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Telangana High Court
Sri G. Narayana Reddy Rtd., Nalgonda. vs The State Of A.P., Rep. By Spl.P.P., … on 16 April, 2025
HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
*****
Criminal Appeal No. 1450 OF 2009
Between:
Sri G.Narayana Reddy (Rtd) ... Appellant/Accused
And
State of A.P. ... Respondent/complainant
DATE OF JUDGMENT PRONOUNCED: 16.04.2025
Submitted for approval.
THE HON'BLE SRI JUSTICE K.SURENDER
1 Whether Reporters of Local
newspapers may be allowed to see the Yes/No
Judgments?
2 Whether the copies of judgment may
be marked to Law Reporters/Journals Yes/No
3 Whether Their Ladyship/Lordship
wish to see the fair copy of the Yes/No
Judgment?
__________________
K.SURENDER, J
2
* THE HON'BLE SRI JUSTICE K. SURENDER
+ CRL.A. No. 1450 of 2009
% Dated 16.04.2025
# Sri G.Narayana Reddy (Rtd) ... Appellant/Accused
And
$ State of A.P. ... Respondent/complainant
! Counsel for the Appellant: Sri Koteswara Rao Mummaneni
^ Counsel for the Respondent : Sri T.Bala Mohan Reddy
Spl.Public Prosecutor for ACB
>HEAD NOTE:
? Cases referred
1. (2023) 6 SCC 768: 2022 SCC OnLine SC 1150
2. (1992) 4 SCC 45
3. (1995) 6 SCC 749
4. (1977) 1 SCC 816
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HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL APPEAL No.1450 OF 2009
JUDGMENT:
1. This criminal appeal is filed by the appellant, aggrieved by the
judgment dated 14.10.2009 in C.C. No. 14 of 2003, passed by the
Additional Special Learned Special Judge for SPE & ACB Cases, City
Civil Court, Hyderabad, whereby the appellant was convicted for the
offence under Section 13(1)(e) read with Section 13(2) of the Prevention
of Corruption Act, 1988, and was sentenced to undergo rigorous
imprisonment for a period of two years and to pay a fine of Rs.5,000/-,
and in default of payment, to undergo simple imprisonment for a
further period of six months.
2. Briefly, the facts of the case are that the appellant/accused
served as the Assistant Director of Agriculture from 30.4.1991 to
31.5.1999. On credible information that the appellant, while working
in various capacities in the Agricultural Department and as Assistant
Director of Agriculture, had acquired substantial assets in his name
and the names of his dependents, a case was registered under Cr. No.
5/ACB-HR/97 on 12.3.1997. The case was registered under sections
13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988, on
the authorization of the Additional Director, ACB, Hyderabad, vide
proceedings no. 45/RCH/HMR/97 dated 22.3.1997, and an
investigation was initiated.
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3. During the investigation, after obtaining search warrants from
the Hon’ble Court on 23.3.1997, searches were simultaneously
conducted at the appellant’s residential premises at no. 4-1-124,
Attapur village, Ranga Reddy District, at his house located at no. 3-5-
199/A/7, Harivihar Colony, Narayanguda, and at his office situated in
Nalgonda. Furthermore, the appellant’s residential house was also
searched under section 165 of CrPC, during which incriminating
documents relating to assets, income, and expenditure were seized.
During the course of the investigation, a locker bearing no. 19, Indian
Bank, main branch, Koti, was also found, and several incriminating
documents were seized. Another locker, locker no. 41, at Indian Bank,
main branch, Koti, was searched on 26.3.1997, and gold and jewellery
worth Rs 27,700 were found and inventoried.
4. For the purpose of the investigation, the check period was set
from 1.2.1968 (the date the appellant entered government service) to
23.3.1997 (the date of searches).
5. The incriminating material/documents seized during the
searches revealed that the appellant was in possession of assets
amounting to Rs 28,20,569.28 as of the terminal date of the check
period. The total income of the appellant during the check period was
calculated to be Rs 19,45,111, and his expenditure was calculated to
be Rs 14,75,546.70 as of the terminal date of the check period. The
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likely savings of the appellant as of the terminal date of the check
period were calculated to be Rs 4,69,565.00 (total income of Rs
19,45,111.00 – total expenditure of Rs 14,75,546.70).
6. Thus, the appellant was found to be in possession of
disproportionate assets amounting to Rs 23,51,004 (total assets of Rs
28,20,569.28 – total savings of Rs 4,69,565.00), for which the
appellant could not provide satisfactory accounts.
7. Since the appellant retired from service on 31.5.1999, no
sanction orders were required from the competent authority to
prosecute the appellant.
8. After the conclusion of the investigation, the appellant was
charge-sheeted for offences under sections 13(1)(e) read with 13(2) of
the Prevention of Corruption Act, 1988.
9. The learned Special Learned Special Judge, having considered
the evidence on record, arrived at the conclusion that the total income
of the appellant was Rs.17,09,611.80 and the expenditure was
Rs.11,32,434.80. The likely savings of the appellant were thus found
to be Rs.5,77,177.00 (Rs.17,09,611.80 – Rs.11,32,434.80). Since the
total assets were valued at Rs.25,82,852.28, the disproportionate
amount was arrived at Rs.20,05,675.28 (Rs.25,82,852.28 –
Rs.5,77,177.00). Accordingly, the Learned Special Judge convicted the
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appellant, as he was found to be in possession of disproportionate
assets to the tune of Rs.20,05,675.28.
ASSETS:
10. The following disputed items are discussed below:
Item No. 2: House Bearing No. 4-1-124, situated at Attapur:
According to the prosecution, the said house stands in the name
of Smt. Taramma, wife of the appellant, and it was constructed by the
appellant after dismantling the old building. PW31, the Deputy
Executive Engineer, evaluated the cost of construction at Rs. 1,13,000
and deposed that the period of construction was reported to be the
year 1981. He adopted the rates from the Standard Schedule of Rates
(SSR) of the Roads and Buildings Department for the year 1980-81.
Exhibits P41 and P42 are the reports submitted by him. The
prosecution has added an amount of Rs. 1,13,000 under this item.
11. The learned Special Judge acknowledged that the wife of the
appellant had inherited the house from her father under the will dated
8.12.1975. Relying on the cross-examination of PW31, the learned
Special Judge noted that PW31 denied the suggestions put to him that
the house was an old structure and was only renovated by the
appellant’s father-in-law. The learned Special Judge also relied on
ExP42, a letter addressed by PW31 to the Inspector, and concluded
that the details mentioned by PW31 in his report clearly indicated that
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the structure was not an old building, but a completely new
construction undertaken by the appellant after demolishing the earlier
one. Based on this, the learned Special Judge held that Item No. 2 was
a new building and included the cost of construction of Rs. 1,13,000
as part of the appellant’s assets.
12. The appellant, however, argued that the house cannot be tagged
to his assets. He contended that the house belonged to his father-in-
law and was inherited by his wife through a will dated 8.12.1975,
marked as ExP91. Further, it was pointed out that PW31 did not
mention the period of construction in his evidence before the court,
and the Investigating Officer/PW39 did not furnish any such date to
PW31 either. There is no basis for PW31 adopting the SSR of 1980-81.
Though PW39 stated that the house was constructed in the name of
the appellant’s wife after dismantling the old house, there is no
evidence on record to support that claim.
13. It is admitted by PW39 that the house was inherited by the
appellant’s wife from her father. The prosecution’s case is that the
appellant dismantled the existing structure and constructed a new
house. Accordingly, PW31 evaluated the building using the SSR for
the year 1980-81, based on the assumption that construction took
place in that year. Yet, the prosecution has not produced any evidence
to show that the appellant indeed undertook the construction or that
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the building was constructed in 1980. There is nothing on record to
explain why PW31 used the SSR for that specific year. In his chief
examination, PW31 stated that the year of construction was reported
to be 1981, but in his cross-examination, he admitted that no such
date was furnished to him. Even in ExP42, PW31’s letter, it is
mentioned that the year of construction of the building is reported to
be 1980-81. To worsen the matter, PW35, in his cross-examination,
stated that his inquiries revealed that the house bearing No. 4-1-124
was constructed in 1988.
14. Therefore, the valuation of the building at Rs. 1,13,000, based
on the SSR of 1980-81, cannot be considered reliable. If the SSR of a
particular year is used for valuation, the prosecution must establish
that construction occurred during that period. Without such proof,
relying on an arbitrary SSR undermines the evidentiary value of the
report.
15. Moreover, even the fact of construction by the appellant has not
been established by the prosecution. PW39, in his cross-examination,
admitted that there was no evidence to show that the appellant
demolished the old house and constructed a new one, apart from the
fact that the appellant paid tax. Even if it is presumed for the sake of
argument that the appellant did construct the building, unless it is
proved that the construction took place in the year 1980, the use of
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the SSR of that year for valuation cannot be justified. Applying the
wrong year’s SSR can skew the valuation and cannot be the basis for
attributing the value to the appellant’s assets. Hence, the value of this
item, i.e., Rs. 1,13,000, as assessed by the learned Special Judge, is
excluded from consideration.
16. Item No. 4: Maruti Car bearing No. AP 9 F 9600:
According to PW39, IO, the appellant purchased this vehicle in
the name of his wife. The registration of the car was completed on
7.6.1994 in the name of Smt. G. Tara (wife of the appellant), and an
amount of Rs. 8,750 was paid towards life tax. The vehicle was
purchased under a Hire Purchase Agreement from M/s. Sunita
Finance Corporation, from whom a loan of Rs. 1,57,261 was obtained.
Consequently, an amount of Rs. 1,68,740 was added to the assets of
the appellant.
17. The appellant contended that the car, valued at Rs. 1,68,740, is
registered in his wife’s name and was purchased by her under a Hire
Purchase Agreement from M/s. Sunita Finance Corporation. It was
argued that she had been making the monthly payments towards the
vehicle from her agricultural income and that there is no evidence to
suggest that the appellant paid or contributed any amount towards
the purchase of the car.
10
18. The learned Special Judge observed that there is no dispute
regarding the cost of the vehicle. It was admitted that the car was
purchased in the name of the appellant’s wife and that she had
inherited property from her father, which provided her with an
independent source of income. The learned Special Judge also noted
that the counsel for the appellant submitted that if the income of the
appellant’s wife is treated as the income of the appellant, the item may
be tagged to him. On this basis, the learned Special Judge tagged the
item to the appellant, stating that the aspect of income would be
considered in detail while assessing the income of the appellant.
19. However, while dealing with Item No. 3 under the head of
income, which concerns the loan from Sunita Finance Corporation
amounting to Rs. 80,000, the learned Special Judge held that since it
had already been considered and treated that the car purchased in the
name of the appellant’s wife was an asset of the appellant, the claim
that this amount of Rs. 80,000 was borrowed by the wife of the
appellant could not be accepted.
20. PW5, an officer from the Road Transport Authority, confirmed
that according to the registration particulars of the vehicle, the car
stands in the name of G. Tara, wife of the appellant. Further, PW37
stated that the Maruti car was in the name of the appellant’s wife and
that she had obtained a loan to purchase the said vehicle. PW39,
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during cross-examination, admitted that there exists a loan account in
the name of the appellant’s wife with Sunita Finance Corporation.
21. The evidence clearly establishes that the car was purchased in
the name of the appellant’s wife, who had a loan account with Sunita
Finance Corporation. It is also admitted by PW39 that the wife of the
appellant disposed of approximately 15 acres of land along with her
sister during the relevant period.
22. Since the income of the wife of the appellant will be added to the
income of the appellant, the assets of the wife of the appellant will also
be added to the assets of the appellant. Hence, the finding of the
learned Special Judge under this item needs no interference.
23. Item No. 5 – Bajaj Chetak Scooter bearing No. AP 9L 1529:
The prosecution’s case is that the said vehicle is registered in the
name of the appellant’s son. As per ExP6, which is a letter disclosing
the registration particulars, the vehicle was registered on 24.2.1996. A
life tax of Rs. 1,910 and a registration fee of Rs. 45 were paid, and the
cost of the vehicle, amounting to Rs. 23,310, was added to the
appellant’s assets.
24. The learned Special Judge, relying upon the evidence of PW5, an
officer from the RTA, PW39, the Investigating Officer, and ExP6, held
12
that the vehicle was purchased by the appellant in the name of his son
and accordingly added Rs. 23,310 to the appellant’s assets.
25. The appellant contended that the scooter, which stands in the
name of his son, was purchased by his wife for their son. It was
argued that there was no evidence to show that the appellant made
any payment towards this purchase and, therefore, the cost should
not have been attributed to his assets.
