JUDGMENT
V. Eswaraiah, J.
1. This appeal is filed against the Judgment dated 1-11-1996 in C.C.No.10 of 1993 on the file of the Special Judge for SPE & ACB Cases, City Civil Court, Hyderabad.
2. During the pendency of the appeal, the appellant died on 17-5-2000 and his wife was also died prior to him on 16-1-1998 after filing of the appeal. Therefore, the legal heirs of the appellant, his sons are permitted to come on record as appellants 2 to 4 as per the orders of this Court dated 10-7-2000. For the sake of convenience, the appellant is herein after referred to as accused.
3. The Special Judge of SPE & ACB Cases held that the accused was found in possession dis-proportionate assets to the known sources of income of Rs.3,00,636-52 Ps., and the prosecution has established the guilt of the accused for the offence under Sec.5(2), read with Sec.5(1)(e) of Prevention of Corruption Act, 1947 (herein after referred to as the Act) and accordingly, he was sentenced to undergo Rigorous Imprisonment for one year and to pay a fine of Rs.30,000/-, in default to suffer Simple Imprisonment for nine months. Apart from that, item Nos.1 and 2 of the assets are directed to be confiscated to the State by selling the said items in public auction. Aggrieved by the said order, this appeal is filed.
4. The case of the prosecution according to the charge sheet is that the accused entered into Government service in Industries Department as Technical Instructor on 28-12-1956. He was promoted as Selection Grade Instructor on 1-1-1972, later on as Manager (UDC Grade) on 28-8-1975 and as Manager (Superintendent Grade) on 16-4-1977. He was promoted as Technical Manager (Senior Grade) on 29-5-1984 in Eluru Head Quarters. The accused indulged in corrupt activities during the period of his service in the State Government and acquired assets to the extent of 7,90,846/- in his name and in the name of his dependents during the check period from 28-12-1956 to 20-2-1985. When his house was searched, while his total income from all known sources during the check period was Rs.2,46,650/- and his total expenditure was Rs.70,017/- leaving possible likely savings of Rs.76,633/-. Thus, it has been alleged that he had acquired immovable and movable assets worth Rs.7,14,213/- as on 20-2-1985 which are disproportionate to his known sources of income, for which, the A.O., could not render any satisfactory account.
5. The Special Judge for SPE & ACB Cases, found the following assets purchased by the accused either in his name or in the name of his wife, children and relations, which are included in the assets of the Accused.
Sl. No. Particulars of the asset Value of the assets (in Rupees) 1. One terraced building bearing Door No.26-5-28 in NGGO's 1,23,304.00 Colony in the name of AO. (including house site. 2. Wet land of 1.50 acres situated in Duggirala village, 07,000.00 doc.No.6006/82,dt 3-7-82 in the name of A.O. 3. Wet land 1.50 ac., situated in Duggirala village, doc. No.6064/82, dt.22/7/82 in the name of K.Laxmi w/o A.O. 7,000.00 4. Wet land of 1.49 Ac. situated in Duggiral village, document No.7871/82, dt.1.12.82 in the name of Lakshmi w/o A.O. 5,000.00 5. House site of 300 Sq.yards vide document No.1859/82 in Eluru Town Ramachandraraopet in the name of K.Lakshmi w/o A.O. 34,500.00 6. House site in the name of K.Lakshmi w/o A.O. for an extent 12,000.00 of 200 sq. yards vide document No.17770/82 in Ramachandraraopet in Eluru. 7. House site in the name of K.Lakshmi w/o A.O. for an extent 2,200.00 of 433/ 3/9 Sq.yards in Gowraram village vide document No.161/79 8. House site of 289 sq.yards in the name of K.Lakshmi w/o A.O. 1,500.00 in Behramguda R.R.Dist., vide document No.2333/80. 9. Wet land of 1.50 acres in the name of K.Venkata Janardhan s/ 7,000.00 A.O. at Duggirala(v) vide document No.6120/82 10. House site of 433 3/9 sq.yards in Gowravaram village in the 2,200.00 name of K.V.J.Rao S/o A.O. 11. House site of plot No.363 Behramguda, R.R.Dist., in the name 1,500.00 of K.V.J.Rao, son of A.O., vide document No.2336/80 of 289 sq.yards. 12. House site of 485 6/9 sq.yards at Gowravaram (v) in the name 2,500.00 of K.Srinivasa Rao 2nd son of A.O., vide document No.240/80. 13. Wet land of 1.50 Ac.in Duggirala (v) in the name of K.Srinivasa 7,000.00 Rao 2nd son of A.O., vide document No.6198/82. 14. House site of 216 6/9 sq.yards in Gowravaram (v) in the name 1,100.00 of Sri K.Chandra Sekharbose 3rd son of A.O., vide document No.479/80. 15. Wet land of 1.50 Ac in the name of K.C.S. Bose 3rd son of 7,000.00 A.O., vide document No.6233/82 in Duggirala village. 16. Old terraced building bearing Door No.22-C-15-9/1 situated in 1,37,080.00 Power Pet, Eluru in the names of (1) P.Venkateswara Rao and (2) Y.Venkateswara Rao and subsequent construction of the building on the old building. 17. House site document No.289 Sq.yards in Bheramguda, Hyatnagar 1,6000.00 Tq.R.R.District in the name of Rajyalaxmi, daughter of A.O. 18. Cost of Luna Moped purchased in the name of A.O's son from 4,490.00 M/s.Murthy Enterprises, Eluru. 19. Investments by A.O., in M/s.Srinivasa Enterprises, Powerpeta 1,00,000.00 Eluru in the name of K.V.Janardhan Rao 1st son of the A.O. 20. Immovable property found during the search of the A.O., residential premises of A.O., on 19-2-1985: a) Furniture Rs. 7,023.00 b) Clothing Rs. 5,577.00 c) Utensils Rs. 3,020.00 d) Other articles Rs.15,640.00 e) Gold & Silver Rs.37,940.00 Rs.69,200.00 21. Cash found in Almirah in the house of A.O., at Amenapet, 8,633.80 Eluru Town at the time of search of the residential premises of A.O., conducted on 19-2-1985 22. Cash found in the Bank locker in the name of Smt.K.Laxmi wife 750.00 of A.O., in Co-op.Central Bank, Eluru during the search on 20-2-1985. Total Rs.5,42,557.80 Thus, the value of the total assets was arrived at Rs.5,42,557.80 Ps.
