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PETITIONER: STATE OF MAHARASHTRA

       Vs.

RESPONDENT: POLLONJI DARABSHAW DARUWALLA

DATE OF JUDGMENT10/11/1987

BENCH: VENKATACHALLIAH, M.N. (J) BENCH: VENKATACHALLIAH, M.N. (J) SEN, A.P. (J)

CITATION:  1988 AIR   88            1988 SCR  (1) 906  1987 SCC  Supl.  379     JT 1987 (4)   363  1987 SCALE  (2)1127

ACT:      Prevention   of   Corruption   Act,   1947-Respondent’s acquittal  of  offence  under  section  5(1)(e),  read  with section 5(2), Ihereof challenged.

HEADNOTE: %      The respondent,  Pollonji Darabshaw  Daruwalla, was  an appraiser in the Customs Department. The police searched his residential premises  on a  suspicion of  his complicity  in certain offences  concerning the  export  of  the  Stainless Steel-Ware, in the course of the investigation of that case. Though  nothing   incriminatory  for  the  purpose  of  that investigation was  discovered, the  search revealed that the respondent was  in  possession  of  property  and  pecuniary resources, disproportionate  to his  known sources of income between 1.4.1958  and 31.12.1968,  for which  he  could  not satisfactorily account for. This led to the suspicion of the commission  by  the  respondent  of  an  offence  under  the Prevention of  Corruption Act,  1947, and the respondent was charge-sheeted for  an offence  under section  5(1)(e), read with section  S(2) of  the Act.  In support of the charge, a number  of   documents  pertaining   to   the   respondent’s investments in  the banks,  in the  company deposits  and on shares, both  in his  own name and jointly with his wife, as also the  documents pertaining  to the salary and emoluments of the  respondent  between  1.4.1958  and  31.12.1968  were brought on  record in  evidence. The  defence was  that  the respondent was  in possession  of  substantial  assets  even anterior to 1.4.1958.      The  Special  Judge  held  the  respondent  guilty  and sentenced  him   to  rigorous  imprisonment  and  fine.  The respondent filed an appeal before the High Court against the Judgment and  order of  the Special  Judge. The  High  Court allowed the  appeal and  acquitted the respondent. The State appealed to this Court by special leave against the decision of the High Court.      Dismissing the appeal, the Court, ^      HELD: In order to establish that a public-servant is in possession   of    pecuniary    resources    and    property

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disproportionate to his known 907 sources of  income, it  is not imperative that the period of reckoning be  spread out  for the entire stretch of anterior service of  the public servant. There can be no general rule or criterion,  valid for  all cases, in regard to the choice of the  period for  which accounts  are taken  to  establish criminal misconduct  under section  S(1)(e) of  the Act. The choice of  the period  must necessarily be determined by the allegations of  fact on which the prosecution is founded and rests. However,  the period must be such as to enable a true and comprehensive picture of the known sources of the income and the  pecuniary resources  and property  in possession of the public  servant either  by himself  or through any other person  on   his  behalf   which  are   alleged  to   be  so disproportionate. A  ten year  period cannot  be said  to be incapable of yielding such a true and comprehensive picture. The assets  spilling-over from the anterior period, if their existence is probablised, would, of course, have to be given credit to  on the  income side  and would  go to  reduce the extent and  quantum of  the disproportion.  It  is  for  the prosecution to  choose what  is the period, having regard to the  acquisitive  activities  of  the  public  servant,  and characterise and  isolate that  period for special scrutiny. In this  case, the  selection of  a ten  year period between 1.4.1958 and  31.12.1968, cannot,  by reason  alone  of  the choice  of   the  period,   be  said  to  detract  from  the maintainability of the prosecution, and the view of the High Court on these points is erroneous. [913C-F; 914E; 915C-D]      Once  the   prosecution   establishes   the   essential ingredients  of   the  offence  of  criminal  misconduct  by proving, that  the public  servant is,  or was,  at any time during the period of his offence, in possession of pecuniary resources or  property disproportionate  to his  sources  of income  known   to  the  prosecution,  the  prosecution  has discharged its  burden of  proof and  the burden of proof is lifted from  the shoulders  of the  prosecution and descends upon the shoulders of the defence. It then becomes necessary for the  public servant  to satisfactorily  account for  the possession of such properties and pecuniary resources. It is erroneous to  predicate that  the  prosecution  should  also disprove the  existence of the possible source of the public servant. [914G-H; 915A-B]      Equally erroneous  and unsustainable is the view of the High Court  on the  proposition that  the respondent was not the beneficial owner in the joint bank investments where the respondent’s name was not the first name but his wife’s name occurred first.  The  assumption  that  in  all  the  joint- deposits, the  depositor first-named alone is the beneficial owner and  the depositor named second has no such beneficial interest, is  erroneous. The matter is principally guided by the terms  of the  agreement, inter  se between  the  joint- depositors. If, however, the 908 terms of  the acceptance  of the  deposit by  the  depositee stipulate that  the name of the beneficial owner shall alone be entered  first, then  the presumptive beneficial interest in favour of the first depositor might be assumed. There was no  such   material  before  the  Court  in  the  case.  The respondent virtually acknowledged his beneficial interest in the deposits  in the course of his examination under section 342, Cr. P.C. [915D-G]      However, though  there are  errors of  approach and  of assumption and  inference in the judgment under appeal, they did not by themselves detract from the conclusion reached by

