STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC

From the Judgment and Order dated 27.04.2017 of the High Court of Judicature at Madras in Criminal Revision Case Nos.702 and 703 of 2016. V. Krishnamurthy, AAG, Dr. Joseph Aristotle S., Nupur Sharma, Shobhit Dwivedi, Sanjeev Kumar Mahara, Ms. Richa Vishwakarma, Advs. for the Appellant. K. Radhakrishnan, Sr. Adv., D. L. Chidananda, R. Janarthanan, S. Senthil Elangovan, S. Krishnamoorthy, K. Kumaravadivel, Advs. for the Respondents. The Judgment of the Court was delivered by J. B. PARDIWALA, J.

Leave granted.

Since the issues raised in both the captioned appeals are the same, those were heard analogously and are being disposed of by this common judgment and order.

These appeals are at the instance of the State of Tamil Nadu through the Deputy Superintendent of Police, Vigilance and Anti- Corruption, Salem District, Tamil Nadu and are directed against the two judgments and orders passed by the High Court of Madras dated A B C D E F G H 638 SUPREME COURT REPORTS [2022] 7 S.C.R.

27.04.2017 allowing the criminal revision applications preferred by the respondents herein (original accused persons) discharging them from the prosecution under Section 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 (for short, “Act 1988”) read with Section 109 of the Indian Penal Code (for short, “the IPC”). FACTUAL MATRIX

The Respondents in these appeals are husband and wife. The Respondent No.1 - R. Soundirarasu at the relevant point of time was serving as a Motor Vehicle Inspector (Grade 1) at Namakkal during the check period, i.e., from 01.01.2002 to 31.03.2004. The Respondent No. 2, namely, Suguna is the wife of the Respondent No. 1.

The Respondent No. 2 is a commerce graduate and claims to be having a separate source of income. She was a partner in a partnership firm running in the name of S.K. Mat Industries along with one R. Kumar w.e.f. 23.10.1993. The partnership came to be dissolved on 31.03.2003, and, thereafter she continued as a sole proprietor.

It is the case of the Respondent No. 2 that she has been paying the income tax from 1990 onwards and her IT Returns are being scrutinized by the appropriate authorities.

It appears from the materials on record that a First Information Report (FIR) came to be registered against the Respondent No. 1 herein dated 19.09.2005 at the Police Station, Vigilance and Anti-Corruption, District Salem for the offences under the Act 1988 as enumerated above.

For better and effective adjudication of the present appeals, we deem it necessary to reproduce the entire FIR as under: “Column No. 12 in FIR Cr. No.9/AC/2005/SL/SU Tr. R. Sundararasu was working as Motor Vehicle Inspector Grade-1 at the office of the Regional Transport Officer, Namakkal, Rasipuram and Sankari from March 98 to May 2000 to July 2002 and September 2002 to September2004 respectively and again in Namakkal from 27.09.2004. He is a Public Servant as defined u/s 2 (C) of Prevention of Corruption Act, 1988. The accused Tr. R. Sundararasu, Motor Vehicle Inspector Grade-1 hailed from an ordinary agricultural family. He is a second son to his parents. Tr. Ramasamy and A B C D E F G H STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 639 Tmt. Krishnammal. He has got diploma in Mechnaical Engineering and got B.E., degree by attending evening classes. He got married one Suguna D/o Tr.

It appears that vide the letter dated 16.10.2007 the investigating officer called for the explanation from the Respondent No. 1 as regards the allegations levelled in the FIR.

The Respondent No. 1 vide his letter dated 1.11.2007 offered his explanation stating that he does not possess or had acquired any assets disproportionate to the known source of his income. The Respondent No. 1 also placed on record the income tax returns filed by his wife from 1990 onwards and that of the partnership firm too from 1993.

It appears that in the course of investigation the role of the Respondent No. 2 as the wife of the Respondent No. 1 also surfaced as an abettor.

Upon conclusion of the investigation, the Investigating Agency filed charge-sheet in the Court of the Special Judge, Salem for the offences enumerated above. The filing of the charge-sheet culminated in the registration of the Special Criminal Case No. 36/2008 in the Court of the Special Judge, Salem.

In such circumstances referred to above, the Respondents preferred Crl. M.P. Nos. 87 and 86 of 2014 resply under Section 239 of the Code of Criminal Procedure (for short, ‘the CrPC’) seeking discharge from the trial essentially on the ground of lack of any prima facie case against them.