6. The income from the salary savings of the accused during the check period was arrived at Rs.1,45,958.29 Ps., and the house-hold expenditure was estimated at 60% of his net salary and 40% of the net salary was shown as savings, which will be Rs.58,383/-. Item No.2, of the income is the income of the wife of the accused, arrived at Rs.30,000/- and 50% of which was taken as house-hold expenditure and her savings as accepted are Rs.15,000/-. Item No.3 of income from the agricultural lands of the accused and his family members is arrived at Rs.19,796/-. Item No.4 is the income from M/s.Srinivasa Enterprises, run in the name of sons of the accused is arrived at Rs.45,925.60 Ps. Item No.5 is income by way of disposal of gold jewellery and silver by the accused was taken as Rs.23,336/-. Thus, the total income of the accused was arrived at Rs.1,62,440.60 Ps.
7. Apart from the said income, the contention of the learned counsel for the accused as regards to the additional rental income derived from the old east street house of the accused at Eluru and one portion in new house at Amenapeta, Eluru was also considered and arrived at Rs.71,425/-, thus the total income was Rs.2,33,865-60 Ps. The Court below also added 20% as Cushion to the income, which would be around Rs.46,792/-. Thus, the total income will be Rs.2,80,657.60 Ps.
8. 27 items of expenditure are shown in Annexure-III, the particulars of which are as follows:-
Sl. No. Particulars of expenditure Amount (in Rupees) 1. Premia paid on LIC policy bearing No.36956096 for 3,548.50. an assured sum of Rs.5000/- of A.O. 2. Premia paid on LIC policy bearing No.36959142 for 4,702.20 an assured sum of Rs.10,000/- of A.O. 3. Expenditure of phone bearing No.1639 in the name 8,719.70 of son of A.O., in Eluru. 4. Expenditure on electricity bills of the A.O to his 5,564.00 house at Eluru 5. Expenditure of Vespa PL: 170 booking 500.00 6. Expenditure on Daughter's marriage. 8,500.00 7. Expenditure towards registration of documents 763.00 No.2808/82 and 483/82 house sited in NGO's colony Eluru. 8. Registration expenses vide document No.6006/82 and 895.00 7887/82 of 1.50 Ac of wet land in favour of A.O. 9. Registration expenses vide document No.6064/82 and 895.00 7885/82 in favour of Smt.Lakshmi w/o A.O. 10. Registration expenses vide document No.7871/82 in 555.00 favour of w/o A.O. 11. Registration expenses vide document No.1859/82 in 3,678.00 favour of w/o A.O. 12. Registration expenses vide document No.1770/82 house 1,317.00 site in favour of wife Smt.K.Lakshmi w/o A.O. 13. Registration expenses vide document No.1671/79 of house 265.00 in favour of wife Smt.K.Laxmi in Gowravaram 14. Registration expenses vide document No.2333/80 of house 183.50 site in Bheramguda in the name of Smt.K.Lakshmi. 15. Registration expenses vide document No.6120/82 in the 6,120.80 name of K.V.J.Rao 1st son of A.O., wet land at Duggirala 16. Registration expenses vide document No.1672/79 of house 265.50 site at Gowravaram in favour of K.V.Janardan 3rd son of A.O. 17. Registration expenses vide document No.2336/80 in favour 183.50 of K.V.Janardhan 1st son of A.O., at Bheramguda R.R.District. 18. Registration expenses vide document No.240/80 in favour 280.00 of K.Srinivas 2ns son of A.O. in Gowravaram 19. Registration expenses vide document No.6198/82 895.00 and 7888/82 of wet land in Duggirala in favour of K.Sruinivas 2nd son of A.O. 20. Registration expenses vide document No.479/80 house at 150.00 Gowravaram in favour of K.Chandrasekhar- bose 3rd son of A.O. 21. Registration expenses vide document No.6233/82 895.00 and 7886/82 of wet land in favour of 3rd son of A.O., at Duggirala village. 22. Registration expenses vide document No.4871/75 5,008.00 and 4872/75 house sites in favour of relatives in Eluru. 23. Expenditure on education of eldest son of A.O 1,263.00 (K.V.Janardhan Rao) 24. Expenditure on registration fee and security deposit 1,015.00 paid to CTO Eluru 25. Taxes paid to the Commercial Tax Department 1,066.00 26. (a,b) Municipal Tax expenditure 3,815 + 7,492.75 = Rs.11,307.75 27. Expenditure towards income tax during the check period. 660.00 Total Rs.73,711.45 9. As against the aforesaid items, the disputed expenditure items are item Nos.4, 6, 22, 23, 26 and 27.
