the assets, income and expenditure of all the accused collectively. We see no convincing reason to adopt a different course which even otherwise, having regard to the charge, is not warranted.

540. Noticeably, the respondents accused accepted all the findings of the High Court. We have analyzed the evidence adduced by the parties and we come to the conclusion that A[1] to A[4] have entered into a conspiracy and in furtherance of the same, A[1] who was a public servant at the relevant time had come into possession of assets disproportionate to the known sources of her income during the check period and had got the same dispersed in the names of A[2] to A[4] and the firms & companies involved to hold these on her behalf with a masked front. Furthermore, the the charge of abetment laid against A[2] to A[4] in the commission of the offence by A[1] also stands proved.

541. We have noticed that: In State Through Central Bureau of Investigation, New Delhi Vs. Jitender Kumar Singh, reported in (2014) 11 SCC 724, this Court held that once the power has been Page 536 exercised by the Special Judge under sub-section (3) of Section 4 of the P.C. Act to proceed against non-PC offences alongwith PC offences, the mere fact that the sole public servant dies after the exercise of powers under sub-section (3) of Section 4, will not divest the jurisdiction of the Special Judge or vitiate the proceedings pending before him. Therefore, we hold that as the sole public servant has died being A[1] in this matter, in our opinion, though the appeals against her have abated, even then A[2] to A[4] are liable to be convicted and sentenced in the manner as has been held by the Trial Judge. The Trial Court held that even private individuals could be prosecuted for the offence under Section 109 of I.P.C. and we find that the Trial Court was right in coming to the conclusion relying on the decision of Nallammal (supra), wherein it was observed that acquisition and possession by a public servant was capable of being abetted, and observed that Under Section 3 of the 1988 Act, the Special Judge had the power to try offences punishing even abetment or conspiracy of the offences mentioned in the PC Act and in our opinion, the Trial Court correctly held in this matter that private Page 537 individuals can be prosecuted by the Court on the ground that they have abetted the act of criminal misconduct falling under Section 13(1)(e) of the 1988 Act committed by the public servant. Furthermore, the reasoning given by the Trial Court in respect of criminal conspiracy and abetment, after scrutinizing the evidence of this case, is correct in the face of the overwhelming evidence indicating the circumstances of active abetment and conspiracy by A[2] to A[4] in the commission of the above offences under Section 13(1)(e) of the 1988 Act. This would be evident from the following circumstances:-

(i) A[1] had executed a General Power of Attorney in favour of A[2] in respect of Jaya Publications marked as Ex.P-995. The circumstance of executing the power of attorney in favour of A[2] indicates that with a view to keep herself secured from legal complications, A[1] executed the said power of attorney knowing fully well that under the said powers, A[2] would be dealing with her funds credited to her account in Jaya Publications.

(ii) Constitution of various firms during the check period is another circumstance establishing the conspiracy Page 538 between the parties. It has come in evidence that 10 firms were constituted on a single day. In addition, A[2] and A[3] started independent concerns and apart from buying properties, no other business activity was undertaken by them. The circumstances proved in evidence undoubtedly establish that these firms are nothing but extentions of Namadhu MGR and Jaya Publications and they owed their existence to the benevolence of A[1] and A[2]

(iii) The aforesaid firms and companies were operating from the residence of A[1] and it cannot be accepted that she was unaware of the same even though she feigned ignorance about the activities carried on by A[2] to A[4]. They were residing with A[1] without any blood relation between them.

(iv) Although A[2] to A[4] claims to have independent sources of income but the fact of constitution of firms and acquisition of large tracts of land out of the funds provided by A[1] indicate that, all the accused congregated in the house of A[1] neither for social living nor A[1] allowed them free accommodation out of humanitarian concern, Page 539 rather the facts and circumstances proved in evidence undoubtedly point out that A[2] to A[4] were accommodated in the house of A[1] pursuant to the criminal conspiracy hatched by them to hold the assets of A[1].

(v) Ex.D.61 reveals that before the Income Tax Authorities, the representative of A[1] himself had put forth an argument that Rs.[1] crore was advanced by A[1] to Sasi Enterprises towards share capital and further it was submitted that on the security of the said amount, loan was borrowed by A[1], and thus she cannot claim non-involvement with the firms.

(vi) The flow of money from one account to the other proves that there existed active conspiracy to launder the ill-gotten wealth of A[1] for purchasing properties in the names of the firms.

(vii) The conspiracy among the accused persons is also proved by the evidence of Sub-Registrar, North Beach, Sub-Registrar office-PW.159 and the evidence of PW.71 Radha Krishnan, Horticultural officer. Page 540 In our opinion, the Trial Court correctly came to the conclusion on such reasoning and we hereby uphold the same.

542. Accordingly, in view of the reasoning recorded hereinabove in the preceding paragraphs, we set aside the judgment and order of the High Court and affirm and restore the judgment of the Trial Court in toto against A[2] to A[4]. However, though in the process of scrutiny of the facts and the law involved and the inextricable nexus of A[1] with A[2] to A[4], reference to her role as well as the evidence pertaining to her had been made, she having expired meanwhile, the appeals, so far as those relate to her stand abated. Nevertheless, to reiterate, having regard to the fact that the charge framed against A[2] to A[4] is proved, the conviction and sentence recorded against them by the Trial Court is restored in full including the consequential directions.

543. Respondents A[2] to A[4], in view of this determination and the restoration of their conviction and sentence, would surrender before the Trial Court forthwith. The Trial Court is hereby also ordered to take immediate steps to ensure that the respondents A[2] to A[4] serve out the remainder of sentence Page 541 awarded them and take further steps in compliance of this judgment, in accordance with law.

