Introduction

Section 13(1)(e) in the Prevention of Corruption Act, 1988

13. Criminal misconduct by a public servant:

(1) A public servant is said to commit the offence of criminal misconduct,- (e) if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income. Explanation.—For the purposes of this section, “known sources of income” means income received from any lawful source and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant.

Case Laws

  1. M. Krishna Reddy v. State Deupty Superintendent of Police, Hyderabad (SC)- 17-07-1992

An analysis of Section 5(1)(e) of the Act, 1947 which corresponds to Section 13(1)(e) of the new Act of 1988 shows that is not the mere acquisition of property that constitutes an offence under the provisions of the Act but it is the failure to satisfactorily account for such possession that makes the possession objectionable as offending the law…In other words, only after the prosecution has proved the required ingredients, the burden of satisfactorily accounting for the possession of such resources or property shifts to the accused…We are unable to appreciate that reasoning and hold that the prosecution has not satisfactorily discharged the expected burden of proof in disproving the claim of the appellant. Therefore, on the fact of these unassailable documents i.e. the wealth tax and income tax returns, we hold that the appellant is entitled to have a deduction of Rs. 56,240.00 from the disproportionate assets of Rs. 2,37,842/……the prosecution cannot be said to have successfully fixed the criminality under Section 5(1)(e) of the Act

on the appellant who had completed an unblemished service well for over a period of 25 years-  https://www.legitquest.com/case/m-krishna-reddy-v-state-deupty-superintendent-of-police-hyderabad/12A1

2. D.S.P., Chennai v. K. Inbasagaran (SC)- 07-12-2005

In view of the explanation given by the husband and when it has been substantiated by the evidence of the wife, the other witnesses who have been produced on behalf of the accused coupled with the fact that the entire money has been treated in the hands of the wife and she has owned it and she has been assessed by the Income-tax Department, it will not be proper to hold the accused guilty under the prevention of Corruption Act as his explanation appears to be plausible and justifiable. The burden is on the accused to offer plausible explanation and in the present case, he has satisfactorily explained that the whole money which has been recovered from his house does not belong to him and it belonged to his wife. Therefore, he has satisfactorily accounted for the recovery of the unaccounted money. Since the crucial question in this case was of the possession and the premises in question was jointly shared by the wife and the husband and the wife having accepted the entire recovery at her hand, it will not be proper to hold husband guilty. https://www.legitquest.com/case/dsp-chennai-v-k-inbasagaran/2252F

3. Tej Prakash Shami & Anr vs The State Of W. B. & Anr (Calcutta HC)- 6 May, 2016

The Income Tax Return was also submitted long after the check period and long after initiating the present criminal proceeding by the Central Bureau of Investigation against the petitioner no.1. The above aspect of evidence collected during investigation indicates that the petitioner no.2 tried to help her husband petitioner no.1 to wriggle out of the liability of acquiring disproportionate assets during the check period, but the said evidence cannot go to prima facie establish that the petitioner no.2 instigated the petitioner no.1 or engaged in any conspiracy or intentionally aided by doing any specific act for acquiring disproportionate assets by the petitioner no.1. In the absence of any evidence to establish the prima facie charge of abetment against the petitioner no.2, I would like to accept the contention made on her behalf that she is not liable to be prosecuted for the offence under Section 109 of the Indian Penal Code read with Section 13(2) and Section 13(1)(e) of the Prevention of Corruption Act. https://www.legitquest.com/case/tej-prakash-shami–anr-v-the-state-of-w-b–anr/1D1148

4. Selvi. J. Jayalalithaa & Others v. Central Bureau of Investigation, represented by its SP/CBI/CBI, Chennai (Madras HC)- 30-09-2011

It is to be reiterated that the whole allegation is founded on the basis of disclosure of the gifts received by A1 in her income tax returns and the above said FIRs were not registered on the basis of any complaint preferred by any aggrieved persons or from any other source of information. Therefore, it is crystal clear that A1 has not suppressed any material factor and there is absolutely no clandestine dealings alleged against her.https://www.legitquest.com/case/selvi-j-jayalalithaa–others-v-central-bureau-of-investigation-represented-by-its-spcbicbi-chennai/6C50F

5. State Of Madhya Pradesh vs Mohanlal Soni (SC)- 19-07-2000

The High Court in the order under appeal has elaborately considered the documents collected during the course of investigation and produced by the prosecution itself which were available at the time of framing charges. It may be added that most of the documents relate to the income-tax returns or income-tax assessment orders. All these documents pertain to the period prior to 26.3.1993. Some of them even relate to the year 1988. In the normal course the documents could not have been prepared in anticipation that the respondent would have to face such charges on a future date. The documents being the orders of assessment or return filed with the income- tax authorities on their face value supported the case of the respondent…the High Court looking to the material and documents that were made available at the stage of framing charges on their face value in the light of the directions given earlier in Criminal Revision No. 337/97 and bearing in mind the position in law concluded that charges could not be framed against the respondent– https://www.legitquest.com/case/state-of-madhya-pradesh-v-mohanlal-soni/B3C

6. Shri. Prakash v. State of Karnataka (Karnataka HC at Dharwad)- 31-10-2015 

 Though the wife of the petitioner is doing business and has been filing income tax returns wherein she has declared her income the investigating officer has not considered the same….this is a fit case to exercise inherent powers of this court to quash the proceedingshttps://www.legitquest.com/case/prakash-v-the-state-of-karnataka/1E5638