10. The learned counsel appearing for the accused submitted that the Judgment of the Court below in holding the accused guilty of the offence under Sec.5(2) read with Sec.5(1)(e) of the Act and sentencing him with imprisonment and fine and further directing item Nos.1 and 2 of the assets to be sold in the public auction and confiscate the sale proceeds to the State is ill-conceived and the same is not sustainable either on facts or on law. The assets of item Nos.3 to 8 are purchased by the wife of the accused from her own sources of income and she was an Income-Tax Assessee, apart from being owning properties deriving income thereon and the said items and their values should have been excluded from the dis-proportionate assets of the accused. Similarly, the Court below ought not to have held the items 9 to 11 of the assets and the income derived thereon as of the accused, which in fact belong to his sons, which are purchased from out of the income of the wife of the accused. It is stated that in so far as item No.16 is concerned, his brother-in-law was having income from the agricultural lands and properties, who is a reputed folk story performer in villages and towns, making bountiful incomes and the cousin of the accused P.Venkateswar Rao was also having sufficient income and therefore, item No.16 of the assets ought not to have included in the assets of the accused, including the income derived therefrom. He stated that the accused was only joined as a Cutter (Technical Instructor) in the Government service and he got the promotion as Selection Grade Instructor in the year 1972 and thereafter he was further promoted as Manager (UDC Grade) in the year 1975 and till he was further promoted as Technical Officer on 29-5-1984, there was any scope to acquire any assets and committing any criminal mis-conduct. Therefore, the properties which were acquired prior to 1984, cannot be said that the said properties are acquired by any corrupt or illegal means. It is stated that the prosecution has failed to establish as to how the assets are acquired from unknown pecuniary resources and as to how the assets are dis-proportionate to the known sources of income.
11. On the other hand, the learned Standing Counsel for the ACB., submits that the accused was not having any ancestral properties except a small house in Eluru town and he was not having any agricultural lands. He has acquired the assets right from 1975 onwards, which are dis-proportionate to the known sources of his income and his wife is not having any independent income, but however, the Court below very generously taken into account the income of the accused and his wife while arriving the dis-proportionate assets from the known sources of income.
12. Admittedly, the accused was a Government servant and he entered into service as Technical Assistant (Cutter) in 1956 and subsequently, he got promotion as Selection Grade Instructor in the year 1962 and as Technical Officer in 1984. The accused is the native of Eastern Street, Eluru and hails from a poor family. He is the only son to his father. His father got three brothers. The accused got 1/4th share in the ancestral house along with his three paternal uncles. His father died long back. He did not own any other property, except 1/4th share in the ancestral house along with his uncles. He married Smt.Laxmi-Dw.9 and daughter of Y.Subbaiah, a resident of Chanubanda village of Krishna District on 7-5-1960. His father-in-law Subbaiah also expired 10 years back prior to the check and he was having 5 acres of land given to his only son Y.Venkateshwar Rao-Dw.8. Y.Venkateshwar Rao was having no other property, except the ancestral agricultural lands of 5 acres at Chanubanda village. The accused has got one daughter Smt.Rajyalaxmi and three sons namely K.V.Janardhan Rao, K.Srinivas and K.Chandrasekhar. The accused performed the marriage of his daughter Smt.Rajyalaxmi on 2-6-1982. The wife of the accused left him in the year 1970 and went away from Eluru to Ongole and stayed there about 12 years i.e., up to May,1982. At the time of the marriage of her daughter, she came and joined with her husband (the accused) in the year 1982. The wife of the accused also did not inherit any property. While she was residing at Ongole, she was working as a Primary School Teacher in a private school and getting Rs.150/- per month and Rs.100/- per month from tuitions and getting total income of Rs.250/- per month. The elder son of the accused K.Venkata Janardhan Rao studied up to Intermediate and the accused started business in the name and style of M/s.Srinivasa Enterprises in the year 1982. The other two sons Srinivas and Chandrasekhar were studying 10th class and 8th class respectively. The investigating officer fixed the check period from 28-12-1956, the date of entry into service to 20-2-1985 the date of search of the accused house.
13. Before considering the acquisition of assets items, the income and expenditure in excess of dis-proportionate income acquired by the accused to the known sources of income, I am of the opinion that while arriving whether a particular asset is acquired from the known sources of income, it is just and proper to consider the items acquired at the earlier point of time, date wise keeping in view of the savings at the relevant period of time. I am also of the opinion that the method and manner in which the ACB., has adopted is not proper or correct. There is nothing wrong in treating the check period from the date of entry into service, to the date of search, it but has to be seen, whether the property acquired at the earliest instance was acquired with the known sources of income of the accused or the said property is acquired from his unknown sources of income.