The Special Judge adjudicated both the aforesaid applications filed by the respondents and thought fit to reject those by two separate orders dated 29.03.2016. While rejecting the Crl. M.P. No. 86 of 2014 filed by the respondent No. 2 (wife of respondent No. 1), the Special Judge observed as under :- “15. Yet another ground urged by the petitioner is that the income derived by the petitioner being partner in S.K. Mat Industries and by doing money lending business was not given due credit by the Investigating Officer and as such the decision arrived at by the Investigating Officer that the petitioner has no wherewithals to acquire the properties standing in her name and described in Statement II and to treat the said properties as the properties acquired by the 1st accused in the name of the petitioner is totally wrong. The Investigating Officer in his final report has categorically mentioned that no documents A B C D E F G H 642 SUPREME COURT REPORTS [2022] 7 S.C.R. A B C D E F G H were produced during investigation, either by the petitioner or her husband, to showcase the income derived by the petitioner by doing money lending business. Even in the present application there is no whisper in this regard by the petitioner. The contentious issue as to whether the petitioner derived income from S.K. Mat Industries and through money lending business can be decided only during trial based on the evidence placed before the court in this regard. Hence this court decides that the above ground urged by the petitioner is a pre-matured one and thus cannot be entertained at the time of framing charges.

In the present case the total value of assets and pecuniary resources held by the petitioner, her husband and son at the end of the check-period has been computed by the Investigating Officer at Rs.31,69,498/- as set out in Statement II. During investigation the petitioner and her husband have not produced any documents except the Income-Tax returns of the petitioner to trace the source of income of the petitioner to acquire the properties that stood recorded in her name during the check-period. Hence the Investigating Officer has proceeded to treat the properties standing in the name of the petitioner and her minor son as the properties of the petitioner’s husband, the lst accused, which cannot be found fault at this stage more so when the petitioner’s husband has not disclosed the acquisition of properties by his wife, the petitioner herein, to the concerned Department as required under Tamil Nadu Government Servants Conduct Rules. Hence this court decides that, at this stage, there is no substance in the contention’ of the petitioner that the methodology adopted by the Investigating Officer in computing the value of the assets of the petitioner’s husband is erroneous. x x x x x

The materials produced by the Investigating Officer along with the final report prima facie disclose the existence of all the ingredients essential to constitute the offence U / s 13 (2) r/w 13 (2) r/w 13 (1) (e) of the Prevention of Corruption Act read with Sec : 109 of the IPC alleged to have been committed STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 643 by the petitioner. Since the offence alleged against the petitioner and her husband are grave in nature the petitioner cannot be let scot free without facing trial and without affording an opportunity to the prosecution to establish the case during trial by adducing evidence.

Hence on a conspectus evaluation of all legal and factual aspects involved in the application, this court decides that there is no merit in the contention that the charge levelled against the petitioner is groundless on the face of materials available on record. Hence this court decides that the petitioner is not entitled for an order of discharge as prayed for.”

While rejecting the Crl. M.P. No. 87 of 2014 filed by the Respondent No. 1 (husband), the Special Judge observed as under:- “8. Now let us consider the grounds urged by the petitioner in seriatum. I. The Income-Tax returns submitted by the petitioner’s wife, was not considered by the Investigating Officer in the proper perspective. The learned counsel for the petitioner assiduously argued that through the Income-Tax returns submitted by the wife of the petitioner, who is arrayed as 2nd accused in the main case, it established beyond doubt that the petitioners wife had sufficient source to acquire properties mentioned in Statement II but the Investigating Officer in total disregard to the Income-Tax returns has treated the properties standing in the name of the petitioner’s wife as the properties of the petitioner on the premise that the petitioner has purchased the properties benami in the name of his wife and as such the computation made by the Investigating Officer in arriving at the total value of the assets acquired by the petitioner during the check period at Rs. 28,23,492/- as set out in Statement V is grossly erroneous. As already pointed out the fact that the petitioner’s wife, the 2nd accused is an Income-Tax assessee and that she had submitted her Income-Tax returns to the concerned Income-Tax authorities regularly is not seriously disputed. The petitioner is making an adroit effort to impress A B C D E F G H 644 SUPREME COURT REPORTS [2022] 7 S.C.R. upon the court that particulars set out in the Income-Tax returns unequivocally establish the financial capabilities of the wife of the petitioner to purchase properties and hence the properties standing in the name of the wife of the petitioner has to be treated as self-acquired properties of the wife of the petitioner.

11. (II). Income derived by the petitioner’s wife through money lending business not given due consideration. According to the petitioner, his wife, the 2nd accused by doing money lending business was deriving size able income but the same was not considered by the Investigating Officer and as such the conclusion arrived at by the Investigating Officer that the 2nd accused is an ostensible owner of the properties standing in her name and that the petitioner is the true owner of the said properties is absolutely wrong. The Investigating Officer has categorically mentioned that in respect of the so called money lending business no documents were produced before him either by the petitioner or his wife during investigation. Even in the present application the petitioner has not claimed that there are documents to establish the money lending business carried out by his wife and the income derived by her through the said business. The contentious issue as to whether the petitioner wife was deriving income by doing money lending business can be decided only during trial based on the evidence placed in this regard. Hence this court decides that above contention raised by the petitioner is pre-matured one and thus cannot be entertained at the stage of framing charges. On a conspectus evaluation of the legal and factual aspects involved in the case, this court decides that the claim of the petitioner for an order of discharge alleging that the Investigating Officer has erred in treating the properties standing in the name of the petitioner’s wife as the properties of the petitioner ignoring the separate income of the petitioner’s wife through money lending business is not sustainable under law.