26. PW5 deposed that ExP6 furnished the registration particulars
and that the scooter stands registered in the name of the appellant’s
son. PW39, in his cross-examination, admitted that there is no direct
evidence showing that the appellant paid the sale consideration for the
purchase of the scooter.
27. Nevertheless, it is clear that the appellant’s son was dependent
on him at the relevant time. Even if the appellant’s claim is that the
vehicle was purchased by his wife for their son, the same will be
tagged to the assets of the appellant in light of the income of the wife
being added to the income of the appellant. Thus, the finding of the
learned Special Judge under this item needs no interference.
28. Item No. 9 – Cost of Household Articles:
According to the prosecution, while conducting the search, an
inventory of household articles was taken. During the search, the
13appellant and his family members were present, and they gave the
values of the articles along with the year of acquisition. As per the said
value, the cost of household articles was arrived at Rs 1,47,030, vide
ExP47, and the same is added under this item to the assets of the
appellant.
29. It is the contention of the appellant that the entire household
articles do not belong to him, since his sister-in-law, i.e., DW19, was
also residing in the said house. According to the appellant, out of Rs
1,47,030, articles worth Rs 54,000 belong to him. He also states that
the value of the clothes, i.e., an amount of Rs 18,350, was included in
the household articles. The appellant has also contended that the
ExP47 inventory proceedings were written at the office of ACB under
their dictation.
30. The learned Special Judge stated that there is no whisper, either
in the evidence adduced on behalf of the appellant or in the written
arguments, as to which articles from the list belong to the sister-in-
law. A bald statement was made stating that only an amount of Rs
54,000 has to be considered. The learned Special Judge stated that if
the appellant’s contention is that the household articles which do not
belong to him are also included, he must be in a position to identify
which articles belong to him and which ones belong to the sister-in-
law.
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31. The learned Special Judge also stated that, as per the evidence
of the mediator, PW34, the sister-in-law of the appellant and her son
have stated that no movables, either valuable or non-valuable,
belonging to them are in the possession or custody of the appellant.
Thus, the learned Special Judge added an amount of Rs 1,47,030/-.
32. ExP47 is the inventory report and ExP48 is the search list. PW34
stated that the year of acquisition of the articles found in the house
and the price of the articles were furnished by the appellant, his wife,
daughter, and son. He noted down the year of acquisition and the
price against each article.
33. The appellant’s contention that the entire household articles do
not belong to him, since his sister-in-law, i.e., DW19, was also
residing in the said house, cannot be believed. It is DW19’s evidence
that she is residing in the Attapur house (which is Item No. 2 in the
assets) and that the appellant is residing in the house at Narayanguda
(which is Item No. 1 in the assets). Even according to PW39, DW19 is
living in the house at Attapur village. ExP47 was conducted at the
house in Narayanguda (which is Item No. 1); hence, it cannot be
accepted that DW19’s movables were also present in the appellant’s
house at Narayanguda.
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34. Further, if the appellant’s contention is that the household
articles which do not belong to him are also included, he must be in a
position to say which articles belong to him and which from the list
belong to the sister-in-law.
35. Since the appellant has not filed any evidence to show which
articles belong to him and which belong to the sister-in-law and since,
in any case, the sister-in-law was not residing in the appellant’s house
at Narayanguda–the appellant’s contention cannot be believed.
36. According to the prosecution, as per ExP47, the cost of
household articles was arrived at Rs 1,47,030. However, the value is
incorrect, and the cost of household articles as per ExP47 actually
comes to Rs 1,14,980. This value also excludes the cost of clothing
expenditure, as PW39 and PW42, the then Deputy Director of
Accounts, who furnished ExP61 showing the household expenditure of
the appellant, have deposed that the clothing expenditure of the
appellant is included in ExP61. Hence, the same is excluded under
ExP47. Thus, for the reasons discussed above, the amount of Rs
1,47,030, as assessed by the learned Special Judge, is incorrect, and
the correct amount of Rs 1,14,980 is added.
37. Item No. 10 – Gold and Silver Ornaments:
According to the prosecution, during the house search
conducted at the appellant’s residence, gold and silver articles were
16found. It was stated that the wife of the appellant and other family
members provided the details of these articles. After excluding the
value of items that were stated to be gifts, the remaining gold and
silver articles were valued at Rs. 44,600, and the prosecution added
the same to the assets of the appellant.
38. The appellant’s contention is that he did not purchase any gold
or silver ornaments, and that if any such ornaments were found, they
constituted the stridhan property of his wife. It was argued that these
items belonged to her and were not acquired by the appellant.
39. The learned Special Learned Special Judge, however, noted that
according to the defence, as per ExP47, the value of the gold
ornaments came to Rs. 14,900. The silver ornaments found were not
valued on the ground that they belonged to the daughter of the
appellant’s co-brother. The learned Special Judge observed that PW34
had recorded the year of acquisition and price for each of the gold and
silver ornaments found, and that this information regarding the year
and cost was furnished by the appellant and his wife themselves. The
learned Special Judge referred to ExP47, which contains a detailed list
of the gold and silver articles, and noted that against Item No. 1–gold
bangles (2 in number)–it was specifically mentioned that they were
given by the father-in-law of the appellant. Similarly, the silver articles
were noted to belong to the daughter of the appellant’s co-brother.
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40. The learned Special Learned Special Judge also referred to the
will (ExP91), which stated that the gold and silver ornaments, articles,
and vessels of the family were bequeathed in favour of the appellant’s
mother-in-law. In paragraph 6 at page 5 of the will, it was mentioned
that “all my heirs, survivors and legal representatives shall own all
ornaments, big or small…”. While the learned Special Judge
acknowledged that the appellant’s wife did own some gold ornaments,
he pointed out that there was no specific evidence on record
identifying which of the gold items found during the search were part
of that ownership.
41. The learned Special Learned Special Judge further held that the
burden lies on the appellant to establish that the source of acquisition
of the ornaments was independent and not from known sources of
income. It was noted that if the appellant disputed the valuation or
inclusion of these gold items, it was for him to produce evidence to
contradict the values and ownership as recorded in ExP47.
Accordingly, the learned Special Judge excluded only Item No. 1 (gold
bangles), and added the remaining value of Rs. 14,900 to the assets of
the appellant.
42. PW34 deposed that the gold and silver ornaments found during
the search were listed and recorded in ExP47. Although PW39, during
cross-examination, admitted that no records were produced to show
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that the appellant or his wife had purchased the gold and silver
articles, it is true that in ExP47, the years of acquisition are
mentioned alongside certain gold items. These entries indicate the
likely years of purchase. It would not have been possible to provide
such information if the items were received as stridhan, and had not
been acquired by purchase. Moreover, if these ornaments were indeed
stridhan, such a claim should have been specifically mentioned in
ExP47, just as it was done next to Item No. 1, where it is clearly stated
that the gold bangles were gifted by the father-in-law.
43. Further, PW34 denied that any information was provided during
the search to indicate that the gold ornaments were stridhan property.
PW39 also denied that Item No. 10 constitutes stridhan property of the
appellant’s wife. It was also denied by PW34 that any of the gifted
articles were recorded as purchased in ExP47. A review of ExP47
confirms that for several gold items, years and values are mentioned.
44. Moreover, Item No. 5 should also be excluded from the valuation.
First, there is no year of acquisition mentioned next to it, and second,
the description next to it is incomplete. The entry begins with the
phrase, “stated to be belonged to…”, and does not specify the owner or
context, leaving the nature of that item unclear. Since the provenance
of Item No. 5 remains ambiguous, this particular amount should be
excluded.
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45. Therefore, from the amount of Rs. 14,900, a deduction of Rs.
1,500 (towards Item No. 5) is warranted. Thus, for the reasons
discussed above, the amount of Rs 14,900, as assessed by the learned
Special Judge, is incorrect, and the correct amount of Rs 13,400 is
added.
46. Item No. 11 – Cash of Rs 64,560:
According to the prosecution, during the course of the house
search, a total of Rs 64,560 in cash was found, and the particulars of
this recovery are recorded in ExP47, the inventory list. The
prosecution added Rs 64,560 under this item.
47. The appellant contended that this cash belonged exclusively to
his wife, who is a resourceful individual with independent income. It
was further argued that the wife had sold property that she inherited
from her father and had engaged in land dealings, and therefore, the
cash recovered should be treated as her personal asset and not be
added to the assets of the appellant.
48. The learned Special Judge took note of the appellant’s
submission and remarked that if the income of the appellant’s wife
was to be considered during the assessment, then this cash amount
might be treated as one of the appellant’s assets. Accordingly, the
learned Special Judge added the amount to the appellant’s assets,
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stating that the contention would be examined during the income
discussion part of the judgment.
49. PW35 deposed that the cash was found in the master bedroom’s
cupboard–Rs 64,500 in a velvet handbag–and some additional
amount in an almirah, totalling Rs 64,560. As per ExP47, it is clear
that the bulk of the cash, around Rs 64,500, was found inside the
velvet handbag.
50. Although PW39, during cross-examination, denied that the cash
belonged to the wife of the appellant, it is significant to note that he
admitted the wife had independent income and had disposed of
approximately 15 acres of land, which she had inherited from her
father and jointly owned with her sister during the check period.
51. Nevertheless, even if the cash is claimed to belong to the
appellant’s wife, since the income of the wife will, in any case, be
added to the income of the appellant, this asset should also be added
to the assets of the appellant.
52. Moreover, the prosecution has failed to include the value of
additional amounts found in the appellant’s house under this item:
• Rs 863 found in the almirah located in the master bedroom.
• Rs 3,720 found in the wallet of the appellant.
• Rs 700 found in the wallet of the appellant’s son.
21• Rs 210 found in the purse of the appellant’s daughter.
53. The above-mentioned amounts, totalling Rs 5,493, are also
included under this amount. Thus, for the reasons discussed above,
the amount of Rs 64,560, as assessed by the learned Special Judge, is
incorrect, and the correct amount of Rs 70,053 (Rs 64,560 + Rs 5,493)
is added.
54. Item No. 12 – Loans and Advances worth Rs 31,976:
The prosecution’s case is that during the course of the house
search, a long notebook in the handwriting of the appellant was found,
recording the salaries of the farm servants. According to this
notebook, the appellant had advanced loans totalling Rs 31,976 to
various individuals. The same book also contains entries of various
expenditures incurred on farm servants. This notebook was marked as
Ex.P82.
55. The appellant contends that this amount of Rs 31,976 was
arbitrarily added to the value of his assets based solely on entries in
ExP82, which was a book seized from his house. It was argued that
none of the entries in ExP82 were in the handwriting of the appellant,
and that no independent proof was produced to substantiate the claim
that the appellant had actually advanced these loans.
56. The learned Special Judge, however, held that as per the entries
in the long notebook, which was stated to be in the handwriting of the
22
appellant, the appellant had advanced loans to various individuals
and incurred expenses related to the salaries and needs of farm
servants, with the total amounting to Rs 31,976. The learned Special
Judge further noted that since the book was recovered from the house
of the appellant, it was incumbent upon him to explain who the
author of the contents was, if it was not him.
57. ExP82 is a long notebook seized from the house of the appellant.
It contains information about the loans advanced by the appellant
totalling Rs 31,976 to various individuals. The same book also
contains entries of various expenditures incurred on farm servants.
Once the appellant claims that he had agricultural income, the
expenditure incurred on farm servants is inevitable. Since this court
has considered the income claimed by the appellant on the basis of
both the annual property statements filed by the appellant, which are
marked as Exs P113 to P120, and the fact that there was suppression
of a made-up file at Serial No. 21 of the list of documents–which
consisted of receipts and bills relating to the sale of paddy and
vegetables, bills issued by Adarsh Farmer Cooperative Society, AP
State Seed Development Corporation, and the Agricultural Market
Committee, Hyderabad, etc.–as admitted by PWs 37 and 39, the
entries in ExP82 have to be accepted in their entirety.
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58. The failure to rely on the entries in the document would
contradict the claim of the appellant that he was having agricultural
income, as mentioned in Exs P113 to P120. Thus, the finding of the
learned Special Judge under this item needs no interference.
59. Item No. 13 – Stamp Receipt of Rs 2000:
It is the case of the prosecution that one stamp receipt for Rs
2000 was found during the course of searches, and the same was
marked as ExP83. According to PW39, Investigating Officer, the
appellant purchased land admeasuring 1.22 acres at Erra Cheruvu of
Podur village of Medchal Mandal. During the search, one stamped
receipt for Rs 3000 dated 25.9.1972 was seized, which shows that one
Anaji Reddy received an amount of Rs 1000 from the appellant
towards the advance for this land. Similarly, another Rs 2 stamped
paper executed in favour of the appellant dated 25.9.1972 was seized,
which shows that Anaji Reddy received the remaining payment of Rs
1000 from the appellant. Subsequently, the land was registered in
favour of the appellant vide sale deed No. 115 dated 8.5.1973 under
ExP83. As such, an amount of Rs 2000 was added to the assets.