14. In the instant case, the check period is about 28 years. In a case where particular property is acquired, which is a dis-proportionate asset to the known sources of income of the accused and if that property derives substantial income and if the income is also taken into account at the end of the check period, though the property is acquired from the unknown sources of income, then, it is difficult to prove the guilt of officers under Prevention of Corruption Act and their criminal mis-conduct. Therefore, I am of the opinion that it is just and proper to take up the asset acquired at the earliest point of time, whether said item was acquired from the known sources of income or not, and if the said property is a dis-proportionate asset to the known sources of income, the income derived there from shall not be taken into account as the income of the accused.
15. Under Sec.5(1)(e) of the Act, if the accused or any person on his behalf is in possession or has, at any time during the check period been in possession, for which, the accused (public servant) cannot satisfactory account of the pecuniary resources or property, dis-proportionate to his known sources of income, is said to have been committed an offence of criminal mis-conduct, which is punishable under Sec.5(2) of the Act. The case of the prosecution is that item No.16 of the assets which has been acquired at the earlier point of time by the accused in the name of his brother-in-law and cousin and invested amount for the development and thereafter, obtained a sale deed in the name of his first son.
16. ITEM NO.16: Whether the amount spent in acquiring the said item No.16 of the assets in the name of his brother-in-law and cousin is spent by the accused and whether the said item was transferred in the name of the son of the accused with the funds of the accused to treat it as one of the assets of the accused.
17. Item No.16 was the asset, which is an old terraced building with Asbestas sheets and vacant place. The said property was purchased by Y.Venkateshwar Rao-Dw.8-brother-in-law of the accused and his brother-in-law P.Venkateswar Rao (not examined) under Exs.P79 and P80, dated 27-12-1975 for a consideration of Rs.17,500/- by each of them. The total consideration for acquiring the said item was Rs.35,000/- in the year 1975. Later on, after obtaining permission, Dw.8 and P.Venkateswar Rao invested about Rs.50,000/- each for extension of the ground floor of the said two old terraced shops and constructed first floor on the said building. The said property was sold to the elder son of the accused vide two sale deeds document Nos.1505/84, dated 21-3-1984 (Ex.P37), executed by P.Venkateswar Rao, brother in law of Dw.8 and by sale deed document No.34/85 dated 28-1-1985 (Ex.P38) by Y.Venkateswar Rao, both for a total sum of Rs.67,500/-. The Deputy Engineer of A.C.B., Pw.14 inspected the said building and evaluated the cost of construction as Rs.1,16,000/- excluding the original cost of Rs.35,000/-. According to the charge sheet, the value of item No.16 is Rs.1,51,000/-, but the case of the accused is that the value of the asset is Rs.67,500/-, as the said property was purchased for an amount of Rs.67,500/- only under Exs.P37 and P38. According to the admitted evidence of Dw.8 and Exs.P79 and P80, the said property was purchased by Dw.8 and his brother-in-law P.Venkateswar Rao for a sum of Rs.35,000/- and each of them have invested about Rs.50,000/- for the extension of the ground floor and construction of first floor and thus, the value of the property of item No.16 of the assets is Rs.1,35,000/-. Though, the Court below arrived the value of item No.16 at Rs.1,37,080/-, I am of the opinion that the admitted value is only Rs.1,35,000/-.
18. The next question that arises as to whether the said property is really purchased and developed by Dw.8 Y.Venkateswar Rao and his brother-in-law P.Venkateswar Rao from their independent sources or whether the said property is purchased from out of the income of the accused.
19. Y.Venkateswar Rao-Dw.8 purchased half share of the property for a sum of Rs.17,500/- vide document No.4871/1975, dated 27-12-1975 and the remaining half share of the property was purchased by his brother-in-law who is the cousin brother of the accused, for a sum of Rs.17,500/- vide sale deed document No.4872/1975, dated 27-12-1975 under Exs.P79 and P80 respectively, for a total sum of Rs.35,000/-. P.Venkateswar Rao has not been examined by the accused. Y.Venkateswar Rao-Dw.8 stated that he has purchased half share of the property i.e., item No.16 of the assets and his brother-in-law P.Venkateswar Rao purchased the remaining half share and both of them thus purchased the said property under Exs.P79 and P80 in the year 1975 and each of them spent about Rs.50,000/- for construction. The said property was leased out to the elder son of the accused after two years of the construction for the purpose of carrying on the business. The said property was sold to the second son of the accused by both of them during the year 1984-85. In the cross examination, he has stated that he cannot say for what consideration, he has purchased the said property. The elder son of the accused namely Janardhan was studying from 1975 to 1987. The said Janardhan was running business from 1975 in Electrical goods under the name and style of Srinivasa Enterprises. He stated that while staying in the said property, he used to conduct business. He also stated that P.Venkateswar Rao is one of his partners and he do not know what properties and income the said P.Venkateswar Rao was having. He accepted that he was working as a clerk in Ritset Industries at Gudiwada from 1955 to 1981 on a monthly salary of Rs.300/-. He do not know, when he has executed the registered sale deed in favour of the son of the accused. He obtained crop loan of Rs.1,400/- from Indian Bank, Chanubanda on 21-7-1982.