12. (III). The methodology adopted by the Investigating Officer in arriving at the total value of assets standing in the A B C D E F G H STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 645 name of the petitioner at the end of the check-period erroneous:- A According to the petitioner the income derived by the petitioner’s wife other than from S.K. Mat Industries during the relevant period of Rs. 5,90,342/- but the same has not been considered by the Investigating Officer even though the same has been set out in the Income-Tax returns submitted by the petitioner’s wife, the 2nd accused Suguan. The petitioner further allege that the properties of the petitioner’s wife and son more fully described in Statement II ought to have been excluded but strangely the Investigating Officer has included the same, which again clearly demonstrate that computation has not been made in proper line. Based on the above said contentions the petitioner challenging the very methodology adopted by the Investigating Officer, seek an order of discharge. As elaborately discussed in the earlier part of this order, the question as to whether the properties standing in the name of the petitioner’s wife and son are in reality their self acquired properties or whether those properties were in fact acquired by the petitioner through his financial resources can be decided only at the time of trial based on the evidence adduced by both parties in this regard. Since the nature of properties standing in the name of the petitioner’s wife and son cannot be decided at this stage, at no stretch of imagination it can be contended that the methodology adopted by the Investigating Officer in arriving at the total value of assets and financial resources standing in the name of the petitioner at the end of the check period is erroneous.

13. Hence considering the materials available on record in the back drop of the principles of law propounded by our Apex Court in the case of Suresh Rajan referred supra, this court decides that the petitioner is not entitled for an order of discharge alleging that the methodology adopted by the Investigating Officer is erroneous.

14. In the present case the total value of the assets and pecuniary resources of the petitioner and his family members at the end of the check-period has been computed by the Investigating Officer at Rs.31,69,498/- as set out in Statement B C D E F G H 646 SUPREME COURT REPORTS [2022] 7 S.C.R. II. During investigation of the case, the petitioner has not produced any documents before the Investigating Officer except the Income-Tax returns of his wife, the 2nd accused, to trace the source of income of the petitioner’s wife to acquire the properties standing in her name. Hence the Investigating Officer proceeded to treat the properties standing in the name of the petitioner’s wife and his son as the properties of the petitioner, which cannot be found fault at this stage more so when the petitioner has not disclosed the acquisition of properties by his wife to the concerned department as required under the Tamil Nadu Government Servants conduct rules. Hence this court, at this stage, decides that there is no substance in the contention of the petitioner that the methodology adopted by the Investigating Officer in computing the value of the assets of the petitioner is erroneous.

15. Conclusion : The materials placed by the Investigating Officer along with the Final Report disclose grave suspecion against the petitioner of having committed the alleged offence U/s 13 (1) (e) of the Prevention of Corruption Act. The guilt or otherwise of the petitioner has to be decided by court by affording an opportunity to the prosecution to march in evidence in support of its case. The materials placed by the Investigating Officer along with the final report prima facie disclose the existence of all the essential ingredients constituting the offence U/s 13 (2) r/w 13 (1) (e) of the Prevention of Corruption Act 1988. Hence this court decides that the petitioner is not entitled for an order of discharge.

16. In the result the application is dismissed.”

16. Thus, while rejecting the discharge applications filed by the respondents herein, the learned Special Judge recorded a categorical finding that there was more than a prima facie case against the accused persons to put them to trial for the alleged offence. The learned Special Judge recorded a clear finding that the charges levelled against the accused persons cannot be said to be groundless so as to discharge them from the prosecution in exercise of powers under Section 239 of the CrPC. A B C D E F G H STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 647

The respondents, being dissatisfied with the orders passed by the Special Court rejecting their discharge applications, went before the High Court and challenged the orders by filing Criminal Revision Application Nos. 702 and 703 of 2016 resply. Both the Revision Applications came to be heard by the High Court analogously and came to be allowed by the common impugned judgment and order dated 27.04.2017. The respondents herein came to be discharged from the prosecution. While allowing the Revision Applications, the High Court held as under : “41. Taking into consideration all the relevant facts and circumstances, this Court is of the view that the Investigating Officer had not considered the explanation submitted by the first accused and also not taken into account any assets of the petitioners/ Al and A2.