60. It is the contention of the appellant that a partition deed was
received on behalf of the joint family property, and the amount of Rs
2000 was paid by his father for the said land.
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61. The learned Special Judge stated that according to the appellant,
the property was purchased in 1973 and ExP83 is the agreement of
sale. It contains that out of the Rs 2000 sale consideration, an amount
of Rs 1000 was paid on 25.9.1972 through a receipt, and the balance
amount of Rs 1000 was agreed to be paid on the date of execution of
the registered sale deed. The learned Special Judge noted that the
transaction was entered into by the appellant independently and it is
within the check period. There is no evidence before the court that the
appellant executed the registered sale deed for the property and got
the balance amount. Therefore, the learned Special Judge added an
amount of only Rs 1000 to the assets of the appellant.
62. PW39, in his cross-examination, denied the suggestion that this
item was purchased by the father of the appellant out of the Hindu
Undivided Family Fund, as contended by the appellant.
63. ExP90 – the partition deed – is an agreement for the partition of
joint family properties. However, it only deals with the tractor and
trailer and not with the purchase of any land, and there is no
connection between Exs P83 and 90.
64. ExP83 shows that one Anaji Reddy received an amount of Rs
1000 from the appellant towards the advance for this land. And since
there is no evidence to show that, in addition to paying Rs 1000, the
25
appellant paid another 1000 to Anaji Reddy, the learned Special Judge
has rightly added Rs 1000 to the assets of the appellant. Thus, the
finding of the learned Special Judge under this item needs no
interference.
65. Item No. 15 – Promissory Notes executed in favour of the
appellant:
It is the prosecution’s case that during the house search, a few
promissory notes executed in favour of the appellant by various
persons were seized. The promissory notes include: dated 4.5.1983
executed by Tipaiah for Rs 3,800; dated 29.4.1987 executed by
Masireddy for Rs 1,000; dated 12.4.1990 executed by Narsimha for Rs
1,000; dated 1.1.1982 by Yadaiah for Rs 5,000; and dated 12.6.1987
executed by Narsi Reddy for Rs 2,000. Thus, an amount of Rs 12,800
was added to the assets of the appellant.
66. It is the contention of the appellant that Rs 12,800 was added to
the assets without any basis, and that PW39 admitted he has not
examined anybody related to the said promissory notes, which refer to
the years 1982 onwards.
67. The learned Special Judge added an amount of Rs 11,800 (3,800
+ 1,000 + 5,000 + 2,000) to the assets of the appellant, since ExP86
was found not to belong to the appellant, as it was not executed in
favour of the appellant. The learned Special Judge considered the
26
defence that no evidence was adduced in proof of these documents
and stated that it is for the appellant to establish the fact that these
documents seized from his custody do not belong to him.
• ExP85 is executed in favour of the appellant for Rs 3,800.
• ExP86 is not executed in favour of the appellant but is executed
in favour of Maisi Reddy for Rs 1,000.
• ExP87 is executed in favour of the appellant for Rs 1,000.
• ExP88 is executed in favour of the appellant for Rs 5,000.
• ExP89 is executed in favour of the appellant for Rs 2,000.
68. Besides denial, the appellant has not proved that these
promissory notes were not executed in his favour. The learned Special
Judge has rightly stated that it is for the appellant to prove that
ExP85 and Exs P87 to P89, which were seized from his custody, do
not belong to him. Thus, the finding of the learned Special Judge
under this item needs no interference.
69. Item No. 16 -Towards Purchase of Tractor Trailer:
According to the prosecution’s case, during the house search, an
agreement of joint family property partnership deed–ExP90–was
seized. It states that the father of the appellant had purchased the
tractor trailer in his name by obtaining a loan from SBH through
Adarsha Cooperative Society, Podur village, in 1977. Later, he sold
27this vehicle to the appellant and his brother, Yaji Reddy, with a
stipulation that the remaining instalments of Rs 1,02,554.27 were to
be paid by the appellant and his brother equally. As such, an amount
of Rs 51,227 fell to the share of the appellant.
70. It is the contention of the appellant that the tractor was
purchased by his father by obtaining a loan from SBH, and this is
evidenced by ExP90. By the time the father transferred the tractor to
the appellant and his brother, an amount of Rs 67,327 was due to the
bank as per the partition deed ExP90. It is submitted that the
appellant never used the tractor and never paid the instalments.
71. The learned Special Judge stated that, in fact, the appellant and
his brother purchased the tractor and trailer at a cost equal to the
outstanding balance of the loan amount payable on the date of the
said purchase and added the amount of Rs 51,227 to the assets of the
appellant.
72. As per ExP90, the agreement between the appellant’s father and
the appellant and his brother stipulates that the appellant and his
brother agreed to pay: Rs 19,000, which the appellant’s father had
already paid; Rs 16,227, towards two instalments of loan amounts;
and Rs 67,327, towards the balance of twelve instalments. The total
comes to Rs 1,02,554. Since the appellant and his brother agreed to
jointly pay the amount of Rs 1,02,554, the learned Special Judge has
28
rightly added half of Rs 1,02,554, which is Rs 51,227, to the assets of
the appellant.
73. It is the defence of the appellant that he has not paid any
amount towards the tractor, and PW39, in his cross-examination,
stated that he has not verified the existence of the tractor and has not
verified who paid the loan. However, the appellant has not adduced
any evidence through his brother or anyone else to show that his
brother paid the entire amount or that someone else did. He has not
even examined his brother to prove that the appellant is not the one
who paid this amount. Thus, the finding of the learned Special Judge
under this item needs no interference.
74. In light of the above discussion, the total amount of assets as
determined by this Court, when compared to the amounts calculated
by the prosecution, the defence, and the special learned Special Judge
in the lower court, are tabulated as under:
S.No. Description of Amount Amount Amount Amount
Assets Calculated by Calculated Determined Determined
the by the by the by this Court
Prosecution Defence Special (in Rs)
(in Rs) (in Rs) Learned
Special Judge
in the Lower
Court (in Rs)
1. Item No. 1: 18,48,517 16,50,000 16,50,000 16,50,000
Appellant
constructed
house bearing
No. 3-5-
29
199/A/97,
Narayanguda, in
his name,
including the
cost of the plot.
2. Item No. 2: 1,13,000 Nil 1,13,000 Nil
Appellant
constructed
house bearing
No. 4-1-124,
situated at
Attapur.
3. Item No. 3: 86,484 86,484 86,484 86,484
Appellant
purchased house
bearing No.5-
B2/F3/FF at
Barkathpura.
4. Item No. 4: 1,68,740 1,68,740 1,68,740 1,68,740
Maruthi Car
bearing no. AP 9
F 9600.
5. Item No. 5: Bajaj 23,310 23,310 23,310 23,310
Chetak Scooter
bearing No. AP 9
L 1529.
6. Item No. 6: Bank 97,900.28 95,607 97,900.28 97,900.28
Balances.
7. Item No. 7: 1,03,425 1,03,425 1,03,425 1,03,425
Investments
made by
appellant with
private chits and
finances.
8. Item No. 8: Bank 10,000 10,000 10,000 10,000
Deposits.
30
9. Item No. 9: Cost 1,47,030 54,000 1,47,030 Rs 1,14,980
of Household
articles.
10. Item No. 10: Cost 44,600 Nil 14,900 13,400
of Gold and
Silver Articles.
11. Item No. 11: 64,560 64,560 64,560 70,053
Cash
12. Item No. 12: 31,976 Nil 31,976 31,976
Loans and
Advances
13. Item No. 13: 2,000 Nil 1,000 1,000
appellant
purchased land
admeasuring
1.22 acres at
Yellacheruvu of
Pudur Village.
14. Item No. 14: 15,000 Nil 7,500 7,500
Appellant
purchased and
admeasuring
1.20 acres at
Pudur Village.
15. Item No. 15: 12,800 Nil 11,800 11,800
Promissory notes
executed in
favour of the
appellant.
16. Item No. 16: 51,227 Nil 51,227 51,227
Appellant’s share
in purchase of
Tractor bearing
31
NO. AP F 5461
and APF 5462.
TOTAL 28,20,569.28 22,56,126.00 25,82,852.28 24,41,795.28
INCOME:
75. The following disputed items are discussed below:
Item No. 1- Net Salaried Income of the Appellant:
The prosecution’s case is that the appellant worked as a
government servant in various capacities from 1967 to 29.3.1997.
After the concerned officers furnished the pay particulars of the
appellant from the date of entry into service to the date of the search,
the computation was made, and it was found that the appellant
received an amount of Rs 7,28,000 towards his pay and other
allowances, and the same was added by the prosecution under this
item.
76. The appellant contends that the total salary drawn by him is Rs
8,46,607. He argues that the salary drawn by him from 7.11.1977 to
1.4.1985 and from 1.11.1985 to 31.5.1986 were not taken into
consideration. He further contends that the pay particulars for these
periods were not included in Exs P 11 and 12, which contain the
salary particulars of the appellant. The appellant also claims that the
salary particulars from 7.11.1977 to 28.2.1979 and from 1.3.1980 to
3228.2.1982 are missing, which establishes that certain salary
particulars were not provided to the police by the department. The
counsel also relied upon the evidence of PW9, who admitted that the
salary particulars do not contain the leave encashment amount and
the particulars of loans drawn by the appellant.
77. The learned Special Judge stated that when the appellant
disputes his average salary for the missing period as assessed by the
prosecution, he ought to have substantiated the said aspect by
adducing evidence, either in the form of oral or documentary evidence.
The learned Special Judge further stated that the appellant did not
explain how he assessed his salary for the missing periods, despite not
having any particulars of the same in his custody. On the other hand,
the learned Special Judge stated that PW39, the investigating officer
(IO), testified that the average pay drawn particulars for the missing
period were taken into consideration. Thus, the learned Special Judge
concluded that Rs 7,28,000 should be considered as the appellant’s
net salaried income.
78. As seen from the documents,ExP11 discloses the pay particulars
for the period from 1.5.1985 to 31.10.1985; 1.6.1986 to 31.5.1987;
1.6.1987 to 31.5.1990; and 1.6.1990 to 6.4.1991. Further, ExP12
discloses the pay particulars of the appellant for the period from
1.3.1979 to 28.2.1980; 1.3.1982 to 30.4.1985; and 1.11.1985 to
33
31.5.1986. ExP13 discloses the salary particulars for the period from
1.5.1997 to 18.6.1997 and from 27.10.1997 to 31.5.1998, while
ExP14 contains the pay particulars for the period from 1.4.1991 to
5.6.1995. ExP15(a) contains the particulars of the appellant’s period of
working, place of work, and the post in which the appellant worked
from 1.2.1968 until 21.5.1997. ExP15(b) is the last pay certificate, and
ExP15(c) shows the pay and allowances from 1.6.1995 to 30.4.1997.
The prosecution’s case is that the evidence on record discloses the
appellant’s net salaried income of Rs 7,28,000.
79. In ExP11, it is mentioned that the pay particulars of the
appellant from 7.11.1977 to 1.4.1985 and from 1.11.1985 to
31.5.1986 were not available. In ExP12, it is mentioned that the pay
particulars from 7.11.1977 to 28.2.1979 and from 1.3.1982 to
28.2.1982 were not available in the office. PW39, the IO, admitted
that, as per exhibits 11, 13, and 15(c), the salary particulars for some
periods were not made available, as mentioned in the exhibits. This
was also admitted by PW9.
80. The appellant contends that, considering the salaries for the
missing periods mentioned in Exs P11 and P12, the total salary drawn
by him would come to Rs 8,46,607. However, the appellant has not
submitted any evidence to support his contention regarding how he
arrived at the figure of Rs 8,46,607.
34
81. It is not the case that the salary for those periods was not
considered by the prosecution, because PW39 stated that for the
missing periods, average pay drawn particulars were taken into
account.
82. Moreover, in ExP11, it is also mentioned that the appellant was
asked to come to the office to trace the missing records. The appellant
has not provided any evidence showing that, even though the records
of salary particulars for the missing periods were available, these were
not submitted by the prosecution or were suppressed by the
prosecution.
83. The appellant further contends that the salary particulars do not
contain the leave encashment amount and the particulars of loans
drawn by him, but this argument cannot be accepted. Though PW9
admitted that Exs P11 and P12 do not mention the encashment of
earned leave and the particulars of any loans taken by the appellant,
the appellant has not provided any evidence showing that records of
leave encashment and loan particulars were available but were not
included in the final settlement.