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the  High   Court  that   in  the   ultimate  analysis,  the prosecution  had   not  established  the  case  against  the respondent beyond  reasonable doubt.  The conclusion reached by the  High Court  tends to  show that the disproportion of the assets  in relation  to the  known sources of income was such as to entitle the respondent to be given the benefit of doubt, though, however, on a consideration of the matter, it could not  be said that there was no disproportion or even a sizeable disproportion;  for instance, the acceptance by the High Court  of the  case of receipt by the respondent of the alleged gift  from his mother, was wholly unsupported by the evidence. There  were also  other  possible  errors  in  the calculations in  regard to  the carried-forward assets, etc. The finding  became inescapable  that  the  assets  were  in excess of  the known  sources of income. But on the question whether the  extent of  the disproportion  was  such  as  to justify a  conviction for  criminal misconduct under section 5(l)(e) read  with section 5(2), the Court thought it should not, in  the circumstances  of the  case, interfere with the verdict of  the High  Court, as,  in the  Court’s view,  the difference would be considerably reduced in the light of the factors pointed  out by  the High  Court. A somewhat liberal view was  required to  be taken of what proportion of assets in  excess  of  the  known  sources  of  income  constitutes "disproportion" for  the purposes  of section 5(1)(e) of the Act. [915G-H; 916A-D]      The respondent  should have the benefit of doubt. State of Maharashtra v. Wasudeo Ramachandra, A.I.R. 1989 S.C 1189, referred to. [916E]

JUDGMENT:      CRIMINAL APPELLATE  JURISDICTION: Criminal  Appeal  No. 318 of 1978.      From the  Judgment and order dated 29th and 30th April, 1976 of the High Court of Bombay in Criminal Appeal No. 1044 of 1973      A.S. Bhasme for the Appellant. 909      Prem Malhotra for the Respondent.      The Judgment of the Court was delivered by      VENKATACHALIAH, J. This appeal, by special leave by the State of  Maharashtra, arises out of and is directed against the judgment,  dated, April 29-30, 1976 of the High Court of judicature at  Bombay in  Criminal Appeal  No.1044/73 on its file  setting-aside  respondent’s  conviction  and  sentence dated, 21.7.73, under Section 5(1)(e) read with Section 5(2) of the  Prevention of  Corruption Act  of  1947  (’Act’  for short) in  Special Case No. 24/70 on the file of the Special Judge, Greater Bombay.      The special  judge held respondent guilty of the charge of Criminal  Misconduct in that respondent was in possession of property and pecuniary resources, disproportionate to his known  sources   of  income   for   which   he   could   not satisfactorily account;  and sentenced respondent to undergo rigorous imprisonment  for 3  years and  to pay  a  fine  of Rs.20,000.      The High  Court allowing  respondent’s appeal before it acquitted him  of the  charge.  The  State  has  come-up  in appeal.      2. At  the relevant time, respondent-Pollonji Darabshaw Daruwalla-was an  Appraiser in  the  customs  department  at Bombay. He and several other customs officers were suspected of their  complicity in  certain offences, concerning export