544. The appeals are allowed in the above terms. ….....….……………………J (Pinaki Chandra Ghose) ….....…..…………………..J (Amitava Roy) New Delhi; February 14, 2017. Page 542 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPEALATE JURISDICTION CRIMINAL APPEAL NOS. 300-303 OF 2017 (Arising out of SLP (Crl.) Nos. 6117-6120 of 2015)

STATE OF KARNATAKA...... APPELLANT(S):Versus: SELVI J. JAYALALITHA & ORS.... RESPONDENT(S) WITH CRIMINAL APPEAL NOS.304-307 OF 2017 (Arising out of SLP (Crl.) Nos. 6294-6297 of 2015)

K. ANBAZHAGAN...... APPELLANT(S):Versus: SELVI J. JAYALALITHA & ORS. ETC.... RESPONDENT(S) AND CRIMINAL APPEAL NOS. 308-313 OF 2017 (Arising out of SLP (Crl.) Nos. 6121-6126 of 2015)

K. ANBAZHAGAN...... APPELLANT(S):Versus: INDO DOHA CHEMICALS & PHARMACEUTICALS AND ORS. ETC....... RESPONDENT(S) AND Page 543 CRIMINAL APPEAL NOS.314-319 OF 2017 (Arising out of SLP (Crl.) Nos. 7107-7112 of 2015)

STATE OF KARNATAKA...... APPELLANT(S):Versus: INDO DOHA CHEMICALS & PHARMACEUTICALS AND ORS. ETC....... RESPONDENT(S)

JUDGMENT

Amitava Roy, J. A few disquieting thoughts that have lingered and languished in distressed silence in mentation demand expression at the parting with a pulpit touch. Hence, this supplement.

2. The attendant facts and circumstances encountered as above, demonstrate a deep rooted conspiratorial design to amass vast assets without any compunction and hold the same through shell entities to cover up the sinister trail of such illicit acquisitions and deceive and delude the process of law. Novelty in the outrages and the magnitude of the nefarious gains as demonstrated by the revelations in the case are, to say the least, startling. Page 544

3. A growing impression in contemporary existence seems to acknowledge, the all pervading pestilent presence of corruption almost in every walk of life, as if to rest reconciled to the octopoid stranglehold of this malaise with helpless awe. The common day experiences indeed do introduce one with unfailing regularity, the variegated cancerous concoctions of corruption with fearless impunity gnawing into the frame and fabric of the nation’s essentia. Emboldened by the lucrative yields of such malignant materialism, the perpetrators of this malady have tightened their noose on the societal psyche. Individual and collective pursuits with curative interventions at all levels are thus indispensable to deliver the civil order from the asphyxiating snare of this escalating venality.

4. In the above alarming backdrop of coeval actuality, judicial adjudication of a charge based on an anti-corruption law motivated by the impelling necessities of time, has to be informed with the desired responsibility and the legislative vision therefor. Any interpretation of the provisions of such law has to be essentially purposive, in furtherance of its mission and not in retrogression thereof. Innovative nuances of evidential Page 545 inadequacies, processual infirmities and interpretational subtleties, artfully advanced in defence, otherwise intangible and inconsequential, ought to be conscientiously cast aside with moral maturity and singular sensitivity to uphold the statutory sanctity, lest the coveted cause of justice is a causality.

5. Corruption is a vice of insatiable avarice for self-aggrandizement by the unscrupulous, taking unfair advantage of their power and authority and those in public office also, in breach of the institutional norms, mostly backed by minatory loyalists. Both the corrupt and the corrupter are indictable and answerable to the society and the country as a whole. This is more particularly in re the peoples’ representatives in public life committed by the oath of the office to dedicate oneself to the unqualified welfare of the laity, by faithfully and conscientiously discharging their duties attached thereto in accordance with the Constitution, free from fear or favour or affection or ill-will. A self-serving conduct in defiance of such solemn undertaking in infringement of the community’s confidence reposed in them is therefore a betrayal of the promise of allegiance to the Constitution and a condemnable sacrilege. Page 546 Not only such a character is an anathema to the preambulor promise of justice, liberty, equality, fraternal dignity, unity and integrity of the country, which expectantly ought to animate the life and spirit of every citizen of this country, but also is an unpardonable onslaught on the constitutional religion that forms the bedrock of our democratic polity.

6. This pernicious menace stemming from moral debasement of the culpables, apart from destroying the sinews of the nation’s structural and moral set-up, forges an unfair advantage of the dishonest over the principled, widening as well the divide between the haves and have nots. Not only this has a demoralising bearing on those who are ethical, honest, upright and enterprising, it is visibly antithetical to the quintessential spirit of the fundamental duty of every citizen to strive towards excellence in all spheres of individual and collective activity to raise the nation to higher levels of endeavour and achievement. This virulent affliction triggers an imbalance in the society’s existential stratas and stalls constructive progress in the overall well-being of the nation, besides disrupting its dynamics of fiscal governance. It encourages defiance of the rule of law and the Page 547 propensities for easy materialistic harvests, whereby the society’s soul stands defiled, devalued and denigrated.

7. Such is the militant dominance of this sprawling evil, that majority of the sensible, rational and discreet constituents of the society imbued with moral values and groomed with disciplinal ethos find themselves in minority, besides estranged and resigned by practical compulsions and are left dejected and disillusioned. A collective, committed and courageous turnaround is thus the present day imperative to free the civil order from the suffocative throttle of this deadly affliction.

8. Every citizen has to be a partner in this sacrosanct mission, if we aspire for a stable, just and ideal social order as envisioned by our forefathers and fondly cherished by the numerous self-effacing crusaders of a free and independent Bharat, pledging their countless sacrifices and selfless commitments for such cause ............................................. J. (AMITAVA ROY) NEW DELHI; FEBRUARY 14, 2017