REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.                  OF 2008 Arising out of SLP (Crl) No. 5476 of 2006

N. Ramakrishnaiah (dead) thr. Lrs. ….Appellants  

versus

State of A.P. ….

Respondent

J U D G M E N T

Dr. ARIJIT PASAYAT, J

1. Leave granted.

2. Challenge in this appeal is to the judgment of a learned Single Judge

of the Andhra Pradesh High Court dealing with Criminal Appeal preferred

by appellant No.1-N. Ramakrishnaiah who died during the pedency of the

appeal  and  his  legal  heirs  were  brought  on  record  as  appellants  in  this

appeal.  

3. The  factual  matrix  leading  to  the  conviction  of  the  accused  N.

Ramakrishnaiah was as follows:

The  accused  joined  government  service  as  a  Supervisor  on

02.11.1955  in  the  Andhra  Pradesh  Panchayat  Raj  Department.  He  was

promoted  as  a  Deputy  Executive  Engineer  on  02.01.1967  and  further

promoted as an Executive Engineer on 01.03.1979. He continued to work

as an Executive Engineer, Kamareddy of Karimnagar District till he was

kept under suspension on 26.05.1986. On reliable information that he had

acquired assets disproportionate to his known sources of income, a case

was registered on 12.05.1986 and the investigation was taken up. During

the course of investigation, search was conducted. The documents found

during the search disclosed acquisition of number of assets by the accused

in his name and in the name of his dependents. During the check period i.e.

from 2.11.1955 to 13.5.1986, he acquired assets worth Rs.14,71,578. His

income from all  known  sources  was  Rs.8,23,634/-  and  the  expenditure

during  the  check  period  was  Rs.7,88,574/-.  After  deducting  the

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expenditure from the income, he would have saved Rs.35,040/-. But  he

had acquired the assets worth Rs.17,71,578/-. After deducting the likely

saving of Rs.35,040/-, the disproportionate assets in possession of accused

from his known sources of income was worked out at Rs.14,36,538/- and

he could not give satisfactory account for acquisition of those assets. He

was,  therefore,  liable  for  punishment  under  Section  5  (1)(e)  read  with

Section  5  (2)  of  the  Prevention  of  Corruption  Act,  1947  (hereinafter

referred to as the “Old Act”).

The following was the charge framed against the accused:

"That you being a public servant employed as Supervisor on 02.11.1955 subsequently promoted as Dy. Executive Engineer  on  02.01.1967  and  Executive  Engineer  on 01.03.1979  in  the  Panchayat  Raj  Department  of Government  of  Andhra  Pradesh,  during  the  period between  02.11.1955  and  13.05.1986  acquired  assets, which were disproportionate to your known sources of income and on or about the 13th day of May, 1986 you had  been  in  possession  of  pecuniary  resources  or property in your name and in the names of your wife and children  to  the  extent  of  Rs.14,36,538.00  which  were disproportionate to your known sources of income and for which you could not satisfactorily account and you thereby committed an offence under section 13 (1) (e) of the Prevention of Corruption Act, 1988 .(Sec. 5(1) (e) of the Old Act) punishable under Section 13(2) of the said Act  (Sec.  5(2)  of  the  Old  Act)  and  within  my cognizance."

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He denied the above charge and claimed for trial. The prosecution in

order to prove the guilt of the accused examined P.Ws. 1 to 52, and marked

Exs.  P.1 to  P.195.  No  oral  evidence  was  adduced  on  defence  side.  But,

Ex.D-1 relating to the agricultural income for some period was marked.

The learned Special Judge after considering the oral and documentary

evidence, found the accused guilty for the offence punishable under Section

5(1(e) read with Section 5(2) of the Act, convicted and sentenced him to

undergo simple imprisonment for one year and to pay a fine of Rs.20,000/-

in  default  to  suffer  simple  imprisonment  for  three   months.  The learned

Special  Judge  also  directed  that  Item Nos.1  to  4  of  assets  to  be  sold  in

public auction and the sale proceeds was directed to be confiscated to the

State. Being aggrieved by the judgment of the trial Court accused preferred

the appeal in the High Court, which was dismissed.   

4. It is to be noted that in the appeal before the High Court, the dispute

was restricted to only Item No.26 of the assets (movables) and agricultural

income. It was stated that the former was over estimated and deserved to be

scaled down and there was underestimation of the latter and the same was to

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be increased. The High Court with reference to the evidence and materials

on record did not find any substance in the plea and upheld the conclusions.  

5. The stand was re-iterated by the learned counsel for the appellants.  

6. On  the  other  hand,  learned  counsel  for  the  State  supported  the

judgments of the trial Court and the High Court.  

7. One  of  the  items  as  far  as  income is  concerned  was  interests  on

deposits. The High Court noted that the same related to interest accrued on

deposits.  Since  total  income  and  expenditure  formed  the  basis  of

computation, the accrued income has been duly taken note of. The accrual

of interest was on the deposits made, in a sense that it is not an investment.

That was accrued income. If it  is  excluded,  the income earned would be

reduced  to  that  extent.  Thus,  it  would  not  be  a  factor  in  favour  of  the

accused.  

8. Similar  is  the  position  in  respect  of  deposits  in  Pratibha  Finance

Corporation and Sapthagin Finance Corporation.  

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9. So far as movables covered by item No.26 are concerned, the trial

Court and the High Court relied upon the evidence of PW 36 and PW 52

and Ext P-112 (list of movables).  