This Court has also perused the statements of the listed witnesses along with the impugned orders. As already discussed in the foregoing paragraphs and as decided in State of Maharashtra Vs Wasudeo (AIR 1981 SC 1186 : 19813sec 199) cited supra, the nature and the extent of burden cast on the accused is well settled and the accused is not bound to prove his innocence beyond all reasonable doubt. All that he would do is to bring out a preponderance of probability. In so far as this case is concerned, the petitioners have brought out a preponderance of probability by way of establishing their case. As enunciated in Explanation to clause (e) of Sub Section (1) to Section 13, the petitioners have intimated their income received from lawful source to the income tax authorities concerned in accordance with the provisions of the Income Tax Act, which is applicable for the first accused being the public servant to intimate his known source of income and therefore, this Court is of the view that the prosecution has miserably failed to make out a prima facie case against the petitioners/ Al and A2.

It is the cardinal principle that the accused is presumed to be innocent unless proved to be guilty by the prosecution and the accused is entitled to the benefit of every reasonable doubt. Thus, giving false information or failing to prove his innocence is no ground to base conviction of accused and on the A B C D E F G H 648 SUPREME COURT REPORTS [2022] 7 S.C.R. A B C D E F G H contrary it offends the very basic principle of criminal jurisprudence which lays the burden on the prosecution to prove the offence against the accused.

In criminal cases, the guilt should be proved beyond any reasonable doubt that a reasonable man with ordinary prudence can have. There should. be no doubt whether the accused is guilty or not. If there is slightest doubt, no matter how small it is, the benefit will go to the accused. In Indian legal system the provision regarding burden of proof and how it is to be discharged are grandeurly laid down in Chapter VII of the Evidence Act, 1872. The rule is that whoever alleges a fact must prove it. In a criminal trail it is the prosecution who alleges that the accused has committed the offence with requisite mens rea and so the burden lies upon the prosecution to prove the same.

As observed in the preceding paragraphs the accused is not bound to prove his innocence beyond all reasonable doubt. All that he has to do is, to bring out a preponderance of probability. The phrase ‘preponderance of probability’ appears to have been taken from Charless R.Cooper V F.W.Slade, (1857-59) 6 HLC 746. The observations made therein make it clear that what ‘preponderance of probability’ means is ‘more probable and rational view of the case’, not necessarily as certain as the pleadings should be.

Section 397(1) confers a sort of supervisory power. The purpose is to rectify miscarriage of justice. The main consideration was whether substantial justice was done since this Section confers the revisional jurisdiction upon both the Sessions Court as well as the High Court (Criminal). Nobody can claim it as a matter of right as it confers supervisory jurisdiction. When there is a clear illegality in the order passed by the lower Court, a revision could be entertained.

On coming to the provisions of Section 401 of the Code, as it is understood, the object behind this Section is to empower the High Court to exercise the powers of an Appellate Court to prevent failure of justice in cases where the Code does not provide for appeal. STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 649

The power, however, is to be exercised only in exceptional cases where there has been a miscarriage of justice owing to : I (i) a defect in the procedure or (ii) a manifest error on a point of law; (iii) excess jurisdiction, (iv) abuse of power, & (v) where the decision upon which the trial Court relied has since been reversed or overruled when the revision petition was being heard.

As observed by the Supreme Court in State of M.P. Vs. S.B.Johari, (AIR 2000 SC 665: (2000) 2 sec 57: 2000 SCC (Crl) 311 : 2000 Crl.L.J.944), under Section 401 of Criminal Procedure Code quashing of the charge by the High Court would be justified if even on considering the entire prosecution evidence, the offence is not made out.

Viewing it from any angle, this Court is of considered opinion that the prosecution has not made out any case as against the petitioners/ Al and A2 to proceed with.

In the result, Criminal Revision Case Nos. 702 and 703 of 2016 are allowed and the impugned orders, dated 29.03.2016 and made in Crl.M.P.Nos.87 and 86 of 2014 in Special CC.No.76 of 2014 on the file of the learned Special Judge (for Corruption Cases), Salem are set aside and the petitions in Crl.M.P.Nos.87 and 86 of 2014 in Special CC.No.76 of 2014 are allowed. The petitioners/ Al and A2 are discharged from the clutches of the charges.”

18. Thus, from the aforesaid, it appears that the High Court thought fit to discharge both the accused essentially on the following counts. a) The Investigating Officer wrongly declined to consider the explanation offered by the Respondent No. 1 as regards the allegations and also failed to take into consideration the lawful assets of the Respondents. A B C D E F G H 650 SUPREME COURT REPORTS [2022] 7 S.C.R. b) The accused persons had disclosed their income to the income tax authorities in accordance with the provisions of the Income Tax Act and, in such circumstances, no prima facie case could be said to have been made out against them. c) The accused in a prosecution under the Act 1988, more particularly for the offences punishable under section 13(1)(e) of the Act, is obliged only to explain as regards the alleged assets disproportionate to the known sources of his income on the principle of preponderance of probability. d) As no prima facie case could be said to have been made out against the accused persons, they deserve to be discharged from the prosecution in exercise of revisional powers meant for doing substantial justice.

