http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 8  

PETITIONER: C.S. D. SWAMY

       Vs.

RESPONDENT: THE STATE

DATE OF JUDGMENT: 21/05/1959

BENCH: SINHA, BHUVNESHWAR P. BENCH: SINHA, BHUVNESHWAR P. GAJENDRAGADKAR, P.B. WANCHOO, K.N.

CITATION:  1960 AIR    7            1960 SCR  (1) 461  CITATOR INFO :  RF         1961 SC 583  (8)  R          1962 SC 605  (19)  D          1962 SC1204  (4)  R          1964 SC 464  (13,37)  F          1971 SC 786  (13)  R          1977 SC2091  (5)  R          1979 SC 602  (6)  R          1981 SC1186  (11,13)  R          1990 SC1459  (30)

ACT: Prevention of Corruption-Criminal misconduct in discharge of official  duty-Charge  in respect of specific  instances  of corruption found unsustainable on evidence-Conviction  based on presumption Validity-Prevention of Corruption Act,  1947, (2 of 1947), ss.5(1)(a), 5(1)(d), 5(3).

HEADNOTE: The  appellant  was  put up on trial on  charges  under  ss. 5(1)(a)  and  5(1)(d) of the Prevention of  Corruption  Act, 1947.  Payments of particular sums by way of bribe were  not proved  against him.  But the High Court, holding  that  the appellant’s bare statements from the dock unsupported by any other  acceptable evidence could not satisfactorily  account for  the large deposits standing to his credit in  his  bank accounts raised the presumption under s. 5(3) of the Act and held  him guilty of criminal misconduct in the discharge  of his  official duty under s. 5(1)(d) of the  Act,  concerning the conviction and sentence passed on him by the 462 special  Magistrate.   It  was contended on  behalf  of  the appellant that the charge relating to specific instances  of bribery having failed, the contrary to the presumption under S. 5(3) Of the Act should have been held as established  and in absence of any finding that his statements were false  it should  have been held that the charge against him  had  not been proved beyond all reasonable doubt.   Held, that S. 5(3) of the Prevention of Corruption Act did not  create  a  new offence but only laid  down  a  rule  of evidence  that empowered the Court to presume the  guilt  of the accused in certain circumstances, contrary to the  well-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 8  

known principle of criminal law that the burden of proof was always  on  the  prosecution and never  shifted  on  to  the accused.  The  Legislature by using the expression  "  satisfactorily account  "  in S. 5(3) of the, Act, cast the burden  on  the accused not only to offer a plausible explanation as to  how he  came by the large wealth disproportionate to  his  known sources  of income, but also to satisfy the court  that  his explanation  was  worthy of credence.   Consequently,  cases under  the  general  law where it had  been  held  that  the accused  could  be  exonerated if  he  offered  a  plausible explanation could have no application.  The  expression  " known sources of income " used  in  that section  referred to such sources of income as became  known to  the  prosecution as a result of  the  investigation  and could not mean those that were witthin the special knowledge of  the  accused,  and it was no part of  the  duty  of  the prosecution to lead evidence in that regard. Where the prosecution fulfilled the conditions laid down  by the  earlier  part  of s. 5(3) Of  the  Act,  the  statutory presumption had to be raised and it would be for the accused to rebut the same by cogent evidence. Rex  v.  Carrbriant,  (1943) 1 K.B.  607,  and  Otto  George Gfeller v.     The  King,  A.I.R. (30) 1943 P.C.  211;  Hate Singh Bhagat Singh v.    State of Madhya Bharat, A.I.R. 1953 S.C.  468  and  Regina  v.  Dunbar,  1958  1  Q.B.  1,  held inapplicable.    The failure to substantiate a charge under S. 5(1)(a)  of the Act on evidence would not necessarily mean an  acquittal in respect of a charge under S. 5(1)(d) of the Act.  If  the requirements of the earlier part of S. 5(3) were established by  evidence,  conviction for criminal misconduct  under  s. 5(1)(d)  based on the presumption under S. 5(3) Of  the  Act would be perfectly valid in law.