84. The learned Special Judge rightly dismissed the appellant’s
contention and determined the net salaried income of the appellant to
35
be Rs 7,28,000. Thus, the finding of the learned Special Judge under
this item needs no interference.
85. Item No. 3- Loan of Rs 80,000 from Sunita Finance
Corporation:
The prosecution’s case is that during the house search, the RC
Book of a Maruti car was seized. It shows that the car is in the name
of the appellant’s wife. The investigation revealed that the appellant
obtained a loan from M/s. Sunita Finance Corporation and purchased
the Maruti car from Mitra Agencies. Accordingly, Sunita Finance
Corporation sent a letter informing that the appellant’s wife was
sanctioned a loan of Rs 80,000 for purchasing the said car. Thus, the
appellant received an amount of Rs 80,000, and he same was added
by the prosecution to the income of the appellant. The appellant’s
contention is that this amount was borrowed by his wife and should
not have been tagged to his income.
86. The learned Special Judge stated that since the car purchased in
the name of the appellant’s wife was already considered and treated as
an asset of the appellant, the amount of Rs 80,000 was tagged to the
appellant’s income under this item.
87. In assets, the item no. 4, the Maruti car, which was purchased
by the appellant’s wife in her name by taking a loan from M/s. Sunita
36
Finance Corporation, was treated and tagged as an asset of the
appellant, in light of the finding that the wife’s income will be added to
the appellant’s income. Therefore, the finding of the learned Special
Judge under this item needs no interference.
88. Item No. 4- Rental Income of the Appellant:
The prosecution’s case is that the rental income received by the
appellant amounts to Rs 1,00,000. During the house search of the
appellant, a few tenants were found residing in the house on the 1st
and 2nd floors. Subsequently, PWs 17 and 18 were examined.
According to the information furnished by the two tenants, the
appellant received a total amount of Rs 1 lakh in rent on the terminal
date of the check period, and the same was added by the prosecution
to the income of the appellant.
89. The appellant’s contention is that item Nos. 1 and 3 of the
assets, which are a house and flat, respectively, were given on rent. He
submitted the property statement on 20.3.1997. According to the
statements filed by him, his rental income received is Rs 7,57,500.
90. The learned Special Judge stated that there was no evidence
before the court to show when these statements were received by the
Commissioner and Director of Agriculture, Hyderabad, from the
appellant. Based on this, the learned Special Judge held that these
annual property statements were submitted by the appellant
37
subsequent to the date of the searches. The learned Special Judge also
stated that the burden was on the appellant to establish whether he
derived any lawful income subsequent to the year 1988, and that the
property statements submitted by the appellant, which were
submitted subsequent to the date of the search, for the period from
1989-1990 to 1995-1996, also did not contain the particulars of the
rental income derived by the appellant. Thus, the learned Special
Judge did not tag this item–rental income at Rs 1,00,000, as
assessed by the prosecution–to the income schedule.
91. According to the appellant, item Nos. 1 and 3 of the assets,
which are a house at Narayanguda and a flat at Barkatpura,
respectively, were given on rent, and he received rental income from
these properties. He has also shown the rental income from these
properties in his annual property statements. The annual property
statements of the appellant are marked as Exs P114 to P120 for the
years 1990-1996, and the same were submitted by the appellant on
20.3.1997.
92. PW39’s evidence clearly states that in Exs P114 to P120, the
appellant intimated the rental income in his property statements to
the department. Moreover, appellant had submitted his annual
property statement only for the period 1990-1996 on 20.3.1997, as
per the letter from the Director and Commissioner of Agriculture, AP,
HYD, vide his letter no. Estt. Vii(4)617/97 dated 24.6.1997.
38
Additionally, on Exhibits Exs P113 to P120, the appellant has put his
signature and also mentioned the date as 20.3.1997 under his
signature, as admitted by PW39.
93. From the above evidence, it is clear that the appellant had
submitted his annual property statements to the department on
20.3.1997. It cannot be said that the appellant had filed his
statements subsequent to the search conducted by the inspectors. The
search warrants were issued on 22.3.1997, and the search was
conducted at the appellant’s residence on 23.3.1997.
94. Though the date of submission of the annual property
statements is only three days prior to the search, which raises a
doubt, it is not the prosecution’s case that the appellant deliberately
filed the statements after becoming aware of the registration of the
FIR.
95. Considering the evidence of the annual property statements, it
should be mentioned that these statements were not disputed by the
prosecution either during the investigation or before the court. Thus,
the same will be assessed to determine the rental income of the
appellant.
96. The prosecution examined PWs 17 and 18, who were the tenants
in the house at Narayanguda (marked as item No. 1 in assets). The
39
defence examined DWs 1 to 3 to prove that they were tenants in the
house at Narayanguda, and DWs 4 and 5 were tenants in the flat of
the appellant in the Housing Board Colony, Barkatpura (marked as
item No. 3 in assets). However, no documentary evidence was filed by
any of these witnesses, and there is only oral evidence.
97. The only documentary evidence available is the statement filed
by the appellant, marked as Exs P114 to P120. In Exs P114 to P120,
the appellant’s rental income is from two assets: one from his house at
Narayanguda and the second from his flat at Barkatpura. Further, the
explanation to Section 13(1)(e) defines the expression “known sources
of income” and states that this expression means income received
from any lawful source. It also requires that the receipt should have
been intimated by the public servant in accordance with any
provisions of law, rules, or orders applicable to a public servant. So, as
per the explanation to Section 13(1)(e), if the appellant has intimated
the receipt of income in accordance with the law or provisions
applicable, the same will be considered under known sources of
income.
98. The evidence shows that the appellant has intimated the
department, as is clear from Ex P113, regarding the rental income
from the house and the flat. Thus, the same can be considered.
40
In Exs P113 to P120, the rental income values of the appellant from
these two assets for the period 1990 to 1996 are extracted below:
Relevant years and Relevant property Rental income from
Exhibits property (per annum)1990 (ExP114) Flat at Barkatpura 7,200
1991 (ExP115) Flat at Barkatpura 7,200
1992 (ExP116) Flat at Barkatpura 8,400
1993 (ExP117) Flat at Barkatpura 8,400
1994 (ExP118) House at 14,400
Narayanguda 9,600
Flat at Barkatpura1995 (ExP119) House at 18,000 (First floor) +
Narayanguda 18,000 (second floor)
Flat at Barkatpura 12,0001996 (ExP120) House at 30,000 (First floor) +
Narayanguda 24,000 (second floor)
Flat at Barkatpura 14,400Total- 1,71,600
99. Considering the value of rental income from the annual property
statements, Exs P114-120, the rental income of the appellant comes
to Rs 1,71,600. Before tagging this item of rental income as Rs
1,71,600 to the income of the appellant, two things need to be
considered:
41
i) Firstly, it is the evidence of PW39 that his investigation
disclosed that, as per the documentary evidence collected, the
appellant did not obtain prior permission from the department for
acquiring movable and immovable properties in his name and the
names of his family members, as per the APCS Conduct Rules.
According to the APCS Conduct Rules, the appellant was required to
give intimation to the Government before acquiring immovable
properties. Both the houses from which the appellant was receiving
rental income were acquired by the appellant. However, the fact that
the appellant has submitted his annual property statements, Exs
P113 to P121, shows that he has intimated the department about his
properties.
ii) Secondly, according to PW39, the appellant did not show his
income in the income tax returns. However, PW24 spoke about the
property tax paid by the appellant for his house at Narayanguda (item
No. 1 in assets), and Ex P31 has been marked to show the tax paid.
According to PW24, the annual rental value was Rs 12,000, and the
tax came to Rs 3,500 per year, and the appellant paid the said tax up
to 31.3.1997. Further, PW24 also deposed the same for the house/flat
at Barkatpura, stating that the annual rental value of the house was
Rs 6,600 and the yearly tax came to Rs 1,888, and the appellant paid
the property tax. Nevertheless, the non-filing of income tax returns
showing rental income will not disregard the rental income specified in
42
the annual property statements. Such returns would not by
themselves establish that the income was from a lawful source as
contemplated in the Explanation to Section 13(1)(e) of the PC Act,
1988, and independent evidence would be required to account for the
same. Thus, in light of the above discussion and considering the
annual property statements of the appellant, the amount of Rs
1,71,600 is added under this item to the income of the appellant.
100. Item No. 8 – Income from Sale of Land and Properties:
It is the case of the prosecution that during the house search, a
will deed executed by the father-in-law of the appellant was seized.
According to the will deed, marked as ExP91, the father-in-law of the
appellant mentioned that the following assets were to be shared
equally between his daughters:
1. Plot no. 21 admeasuring 250 square yards.
2. House No. 2-44 and 2-44/1 at Attapur.
3. 600 square yards plot at Attapur.
4. 0.35 acres in Sy. No. 27 and 33 of Attapur village.
5. Sy. No. 28 and 29 land of 71 guntas and 6 guntas.
6. Sy. No. 108, 109, and 110 at Nandi Musalayaguda Village
admeasuring 2 acres, 90.5 guntas, and 1.5 guntas.
7. Sy. No. 108, 109, and 110 at Nandi Musalayaguda village
admeasuring 2 acres, 90.5 guntas, and 1.5 guntas.
43
8. Rs 1,59,000 sale proceeds of land at Katta Kindi Bhoomi.
101. According to PW39, the wife of the appellant received an
amount of Rs 1,59,000 from her father. Additionally, the appellant
received Rs 1,50,000 as the sale consideration for land situated at
Nandi Musalayaguda village. Half of the sale consideration, Rs 75,000,
falls to the share of the wife of the appellant.
102. As per the agreement of sale dated 13.03.1990, the appellant
agreed to sell land in survey no. 106 admeasuring 2,700 square yards
situated at Attapur to one Sri Krishna Reddy for a consideration of Rs
2,30,000. This amount was equally distributed between the wife of the
appellant and her sister. An amount of Rs 1,50,000 was received as
income by the wife of the appellant. Thus, according to the
prosecution, the appellant received Rs 3,49,000 as income from the
sale proceeds of the lands of his father-in-law on behalf of his wife.
However, the prosecution contended that the income of Rs 3,49,000
was not shown in the property statements submitted by the appellant
and, as such, cannot be considered as income of the appellant.
103. The learned Special Judge has wrongly taken the value assessed
by the prosecution under this item as Rs. 4,84,000, instead of the
correct amount of Rs. 3,49,000/-.
44
104. The appellant contended that an amount of Rs 15,84,575 must
be added under this item and examined DWs 13 to 16, marking Exs
D4 to D51 and D53 to D111, which are copies of sale deeds, to prove
his claim.
105. The learned Special Judge considered the evidence of DWs 13 to
18 and Exs D4, 6, 41 to 111, 113, and 114, which are copies of sale
deeds. The learned Special Judge only considered the income from the
sale consideration of lands under Exs D41 to D45, executed by the
wife of the appellant prior to 1988, which totaled Rs 11,500. The
learned Special Judge observed that the sale deeds executed after
1988 cannot be considered as income of the appellant since they were
not declared by him in accordance with Rule 9 of the AP CS (Conduct)
Rules, coupled with Section 13(1)(e) of the PA Act. The learned Special
Judge stated that the burden is on the appellant to submit annual
property statements, including agricultural income derived, which he
had not done. Hence, only the amount of Rs 11,500 was added under
this item by the learned Special Judge.
106. The Hon’ble SC in State of T.N. v. R. Soundirarasu, (2023) 6
SCC 768: 2022 SCC OnLine SC 1150, discussed the meaning of the
explanation to Section 13(1)(e) of the PC Act:
“34. Section 13(1)(e) of the 1988 Act including Explanation
thereto reads as under:
45
“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.
35. The Explanation to Section 13(1)(e) defines the expression “known sources
of income” and states that this expression means the income received from any
lawful source and also requires that the receipt should have been intimated by
the public servant in accordance with any provisions of law, rules or orders for
the time being applicable to a public servant.
36. The Explanation to Section 13(1)(e) of the 1988 Act has the effect of
defining the expression “known sources of income” used in Section 13(1)(e) of
the 1988 Act. The Explanation to Section 13(1)(e) of the 1988 Act consists of
two parts. The first part states that the known sources of income means the
income received from any lawful source and the second part states that such
receipt should have been intimated by the public servant in accordance with
the provisions of law, rules and orders for the time being applicable to a public
servant.”
107. The above observation by the SC clearly shows that the receipt
of income should have been intimated by the public servant in
accordance with the provisions of the law, rules, and orders for the
time being applicable to a public servant.