20. To prove the case of the prosecution, the A.C.B., examined Pws.13, 14, 29, 32, 35 and 40 and the investigating officer is examined as Pw.37. The exhibits that were marked in support of their case are Exs.P37, P38, P40 to P43, P79 and P80.
21. The investigating officer-Pw.37 stated that Dw.8 Y.Venkateswar Rao-brother in law of the accused was having no other independent source of income, except the meager income from his ancestral agricultural land and he is having large family consisting of 4 daughters and a son. Similarly, P.Venkateswar Rao-cousin brother of the accused is having no independent source of income to purchase the said asset. P.Venkateswar Rao was residing in a small hut by paying monthly rent of Rs.100/-.
22. Pw.29 Partner of Ritset Industries, Gudiwada stated that P.Venkateswar Rao worked as a clerk on a monthly salary of Rs.300/-. His salary was Rs.350/- in the year 1981 and it was much below earlier. The financial position of P.Venkateswar Rao was not sound to invest for purchase of the said asset. Y.Venkateswar Rao-Dw.8 has also obtained a lone of Rs.1,400/- from Indian Bank of Chanubanda on 31-7-1982 and he could not repay the loan amount. He also obtained Rs.1,300/- of loan from Co-operative Society, Chanubanda and he could not repay the said loan. Therefore, his financial position was not sound, that is the reason why the accused purchased the above said asset in the name of both persons Y.Venkateswar Rao and P.Venkateswar Rao and the accused intentionally showed them as income tax assessees, though they were not financially sound and having no source of independent income. After purchase of the said building in the names of said two persons, the same was renovated and expanded and thereafter, it was transferred in the name of his minor son K.Sinivas Rao.
23. It is also pertinent to note that Dw.8 in his deposition admitted that he has borrowed Rs.4,000/- from the Co-operative Central Bank on 3-9-1985. By that time, he has already said to have been sold his half share of the property in favour of the son of the accused. If that be so, he should have had sufficient funds in his hands received as sale consideration and there was no need or any necessity to again borrow a sum of Rs.4,000/- from the Co-operative Central Bank on 3-9-1985. The investigating officer was not at all cross examined to rebut the averments made in the chief examination in so far as item No.16 is concerned, except suggesting that P.Venkateswar Rao and Y.Venkateswar Rao were income tax assessees. No other evidence was adduced as a defence to prove that the said property was not purchased from out of the pecuniary resources dis-proportionate to his known sources of income. P.Venkatewar Rao was not at all examined by the accused and the accused himself is not chosen to give any oral evidence. Therefore, I am of the opinion that the prosecution was able to establish that the said item No.16 of the assets was purchased from out of the pecuniary unknown resources of the accused and therefore, the said property was rightly included in the assets of the accused. The said two persons Y.Venkateswar Rao and P.Venkateswar Rao were only the ostensible owners holding for the benefit of the accused and in fact, the accused without paying any sale consideration, got executed the sale deeds from them, transferring the said property in the name of his son. His son was also not having any independent source of income and he was not having any means to pay the sale consideration and as the accused was the real owner of the said property, the same was transferred by them in the name of the second son of the accused under Exs.P79 and P80 for a sum of Rs.67,500/-. They filed income tax returns for one year only. As already stated, the value of the said asset is Rs.1,35,000/- even according to the admissions made by Dw.8 and therefore, it is unbelievable that the son of the accused purchased the said property for a sum of Rs.67,500/-. As far as this item is concerned, I am of the opinion that the prosecution was able to establish that the said property was purchased by the accused alone in the names of P.Venkateswar Rao and Y.Venkateswar Rao and the same was developed with the money of the accused and it was retransferred in the name of his son. Therefore, I have no hesitation to hold that the finding of the Court below that the entire amount spent on item No.16 was of the accused. Hence, the value of item No.16 is fixed at Rs.1,35,000/- belongs to the accused only.
24. As the said asset itself was acquired from out of the pecuniary unknown sources of income of the accused, the rental income derived therefrom cannot be clubbed to the income of the accused. But, the Court below also considered the rental income of the said item as additional income. The rental income of the house situated in Old Eastern Street as well as item No.16 were clubbed together and arrived at Rs.71,425/- and as the A.C.B., itself wrongly added the said income, I am of the opinion that it is not just and proper to exclude the proportionate rental income from the income of the accused in the absence of any appeal filed by the prosecution.