19. In view of the aforesaid, the State being aggrieved and dissatisfied with the impugned orders passed by the High Court is here before this Court with the present appeals. SUBMISSIONS ON BEHALF OF THE APPELLANT

Mr. V. Krishnamurthy, the learned Additional Advocate General appearing on behalf of the State vehemently submitted that the High Court committed a serious error in discharging the accused persons from the prosecution. He would submit that the whole approach of the High Court, more particularly the finding that

when the prosecuting agency has come forward with a specific occasion, that the petitioners have amassed wealth which is disproportionate to their known source of income, it is incumbent on the part of the prosecution, to prove the indictment with clinching and impeccable evidence beyond all reasonable doubts, because the allegations made against the petitioners would definitely affect their private rights and their self- respect as well

is erroneous and unsustainable.

He would submit that the High Court has erroneously cast a burden on the prosecution to prove the case against the accused persons beyond all reasonable doubt even at the stage of framing charge. The scope and ambit of inquiry before framing the charge or at the stage of discharge has been well settled by this Court.

He would submit that the High Court grossly erred in taking into consideration the documents produced by the accused persons in A B C D E F G H STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 651 their defence such as the Income Tax Assessments of A2 and other records, to come to the conclusion that the properties disclosed therein ought to be eschewed from consideration. The learned counsel submitted that the practice of looking into the documents produced by the accused at the stage of framing of charge has not been approved by this Court in the case of State of Orissa v. Debendra Nath Padhi, (2005) 1 SCC 568.

He would submit that the High Court could be said to have conducted a mini trial while considering the discharge applications filed by the accused persons. In other words, at the stage of framing of charge, roving and fishing inquiry is impermissible and that would defect the object of the Code.

In the last, he submitted that the High Court overlooked the dictum as laid by this Court in the State of Tamil Nadu by Inspector of Police, Vigilance and Anti-Corruption vs. N. Suresh Rajan and others, (2014) 11 SCC 709 @ 721 para 29, wherein this Court held that:

It is trite that at the stage of consideration of an application for discharge, the court has to proceed with an assumption that the materials brought on record by the prosecution are true and evaluate the said materials and documents with a view to find out whether the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. At this stage, probative value of the materials has to be gone into and the court is not expected to go deep into the matter and hold that the materials would not warrant a conviction. In our opinion, what needs to be considered is whether there is a ground for presuming that the offence has been committed and not whether a ground for convicting the accused has been made out. To put it differently, if the court thinks that the accused might have committed the offence on the basis of the materials on record on its probative value, it can frame the charge; though for conviction, the court has to come to the conclusion that the accused has committed the offence. The law does not permit a mini trial at this stage.

In such circumstances referred to above, the learned counsel appearing for the State prayed that there being merit in his two appeals, A B C D E F G H 652 SUPREME COURT REPORTS [2022] 7 S.C.R. A those may be allowed and the impugned orders passed by the High Court may be set aside. B C D E F G SUBMISSIONS ON BEHALF OF THE ACCUSED

Mr. K. Radhakrishnan, the learned senior counsel appearing for the accused persons, on the other hand, vehemently opposed both the appeals submitting that no error, not to speak of any error of law, could be said to have been committed by the High Court in passing the impugned orders discharging the accused persons from the prosecution.

The learned senior counsel would submit that without considering the explanation furnished by the respondent No. 1 and without calling for any explanation from his wife (second accused), the chargesheet for the offences punishable under Sections 13(2) r/w 13(1)(e) of the Act 1988 and Section 109 of the IPC could not have been filed. The learned counsel, relying on the decision of this Court in the case of N. Suresh Rajan (supra), submitted as a proposition of law that any property in the name of an income tax assessee, by itself, cannot be a ground to assume that such property belongs to the assessee.

He would submit that this Court in N. Suresh Rajan (supra) was dealing with a factual situation wherein the parents of the accused to whom the property belonged were not having any independent source of income unlike in the facts of the present case where the wife of the respondent is a commerce graduate and an entrepreneur. She has her own independent source of income and had purchased the properties out of her own income and that one of those has been gifted by her father. She has been an income tax assessee from the year 1990 and has been regularly filing her income tax returns.

He would submit that the Investigating Officer failed to consider the explanation furnished by the Respondent No. 1. Relying on the decision of this Court in the case of State of Maharashtra vs. Wasudeo Ramchandra Kaidalwar, (1981) 3 SCC 199, the learned counsel submitted that the nature and extent of burden cast on the accused is not to prove his innocence beyond reasonable doubt. All that the accused is obliged in law is to explain on preponderance of probability. In so far as the present case is concerned, the respondents have brought out a preponderance of probability by way of establishing their case.