10. The movables covered are those which were listed in the inventory

made at the time of search room wise. The details contained are the year of

acquisition,  the  value  of  each  article  and  other  particulars  given  by the

accused himself. The details were recorded by PW-36. Further, PW-52 also

corroborated the evidence by deposing to similar effect. Though suggestion

was made that the accused did not give the detail  to PW-36, significantly

PW-52 was not cross-examined in this regard. High Court noticed that it

was not specified by the accused as to in respect of which particular item

there was over valuation. Significantly, signature of the accused is there in

the inventory. The conclusions of the High Court to reject contentions of the

accused do not suffer from any infirmity to warrant interference.  

11. So  far  as  the  agricultural  income is  concerned,  prosecution  relied

upon  the  evidence  of  Mandal  Revenue  Officer  (PW-23).  He  furnished

details  relating  to  yield,  cultivation,  inspection  remarks  in  respect  of  the

agricultural properties for Faslis 1378 to 1395.  The details are Ext. P91 and

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P92.   Another  witness  was  PW-24  who  gave  Ext  P94  statement  giving

details of land in Agadala Lanka Village.  He also gave details for Faslis

1379 to 1394. Similarly, PW-25 gave details by Ext.P95 for Faslis 1376 to

1390 in respect of Pydichinthalapadu Village.  As per Ext.P96 details were

given from 1968 to 1985 relating to market rate of Paddy at Eluru. Other

witnesses examined to prove the agricultural income aspect were PWs 40,

41, 27. An agriculturist PW-39 was examined to show the yield. His lands

were adjacent to that of the accused.  

12. It  is  interesting  to  note  that  accused  placed  reliance  on  Ext.D1

purporting to show yields in certain Faslis. It was recovered from the house

of the accused.  But interestingly no material was adduced to show who was

the author of the document and as to on what basis the entries were made.

There was not even a signature of the person who had prepared it. The High

Court did not attach any importance to it.  

13. We notice that the figure indicated in Ext.D1 is Rs.1,34,160/- for the

period from 1961 to 1976. The trial Court has in fact gone to the extent of

adopting the figures of these 15 years for the next 10 years. The entries in

Exts. P92 to 95 have not been established to be erroneous and therefore the

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trial  Court  and  the  High  Court  have  rightly  refused  to  accept  accused’s

stand of under-estimation.

14. Section 13 of Prevention of Corruption Act, 1988 (in short the ‘Act’)

deals  with  various  situations  when  a  public  servant  can  be  said  to  have

committed criminal misconduct. Clause (e) of Sub-section (1) of the section

is  applicable  when  the  public  servant  or  any person on  his  behalf,  is  in

possession  or  has,  at  any  time  during  the  period  of  his  office,  been  in

possession  for  which  the  public  servant  cannot  satisfactorily  account  of

pecuniary resources  or  property  disproportionate  to  his  known source  of

income. Clause (e) of Sub-section (1), of Section 5 of the Old Act was in

similar  lines.  But  there  have  been  drastic  amendments.  Under  the  new

clause, the earlier concept of “known sources of income” has undergone a

radical change. As per the explanation appended, the prosecution is relieved

of the burden of investigating into “source of income” of an accused to a

large  extent,  as  it  is  stated  in  the  explanation  that  “known  sources  of

income”  mean  income received  from any  lawful  sources,  the  receipt  of

which  has  been intimated in  accordance with  the provisions  of  any law,

rules  or  orders  for  the  time  being  applicable  to  a  public  servant.  The

expression “known source of income” has reference to sources known to the

prosecution after thorough investigation of the case. It is not, and cannot be

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contended that “known sources  of  income”  means  sources known to  the

accused. The prosecution cannot, in the very nature of things be expected to

know the  affairs  of  an  accused  person.  Those  will  be  matters  “specially

within the knowledge” of the accused, within the meaning of Section 106,

of the Indian Evidence Act, 1872 (in short, the 'Evidence Act').

15. The emphasis of the phrase "known sources of income" in Section 13

(1) (e) (old Section 5(1) (e)) is clearly on the word "income." It would be

primary to observe that qua the public servant, the income would be what is

attached to his office or post, commonly known as remuneration or salary.

The  term  "income"  by  itself,  is  classic  and  has  a  wide  connotation.

Whatever comes in or is received is income. But, however, wide the import

and connotation of the term "income", it is incapable of being understood

as  meaning  receipt  having  no  nexus  to  one's  labour,  or  expertise,  or

property, or investment, and being further a source which may or may not

yield  a  regular  revenue.  These  essential  characteristics  are  vital  in

understanding  the term "Income".  Therefore,  it  can  be said  that,  though

"income" in receipt  in the hand of  its  recipient,  every receipt  would not

partake  into  the  character  of  income.  For  the  public  servant,  whatever

return he gets of his service, will be the primary item of his income. Other

income which can conceivably be income qua the public servant will be in

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the regular receipt from (a) his property, or (b) his investment. A receipt

from windfall,  or gains of graft,  crime or immoral secretions  by persons

prima facie would not be receipt for the "known sources of income" of a

public servant.

16. The  legislature  has  advisedly  used  the  expression  "satisfactorily

account."  The  emphasis  must  be  on  the  word  "satisfactorily"  and  the

legislature has, thus, deliberately cast a burden on the accused not only to

offer a plausible explanation as to how he came by his large wealth, but

also to satisfy the Court that his explanation was worthy of acceptance.

17. The analysis made by the trial Court and the High Court and evidence

on record leave no manner of doubt that the conviction as recorded does not

suffer from any infirmity.  We find no infirmity with the order of the High

Court.  The appeal is dismissed.  

………………………….J. (Dr. ARIJIT PASAYAT)

……………………...…..J. (P. SATHASIVAM)

New Delhi, October 17, 2008

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