25. The next item of assets is item No.19, which is shown as the investment made by the accused in the name of M/s. Srinivasa Enterprises. Though, Srinivas is his second son, but it is shown that the proprietor of Srinivasa Enterprises is Janardhan, the elder son of the accused. The Court below arrived the investment at Rs.1,00,000/-. The only contention of the accused as far as this item is concerned, the value of this asset of the accused shall be limited to Rs.11,116/-, but not Rs.1,00,000/- as the investigating officer stated that the initial investment of the said business, which was started on 5-2-1982 was only Rs.11,116/-, but the investigating officer-Pw.37 estimated the profits derived thereon from the years 1982-83 and 1984-85 and showed the total gross profits as Rs.49,925/-, gross income was shown for the three years at Rs.9,631.33 Ps., for the year 1982-83, Rs.29,096.34 Ps., for 1983-84 and Rs.28,320/- for 1984-85, the total gross profits comes to Rs.65,608-27 Ps. The investigating officer deducted 30% towards expenditure, though there are no expenses. It is the contention of the accused that the said income has to be added to the income of the accused, but the value of the asset is to be taken only as Rs.15,683/-. It is true that as per the evidence of the investigating officer-Pw.37, Pws.10, 19, 26, 27 and 30 and Exs.P16, 48, 54 to 57 goes to show that the initial investment as deposed by Pw.37 was only Rs.11,116/- when the business was commended in the year 1982. But, as per the sales tax returns, the gross turn over for the year 1982-83 was shown at Rs.98,623-60 Ps., and the net turn over is Rs.7,748.30 Ps. For the year 1983-84 the gross turn over is Rs.2,51,094.95 Ps., and net turn over is Rs.12,692.20 Ps. For the first time, the income tax returns were filed by K.V.Janardhan, proprietor of M/s.Srinivasa Enterprises, son of the accused, showing the net taxable income as Rs.11,950/-, but the investigating officer assessed the same as Rs.17,000/- and levied tax of Rs.660/- . From April, 1984 to March, 1985, the net turn over was about Rs.59,404/- and therefore, the Court below has taken the average net turn over at Rs.50,000/- and based upon the magnitude and the transactions of business, the Court below rightly estimated item No.19 as Rs.1,00,000/-. The elder son of the accused was a minor and he was a student when the business was established and he was not having any independent source of income and therefore, I am of the opinion that the said item was rightly included in the assets of the accused.
26. Item Nos.1 and 2 of the assets are admittedly stands in the name of the accused. Item Nos.3 to 8 and 22 stands in the name of the wife of the accused. The value of the said assets as arrived by the Court below was not disputed. The asset Nos.9, 10, 11 and 19 are stands in the name of the first son of the accused. Item Nos.12, 13 and 18 stands in the name of the second son of the accused. Item Nos.14 and 15 stands in the name of the third son of the accused. Item No.17 was in the name of the daughter of the accused.
27. Item No.20 are the movable properties namely furniture, clothing, utensils, other articles, gold and silver. The values of the said assets arrived by the Court below is not seriously disputed as the Court below while taking the value of the assets as per the registered documents and accepted most of the contentions of the accused in arriving the value of the said assets. Therefore, I am not proposed to deal with in detail as regards the method and manner as to how the Court below arrived the value of the said assets. Whether the said assets are the assets of the accused or some of them were also independently acquired by the wife and sons of the accused is to be decided.
28. Admittedly, the wife of the accused was away from her husband from 1970 to middle of 1982 and she left the company of her husband in Eluru and was residing at Ongole. Pw.37, the investigating officer as regards to the income of the wife of the accused admitted that she got the net savings out of her income from the salary. The wife of the accused got an amount of Rs.15,000/- as net savings from her salary and tuitions during her stay at Ongole. She left her children and the accused and was residing with her mother’s sister owing to the family disputes. She was staying in the house of B.Venkateswarlu-Pw.20 by paying monthly rent of Rs.8/- as a tenant. Hence, her net savings were Rs.15,000/- from out of her total income. It is stated that she was getting monthly salary of Rs.150/- apart from an amount of Rs.50/- from tuitions. Except her net savings of Rs.15,000/-, all the assets standing in her name were treated as the assets of the accused.
29. Pw.20 B.Venkateswarlu stated that the wife of the accused-Dw.9 was working as a teacher in their school, on a monthly salary of Rs.150/- and part from that, she used to give private tuitions also. The wife of the accused-Dw.9 stated that she lived at Ongole from 1970 to 1982 and she used to get salary of Rs.150/- as a teacher of an Elementary School run by Pw.20, apart from an amount of Rs.100/- from the tuitions. The Court below rightly came to the conclusion that her salary was Rs.150/- and she was getting about Rs.50/- towards tuitions and her monthly earnings were Rs.200/- and based on the same, total income of Rs.30,000/- was calculated, out of which, 50% was deducted towards house-hold expenditure and arrived the net savings at Rs.15,000/-. The contention that the properties purchased by her are from out of her own savings were rightly dis-believed as her brother was not having any independent source of income and he was having large family of three daughters and a son with meager salary.