The learned counsel in his written submissions has stated as H under:- STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 653 i. ii. iii. iv. v. vi. “In determining the assets of the respondent, the assets standing in the name of his wife and their son must be eschewed. Income of Tmt. Suguna, wife of the respondent R. Soundirarasu could not be clubbed along with the income of her husband when she is particularly having independent source of income and pays income tax. Further, the investigating Officer has called for the explanation from the respondent R. Soundirarasu, which was not considered by the IO. However, the IO has not called for the explanation from Tmt. Suguna. This approach of the IO is contrary to the law laid down by this Hon’ble Court. This Hon’ble Court in the case of Devine Retreat Centra Vs. State of Kerala (2008) 3SCC 542, has held that no judicial order can ever be passed by any court without providing a reasonable opportunity of being heard to the person likely to be affected by such order and particularly when such order results drastic consequences of affecting one’s own reputation. Respondent-R. Soundirarasu in his explanation had explained that his wife Tmt. Suguna has independent source of income. She is a commerce graduate and was a partner in a S.K. Matt Industries along with one R. Kumar with effect from 23.10.1993. The partnership was dissolved on 31.3.2003 and thereafter she continued as the sole proprietor. She had been paying income tax from 1990 onwards and her IT returns were scrutinized by the appropriate authorities. She had been regularly filed her income tax returns even beyond the end of the check period. It is respectfully submitted that the Investigating Officer while collecting necessary details from both the income tax authority as well as the respondent R. Soundirarasu, had failed to consider them in proper perspective which do establish that his wife Tmt. Suguna had acquired properties from her own income. But the investigating A B C D E F G H 654 SUPREME COURT REPORTS [2022] 7 S.C.R. A B C D E F G H officer has erroneously stated in the final report that she had no source of income and that her father also did not possess any means to acquire property.

15. It is submitted that Statement No. 1 appended to the letter dated 16.10.2007 and the Charge Sheet is the assets and pecuniary resources that stood to the credit of respondent and his family members. The check period, as per the prosecution has been determined from 1.1.2002 to 31.3.2004. In statement No. 1, 14 items have been shown. In so far as Statement I is concerned, properties mentioned at item Nos, 01,02,08,10,12 and 14 are exclusively the investments of his wife out of her own resources.

16. It is submitted that in so far as Statement II is concerned. Item 1, the house was constructed at the cost of Rs. 4,15,344/- by respondent’s wife Tmt. S. Suguna from her independent resources derived from S.K. Mat Industries and other income and LIC Finance Housing Loan. Item No. 2 was purchased by respondent’s wife out of her independent income derived from S.K. Mat Industries. Item no. 12, the Land measuring 0.67.½ cents comprised in Survey No. 12/1Q situated at M. Chettipatti, Omalur Taluk, Salem District was inherited by respondent’s mother Krishnammal and subsequently settled this property in favour of her three sons and thereby he had received 1/3rd share. Item No. 13 was purchased by respondent’s father-in- law Thiru. T. Duraisamy with his own resources and later gifted by way of dhana settlement to his son Thiru. S.S.Saran Kumar on 16.02.2004. This property should be taken into account as a gift and the value thereof should not have been included in the Statement. i. ii. iii. iv. v. Item No. 14, was inherited by respondent’s wife Tmt. S.Suguna by virtue of Dhana settlement. STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 655 vi. vii. viii. i. ii. iii. iv. v. vi. vii. Item No. 15 was purchased by respondent’s mother-in- law Tmt. D. Shantha out of her own funds in the name of his son and that neither he nor his wife had invested any money in this transaction. Item Nos. 17, 18, were purchased by respondent’s wife Tmt. S. Suguna out of her own resources. Items 19, 21 are related to respondent’s wife Tmt. S. Suguna and the same cannot be attributed to the respondent.

17. It is submitted that items 2, 3, 4, 5 of Schedule III pertains to respondent’s wife Tmt. S. Suguna and the same cannot be attributed to the respondent.

18. It is submitted that in respect of Statement IV, Item No. 2, the expenditure towards repayment of LIC housing loan to the extent of Rs. 1,19,934.30 cannot be shown towards respondent’s expenditure as the loan was availed and repaid by his wife Tmt. S. Suguna out of her own resources. Similarly, the expenditure being Rs. 1,80,000/- shown under item No. 3 should not have been shown in respondent’s account, since the loan was obtained by his wife independently and repaid so far with interest by her, out of her own resources. Item No. 5, Telephone charges of Rs. 26,854/- were paid by respondent’s wife out of her own resources. Item No. 10, the house tax was paid by respondent’s wife out of her own resources. Item No. 09, the transaction pertains to respondent’s wife. Therefore, the loss should not have been shown in respondent’s account. Item No. 11 is subscription towards Sri Ram Chits was made by respondent’s wife out of her own resources. Item No. 12 the house tax for the house at Ganapathy is paid by respondent’s wife out of her own resources. A B C D E F G H 656 SUPREME COURT REPORTS [2022] 7 S.C.R. A viii. Item No. 14, the income tax paid by his respondent’s wife out of her own resources has been shown in his account.