108. This brings us to the A.P.C.S. (Conduct) Rules, 1964, which is
the relevant act applicable to the appellant. Sub-Rule 7 of Rule 9 of
the Conduct Rules reads as follows:
“(7) Every Government Employee, other than a member of the
Andhra Pradesh Last Grade Service and a Record Assistant in the
Andhra Pradesh General Sub-ordinate Service, shall, on first appointment
to the Government Service, submit to the Government a statement of all
immovable property/properties, irrespective of its value, and movable
property/properties whose value exceeds Rs. 50,000/- owned, acquired,
or inherited by him or held by him on lease or mortgage either in his own
name or in the name of any member of his family, in the forms prescribed
in Annexure-I and II separately. He shall also submit to the Government
46before 15 January of each year, through the proper channel, a declaration
in the forms given in Annexure-I and II of all immovable/movable
property/properties owned, acquired, or inherited by him or held by him
on lease or mortgage, either in his own name or in the name of any
member of his family. The declaration shall contain such further
information as the Government may, by a general or special order,
require. If in any year, a Government employee has not acquired or
disposed of any immovable or movable property or any interest therein,
he shall submit a declaration to that effect.”
109. Annexure I is the Statement of immovable property possessed,
acquired, and disposed of by Sri —– — or any other person on his
behalf or any member of his family during the year ending ————–
– as per Sub-rule (7) of Rule 9 of APCS (Conduct) Rules 1964.
110. From the above, it is clear that the appellant was required to
submit his annual property statement as per Annexure I to show his
income from the disposal of properties in his name or in the name of
any other person on his behalf or any member of his family.
111. Considering the explanation to Section 13(1)(e), only the income
which has been intimated by the public servant in accordance with
the provisions of the law can be considered under ‘known sources of
income’. Hence, the appellant’s income from the sale of lands will be
considered only if it has been intimated by him under Sub-rule 7 of
Rule 9.
112. Appellant has examined DWs 13 to 16 and marked Exs D4 to
D51 and D53 to D111 to prove his contention that his income from
47
the sale of lands is Rs 15,84,575. However, the appellant has not filed
any documentary evidence to show that he intimated the department
regarding his income from the sale of lands. Thus, only the income
from the sale of lands prior to 1988 can be considered to determine
the income under this item, as rightly observed by the Special Learned
Special Judge.
113. Out of Exs D4 to D51 and D53 to D111, Exs D15, D20, D21,
D22, D26, D27, D38, and D39 are the copies of sale deeds executed
by the appellant.
• ExD15 was executed in 1981, for a sale consideration of Rs
3,000
• ExD20 was executed in 1981, for a sale consideration of Rs
6,000
• ExD21 was executed in 1981, for a sale consideration of Rs
3,000
• ExD22 was executed in 1981, for a sale consideration of Rs
3,000
• ExD26 was executed in 1982, for a sale consideration of Rs
6,000
• ExD38 was executed in 1982, for a sale consideration of Rs
5,600
48
• ExD39 was executed in 1982, for a sale consideration of Rs
1,500
114. The above sale deeds were executed by the appellant prior to the
year 1988. Even though the appellant has not filed any evidence to
show that the income from the sale of the above lands was intimated
to the department, these can be considered as they are prior to the
introduction of the explanation to Section 13(1)(e) of the Act 1988.
115. Though the appellant is required to intimate the income from
these sale deeds to the department as per Rule 9 of the APCS Conduct
Rules, since these are rules, the consequence of violating these rules
would be departmental action, and a violation of the same cannot be a
ground to reject considering the income from the above sale deeds,
given the seriousness of the consequences attached to the punishment
for a person found to have assets disproportionate to their sources of
income.
116. Thus, in light of the above discussion, an amount of Rs 28,100
is added as income from the sale of lands as mentioned in Exs D15,
D20, D21, D22, D26, D27, D38, and D39. The following sale deeds
were executed by the appellant as the GPA holder on behalf of his
sister-in-law: Exs D5, D6, D8, D9, D16, D17, D24, D25, D28, D29,
D30, D31, D46, D47, D48, D49, D50, and D51.
49
117. The income from these sale deeds cannot be considered as the
income of the appellant, as they were executed on behalf of the
appellant’s sister-in-law. Hence, these documents will not be
considered to determine the income of the appellant.
118. The following sale deeds were executed prior to 1988:
• ExD7 was executed by the appellant as the GPA holder on behalf
of his wife and sister-in-law in the year 1986 for a sale
consideration of Rs 15,000.
• ExD10 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1980 for a sale consideration of Rs
3,000.
• ExD11 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1980 for a sale consideration of Rs
3,000.
• ExD12 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1980 for a sale consideration of Rs
9,000.
• ExD13 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1981 for a sale consideration of Rs
4,500.
50
• ExD14 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1981 for a sale consideration of Rs
4,500.
• ExD18 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1980 for a sale consideration of Rs
3,000.
• ExD19 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1981 for a sale consideration of Rs
2,175.
• ExD23 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1981 for a sale consideration of Rs
3,000.
• ExD34 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
3,000.
• ExD35 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
3,000.
• ExD36 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
3,000.
51
• ExD37 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
3,000.
• ExD40 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
3,000.
• ExD41 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
3,000.
• ExD42 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
3,000.
• ExD43 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1983 for a sale consideration of Rs
5,000.
• ExD44 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
4,500.
• ExD45 was executed by the appellant as the GPA holder on
behalf of his wife in the year 1982 for a sale consideration of Rs
2,500.
119. Since the above sale deeds were executed prior to 1988 and they
were executed by the appellant as the GPA holder on behalf of his wife,
52
the income from these sale deeds will be added to the income of the
appellant, since the income of the wife of the appellant is added to the
income of the appellant.
120. Further, ExD7 was executed by the appellant as a GPA holder on
behalf of his wife and sister-in-law. Here, half of Rs 15,000 will be
considered towards the income of the wife of the appellant since the
sale was on behalf of both the wife and the sister-in-law of the
appellant. Thus, an amount of Rs 7,500 will be considered from the
sale under ExD7. Thus, an amount of Rs 72,675 will be added to the
income of the appellant from the sale of the lands in the above-
mentioned sale deeds.
121. The sale deeds, ExD4 and Exs D52 to D111, were executed
subsequent to 1988. Hence, they cannot be considered to determine
the income of the appellant in light of Rule 9 of the APCS Conduct
Rules coupled with Section 13(1)(e), 1988. Therefore, for the reasons
discussed above, the amount of Rs 11,500, as assessed by the learned
Special Judge, is incorrect, and the correct amount of Rs 1,00,775 (Rs
28,100 + 72,675) is added.
122. Item No. 9 – Agricultural Income:
The case of the prosecution is that the Director of Agriculture,
Medchal, furnished the statements showing the year-wise crops sown,
acres and normal yield of different crops, total yield, rates and
53prevailing total income, cost of cultivation of different crops, total
expenditure, and net income, which is marked as ExP121. It shows
the year-wise crop sown. ExP122 is the statement containing market
rates of various agricultural produce from the year 1980-81 to 1994-
95. As per ExP121, the Assistant Director has shown that the
appellant’s wife received a net agricultural income of Rs 76,000 for
lands situated at Attapur, and an amount of Rs 89,232 was received
by the appellant for lands situated at Pudur village. Thus, according to
the prosecution, the appellant received a total amount of Rs 1,65,832,
and this amount was added to the income of the appellant.
123. The contention of the appellant is that Rs 34,95,862 has to be
taken as income from agriculture. In addition to relying on income
mentioned in the annual property statements, the appellant has
examined DWs 7, 8, 11, and 12 to prove his claim.
124. The learned Special Judge, relying upon ExP121, tagged this
item of agricultural income of the appellant as assessed by the
prosecution to a tune of Rs 1,65,832 in the income schedule.
125. PW40 is the witness who furnished ExP121 along with the
statement showing the year-wise crop sown in the land of the
appellant. According to him, he went through the records provided by
the ACB office, i.e., the pahanies, tentative yield of paddy and maize,
54
and the prevailing market rate of the crops provided by the AD,
Marketing. Basing on the above records, he prepared ExP121. He
mentioned the year, Survey No., crop cultivated as per MRO records,
acres and yield particulars, total yield in kgs, rate and total amount,
approximate cost of cultivation in Rs, total expenditure, and net
income. The total amount is Rs 1,56,682, the total expenditure is Rs
67,450, and the net income is Rs 82,232.
126. The evidence of PW40 shows that he computed the figures based
on the material supplied by the ACB officials. He did not personally
ascertain the figures; the ACB provided the materials from the MRO,
and based on that, he furnished ExP121.
127. ExP121 gives the following information: it shows the year, the
Survey Numbers, the crops cultivated as per MRO records, acres, total
yield in kgs, market rates per quintal, total amount, approximate cost
of cultivation, total expenditure, and net income. ExP122 contains the
market rates of agricultural commodities for the years 1980-81 to
1994-95. The prosecution has relied only upon ExP121 to calculate
the appellant’s agricultural income.
128. The appellant has relied upon Exs P114-120 to prove his
agricultural income from 1990-1997, and he has examined DWs 7, 8,
11, and 12. The learned Special Judge disregarded the evidence of
55
these witnesses mainly on the ground that there was no documentary
evidence.
129. However, PW37 stated that during the course of the search of
the appellant’s house, a made-up file at Serial No. 21 of the list of
documents was seized. It consisted of receipts and bills relating to the
sale of paddy and vegetables, bills issued by Adarsh Farmer
Cooperative Society, AP State Seed Development Corporation, and the
Agricultural Market Committee, Hyderabad, etc. He has not
investigated the said bills in the made-up file. PW39 also admitted
that made-up file Document No. 22 seized during the search
contained a carbon copy of the bill. It contains receipts regarding the
sale of vegetables by the appellant.
130. It is clear that though the prosecution seized the above
documents, the same have not been filed by them and appear to have
been suppressed.
131. According to Section 114(g) of the Indian Evidence Act, “(g) that
evidence which could be and is not produced would, if produced, be
unfavourable to the person who withholds it.”
132. Since the prosecution has suppressed facts, an adverse
inference is drawn, and the agricultural income as mentioned in the
annual property statements filed by the appellant will be considered.
56
Exs P114-120 disclose the agricultural income for the years 1990-
1997. PW39 also admitted that, as per Exs P114-120, the appellant
furnished his agricultural income to his department.
133. As per Exs P114-120, the agricultural income of the appellant
for the period 1990-1997 comes to Rs 16,50,000. To assess the
agricultural income of the appellant prior to 1990, ExP121 can be
considered, along with the evidence of the defence witnesses. However,
the appellant’s contention is that in ExP122, the market rates of
paddy and maize are not mentioned. According to PW40, he furnished
ExP121 solely based on the information provided by the ACB
inspector. If ExP122 did not contain the market rates of paddy and
maize, it is questionable how PW40 arrived at the market rates for
these crops to calculate the net income in ExP121. This is particularly
significant because ExP121 mentions that it was based on the
prevailing market rates provided by the inspector.
134. PW41 and PW39 admitted that there is no mention of paddy or
maize in ExP122.
135. For this, the defence examined DW17, the Senior Marketing
Assistant in the Office of the Commissioner and Director of
Agricultural Marketing. He produced the attested copy of the support
prices fixed by the Government of India for agricultural crops from
1983-1984 to 1998-1999, marked as ExD112. ExD112 also shows the
57
price of maize and paddy per quintal set by the government. However,
in ExD112, the prices fixed by the government for agricultural crops
are from the year 1983. Upon comparing ExD112 and ExP121, the
prices of maize and paddy are higher in ExP121. Hence, ExP121 can
be considered to determine the agricultural income prior to 1990, for
the years 1980-1984 and 1985-1990. Though the defence has also
examined DWs 7, 8, 11, and 12, they have not produced any
documentary evidence.
136. As per ExP121, the net income for the years 1980-81, 1981-82,
1982-83, 1983-84, 1985-86, 1986-87, 1987-88, 1989-90 is as
follows: Rs 1080; 4130 + 1600; 4880 + 120; 600 + 3000; 3000 + 7912;
650 + 5600; 930 + 4800; 1485 — totaling Rs 39,787. Thus, the total
agricultural income of the appellant comes to Rs 16,50,000 + Rs
39,787 = Rs 16,89,787. For the reasons discussed above, the amount
of Rs 1,65,832, as assessed by the learned Special Judge, is incorrect,
and the correct amount of Rs 16,89,787 is added.