30. In so far as the income tax returns are concerned, admittedly, she has filed the income tax returns for the first time in the year 1982, after she joined the company of her husband at the time of performing of her daughter’s marriage in June, 1982. In her cross examination, she stated that she did not maintain any accounts and she has filed the income tax returns based on the so called advances of huge amounts said to have been lend by her and the interest therefrom, from different persons. She admitted that she has filed income tax returns for the first time in 1982 for the entire period. She was having a bank account at Eluru under Ex.P25 and the bank balance in Co-operative Central Bank, Eluru was only Rs.750/- when the search was made. She accepted that her children were studying since 1985. There was no bank account in the name of her children and there were no F.D.Rs., in their names. When the business in the name and style of Srinivasa Enterprises was started, her eldest son was studying. P.Venkateswar Rao was maintaining all the account books, who was half share holder in respect of item No.16 of the assets. Said P.Venkateswar Rao was only a clerk working in Ritset Industries from 1955 to 1981 on a monthly salary of Rs.300/-. When Rs.300/- per month was in the year 1981, his salary might have been much lower in the previous years. Therefore, the Court below rightly dis-believed that she was having total earnings of Rs.1,50,000/- and her total earnings and savings are rightly arrived as Rs.15,000/-. If that be so, the properties that were purchased by her prior to joining her husband can be taken into account as properties of the wife of the accused, which is item No.7 which was purchased in 1979 for a sum of Rs.2,200/-, item No.8, which was purchased in 1980 for a sum of Rs.1,500/-, total of which is Rs.3,700/-. From out of Rs.15,000/-, the amount of Rs.3,700/- is deducted, still she will have Rs.11,300. From out of the said amount, she might have purchased gold and silver.
31. It is the case of the wife of the accused that her mother was residing with her and her mother executed a will Ex.X1 in her favour and her brother and sister were also attestors. According to Ex.X1 she got 15 sovereigns of gold by way of ornaments. In item No.20(e), the value of the gold and silver was shown as Rs.37,940/-. I am of the view that the said gold and silver is properly accounted by the wife of the accused, which was acquired by her from out of her own savings and as well as it was given at the time of her marriage and also by her mother and mother’s sister. Therefore, an amount of Rs.37,940/- is deleted from the value of asset No.20. Thus, the value of asset No.20 of the accused is arrived at Rs.31,260/-.
32. Admittedly, item No.22 is in the name of the wife of the accused and therefore, the value of the said item at Rs.750/- is deducted from the assets of the accused. Thus, item Nos.7, 8, 20(e) and 22 are deleted from the assets of the accused.
33. In so far as the remaining items are concerned, which were acquired in the names of the minor children of the accused, who were not having any independent source of income and they are residing along with the accused at Eluru and the said items are purchased out of the pecuniary resources which are dis-proportionate to the known sources of income and therefore, all of them are rightly treated as assets of the accused.
34. EXPENDITURE:- The disputed items of expenditure are only item Nos.4, 6, 22, 23, 26 and 27. Admittedly, item No.4 is electricity bills paid to the house of the accused at Eluru. As against the evidence adduced by the prosecution in arriving the expenditure on the electricity bills by the Accused Officer i.e., by Pws.11 and 37 and Ex.P17, it was defence of the accused as per Dw.10 and Ex.D4 that it was only one of the component item of the family expenditure and therefore, the said amount ought not to have shown as the separate expenditure. There was no evidence to show that the said electricity component was shown in the family expenditure. Therefore, I am not inclined to accept the contention of the accused and the said item was rightly held as expenditure of the accused.
35. Item No.6 is the expenditure incurred on the daughter’s marriage of the accused, Rs.8,500/-, which was the only expenditure and it was the most reasonable and minimum probable amount, which could have been incurred by the accused in performing the marriage of his daughter, as rightly held by the Court below. Therefore, I am not inclined to reduce anything from the said expenditure.
36. In so far as item No.13 is concerned; as the relevant item No.7 of the assets was deleted from the assets, as it was purchased by the wife of the accused, the corresponding expenses of Rs.265/- is also liable to be deleted from out of the expenditure of the accused. Accordingly, item No.13 of the expenditure is deleted from the expenditure of the accused.
37. Similarly, item No.14 of the expenditure which is the corresponding expenditure incurred for acquiring item No.8 of the assets by the wife of the accused is also deleted from the expenditure of the accused.
38. The next disputed expenditure is item No.22, which is the expenditure of Rs.5,008/- incurred for the purchase of the house and registration of Exs.P79 and 80 and for the reasons stated in rejecting the contention of the accused to delete item No.16 from out of his assets, the expenditure was only made by the accused and therefore, the said amount of Rs.5,008/- has to be added as expenditure of the accused only.
39. Item No.23 is the expenditure incurred on the education of the elder son of the accused, which is only Rs.1,263/- and it was rightly held by the Court below as the expenditure of the accused alone. Item Nos.26 and 27, which are the Municipal Taxes and the expenditure of income tax are rightly shown as expenditure of the accused only, as the income tax returns of his wife was not rightly accepted by the Court below, as the said income tax returns were got filed by the accused with a view to escape the criminal liability under the Prevention of Corruption. They are all manipulated by the accused and therefore, the said expenditure is rightly included in the expenditure of the accused.
40. The total value of the assets of the accused after deducting the value of the assets belonging to his wife (Rs.5,42,557.80 minus Rs.42,390.00) are arrived at Rs.5,00,167.80 Ps. The total expenditure of the accused after deducting the expenditure on item Nos.13 and 14 (Rs.73,711.45 – Rs.448.50) is arrived at Rs.73,262.95 Ps..