19. It is submitted that the calculation made by the petitioner is incorrect. It is submitted that the correct computation as has been explained by the respondent in his explanation is as follows, The value of assets that stood to respondent’s credit as well as to the credit of his family members at the beginning of the check period is Rs. 1,31,254/-. The value of the assets that stood to respondent’s credit as well as to the credit of his family members at the end of the check period is Rs. 1,37,430/- Therefore, the value of assets acquired during the check period is Rs. 6,176/-. Income derived by him and his family members during the check period is Rs. 3,11,547/-. Expenditure during the check period is Rs. 1,91,910/-. Thus, the savings during the check period is Rs. 1,19,636.80 i. ii. iii. iv. v. vi. Therefore, it is submitted that the assets acquired by the respondent (R. Soundirarasu) are not disproportionate to his known source of income.

20. It is submitted that in his explanation respondent (R. Soundirarasu), has referred to the provisions of the Tamil Nadu Government Servant Conduct Rules 1973 as amended up to September 2006, Rules 7 (1) (a), which reads as follows: (1)(a) No Government servant, shall except after notice to the prescribed authority, acquire or dispose of any immovable property by lease, mortgage, purchase, sale, gift, exchange or otherwise either in his own name or in the name of any member of his family. Such a notice will be necessary even where any immovable property is acquired by any member of the family of the B C D E F G H STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 657 Government servant out of the resources of the Government servant: A Provided that the previous sanction of the prescribed authority shall not be necessary for the acquisition of immovable property in respect of house-site assigned by the Government in favour of the Government servant. Explanation-A Government servant is not required to give notice to the prescribed authority or seek prior permission from the prescribed authority for acquisition or disposal of immovable properties by the members of his family under clause (a), if the immovable property in question is not acquired from the resources of the Government servant concerned. The IO ought to have considered this provision before taking the properties and other resources into account.

21. It is respectfully submitted that the High Court has decided the matter by following the principles of law laid down by this Hon’ble Court. The High Court has only looked at the materials relied upon in the chargesheet to ascertain whether a prima facie case is made out or not. It is submitted that the High Court has rightly arrived at the conclusion that the prosecution has not examined the materials and the explanation afforded by the respondent. After examining the facts emerging from of the materials brought on record by the prosecution, the High Court has concluded that prima facie the materials on record does not disclose the existence of all the ingredients constituting the offences alleged against the respondents. The High Court has rightly concluded that the evidences tagged along with the final report are also not in consonance with the accusation made in the final report. The High Court has rendered the judgment discharging the accused to avert miscarriage of justice and to erase the prejudice caused to the accused at the instance of the investigating officer by not examining the explanation rendered by the first accused in proper perspective and without calling for the explanation from the second accused. Prejudice is also caused by the finding of the Special judge B C D E F G H 658 SUPREME COURT REPORTS [2022] 7 S.C.R. A B C D E F G H to the effect that there are no materials/ evidence to prove that the second accused has separate and independent source of income.” (Emphasis supplied) In such circumstances referred to above, the learned counsel prayed that there being no merit in the two appeals filed by the State, those may be dismissed.

If we have to give a fair idea as regards the case put up by the Prosecution against the accused persons, we may do so as under:- (a) (b) (c) (d) (e) (f) There are 14 items shown in the Statement No. 1, i.e. Assets and pecuniary sources that stood to the credit of the accused and his family members at the beginning of the check period i.e., 01.01.2002 such as lands, house sites, shares, jewels and other movables valued at Rs.3,46,006-00. There are 21 items shown in the Statement No. II i.e., assets and pecuniary source that stood to the credit of the accused and his family members at the end of the check period as on 31.03.2004, valued at Rs. 31,69,498-00. There are 6 items shown in the Statement No. III as income derived by the accused and his family members during the check period i.e., 01-01-2002 to 31-03-2004, calculated at Rs. 9,97,888-00. There are 15 items shown in the Statement No. IV i.e., expenditure incurred by the accused and his family members during the check period from 01-01-2002 to 31-03-2004 as family consumption expenditure, education, electricity charges, housing loan, LIC premiums, telephone charges etc. is calculated at Rs. 6,16,376-50. The value of assets acquired by the accused and his family members at the end of the check period i.e., 31-03-2004 as shown in Statement No. V is at Rs. 28,23,492-00 (i.e. Rs. 31,69,498 (-) Rs. 3,46,006-00). The likely savings of the accused and his family members during the check period as shown in Statement No. VI is arrived at Rs. 3,81,512-00 (i.e.,) Rs. 9,97,888-00 (-) Rs. 6,16,376-50). STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 659 (g) (h) The value of disproportionate assets acquired by the accused and his family members as shown in the Statement No. VII is calculated at Rs. 24,41,980-00. The percentage of disproportionate assets acquired by the accused and his family members to the known sources of their income is calculated at 244.71% (Rs.24,41,980-00 divided by Rs.9,97,888-00 multiplied by 100). Thus, in view of the aforesaid, the case of the prosecution is that the accused No. 1 (public servant) was found to be in possession of assets disproportionate to the known sources of his income to the extent to Rs. 24,41,980/- as on 31.03.2004. ANALYSIS

Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the High Court committed any error in discharging both the accused from the charges levelled against them?

We have no hesitation in observing that the impugned orders passed by the High Court are utterly incomprehensible. We shall explain in details why we say so. PREVENTION OF CORRUPTION ACT, 1988

Section 13(1)(e) of the Act 1988 including explanation thereto reads as under :- “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 A B C D E F G H 660 SUPREME COURT REPORTS [2022] 7 S.C.R. A B C D E F G H with the provisions of any law, rules or orders for the time being applicable to a public servant.”

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. This explanation was not there in the Prevention of Corruption Act, 1947 (for short, “Act 1947”). Noticing this fact in Jagan M. Seshadri v. State of Tamil Nadu, (2002) 9 SCC 639, this Court has observed as under:- “7. A bare reading of Section 30(2) of the 1988 Act shows that any act done or any action taken or purported to have been done or taken under or in pursuance of the repealed Act, shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under or in pursuance of the corresponding provisions of the Act. It does not substitute Section 13 in place of Section 5 of the 1947 Act. Section 30(2) is applicable “without prejudice to the application of Section 6 of the General Clauses Act, 1897”. In our opinion, the application of Section 13 of the 1988 Act to the fact situation of the present case would offend Section 6 of the General Clauses Act, which, inter alia provides that repeal shall not (i) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder, or (ii) affect any investigation, legal proceedings or remedy in respect of any such rights, privilege, obligation, penalty, forfeiture or punishment. Section 13, both in the matter of punishment as also by the addition of the Explanation to Section 13(1)(e) is materially different from Section 5 of the 1947 Act. The presumption permitted to be raised under the Explanation to Section 13(1)(e) was not available to be raised under Section 5(1)(e) of the 1947 Act. This difference can have a material bearing on the case.”

The explanation to Section 13(1)(e) of the Act 1988 has the effect of defining the expression “known sources of income” used in Section 13(1)(e) of the Act 1988. The explanation to Section 13(1)(e) of the Act 1988 consists of two parts. The first part states that STATE THROUGH DEPUTY SUPERINTENDENT Of POLICE v. R. SOUNDIRARASU ETC. [J. B. PARDIWALA, J.] 661 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.

Referring to the first part of the expression “known sources of income” in N. Ramakrishnaiah v. State of A.P., 2009 Crl.L.J. 1767, this Court observed as under: “15. The emphasis of the phrase “known sources of income” in Section 13(1)(e) (old Section 5(1)(e)) is clearly on the word “income”. It would be primary to observe that qua the public servant, the income would be what is attached to his office or post, commonly known as remuneration or salary. The term “income” by itself, is classic and has a wide connotation. Whatever comes in or is received is income. But, however, wide the import and connotation of the term “income”, it is incapable of being understood as meaning receipt having no nexus to one’s labour, or expertise, or property, or investment, and being further a source which may or may not yield a regular revenue. These essential characteristics are vital in understanding the term “Income”. Therefore, it can be said that, though “income” in receipt in the hand of its recipient, every receipt would not partake into the character of income. For the public servant, whatever return he gets of his service, will be the primary item of his income. Other income which can conceivably be income qua the public servant will be in the regular receipt from (a) his property, or (b) his investment. A receipt from windfall, or gains of graft crime or immoral secretions by persons prima facie would not be receipt for the “known source of income” of a public servant.”

The above brings us to the second part of the explanation, defining the expression “such receipt should have been intimated by the public Servant” i.e. intimation by the public servant in accordance with any provisions of law, rules or orders applicable to a public servant.

The language of the substantive provisions of Section 5(3) of the Act 1947 before its amendment, Section 5 (1)(e) of the Act 1947 and 13(1)(e) of the Act 1988 continues to be the same though Section 5(3) before it came to be amended was held to be a procedural Section in the A B C D E F G H 662 SUPREME COURT REPORTS [2022] 7 S.C.R.