137. In light of the above discussion, the total amount of income as
determined by this Court, when compared to the amounts calculated
by the prosecution, the defence, and the social learned Special Judge
in the lower court, are tabulated as under:
S.No. Description of Amount Amount Amount Amount
Income Calculated by Calculated by Determined by Determined by
the the Defence the Special this Court
Prosecution (in (in Rs) Learned (in Rs)
Rs) Special Judge
58in the Lower
Court (in Rs)
1. Item No. 1: Net 7,28,000 8,46,607 7,28,000 7,28,000
Salaried Income
2. Item No. 2: Loan 1,00,000 1,00,000 1,00,000 1,00,000
from Aryan Co.op
Housing Limited
3. Item No. 3: Loan 80,000 80,000 80,000 80,000
from Sunita
Finance
Corporation
4. Item No. 4: Rental 1,00,000 7,57,500 Nil 1,71,600
Income
5. Item No. 5: 16,100 16,100 16,100 16,100
Interest from
FDRs
6. Item No. 6: 3,53,950 3,53,950 3,53,950 3,53,950
Income from
Chits
7. Item No. 7: 2,261.80 2,261.80 2,261.80 2,261.80
Interest from SB
Accounts
8. Item No. 8: 3,49,000 15,84,575 11,500 1,00,775
Income from Sale
Proceeds
9. Item No. 9: 1,65,832 34,95,862 1,65,832 16,89,787
Agricultural
IncomeAdditional Income
i) Amounts 2,02,000 2,02,000 2,02,000
withdrawn from
GPF of appellantTOTAL 18,95,143.80 74,56,856.00 16,59,643.80 34,44,473.80
138. The total amount of income, as calculated by the Special
Learned Special Judge, is Rs. 17,09,611.80, which is incorrect. The
59
correct calculation of the total amount, based on the values of the
items under income reflected in column No. 5 (Amount Determined by
the Special Learned Special Judge in the Lower Court) of the above
table, is Rs. 16,59,643.80 and not Rs 17,09,611.80.
EXPENDITURE
139. The following disputed items are discussed below:
Item No. 1 – Household Expenditure:
The case of the prosecution is that during the course of the
investigation, PW42, the Dy. Director, Accounts, ACB, Hyderabad,
calculated the family expenditure of the appellant during the check
period by adopting the scientific method, i.e., CSO data, and he
arrived at the expenditure of Rs. 2,67,292.30 and the same is added to
the expenditure of the appellant. The relevant document is ExP61.
140. The contention of the appellant is that his sister-in-law used to
supply rice, milk, vegetables, etc., and after deducting the same, the
household expenditure should have been considered at Rs. 1,50,000
instead of Rs. 2,67,292.
141. The learned Special Judge stated that the appellant did not
dispute the item-wise expenditure as assessed by PW42 and observed
that, in the absence of any contradicting evidence to that of PW42, he
added Rs. 2,67,292.30 under this item to the expenditure of the
appellant.
60
142. PW42, the then Dy. Director of Accounts, deposed that he
computed the household expenditure of the appellant for the check
period from 1.2.1968 to 23.3.1997 and furnished ExP61, showing the
value of household expenditure as Rs. 2,67,292.30, as per the Central
Statistical Organisation information.
143. ExP61 shows the household expenditure incurred by the
appellant. The appellant is not contesting the values arrived at by
PW42 in ExP61. His contention is that his sister-in-law used to supply
milk, vegetables, etc., and the same should be deducted from the
household expenditure. However, it was already discussed that DW19,
the sister-in-law, deposed that she resides in the Attapur house
(which is Item No. 2 in the assets), and the appellant resides in the
house at Narayanguda (which is Item No. 1 in the assets). Even
according to PW39, DW19 is living in the house at Attapur village.
ExP47 was conducted at the house in Narayanguda (which is Item No.
1); hence, it cannot be accepted that DW19 was incurring the
expenditure for the supply of milk, vegetables, etc. Further, no
document has been furnished by the appellant to prove his claim.
Therefore, the contention of the appellant cannot be accepted. Hence,
the finding of the learned Special Judge under this item needs no
interference.
144. Item No. 5 – Property Taxes paid to MCH:
61
The prosecution’s case is that during the course of the
investigation, the Dy. Commissioner sent a letter mentioning the
payment of Municipal taxes in respect of the houses bearing No. 3-5-
199/A/7, Narayanguda, and house bearing No. 3-4-864/6,
Barakatpura, respectively. As per the said letters, which are marked
as Exs P31 and P32, the appellant paid an amount of Rs. 17,500 and
Rs. 34,000 towards property taxes for the above houses.
145. Similarly, the Commissioner, Rajendranagar Municipality, sent a
letter informing that the appellant paid an amount of Rs. 5,592
towards house tax for the house bearing No. 4-1-124, Attapur during
the check period. Thus, according to the prosecution, the appellant
paid an amount of Rs. 57,092 as house tax, and the said amount was
added to the total expenditure of the appellant.
146. The contention of the appellant is that, out of the total amount of
Rs. 57,092, an amount of Rs. 5,592 relating to the Attapur house
should be deducted, as his sister-in-law, DW19, has paid the taxes for
the Attapur house and she is in possession of the receipts.
147. The learned Special Judge, relying upon the evidence of PWs 2,
24, 19, 39, coupled with Exs P2, P2(a), 23, 24, 31, and 32, favoured
the prosecution version and added an amount of Rs. 57,092 under
this item to the total expenditure of the appellant.
62
148. As per the evidence of PW24, ExP31, furnishing the property tax
paid by the appellant, shows that the house bearing No. 3-5-199/A/7,
Narayanguda, stands in the name of the appellant, that the annual
rental value of the house was Rs. 12,000, which was effective from
1992, and the tax comes to Rs. 3,500 per year, and the appellant paid
tax up to 31.3.1997. Further, ExP32, furnishing the property tax paid
by the appellant, shows that the house bearing No. 3-4-864/6,
Barkatpura, stands in the name of the appellant, that the annual
rental value of the house was Rs. 6,600, which was effective from
1.4.1978, and the tax comes to Rs. 1,888.92 per year, and the
appellant paid tax up to 31.3.1997.
149. The appellant has not disputed that he paid an amount of Rs.
17,500 and Rs. 34,000 towards property taxes for the above houses.
His contention is that the tax for the house bearing No. 4-1-124,
Attapur, was paid by his sister-in-law. For this claim, the evidence of
PWs 2, 19, and DW19 is relevant.
150. According to PW2, ExP2 letter dated 22-5-2001, furnishing the
details of the house bearing No. 4-1-124, Attapur, was issued by
Srinivas Reddy, Commissioner, Municipality, Rajendranagar. It
mentions that the said house was standing in the name of the
appellant and that ExP2(a) was the certificate issued showing that the
income tax was paid by the appellant up to March 1999, and that
63
subsequently, the house tax for this house was also paid until 2004-
2005.
151. In his cross, he also stated that the said property stands in the
name of the appellant from 1989-90, that the property tax was
assessed from 1989-90, and that the house tax was paid in the name
of the appellant.
152. PW19 deposed that ExP24, letter dated 2.9.1997, furnishing the
particulars about the house bearing No. 4-1-124, Attapur, was issued
by Siva Shankar Rao, Commissioner, Municipality, Rajendranagar. It
mentions that the property tax assessment was given for the said
house in the year 1989-90 and the annual rental value was fixed at
Rs. 2,138. That the property tax was revised during the year 1991-
1992 and was enforced w.e.f. 1.10.1993. That the house has been in
the name of the appellant since 1989. That the property tax was paid
up to 1995-96 and subsequently, the appellant also paid tax up to
2004-05.
153. The evidence of PWs 2 and 19, coupled with Exs P2, P2(a), and
P24, is clear with respect to the house bearing No. 4-1-124, Attapur,
standing in the name of the appellant and that the appellant was
paying the tax.
64
154. Though DW19, the appellant’s sister-in-law, is residing in the
house bearing No. 4-1-124, Attapur, which is also spoken to by PW39,
and DW19 deposed that she is in possession of the tax receipts paid
for the house at Attapur, she hasn’t filed those receipts to show in
whose name the tax was paid. Further, though she denied the
suggestion that she is not paying any taxes for the said house, besides
her denial and oral evidence, no documentary proof has been filed by
either the appellant or DW19 to show that it was, in fact, DW19 who
was paying the tax for the house bearing No. 4-1-124, Attapur. In the
absence of any such proof, and in light of the evidence filed on record
by the prosecution, it is apparent that it was the appellant who was
paying the tax for the house bearing No. 4-1-124, Attapur.
Thus, the finding of the learned Special Judge under this item needs
no interference.
155. Item No. 8 – Life tax paid on Maruthi car:
It is the case of the prosecution that the Assistant Secretary, RTA,
sent a letter, ExP6, informing that the appellant paid Rs 8,750
towards life tax and Rs 50 towards registration fee on 7.6.1994. As
such, an amount of Rs 8,800 should be added to the total expenditure
of the appellant.
65
156. The contention of the appellant is that this expenditure of Rs
8,800 relates to the wife of the appellant and must be deleted from the
total expenditure.
157. The learned Special Judge, by stating that since the Maruthi car,
item no. 4 in assets, was tagged to the assets of the appellant, added
Rs 8,800 under this item to the total expenditure of the appellant.
165. The appellant is not disputing the quantum paid towards the life
tax of the Maruthi car bearing no. AP 9 F 9600, and his contention is
that the said amount was paid by his wife and has already been
included in the assets of the appellant.
158. The claim of the appellant that an amount of Rs 8,800 under
this item needs to be deleted since it is the expenditure of his wife
cannot be accepted, since the income of the appellant’s wife is added
to the appellant’s income, and her expenditure will also be included in
his expenditure.
159. However, the amount of Rs 8,750 towards life tax has already
been added under item no. 4 in assets, i.e., to the value of the Maruthi
car. Hence, the same cannot be added again under this item. Only an
amount of Rs 50 towards registration fee is added under this item,
since it was not explicitly stated that an amount of Rs 50 was added in
66
addition to Rs 8,750 under item no. 4 in assets. Thus, for the reasons
discussed above, the amount of Rs 8,800, as assessed by the learned
Special Judge, is incorrect, and the correct amount of Rs 50 is added.
160. Item No. 9 – Insurance paid towards car bearing No. AP 9 F
9600:
It is the case of the prosecution that the Manager, National
Insurance Company, informed that the wife of the appellant paid Rs
6,530 towards the insurance of the vehicle during the check period. As
such, an amount of Rs 6,530 was added to the total expenditure of the
appellant.
161. The appellant’s contention is that the expenditure of Rs 6,530
under this item relates to his wife and must be deleted.
162. The learned Special Judge stated that the amount of expenditure
is not in dispute, and since it stands in the name of the wife of the
appellant, he tagged Rs 6,530 to the expenditure of the appellant.
163. PW29 deposed that ExP37 is the letter furnished by the Branch
Manager of the Tarnaka Branch of the National Insurance Company,
which contains the details of the policy taken and renewed by the wife
of the appellant for vehicle no. AP 9 F 9600. It is not in dispute that
the amount of Rs 6,530 was paid by the wife of the appellant.
67
164. Since the income of the wife of the appellant is tagged to the
income of the appellant, the expenditure of the wife of the appellant
will also be added to the total expenditure. Hence, the finding of the
learned Special Judge under this item needs no interference.
165. Item No. 11 – Life tax paid for scooter bearing AP 9 L 1529:
It is the case of the prosecution that, as per the letter of the
Assistant Secretary, RTA, Hyderabad, an amount of Rs 1,910 and Rs
45 were paid towards life tax and registration fees. As such, an
amount of Rs 1,955 was added.
166. The learned Special Judge added an amount of Rs 1,955 under
this item to the total expenditure of the appellant.
167. The contention of the appellant is that the amount of Rs 1,955
was already included under item no. 5 in assets towards the value of
the Bajaj Scooter and hence must be excluded from expenditure under
this item.
168. Under item no. 5 of the assets, a life tax of Rs 1,910 and a
registration fee of Rs 45 were included in the cost of the vehicle to
determine the value of item no. 5 in assets. Hence, it cannot be
included again under this item. Thus, the value of this item, i.e., Rs
1,955, as assessed by the learned Special Judge, is excluded from
consideration.
68
169. Item No. 12 – Expenditure incurred towards LPG:
It is the prosecution’s case that Mukund Enterprises sent a
letter informing that one LPG gas connection No. 14822 was allotted to
the appellant on 18.8.1990, and that the appellant paid Rs 1,669.40
towards the gas connection, refills, etc. As such, this amount should
be added to the expenditure of the appellant.
170. The learned Special Judge accordingly added an amount of Rs
1,669.40 to the total expenditure of the appellant. The contention of
the appellant is that this amount is already covered under item no. 1,
i.e., household expenditure, and hence Rs 1,669.40 should be deleted
under this item.
171. PW39, in his cross-examination, admitted that this item is
covered under household expenditure.
172. Since PW39, the IO’s evidence is clear that an amount of Rs
1,669.40, incurred towards LPG, was included in the household
expenditure, it cannot be added again under this item. Hence, the
value of this item, i.e., Rs 1,669.40, as assessed by the learned Special
Judge, is excluded from consideration.