7. Ananda Bezbaruah vs Union Of India (UoI) (Gauhati HC)- 15-03-1993

I hold that the inclusion of property of the wife as benami, without evaluating the materials on record, i.e. document 3-Income-tax Return of wife of the petitioner and statements of P.Ws. 7, 9 and 12 the charges framed under Section 5(1)(e) of the Prevention of Corruption Act, 1947 are vitiated as ingredients of the said sections were not established prima facie….The important and vital material on record was not considered by the learned Special Judge in framing the charge under Section 5(1)(e) read with Section 5(2) of the Act. Those materials on record are sufficient which give a satisfactory account for total assets of the accused petitioner.https://www.legitquest.com/case/ananda-bezbaruah-v-union-of-india/61B0F

8. Hamsa Manoharan & Another v. State, rep. by the Inspector of Police, SPE/CBI/ACB, Chennai (Madras HC)- 02-07-2018

The first part of clause (e) of Section 5(1) as seen earlier relates to the proof of assets possessed by the public servant. When the prosecution proves that the public servant possesses assets disproportionate to his known sources of income the offence of criminal misconduct is attributed to the public servant. However, it is open to the public servant to satisfactorily account for such disproportionality of assets. But that is not the same thing to state that there is no offence till the public servant is able to account for the excess of assets. If one possesses assets beyond his legitimate means, it goes with- out saying that the excess is out of ill-gotten gain. The assets are not drawn like nitrogen from the air. It has to be acquired for which means are necessary. It is for the public servant to prove the source of income or the means by which he acquired the assets. That is the substance of clause (e) of Section 5(1).- https://www.legitquest.com/case/hamsa-manoharan–another-v-state-rep-by-the-inspector-of-police-specbiacb-chennai/103752#0

9. Mr. R. Soundirarasu vs State By Deputy Superintendent (Madras HC)- 27.04.2017

As enunciated in Explanation to clause (e) of Sub Section (1) to Section 13, the petitioners have intimated their income received from lawful source to the income tax authorities concerned in accordance with the provisions of the Income Tax Act, which is applicable for the first accused being the public servant to intimate his known source of income and therefore, this Court is of the view that the prosecution has miserably failed to make out a prima facie case against the petitioners/A1 and A2. https://www.legitquest.com/case/mr-r-soundirarasu-and-ors-v-state-by-deputy-superintendent-police/1E5643

10. K. Thavasi & Another v. State by Deputy Superintendent of Police, Vigilance and Anti Corruption, Madurai (Madras HC)- 23-04-2014

The learned Judge has not taken into consideration the various statements filed by the accused before the Income Tax Department on the ground that the same were submitted subsequent to the investigation. On a scrutiny of the evidence of PW.69, it has come out in evidence that the accused have filed the statements long before the registration of the First Information Report on 31.10.1996 and in fact, PW.14 has admitted that the accused appeared in the Office on 13.12.1995 itself and filed the statements as evidenced by Ex.P29, etc….From the above discussions, it would follow that the disproportionate assets found by the learned trial Judge to the tune of Rs.9,14,013/- in the possession of the Appellants have been effectively and satisfactorily explained. The accused have satisfactorily shown that they had more savings to purchase the properties during the check period….The Appellants are acquitted of the charges levelled against them. The bail bond, if any executed by the Appellants, shall stand cancelled and the fine amount, if any paid by them, shall be refunded to them.https://www.legitquest.com/k-thavasi-and-another-vs-state-by-deputy-superintendent-of-police,-vigilance-and-anti-corruption,-madurai

11. Kedari Lal v. State of M.P. & Others (SC) -23-03-2015

In the instant case, every single amount received by the appellant has been proved on record through the testimony of the witnesses and is also supported by contemporaneous documents and intimations to the Government. It is not the case that the receipts so projected were bogus or was part of a calculated device. The fact that these amounts were actually received from the sources so named is not in dispute. Furthermore, these amounts are well reflected in the Income Tax Returns filed by the appellant. In similar circumstances, the acquisitions being reflected in Income Tax Returns weighed with this court in granting relief to the public servant… In our view there is no violation of Section 13(1)(e) read with Section 13(2) of the Act. – https://www.legitquest.com/case/kedari-lal-v-state-of-mp–others/906B8

Conclusion

In the case of Thommandru Hannah Vijayalakshmi vs. Central Bureau Of Investigation, the F.I.R. registered against the petitioners under Section 13 (2) read with Section 13 (1) (e) of the Prevention of Corruption Act, 1988 was quashed. It was held that the F.I.R. was registered without application of mind by the respondents, in a mechanical and whimsical manner. The petitioners had provided  Income Tax Returns and also annual statements of disclosure of assets and their values to the department. The respondents did not provide any prima facie material to sustain a charge under Section 109 of I.P.C., and Section 13 (1) (e) of the Prevention of Corruption Act and the F.I.R. was unsustainable on its very face even without considering the evidence of the petitioners. 

As per the analysis of all the judgements these are some points which can be summed up as –

• Only after the prosecution has proved the required ingredients, the burden of satisfactorily accounting for the possession of such resources or property shifts to the accused.

• One has to satisfactorily account for the recovery of the unaccounted money.

• If allegation is founded on the basis of disclosure of the gifts received in the accused’s income tax returns, the Court has held that the Accused has not suppressed any material factor.

• In one of these cases, the HC looking into the materials and documents which were orders of Assessment or Return filed with the Income- Tax Authorities concluded that charges could not be framed against the Respondent.

• Materials on record (which also included Income-tax Returns) have been held to be sufficient which gave a satisfactory account for total assets of the accused.

• It is open to the Public Servant to satisfactorily account for disproportionality of assets.

• It is for the Public Servant to prove the source of income or the means by which he acquired the assets.

• Accused persons have intimated their income received from lawful source to the income tax authorities concerned in accordance with the provisions of the Income Tax Act, which is applicable for the accused being the public servant to intimate his known source of income.

• The acquisitions being reflected in Income Tax Returns have weighed the court in granting relief to the Public Servant.

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