JUDGMENT:   CRIMINAL  APPELLATE JURISDICTION: Criminal Appeal No.  177 of 1957. Appeal  by special leave from the judgment and  order  dated April 11, 1957, of the Punjab High Court in Criminal  Appeal No. 7-D of 1955, arising out of the 463 judgment  and order dated January 19, 1955, of the Court  of Special Judge, at Delhi in Corruption Cas No. 2 of 1953.   G. S. Pathak, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant.    C.     K.  Daphtary,  Solicitor-General  of  India,  G.C. Mathur and R. H. Dhebar, for the respondents.     1959.  May 21.  The Judgment of the Court was  delivered by SINHA  J.-This appeal by special leave is  directed  against the  judgment and order of the High Court on Judicature  for the  State  of Punjab at Chandigarh dated  April  11,  1957, affirming  those of the Special Judge, Delhi, dated  January 19,  1955,  convicting the appellant under s.  5(2)  of  the Prevention  of  Corruption Act (2 of  1947).   The  sentence passed   upon  the  appellant  was  six   months’   rigorous imprisonment.   The facts leading upto this appeal, may shortly be  stated as  follows: During and after the Second World War,  with  a view  to augmenting the food resources of the  country,  the Government  of India instituted a "Grow More Food  Division" in the Ministry of Agriculture.  S. Y. Krishnaswamy, a Joint

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 8  

Secretary  in; that Ministry, was placed in charge  of  that Division,  with effect from January 2, 1947.  The  appellant was  working in that Department as Director of  Fertilizers. He  was  a former employee of the  well-known  producers  of fertilizers,  etc., called "Imperial Chemical Industries  ". Fertilizers  were  in  short  supply  and,  therefore  large quantities  of  such  fertilizers had to  be  imported  from abroad.   As chemical fertilizers were in short  supply  not only  in  India but elsewhere also,  an  international  body known  as  the  " International  Emergency  Food  Council  " (I.E.F.C.) had been set up in United States of America,  and India was a member of the same.  That body used to  consider the  requirements  of  different  countries  in  respect  of fertilizers, and used to make allotments.  Russia was not  a member  of  that Organisation.  Towards the end of  1946,  a Bombay firm, called ’Messrs.  Nanavati and Company’, 464 which used to deal in fertilizers and had bussiness  contcts with Russia, offered to supply ammonium sulphate,from Russia to  the  Government of India.  In the years 1947  and  1948, considerable  quantities of ammonium sulphate were  obtained through Messrs.  Nanavati and Company aforesaid.  One D.  N. Patel,  who was a former employee of Messrs.   Nanavati  and Company,  joined a partnership business under the  style  of Messrs.   Agri Orient Industries Limited of  Bombay’.   This firm obtained a contract from the Government for the  supply of  twenty  thousand tons of ammonium sulphate  from  United States of America, in February, 1950.  In the course of this business deal, the said patel experienced some difficulty in obtaining  Government  orders regarding  some  consignments. The  appelant was approached in that connection; and  it  is aleged that Patel paid to the appellant Rs. 10,000 at Bombay as  bribe  for facilitating matters.  But in  spite  of  the alleged  payment, difficulties and delays occurred  and  the consignments,  even after they had reached heir  destination in  India,  were  not  moving  fast  enough,  thus,  causing considerable loss to the firm in which Patel was interested. Patel,  therefore approached Shri K. M. Munshi who was  then the  Minister  For  Food  and  Agriculture  in  Delhi,   and disclosed to him the alleged payment of bribe of Rs. 10,000, as also the fact that the appellant had been receiving  arge sums  of money by way of bribes for showing favours  in  the discharge  of  his duties in the Department.   The  Minister aforesaid  directed thorough enquiries to be made,  and  the matter  was placed in the hands of the Inspector-General  of Special Police Establishment.  A departmental committee  was also  set up of three senior officers of the  Department  to hold a departmental inquiry, and ultimately, as a result  of that inquiry, the Minister passed orders of dismissal of the appellant, in August, 1950.  A further inquiry in the nature of  a  quasi-judicial  inquiry, was held  by  the  late  Mr. Justice Rajadhyaksha of the Bombay High Court, in 1951.  The inquiry  related  to matters concerned with  the  import  of fertilizers into India.  After receipt of the report of  the inquiry by 465 the  late  Mr. Justice Rajadhyaksha, in January,  1952,  and after consideration of the matters disclosed in that report, a first information report was lodged on April 4, 1952,  and thorough investigations were made into the complaints.   The result  was that two cases were instituted.  The  first  one related to an-" alleged conspiracy involving the  appellant, Krishnaswamy and one of the proprietors of Messrs.  Nanavati and  Company,  and several others, relating to  bribery  and corruption  in  connection  with the  supplies  of  ammonium