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of stainless  steel-ware to  Hongkong. On 9.12.1968, Police- inspector (PW  34), armed  with a  warrant  in  this  behalf searched the  residential-premises of  the respondent in the course of  the investigation  of that  case. Though  nothing incriminatory  for   purpose  of   that  investigation   was discovered;  however,   the  search   revealed  respondent’s possession of  furniture,  refrigerator,  tape-recorder  and cash of  Rs.7593 which  were susceptible of the suspicion of the commission of an offence under Section 5(1)(e) read with Section 5(2)  of the ’Act’. PW 34, accordingly, obtained the requisite authorisation to investigate into this offence and after investigation,  sought and  obtained  on  26.  10.1970 sanction to  prosecute respondent. On 2.11.1970, the charge- sheet was placed against the respondent for an offence under Section 5(1)(a) read with 5(2) of the Act.      3. The  substance of the charge was that respondent, as a  publicservant,   between  the   period  of  1.4.1958  and 31.12.1968 was in 910 possession of  pecuniary resources and property of the value of Rs.2,62,122.15;  that his  known sources of income during the said  period  was  Rs.85,114.12;  that,  therefore,  the property possessed by the respondent was disproportionate to his known sources of income to the extent of Rs.1,71,647 for which respondent  could not satisfactorily account and that, thereby respondent  was guilty of Criminal Misconduct within the meaning of and punishable under Section 5(2) of the Act. Respondent having  pleaded not  guilty, the  matter went for trial .      4. In  support of  the charge, the prosecution examined 34 witnesses.  A  number  of  documents  pertaining  to  the respondent’s investments  in Banks; in company deposits; and on shares both in his own name and jointly with his wife, as also documents  pertaining to  the salary  and emoluments of the respondent  between 1.4.1958 and 31.12.1968 were brought on record and marked in evidence.      In  the  course  of  the  trial,  for  the  most  part, respondent was  not defended  by  a  counsel.  Many  of  the prosecution witnesses  were not  cross-examined. It was only at a late stage of the proceedings that an advocate appeared for him. From what is disclosed by the trend of the answers, in the course of the examination under Section 342 Cr. P.C., the possession  of the  assets in the form of investments in Fixed Deposits  with Banks  and with companies and on shares in the  joint name  of the  respondent and  his wife was not disputed. The  defence was that respondent was in possession of substantial  assets even  anterior to  1.4.1958 and  that respondent had  also derived  substantial  assets  from  his wife’s side.  His wife was stated to be the only daughter of a practising doctor. Respondent also claimed that he and his daughter were in receipt of gifts from his mother.      5. The  trial court  went through  the somewhat complex exercise of  computing and  collating the particulars of the investments, made  by the  respondent in his own name and in the name  of his  wife from  time to time over the years. In Chart No.  I, appended  to and  forming part of its judgment the trial  court formulated  what, according to it, were the results of  the collation  of these  particulars as  to  the receipts and investments for the various years. In Chart No. II, the  pay and  emoluments which respondent was in receipt of, for  and during  the relevant  period were  set-out.  In Chart No.  III, the  trial court  has set-out the amounts of interest and dividends received by the respondent during the relevant-years. 911

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    6. The  substance of the outcome of the exercise by the trial, in  A relation  to the total-income of the respondent for the  relevant-period was  referred to  and summarized by the High Court thus:           "The  total   of  all  these  items  aggregate  of           Rs.169736.69. It  is urged  on behalf of the State           that   out   of   this,   estimated   expense   of           Rs.31,114.47 should  be deducted because they were           not available  to the respondent to be accumulated           as his  assets. So  the total sources available to           him were Rs.1,38,621.83."      Referring  to   the  total   assets  acquired   by  the respondent during  the relevant-period and the extent of the disproportion, the  High Court  noticed the  results of  the findings of the trial court thus:           "It  was   urged  that   the  total  assets  being           Rs.2,21,606.45, the  assets of  worth Rs.827984.23           were in excess".      7. We have heard Shri Bhasme, leamed counsel in support of the  appeal and  Shri U.R.  Lalit, who  was requested  to assist  the   court  as   Amicus  Curiae   in  view  of  the circumstance that respondent remained unrepresented. Learned Counsel have  taken us through the judgment under appeal and the evidence on record on the material points. E      8. From what we can gather from the somewhat spread-out reasoning  of   the  High  Court,  the  considerations  that principally weighed  with the  High Court  in reaching  such conclusions as  it did on the material points in controversy before it, admit of being formulated thus.           (a)  That the  selection of  the particular period      (from 1.4.1958  to 3  1.12.1968) for  the ascertainment      and determination  of disproportionate-assets is itself      arbitrary and caused prejudice to the respondent;                The period of reckoning should have been from           1946 to 1968 as that would have given a fuller and           a more complete picture;           (b)  That it  was erroneous to proceed-as was done      by the trial H 912           court-on  the  premise  that  respondent  was  the beneficial owner  of the  joint bank  investments where  his name was not the first name;                That prosecution  had failed to establish-and           it was erroneous on the part of the trial court to           have assumed-B  that in respect of the deposits in           which  the   wife’s  name   occurred   first   and           respondent’s name second, the respondent alone was           the beneficial-owner           (c)  That the  deduction of  Rs.41,839.17  as  the      carried-forward  assets   from  the   period  prior  to      1.4.1958  was   inadequate  and  it  should  have  been      Rs.56,822.                The effect of this would be that the whole of           the investments  made-in  the  first-year  of  the           accounting-period viz,  1954, would be absorbed by           the higher assets so carriedforward;           (d)  That a sum of Rs.6,000 which was the value of      the  probable   gift  from   the  mother  and  Rs.1,275      representing the brokerage on the fixed deposits had to      be given  credit to  the respondent  on  the  resources      side;           (e)  That from  the bank account of Veera Bai, the      wife of  the respondent, a sum of Rs.82,827.99 had been      with-drawn  during  the  period  between  1.4.1958  and      31.12.1968 and  that only  Rs.31,010.12 had  been given