41. INCOME OF THE ACCUSED: The total income from the salary savings of the accused during the check period was arrived at Rs.1,45,958.29 Ps. It is the contention of the accused that his wife was away from him for a period of 12 years and she was living on her own, deriving separate income and therefore, the family expenditure was only 40% and the savings were 60%. But, it is the case of the prosecution that the expenditure was 70% and savings were only 30%, but the Court below estimated the expenditure as 60% of the net salary and savings are only 40%. The Court below rightly taken into account in so far as the house-hold expenditure of the wife of the accused is concerned as 50% of the total income and as the wife was away from the house of the accused, I am of the view that the house-hold expenditure can be reasonable estimated at 50% only and the savings will be 50% and if that be so, the total saving after deducting 50% of the house-hold expenditure, it will be Rs.72,979.14 Ps. Therefore, I am inclined to take the net savings of the accused from out of his salary is Rs.72,979.14 Ps. The income of the wife cannot be added to the income of the accused as her assets are separately dealt with. Accordingly, the amount of Rs.15,000/- which is the net savings of the wife of the accused is deducted from the income of the accused.
42. In so far as the agricultural income of the accused is concerned, the Court below rightly arrived at Rs.19,796/-, admittedly all the lands are purchased in 1982 and plantation was made in respect of the fruit bearing trees which will not derive any income for first four years and therefore, it cannot be said that it derived the income of Rs.1,00,000/- and the Court below rightly arrived the net income on the agricultural lands at Rs.19,796/-.
43. In so far as the income from M/s.Srinivasa Enterprises, which was run in the name of the son of the accused was also rightly taken as Rs.45,925-60 Ps. Item No.5 was the income that was accepted by the Court below as the income derived from out of the disposal of the gold jewellery and silver by the accused, which was taken as Rs.23,336/-. Thus, the total income of the accused is Rs.1,62,036-74 Ps.
44. The additional rental income as arrived by the Court below was Rs.71,425/-, the total of which is Rs.2,33,461.70 Ps. Though the Court below added 20% as cushion to the said total income, I am of the opinion that the accused is not entitled for 20% of the cushion as held by this Court and the Apex Court. The accused is entitled only an addition of 10% as cushion to the income towards calculation errors etc., which will be Rs.2,56,807.87 Ps. The total expenditure of the accused is Rs.73,262.95 Ps., and the likely savings of the accused will be Rs.1,83,645.92 Ps. If the likely savings are deducted from the total assets of Rs.5,00,167.80 PS., the dis-proportionate assets to the known sources of income of the accused comes to Rs.3,16,521.88 Ps., for which the accused failed to account for the said dis-proportionate assets.
45. The Special Judge for SPE & ACB Cases, apart from imposing a fine of Rs.30,000/-, directed to sell away asset Nos.1 and 2 and the consequent sale proceeds of the said items 1 and 2 to be confiscated to the State. In so far as the said direction is concerned, though the learned counsel appearing for the accused advanced elaborate arguments contending that the assets cannot directed to be confiscated, but only the dis-proportionate amount that was arrived only is liable to be confiscated. Though, I have rejected similar contention in other Judgment dated 12-12-2003 in Criminal Appeal No. 14 of 1998, I am of the view that in this particular case, the asset Nos.1 and 2 cannot be confiscated for the reason that it is not the case of the prosecution that these two assets are purely acquired from out of the pecuniary unknown sources income of the accused. Item No.1 is concerned, the accused was a member of Eluru NGO’s Co-operative House Building Society from 1978 onwards and the society allotted the site in plot No.11 in NGO’s Colony Amenapeta, Eluru, admeasuring 337 Sq.yards for Rs.3,010/- in favour of the accused. Admittedly, the accused constructed a building in the said site during the year 1978-79. It is not the case of the prosecution that the accused was not having the pecuniary sources of his income to purchase the said plot for a meager amount of Rs.3,010/. Admittedly, the accused was having considerable savings as on the date of purchase and as on the date of construction of the said building. Therefore, it cannot be said that the entire item No.1 is acquired from the pecuniary unknown resources of income of the accused and therefore, I am of the view that the said item No.1 cannot be confiscated.
46. In so far as item No.2 also, it is not the case of the A.C.B., that the said item is purely purchased from the unknown sources of income of the accused and therefore, I am of the view that items Nos.1 and 2 cannot be confiscated, but only the value of the dis-proportionate assets is liable to be confiscated in the instant case. Accordingly, the direction of the Court below to confiscate item Nos.1 and 2 of the assets by selling away the same is set aside and the State is entitled to recover the value of the dis-proportionate assets amounting to Rs. 3,16,521.88 Ps.
47. In so far as the sentence is concerned, the accused already died and therefore, the sentence of imprisonment gets abated. In so far as the payment of fine of Rs.30,000/- is concerned, it is liable to be recovered from out of the assets of the accused from his legal heirs. Accordingly, the fine amount of Rs.30,000/- plus the value of dis-proportionate assets Rs. 3,16,521.88 Ps., totaling to Rs.3,46,521.88 Ps., rounded to Rs.3,46,522/- (Rupees three lakhs, forty six thousand, five hundred and twenty two only) is liable to be recovered from the assets of the accused. If the legal heirs of the accused fails to pay the said amount within three months from the date of receipt of this order, it is open for the respondents to sell item Nos.1 and 2 in the public auction and recover the sale proceeds of the same to an extent of Rs. 3,46,522/- (Rupees three lakhs, forty six thousand, five hundred and twenty two only).
48. The Criminal Appeal is accordingly disposed of as indicated above.