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 8  

sulphate from Russia.  With that case, we are not  concerned here.  -The  second case, out of which  the  present  appeal arose,  was  instituted  against  two  persons,  namely  the appellant  and  Krishnaswamy, that they had entered  into  a conspiracy  to  receive  bribes and  presents  from  various firms,  in connection with the import of  fertilizers.   The learned  Special Judge, who heard the prosecution  evidence, came  to  the  conclusion  that  it  did  not  disclose  any conspiracy  as  alleged, except in certain  instances  which formed the subject-matter of the charge of conspiracy  which was being tried separately, as aforesaid.  The present case, therefore,  proceeded against the appellant alone under  two heads  of  charge, namely, (1) that he had  been  habitually accepting  or obtaining, for himself or for others,  illegal gratifications  from a number of named firms and others,  in connection with the import and distribution of  fertilizers- s.  5(1)  (a)  of the Prevention  of  Curruption  Act,  1947 (hereinafter referred to as ’the Act’), and (2) that he  had been  habitually  receiving  presents of  various  kinds  by abusing his position as a public servants. 6 (1) (d) of  the Act.  The High Court, in agreement with the learned  Special Judge,  found the evidence of P. Ws. 9 and 10, who were  the principal  prosecution witnesses as regards the  passing  of certain  sums  of  money from certain  named  firms  to  the appellant, as wholly unreliable.  Further more, Patel, being in the position of an accomplice, his evidence did not  find sufficient corroboration from other facts and  circumstances proved in the case.  The High Court, not being is a position to  accept  the tainted evidence aforesaid, found  that  the case of payment of 59 466 particular  sums  of money by way of bribes,  had  not  been established.  But relying upon the presumption under  sub-s. (3)  of  s.  8  of  the Act, the  High  Court  came  to  the conclusion   that  the  appellant  had  not   satisfactorily accounted  for  the receipt of Rs. 73,000 odd  in  cash  and about Rs. 18,000 by cheques, during the years 1947 and 1948, which  sums were wholly disproportionate to the  appellant’s known  source of income, namely, his salary as a  Government servant, and that, therefore, he was guilty of criminal mis- conduct  in the discharge of his official duties.   In  that view of the matter, the High Court confirmed the  conviction and sentence of six months’ rigorous imprisonment, passed by learned Special Judge of Delhi.   The learned counsel for the appellant has contended (1)  that on the admitted facts, the ingredients of s. 5(3)   of   the Act,  had not been established, (2) that when the charge  in respect  of specific instances of corruption, has  not  been proved,  as found by the courts below, it should  have  been held that the contrary of the presumption contemplated by s. 5(3), namely, of the guilt of criminal misconduct, had  been established, and (3) that the appellant’s statement under s. 342  of  the  Code  of  Criminal  Procedure,  as  also   his statements contained in his written statement, had not  been proved to be false, and that, therefore, it should have been held that the case against the appellant had not been proved beyond all reasonable doubt.   It is true that s. 5(3) of the Act, does not create a  new offence but only lays down a rule of evidence, enabling  the court   to   raise  a  presumption  of  guilt   in   certain circumstances a rule which is a complete departure from  the established  principles of criminal jurisprudence  that  the burden  always  lies  on the prosecution to  prove  all  the ingredients  of  the offence charged, and  that  the  burden