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    credit to  on the  plus side in the accounting and that      the  balance  of  Rs.51,815.87  should  be  treated  as      belonging to Veera Bai in joint investments and should,      therefore be  excluded from  the value  of respondent’s      assets.      9.  The   High  Court,   on  the  basis  of  these  re- calculations, held  that in  all a sum of Rs.77,215,03 could not be treated as the assets of the respondent and had to be deducted from  a sum  of Rs.2,21,66.45.  In other words, the High Court held that the value of the assets of Rs.82,984.23 said to  be in  excess of  and disproportionate to the known sources  of   income  should  be  reduced  by  Rs.77,215.03. Concluding, the High Court observed:           "32. Now  comes the  question, whether a man after           serving for  22 years  from 1946  to 1968,  on the           prosecution own 913           showing, is  able to  save Rs.  1,38,822 can it be           said that  the assets  of Rs. 1,41,495 as observed           by us,  are disproportionate  assets  as  required           under  Section   5(1)(e)  of   the  Act.  In  this           connection, in  our opinion,  the difference is so           negligible  that   it  cannot   be  said   to   be           disproportionate".      10. Shri  Bhasme for  the appellant  seriously assailed the reasoning  of and  the conclusion  reached by  the  High Court on  these points  and more  particularly on the points noticed at  (a) and  (b). Learned counsel submitted that the view of  the High  Court on  points (a) & (b) was manifestly erroneous and  the High  Court misdirected  itself in law on these propositions.      We are  inclined to  agree with  the learned counsel on the submission  on points (a) and (b). In order to establish that  a   public-servant  is   in  possession  of  pecuniary resources  and   property,  disproportionate  to  his  known sources of  income, it  is not imperative that the period of reckoning be  spread-out for  the entire stretch of anterior service of  the public-servant. There can be no general rule or criterion,  valid for  all cases, in regard to the choice of the  period for  which accounts  are taken  to  establish criminal misconduct under Section 5(1)(e) of the ’Act’.      The choice of the period must necessarily be determined by the  allegations of  fact on  which  the  prosecution  is founded and  rests. However,  the period  must be such as to enable a true and comprehensive picture of the known sources of income  and  the  pecuniary  resources  and  property  in possession of  by the  public-servant either  by himself  or through any other person on his behalf, which are alleged to be so  disproportionate. In the facts and circumstances of a case, a  ten year  period cannot  be said to be incapable of yielding such  a true  and comprehensive picture. The assets spilling-over from  the anterior  period, if their existence is probablised, would, of course, have to be given credit-to on the income side and would go to reduce the extent and the quantum of the disproportion.      On this aspect, the High Court observed:                "... 20. But at the same time, it has also to      be remembered that the prosecution, without showing any      reason has  selected to  begin the  calculation of  the      assets from  1958. I  do not see any substantial reason      in the selection of the year 1958. It is on record that      from 1954, the accused had 914                become the  Appraiser. It  is also  on record      that from  year 1958 the accused had separated from his