69
173. Item No. 13: Expenditure on Telephone:
The case of the prosecution is that during the course of the
investigation, the accounts officer, Hyderabad telecom district, sent
letters informing that the appellant had one telephone No. 243773 at
his portion and another No. 3223773 in the same premises. The letter,
ExP33, mentioned that the appellant paid an amount of Rs 8,789 and
Rs 33,759 towards rental charges for the said telephones by
depositing Rs 1,000 each. According to the prosecution, the appellant
paid Rs 44,048 towards the telephone installed in his house; as such,
this amount was added to the expenditure of the appellant.
174. The contention of the appellant is that even at the time of
inspection, telephone number 243773 was in the premises of a tenant,
and the amount of Rs 8,879 was incurred by the appellant, while the
rest of the amount was paid by the tenant. The appellant examined
DW3 to prove his claim.
175. The learned Special Judge disbelieved the evidence of DW3 and
added an amount of Rs 44,048 to the expenditure of the appellant.
183. PW25 deposed that ExP33 is the letter furnished by the then
Accounts Officer, containing the details of the installation of telephone
no. 243773 and the particulars of the amounts paid towards the
installation charges, enclosing the payment history. The said
telephone was sanctioned in the name of the appellant, at the
70
residence of 3-5-199/A/7, 2nd Floor, Narayanguda. The installation
date was in 1995, and an amount of Rs 1,000 was deposited towards
the advance rental deposit. According to PW25, the payment for
telephone bills from 1.3.1995 to 1.7.1997 was Rs 10,085.
176. Further, PW25 also deposed that ExP33(a) furnished information
regarding telephone no. 241724 and the amount deposited towards
the deposit charges, also enclosing the payment history particulars. As
per ExP33(a), the said telephone was issued in the name of the
appellant, at H. No. 3-5-199/A/7, Ground Floor, Narayanguda. The
subscriber paid an amount of Rs 1,000 towards the advance rental
deposit, and he paid the telephone bill from 1.1.1992 to 1.7.1997,
totalling Rs 26,958.
177. Under ExP33, an amount of ₹10,085 was paid as telephone
charges, in addition to ₹1,000 deposited towards the advance rental
deposit. Under Ex.P33(a), an amount of ₹26,958 was paid as telephone
charges, along with ₹1,000 deposited towards the advance rental
deposit. Thus, the total expenditure under this item amounts to
₹39,043, as per the evidence of PW25, and not ₹44,048 as assessed by
the prosecution.
178. It is DW3’s evidence that he was a tenant in the house at H. No.
3-5-199/A/7, 2nd Floor, from 6/92 to 3/97. He also stated that he
used to pay the telephone charges.
71
179. It is not disputed that there were tenants staying at H. No. 3-5-
199/A/7, Narayanguda, as PW39 also stated that during the search of
the appellant’s house, a few tenants were found residing on the 1st
and 2nd floors. Further, Exs P113 to P120 also show that the
appellant received rental income from this house.
180. DW3’s evidence shows that he was residing on the 2nd Floor of
the appellant’s house, and as per ExP33, telephone no. 243773 was
sanctioned in the name of the appellant, at the residence of 3-5-
199/A/7, 2nd Floor, Narayanguda.
181. Though ExP33 shows that the telephone number was
sanctioned in the name of the appellant, it does not show the
particulars of who paid the amount. Further, even PW39 admitted
that, in the inventory at the time of the search of the appellant’s
house, only one telephone was found and mentioned.
182. Though PW39 added that the other telephone, which is in the
name of the appellant, is in the portion of the tenants and is also
maintained by the appellant, no receipts, etc., have been filed to show
that the appellant was paying the charges for the telephone on the
2nd Floor.
183. Though DW3 has also not filed any documentary proof to show
that he paid the telephone charges, the evidence is clear that
72
telephone no. 243773 was placed on the 2nd Floor of the house, and it
is clear that there were tenants residing on the 2nd Floor, as admitted
by PW39 as well. There is no reason why the appellant would pay the
telephone charges of the tenants.
184. In light of the above discussion, an amount of Rs 10,085, which
was paid for the telephone bills of telephone no. 243773 at the
residence of 3-5-199/A/7, 2nd Floor, Narayanguda, is deducted under
this item from the amount of Rs 39,043. The amount of Rs 1,000 paid
towards the advance rental deposit is not deducted as DW3 did not
depose that he paid such advance. Thus, for the reasons discussed
above, the amount of Rs 44,048, as assessed by the learned Special
Judge, is incorrect, and the correct amount of Rs 28,958 (Rs 39,043 –
Rs 10,085) is added.
185. Item No. 15- Expenditure on Scooter:
The prosecution’s case is that the assistant branch manager,
Oriental Insurance, sent a letter informing that the son of the
appellant has paid Rs 351 towards the insurance of the scooter, and
hence, this amount of Rs 351 was added under this item.
186. The learned Special Judge added this amount to the
expenditure of the appellant on the ground that the son of the
appellant has no independent income.
73
187. The evidence of PW27 is clear that ExP35 was issued by the
assistant branch manager of Oriental Insurance Co. Ltd, furnishing
the details of the motorcycle policy of engine no. 46398, and that the
son of the appellant, Sripal Reddy, is the policyholder. It was also
stated that the son of the appellant paid an amount of Rs 351 towards
the premium of the insurance. It is admitted that the son of the
appellant is dependent on him and has no independent income.
Hence, the finding of the learned Special Judge under this item needs
no interference.
188. Item No. 16- Electricity Consumption Charges:
It is the case of the prosecution that during the house search, it
was found that an electricity connection was given to the house of the
appellant, bearing House No. 3-199/A/7, Narayanguda. The Assistant
Accounts Officer, APSEB, Hyderabad, sent a letter informing that
House No. 3-199/A/7, Narayanguda, was allotted to consumer SC
Nos. F3-3134, 3135, 3136, 3137, and 3138. Consumer No. F3-3134
was allotted to the ground floor where the appellant resides. As such,
the electricity consumption charges in respect of the said portion were
taken into account. An amount of Rs 6351 was paid for the said
portion towards electricity consumption charges, and thus, this
amount was added to the expenditure of the appellant.
74
189. The contention of the appellant is that this amount is covered
by household expenditure. The learned Special Judge rejected the
claim of the appellant and added Rs 6351 to the expenditure of the
appellant under this item.
190. PW39, in his cross-examination, admitted that Item No. 16, i.e.,
Electricity Consumption Charges, is covered in the household
expenditure.
191. In light of the IO/PW39’s admission, the value of this item, i.e.,
Rs 6351, as assessed by the learned Special Judge, is excluded from
consideration.
192. Item No. 17: Subscription towards LIC premia:
It is the case of the prosecution that during the house searches,
receipts pertaining to bonds Nos. 640727502 and 640729089 were
seized, which were in the name of the appellant and his wife. As per
the said documents, the appellant paid an amount of Rs 84,752 for
the said policies. Further, some old premium receipts of LIC Policy No.
38483034 were also seized, and as per these receipts, the appellant
insured his life with LIC for a yearly premium of Rs 2,152.50 for 15
years, for Rs 30,000, on 15.4.1975. The appellant initially paid an
amount of Rs 32,287.50 towards premiums during the check period.
Thus, the appellant totally paid Rs 1,17,039.50 towards LIC
premiums, and as such, this amount is added to the expenditure of
75the appellant. The prosecution examined PW38 and marked Exs P76,
P77, P95, and P96 under this item.
193. The contention of the appellant is that out of the amount of Rs
1,17,039.50, an amount of Rs 32,287 was paid to the appellant
towards Maturity Policy No. 38483834, and the same has to be
deducted from the expenditure.
194. The learned Special Judge, relying on the evidence of PW38,
coupled with Exs P76, P77, P95, and P96, stated that the appellant
paid the amount of Rs 1,17,039.50 towards LIC premiums. The
learned Special Judge also observed that no evidence was adduced by
the appellant to prove his claim.
195. PW38, an LIC agent, deposed that the wife of the appellant is the
policyholder of LIC with Policy No. 640727502. The policy commenced
from December 1994. The sum assured was Rs 2,00,000, and the
premium was fixed at Rs 14,594 yearly. Further, PW38 stated that in
the year 1994, at the time of taking the policy, i.e., on 28.12.1994, an
amount of Rs 3,502 was paid by the policyholder, and for the next
year, i.e., in December 1995, the policyholder paid an amount of Rs
14,594 and also paid Rs 322 towards the late fee, totaling Rs 18,418.
ExP76 is the receipt issued by the LIC.
76
196. ExP76 receipt shows that an amount of Rs 18,418 was paid by
the wife of the appellant for Policy No. 640727502 for 1994 and 1995.
ExP95 is the letter furnishing the details of Policies 640729089 and
640727502 in the names of the appellant and his wife, respectively. As
per ExP95, the total premium paid on both policies by the appellant
and his wife is Rs 84,752. ExP95 also shows that the premiums for
both policies were paid up to November 1996 and December 1996,
respectively.
197. ExP96 contains the details of the policy held in the name of the
appellant, which shows that the date of maturity was 28.12.2014.
Further, ExP97 contains the details of the policy held in the name of
the wife of the appellant, which shows that the date of maturity was
1.11.2009.
198. ExP95 gives the details of the entire premium paid by the
appellant and his wife for Policies 640729089 and 640727502 from
the year 1994 until 1996, and a total of Rs 84,752 was paid towards
both policies by the appellant and his wife. ExP96 covers the premium
paid by the appellant’s wife under ExP76, so the amount under ExP76
is once again not considered.
199. The check period is from 1.2.1968 to 23.3.1997. ExP95 contains
the details of the premium paid until December and November 1996.
ExP96 shows that the appellant was required to pay Rs 11,092 yearly
77
on 28th December, since the policy commenced on 28.12.1994. ExP97
shows that the wife of the appellant was required to pay Rs 8,194
yearly on 1st November, since the policy commenced on 1.11.1994.
200. From the above, it is clear that only ExP95 can be considered to
calculate the expenditure of the appellant and his wife towards
premiums on the policies, since the same contains details of
premiums paid until 1996. As per ExP96, the next premium was to be
paid on 28.12.1997, and as per ExP97, the next premium was to be
paid on 1.11.1997. Hence, since both are subsequent to 23.3.1997,
i.e., the end of the check period, the premium paid for the year 1997
cannot be considered.
201. Moreover, ExP94, LIC receipts shows that the appellant paid Rs
2,192.90, Rs 2,243, Rs 2,273, and Rs 2,152 towards LIC premium for
Policy No. 38483034, amounting to a total of Rs 8,861.
202. Though the appellant claimed that Rs 32,287 was received by
him towards the maturity of Policy No. 38483834, the same cannot be
accepted, since the maturity amount received from LIC–as reflected in
ExP98–has already been added to the income of the appellant. Thus,
for the reasons discussed above, the amount of Rs 1,17,039.50, as
assessed by the learned Special Judge, is incorrect, and the correct
amount of Rs 93,613 (i.e., Rs 84,752 + Rs 8,861) is added.
78
203. Item No. 18 – Subscription made by appellant towards
Private chits:
The case of the prosecution is that the appellant joined as a
member of a chit vide Ticket No. 23 on 18.5.1994 with M/s Shashi
Chit Funds. The duration of the chit was 25 months, and the value
was Rs 2 lakhs. This chit was closed on 10.9.1995. It is alleged that
the appellant paid Rs 1,71,474 towards the said chit as instalments,
as informed by the manager of the chit fund.
204. Further, according to the prosecution, the appellant joined as a
member of a chit vide Ticket No. 25 on 24.4.1992. The value of this
chit was Rs 1,00,000 and the period was 25 months. The appellant
paid Rs 85,292 towards the instalments of the said chit up to
14.6.1993. As such, this amount was also added under this item.
205. It was further the case that the wife of the appellant joined as a
member of chit Group No. 514, vide Ticket No. 18 on 23.12.1995. The
duration of the said chit was 20 months and the value of the chit was
Rs 50,000. The wife of the appellant paid Rs 34,040 towards
subscription up to 29.3.1997. As such, this amount was also added.
Similarly, it was stated that the wife of the appellant joined as a
member vide Ticket No. 5 on 24.4.1992. The value of the chit was Rs
50,000 and the duration was 20 months. The wife of the appellant
paid Rs 43,670 towards the subscription. The prosecution examined
79
PW14 and marked ExP18 under this item. Thus, the prosecution
added a total of Rs 3,34,476 under this item to the total expenditure of
the appellant.
206. The learned Special Judge, relying on the admission of PW39 in
his cross-examination that an amount of Rs 1,71,474 and Rs 85,292
was already deducted from the chit bid amount and that the same has
to be deleted from the expenditure under Item No. 18, added only an
amount of Rs 77,710 (34,040 + 43,670) under this item.