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 8  

never shifts on to the accused to disprove the charge framed against him.  With reference to the provisions of s. 5(3) of the Act, it has been contended, in the first instance,  that the  charge of criminal misconduct in the discharge  of  his official duties, is now confined to the fact as disclosed in his bank accounts with the Imperial Bank of India 467 (New  Delhi  Branch)  and  the  Chartered  Bank  of   India, Australia  and China (Chandni Chowk Branch), that  his  nett credit with those banks totalled upto a figure just over Rs. 91,000.  He accounted for that large balance by stating that he was the only son of his father who had been able to  give him advanced education in England for a period of over seven years;  that after his return to India, he had been  holding highly  paid  posts  for  about 20  years  in  the  Imperial Chemical  Industries, in the Army and in the  Government  of India;  that  he  had no children and  no  other  dependants except  his wife; that with his limited household  expenses, he  was able to save a good round sum out of his salary  and allowances  which were considerable, because his  duty  took him  throughout the length and breadth of the country,  thus enabling  him  to  earn  large  sums  of  money  by  way  of travelling  allowances  which he saved by staying  with  his friends  and relations during his official tours.  He  added that he had received a gratuity for services rendered to the Army,  and also considerable sums of money as his  provident fund from the Imperial Chemical Industries, towards the  end of November, 1947.  He also stated that his deposits in  the two banks aforesaid, represented sums of money saved in cash out of his salaries, allowances and gifts from his  parents, as also re-payments of loans advanced by him to his  friends while he was in the Army, and later.  He added that some  of the  deposits  in cash were really  re-deposits  of  earlier withdrawals from the banks, as also the sale-proceeds of his old car sold in June, 1948, for Rs. 5,500, together with the sale-proceeds  of  gold jewelry belonging to his  wife.   He also tried to explain the large deposits of cash in 1948, by alleging  that he had borrowed a sum of rupees  20,000  from one Ganpat Ram on a pronote (which he, later on, re-paid and obtained a receipt), with a view to building a house of  his own  in  Delhi,  but as that negotiation  fell  through,  he deposited  that cash amount in his account in the two  banks aforesaid  in August, 1948, as the creditor aforesaid  would not  accept  re-payment of the loan within a period  of  two years, unless the interest for that period was also paid 468 at the same time.  With reference to those statements of the accused  from  the  dock, it was contended  by  the  learned counsel  for  the accused that in view of  those  facts,  it could  not  be said that the accused had not  accounted  for those large deposits with the two banks aforesaid.  The High Court  has  pointed out that the matters alleged  in  the  , statement  aforesaid of the accused, were capable  of  being easily  proved by evidence which had not been adduced;  that allegation was no proof, and that his lucrative posts in the Imperial  Chemical Industries and in the Army, were  matters of  history in relation to the period for which  the  charge had  been  framed.   The High  Court,  therefore,  found  it impossible to accept the appellant’s bare statement from the dock  as to how amounts earned far in the past,  could  find their way into the banks during the years 1947 and 1948.  It has  been repeatedly observed by this Court that this  Court is  not  a  Court  of criminal appeal,  and  we  would  not, therefore, examine the reasons of the High Court for  coming to certain conclusions of fact.  Apparently, the High  Court