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    brother mother  after the  child was  born to his wife.      When I  a the  Public Prosecutor  for  the  reason  for      selecting the  period of  1958 to 1968, he said that it      was done because the prosecution could lead evidence so      as to  show that  the investment  during these 10 years      would be  disproportionate of  assets compared  to  the      moneys  received.   Looking  to   the  logic   of   the      prosecution, if  amounts invested upto 1958 excluded by      themselves,  I   see  considerable   force  in  Vashi’s      arguments that  the first  year of  1958 should also be      considered along  with the  previous years. There is no      charm  in   selecting  the   year.  I  think  that  the      prosecution  would  have  been  in  a  better  position      instead of selecting the period of 1958 to 1968, it had      taken the  entire period  service from 1946 to 1968 and      given credit  of the  amount that he has earned against      all the  assets that  he had collected. It is therefore      difficult to  understand why the prosecution has chosen      the period from 1958 to 1968                     ".... 20.  We have  carefully considered      this evidence  of the Police Inspector but still we are      not convinced about the selected of the period. We feel      that the  prosecution by  selecting the check period of      10 years, when the accused had put in service from 1946      to 1968,  i.e. for  22 years has done something whereby      the chances  of prejudicing the case of the accused are      there      11. The  assumptions implicit  in the above observation of the High Court suffer from a basic fallacy. It is for the prosecution to  choose what  according to  it, is the period which having  regard to  the acquisitive  activities of  the public-servant in  amassing wealth, characterise and is late that period  for special  scrutiny. It is always open to the public-servant to  satisfactorily account for the apparently disproportionate  nature   of  his   possession.  Once   the prosecution establishes  the essential  ingredients  of  the offence of  Criminal Misconduct  by proving, by the standard of criminal  evidence, that  the publicservant is, or was at any time  during the period of his offence, in possession of pecuniary resources  or  property  disproportionate  to  his sources of  income known to the prosecution, the prosecution discharges its  burden of  proof and  the burden of proof is lifted from  the shoulders  of the  prosecution and descends upon the shoulders of the defence. It then becomes necessary for the public-servant to satis- 915 factorily account  for the possession of such properties and pecuniary resources.  It is  erroneous to predicate that the prosecution  should  also  disprove  the  existence  of  the possible sources  of income of the public servant. Indeed in State of  Maharashtra v.  Wasudeo Ramchandra, A.I.R. 1981 SC 1189 this Court characterised the approach of that kind made by the High Court as erroneous. It was observed:                " ....  The High  Court,  therefore,  was  in      error in  holding that  a public  servant  charged  for      having disproportionate  assets in  his possession  for      which  he  cannot  satisfactorily  account,  cannot  be      convicted of  an offence  under Section  5(2) read with      Sections 5(1)(e)  of the  Act  unless  the  prosecution      disproves all possible sources of income In the  present case,  the selection  of a  ten year  period between 1.4.1958  and 31.12.1968  cannot, by reason alone of the choice  of the  period, be  said  to  detract  from  the maintainability of the prosecution.      12. Equally erroneous, in the view of the High Court on

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the proposition noticed at point (b). The assumption that in all jointdeposits,  the depositor  first-named alone  is the beneficial owner  and the depositor named second has no such beneficial interest  is erroneous. The matter is principally guided by  the terms of the agreement, inter-se, between the joint depositors.  If, however,  the terms of the acceptance of the  deposit by  the depositee stipulate that the name of the beneficial  owner shall alone be entered first, then the presumptive beneficial  interest  in  favour  of  the  first depositor might be assumed. There is no such material before the court in this case.      Indeed, the  answers of  the respondent to the specific questions under  Section 342  Cr.  P.C.  pertaining  to  the nature of  the deposits  and the  suggestion-implicit in the questions-as to  the beneficial  ownership in the respondent in the  deposits do  not support  the view of the High Court and lend  credence to  any doubts  in the matter. Respondent virtually  acknowledged   his  beneficial  interest  in  the deposits in the course of his examination under Section 342. The  view  of  the  High  Court  on  point  (b)  is  clearly unsustainable.      13. However, these errors of approach and of assumption and inference  in the  judgment  under  appeal  do  not,  by themselves, detract  from the conclusion reached by the High Court that,  in the  ultimate analysis,  the prosecution has not  established   the  case   against   respondent   beyond reasonable doubt. 916      The discussion  of and  the conclusion  reached on  the contents and  parts (c)  to (e)  by the  High Court tends to show that the disproportion of the assets in relation to the known source  of income  is such  that respondent  should be given  the   benefit  of   doubt  though   however,   on   a consideration of the matter, if cannot be said that there is no disproportion  or  even  a  sizeable  disproportion.  For instance, Shri  Bhasme is  right in  his contention that the acceptance by the High Court of the case of the alleged gift from the mother is wholly unsupported by the evidence. There are also other possible errors in the calculations in regard to point(e). The finding becomes inescapable that the assets were in excess on the known sources of income.      But  on   the  question   whether  the  extent  of  the disproportion  is  such  as  to  justify  a  conviction  for criminal misconduct  under Section 5(1)(e) read with Section 5(2), we  think, we  should not, in the circumstanees of the ease, interfere  with the  verdict of  the High Court as, in our view,  the difference  would be  considerably reduced in the light  of the  factors pointed  out by the High Court. A somewhat  liberal   view  requires   to  be  taken  of  what proportion of  assets in  excess of  the  known  sources  of income constitutes  "disproportion" for  purpose of  Section 5(1)(e) of the Act.      We think that the respondent should have the benefit of doubt.      The appeal is accordingly dismissed. S.L.                                       Appeal dismissed. 917