207. The contention of the appellant is that the amount of Rs 77,710
added by the trial court is erroneous and that the same has to be
deleted.
208. ExP17 is the letter from Shashi Chit Funds furnishing the
details of the chit groups joined by the appellant. ExP18 is the letter
from Hanuman Chit Funds furnishing the details of the chit groups
joined by the appellant and his wife.
209. As per ExP17:
• The appellant was a member of Chit Group No. SA3, Ticket No.
23, and he has paid a total of Rs 1,71,474 until 29.3.1997.
• The appellant was a member of Chit Group No. SB-1, Ticket No.
25, and he has paid a total of Rs 85,292 until 29.3.1997.
Thus, as per ExP17, a total of Rs 2,56,766 was paid towards the
above chits by the appellant.
80
210. As per ExP18:
• The appellant’s wife was a member of Chit Group No. S14, Ticket
No. 18, and she has paid a total of Rs 34,040 until 29.3.1997.
• The appellant’s wife was a member of Chit Group No. S8, Ticket
No. 5, and she has paid a total of Rs 43,670 until 29.3.1997.
Thus, as per ExP18, a total of Rs 77,710 was paid towards the
above chits by the appellant and his wife.
211. PW39 admitted in his cross-examination that the subscription
amounts of Rs 1,71,474 and Rs 85,292 were already deducted from
the chit bid amount, and as such, the same have to be excluded under
Item No. 18 towards expenditure. Hence, an amount of Rs 2,56,766
(Rs 1,71,474 + Rs 85,292) is deducted from Rs 3,34,476 assessed by
the prosecution. Hence, the finding of the learned Special Judge under
this item needs no interference.
212. Item No. 19- Expenditure incurred towards salaries of the
servants:
It is the case of the prosecution that, as per the long register,
ExP82, maintained by the appellant and mentioning the salaries of the
farm servants, an amount of Rs 1,39,839 was paid towards salaries
during the check period. As such, this amount was added under this
item.
81
213. The fact that the contents of ExP82 can be relied upon in their
entirety was already discussed under Item No. 12 of assets; therefore,
Item No. 19 of expenditure has to be considered as claimed by the
prosecution. Thus, the finding of the learned Special Judge under this
item needs no interference.
214. Item No. 21- Payment to Sri K Bhaskar Reddy and Ors:
It is the prosecution’s case that during the searches, one
agreement dated 7.4.1982 between the appellant’s wife, his sister-in-
law, and mother-in-law, etc., marked as ExP99, was seized. As per
this agreement, the appellant agreed to pay Rs 45,000 to Bhaskar
Reddy and others towards their family settlement. The appellant paid
this amount on two occasions: Rs 10,000 and Rs 35,000. The
expenditure of Rs 45,000 was equally shared by the appellant’s wife
and his sister-in-law. An amount of Rs 22,500, the share of the
appellant’s wife, is added to the total expenditure of the appellant.
215. The learned Special Judge, relying on the evidence adduced by
the prosecution, and that even according to the appellant, the amount
was paid by his wife, added Rs 22,500 to the expenditure of the
appellant.
216. The appellant’s contention is that the amount of Rs 22,500 was
paid to Bhaskar Reddy by his wife and sister-in-law, and the same
82
cannot be tagged to his expenditure. It was also contended that
Bhaskar Reddy was not examined.
217. ExP99 clearly mentions that it is an agreement between the
appellant’s wife, his mother-in-law, and his sister-in-law, on one hand,
and Kaveligudem Venkatamma, Janga Reddy, Bhaskar Reddy, on the
other hand, wherein the appellant’s wife, his mother-in-law, and his
sister-in-law have agreed to pay Rs 45,000 to the other parties. Thus,
it is clear that Rs 45,000 was paid by the appellant’s wife and sister-
in-law.
218. Though, PW39, in his examination, has stated that he has not
examined Bhaskar Reddy and others, the non-examination of Bhaskar
Reddy and others, in light of ExP99, is of no consequence. Also, since
the appellant has admitted that his wife has paid the amount
mentioned under ExP99.
219. Since the income of the wife of the appellant is also added to the
income of the appellant, an amount of Rs 45,000 is divided between
the appellant’s wife and his sister-in-law. Thus, the finding of the
learned Special Judge under this item needs no interference.
83
220. Item No. 22- Loan from Sunita Finance Corporation:
It is the prosecution’s case that during the course of
investigation, Sunita Corporation sent a letter informing that the wife
of the appellant repaid the loan of Rs 1,04,000 up to 8.7.1995. As
such, an amount of Rs 1,04,000 was added to the expenditure of the
appellant.
221. The learned Special Judge stated that admittedly, the said loan
was availed to purchase the Maruti car, which was in the name of the
appellant’s wife. Thus, he added an amount of Rs 1,04,000 under this
item to the expenditure of the appellant.
222. The contention of the appellant is that the loan under ExP73 was
repaid by the wife of the appellant and hence, cannot be added to his
expenditure.
223. ExP73 clearly shows that Rs 1,04,000 was paid by the wife of the
appellant as repayment of the loan taken for the purchase of the
Maruti car. Since the income of the wife of the appellant is included in
the appellant’s income, the appellant’s wife’s expenditure will also be
included. Hence, the finding of the learned Special Judge under this
item needs no interference.
84
224. Item No. 23- Expenditure towards spare parts:
It is the prosecution’s case that during the search, Exs P106 to
P111, which are bills pertaining to the purchase of spare parts, were
seized. As per the said bills, the appellant incurred an expenditure of
Rs 5338 towards spare parts and the servicing of Maruti Car No. AP 9
F 9600. As such, this amount of Rs 5338 is added to the expenditure
of the appellant.
225. The learned Special Judge, relying upon Exs P106 to P111,
tagged an amount of Rs 5338 to the expenditure of the appellant. The
contention of the appellant is that no evidence was placed before the
court on this aspect.
226. ExP106 to ExP111 were seized during the search of the
appellant’s house. All these receipts are in the name of the appellant.
Thus, it cannot be said that these documents do not belong to the
appellant or that the expenditure amount mentioned in the above
bills/receipts was not incurred by the appellant. Hence, the finding of
the learned Special Judge under this item needs no interference.
227. Item No. 24- Expenditure towards maintenance of vehicles:
It is the case of the prosecution that during the investigation, it
was revealed that the appellant was in possession of two vehicles, one
Maruti car and one Bajaj Scooter, since 1994. After considering the
85maintenance costs calculated at an average of Rs 600 per month for
the said car and scooter, an amount of Rs 18,000 under this item is
added to the expenditure of the appellant.
228. The learned Special Judge stated that the maintenance
expenditure assessed at Rs 600 per month for both vehicles is very
meagre and, in fact, less. Thus, the learned Special Judge added an
amount of Rs 18,000 under this item to the expenditure of the
appellant.
229. In his cross-examination, PW39 admitted that he calculated the
expenditure towards the maintenance of the vehicles solely on the
basis of average expenditure. The prosecution failed to furnish any
details of the vehicles, such as the number of kilometres run or any
other relevant data, to substantiate the basis for considering the
maintenance expenditure as Rs 600 per month. Hence, in the absence
of any documentary proof and based purely on guesswork, the amount
under this item cannot be added. Hence, the value of this item, i.e.,
Rs. 18,000, as assessed by the learned Special Judge, is excluded
from consideration.
230. In light of the above discussion, the total amount of expenditure
as determined by this Court, when compared to the amounts
86
calculated by the prosecution, the defence, and the social learned
Special Judge in the lower court, are tabulated as under:
S.No. Description of Amount Amount Amount Amount
Expenditure Calculated by Calculated Determined Determined
the by the by the by this Court
Prosecution Defence Special (in Rs)
(in Rs) (in Rs) Learned
Special Judge
in the Lower
Court (in Rs)
1. Item No. 1: 2,67,292.30 1,50,000 2,67,292.30 2,67,292.30
Household
Expenditure
2. Item No. 2: 1,30,530 1,30,530 1,30,530 1,30,530
Repayment of loan
to Aryan Coop
Housing Society
3. Item No. 3: 1,12,550 1,12,550 1,12,550 1,12,550
Educational
Expenditure
4. Item No. 4: 50,000 Nil Nil Nil
Expenditure
towards marriage of
Smt. Anitha
5. Item No. 5: Property 57,092 51,500 57,092 Rs 57,092
taxes paid to MCH
6. Item No. 6: Water 9,958 2,445 2,445 2,445
Consumption
Charges
7. Item No. 7: 5,000 5,000 5,000 5,000
Payment made to
Harivihar Colony
Welfare Association8. Item No. 8: Life Tax 8,800 8,800 8,800 50
Paid on Maruthi
Car
9. Item No. 9: 6,530 6,530 6,530 6,530
Insurance paid
towards car bearing
no. AP 9 F 9600
87
10. Item No. 10: 5,675 2,675 2,675 2,675
Registration fees
and Stamp Duty
11. Item No. 11: Life 1,955 1,955 1,955 Nil
Tax Paid for Scooter
bearing No. AP 9 L
1529
12. Item No. 12: 1,699 Nil 1,699 Nil
Expenditure
incurred towards
LPG
13. Item No. 13: 44,048 23,688 44,048 28,958
Expenditure on
Telephone14. Item No. 14: Locker 690 690 690 690
Rents15. Item No. 15: 351 Nil 351 351
Expenditure on
Scooter
16. Item No. 16: 6,351 Nil 6,351 Nil
Electricity
Consumption
Charges
17. Item No. 17: 1,17,039.50 84,752 1,17,039.50 93,613
Subscription
towards LIC
18. Item No. 18: 3,34,476 Nil 77,710 77,710
Subscription
towards Chits
19. Item No. 19: 1,39,839 Nil 1,39,839 Rs 1,39,839
Expenditure
incurred towards
salaries of servants
20. Item No. 20: 16,800 Nil Nil Nil
Expenditure
incurred towards
maintenance of
mother-in-law
21. Item No. 21: 22,500 Nil 22,500 22,500
Payment to Sri K
Bhasker Reddy
and Ors
88
22. Item No. 22: Loan 1,04,000 Nil 1,04,000 1,04,000
from Sinta Finance
Corporation
23. Item No. 23: 5,338 Nil 5,338 5,338
Expenditure
towards spare parts
24. Item No. 24: 18,000 Nil 18,000 Nil
Expenditure
towards
maintenance of
vehicles
25. Item No. 25: 9,062 Nil Nil Nil
Expenditure
towards payment of
premia to NationalTOTAL 14,75,575.80 5,81,115.00 11,32,434.80 10,57,163.30
Thus, the following amounts of assets, income, and expenditure
have been arrived at by this Court:
Assets Rs 24,41,795.28
Income Rs 34,44,473.80
Expenditure Rs 10,57,163.30
231. By deducting the expenditure of Rs 10,57,163.30 from the total
income of Rs 34,44,473.80, the likely savings is Rs 23,87,310.50.
Consequently, the disproportionate assets, as calculated by this
Court, are as follows:
89
Savings – Assets = Rs 23,87,310.50 – Rs 24,41,795.28 = Rs –
54,484.78. Thus, the disproportionate assets arrived at by this Court
total Rs 54,484.78.
232. In M. Krishna Reddy v. State of A.P (1992 4 SCC 45), the
Hon’ble Supreme Court observed that a Government memo allowing a
margin of 20% on the income of a government servant while
computing disproportionate assets cannot be laid down as a
proposition of law.
233. In B.C. Chaturvedi v. Union of India and Others (1995 6 SCC
749), the Hon’ble Supreme Court held that the principle of allowing a
deduction beyond 10% while calculating disproportionate assets of an
officer would be undesirable and inappropriate.
234. Similarly, the Hon’ble Supreme Court in Krishnanand
Agnihotri v. State of M.P., (1977) 1 SCC 816, held that 10% of the
disproportionate assets need to be deducted in arriving at the finding
that the appellant had disproportionate assets.
235. The total income of the appellant, as determined by this Court, is
Rs 34,44,473.80. Extending the benefit of 10% in calculating the
disproportion, 10% of the income would be Rs 3,44,447.38 (i.e., 10%
of Rs 34,44,473.80). Since the disproportion now computed is Rs
54,484.78, which is less than the 10% deduction allowed by the
90Hon’ble Supreme Court in the aforementioned learned Special
Judgements, the appeal deserves to be allowed.
236. Accordingly, the Criminal Appeal is allowed.
________________
K.SURENDER, J
Date: 16.04.2025
kvs
91
HON’BLE SRI JUSTICE K.SURENDER
CRIMINAL APPEAL No.1450 of 2009
Date:16.04.2025
kvs
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