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 8  

considered  all the relevant statements made by the  accused under  s. 342 of the Code of Criminal Procedure and  in  his written  statement,  and came to the conclusion  that  those statements had not been substantiated.  We cannot go  behind those findings of fact. Reference  was also made to cases in which courts  had  held that if plausible explanation had been offered by an accused person  for  being in possession of property which  was  the subject-matter of the charge, the court could exonerate  the accused   from   criminal  responsibility   for   possessing incriminating property.  In our opinion, those cases have no bearing upon the charge against the appellant in this  case, because  the  section  requires  the  accused  person  to  " satisfactorily  account."  for the possession  of  pecuniary resources or property disproportionate to his known  sources of  income.   Ordinarily, an accused person is  entitled  to acquittal  if  he  can  account  for  honest  possession  of property which has been proved to have been recently  stolen (see illustration (a) to s. 114 of the Indian Evidence  Act, 1872).  The rule of law is that if there 469 is a prima facie explanation of the accused that he came  by the  stolen goods in an honest way, the inference of  guilty knowledge  is  displaced.   This is  based  upon  the  well- established  principle that if there is a doubt in the  mind of the court as to a necessary ingredient of an offence, the benefit  of  that  doubt must go to the  accused.   But  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. Another argument bearing on the same aspect of the case,  is that the prosecution has not led evidence to show as to what are  the known sources of the appellant’s income.   In  this connection, our attention was invited to the evidence of the Investigating Officers, and with reference to that evidence, it  was  contended  that those officers have  not  said,  in terms,  as to what were the known sources of income  of  the accused,  or  that  the salary was the only  source  of  his income.   Now,  the expression " known sources of  income  " must have reference to sources known to the prosecution on a thorough  investigation  of the case.  It was  not,  and  it could  not  be, 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 s. 106 of the Evidence Act.  The prosecution  can only  lead evidence, as it has done in the instant case,  to show  that  the  accused was known to  earn  his  living  by service  under  the Government during the  material  period. The  prosecution would not be justified in  concluding  that travelling  allowance was also a source of income when  such allowance  is  ordinarily  meant to  compensate  an  officer concerned  for  his  out-of-pocket  expenses  incidental  to journeys  performed  by him for his  official  tours.   That could not possibly be alleged 470 to  be a very substantial source of income.  The  source  of income  of  a  particular individual will  depend  upon  his position in life with particular reference to his occupation or avocation in life.  In the case of a, Government servant,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 8  

the  prosecution  would,  naturally, infer  that  his  known source  of income would be the salary earned by -him  during his active service.  His pension or his provident fund would come  into calculation only after his retirement, unless  he had  a justification for borrowing from his provident  fund. We  are not, therefore, impressed by the argument  that  the prosecution  has  failed to lead proper evidence as  to  the appellant’s  known  sources of income.  It may be  that  the accused  may  have  made  statements  to  the  Investigating Officers as to his alleged sources of income, but the  same, strictly,  would  not be evidence in the case,  and  if  the prosecution has failed to disclose all the sources of income of  an  accused person, it is always open to  him  to  prove those other sources of income which have not been taken into account or brought into evidence by the prosecution.  In the present case, the prosecution has adduced the best  evidence as to the pecuniary resources of the accused person, namely, his bank accounts.  They show that during the years 1947 and 1948, he had credit at the banks, amounting to a little over Rs.  91,000.   His  average salary per  mensem,  during  the relevant  period,  would be a little over  Rs.  1,100.   His salary,  during the period of the two years,  assuming  that the whole amount was put into the banks, would be less  than one-third of the total amount aforesaid, to his credit.   It cannot, therefore, be said that he was not in possession  of pecuniary resources disproportionate to his known sources of income.  It  was next contended that the burden cast on the  accused by sub s.(3) of s. 5 of the Act, was not such a heavy burden as  lies  on  the prosecution positively to  prove  all  the ingredients  of an offence.  In that  connection,  reference was  made  to  a number of decisions,  particularly  Rex  v. Carrbriant(1), to the effect (1)  (1943) 1 K. B. 607, referred to under Art. 3907  at  p. 1511  in Archbold Criminal Pleading Evidence and  Practice’, 34th Edn. 471 that  the onus of proof lies on the accused person  to  show that  a  certain proved payment was in fact  not  a  corrupt payment, but that the burden is -less heavy than that which, ordinarily, lies on the prosecution to prove its case beyond all  reasonable  doubt.   Reference was also  made  to  Otto George  Gfeller v. The King (1), Hate Sing Bhagat  Singh  v. State of Madhya Bharat (2) and Regina v. Dunbar(3).  In  our opinion, those decisions do not assist the appellant in  the present case.  In this case, no acceptable evidence,  beyond the bare statements of the accused, has been adduced to show that   the  contrary  of  what  has  been  proved   by   the prosecution,  has been established, because the  requirement of the section is that the accused person shall be  presumed to be guilty of criminal misconduct ’in the discharge of his official duties " unless the contrary is proved." The  words of  the statute are peremptory, and the burden must lie  all the  time on the accused to prove the contrary.   After  the conditions laid down in the earlier part of sub-s. (3) of s. 5  of  the  Act,  have been fulfilled  by  evidence  to  the satisfaction of the court, as discussed above, the court has got  to  raise the presumption that the  accused  person  is guilty  of  criminal  misconduct in  the  discharge  of  his official duties, and this presumption continues to hold  the field unless the contrary is proved, that is to say,  unless the  court is satisfied that the statutory  presumption  has been  rebutted  by  cogent evidence.   Not  only  that,  the section goes further and lays down in forceful words that  " his conviction therefore shall not be invalid by reason only

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 8  

that it is based solely on such presumption."   Lastly, it was argued that when the section speaks of  the burden being on the accused person to prove the contrary, it must  mean  adducing evidence to disprove the  charge.   The argument proceeds that as in the present case, the facts and circumstances  mentioned in the charge had not been  proved, the accused person must be acquitted as having disproved the charge  with  reference to the particular cases  of  bribery which had been held not proved.  In our opinion, there is a (1) A.I.R. 1943 P.C. 211.   (2) A.I R. 1953 S.C. 468. (3) [1958] 1 Q.B. 1 472 fallacy in this argument.  The finding of the High Court and the  court  below,  is that the prosecution  had  failed  to adduce  sufficient evidence to prove those particular  facts and circumstances of criminal misconduct within the  meaning of  s.  5(1)(a)  of the Act, but the failure  to  bring  the charge  home  to  the accused under  s.  5(1)(a),  does  not necessarily lead to the legal effect contended for.  As soon as  the  requirements of sub-section (3) of s. 5  have  been fulfilled,the  Court will not only be justified  in  making, but is called upon to make, the presumption that the accused person is guilty of criminal  misconduct within the  meaning of s. 5(1)(d). In   order  to  succeed  in  respect  of  the charge under s.     5(1)(a),  the prosecution has  to  prove that  the accused person had accepted or obtained or  agreed to  accept  or  attempted  to obtain  from  any  person  any gratification  by way of bribe within the meaning of s.  161 of  the Indian Penal Code.  That charge failed  because  the evidence  of P.W. 9 was not accepted by’ the High  Court  or the  trial  court.   The charge under s.  5(1)(d)  does  not require any such proof.  If there is evidence forthcoming to satisfy  the requirements of the earlier part of sub-s.  (3) of  s. 5, conviction for criminal misconduct can be had  -on the basis of the presumption which is a legal presumption to be drawn from the proof of facts in the earlier part of  the sub-s.  (3) aforesaid.  That is what has been found  by  the courts below against the accused person.  Hence, the failure of the charge under cl. (a) of sub-s. (1) of s. 5, does  not necessarily mean the failure of the charge under s. 5(1)(d).   In our opinion, the judgment of the High Court is correct, and  the appeal is, accordingly, dismissed.  If the  accused is on bail, he must surrender to his bail bond.                             Appeal dismissed. 473