Shri Nar Bahadur Bhandari, v. State of Sikkim,

his wife, Smt. D.K. Bhandari, value of which was disproportionate to his known sources of income:- (1) Multi storeyed building at Church Road, Gangtok (assessed by Chief Technical Examiner of CVC for Rs.15,05,155/-+ Rs.1,766/- paid to GMC and for installation of water connection, etc.) Rs. 15, 06,921.00 (2) Pan shop valued at Rs. 3,500.00 (3) Land purchased in the name of Shri Kushen Bhandari, the son of Shri Bhandari at village Malbasey Rs. 7,000.00 (4) Deposit with State Bank of India, Gangtok Rs. 12,000.00 (5) Bank balance in the name of Shri Nar Bahadur Bhandari and Mrs. Bhandari Rs. 22,065.09 (6) Investment in shares and Debentures Rs. 49,005.00 (7) Furniture(including transportation charges) Rs. 30,650.00 (8) Jeep SKM 93(including repair cost) Rs. 38,222.00 (9) Weston TV/National VCR Rs. 30,800.00 (10) Pistol (including cartridges) Rs. 15,735.75 (11) Investment in Pine Printers Rs. 86,323.95 (12) Other house hold items Rs. 70,912.00 (13) Cost of the additions made in Primulla Cottage During 1980-81 as assessed by CTE Rs. 47,323.00 -------_---------------------------------------------------_____--._ Total : Rs.19,20,447.79 7

Based on the above findings, it was alleged that the appellant was found to be in possession of assets, value of which was disproportionate to his known sources of income, which he could not satisfactorily account for, resulting in filing of the charge sheet against him.

The learned Special Judge having found prima facie materials that the accused had committed an offence punishable under section 5(2) read with section 5(1)(e) of the P.C. Act, 1947, framed charge under those provisions to which the appellant pleaded not guilty and preferred to go to trial. The learned Special Judge, in the impugned judgment has specifically noted that the appellant while giving explanation as regards the transfer of the land on which ``Primula Cottage" stands, to his wife Smt. D.K. Bhandari on 28-02-1981, had stated that it was his wife who constructed the building and that he was not aware of the sources from which she had constructed the house and that ``Pine Printers" also exclusively belonged to his wife. Upon consideration of the materials on record and the evidence adduced on behalf of the prosecution, the learned Special Judge was satisfied that the appellant was guilty of the offences and, Qi, accordingly, convicted and sentenced him. 8

While pressing the appeal before this Court, Mr. Bhaskar Sen, Ld. Senior Counsel appearing on behalf of the appellant, apart from raising other grounds, sought to lay great stress on the following contentions as the bulwark of his challenge to the impugned ].udgment:- (i) That the case of offence charged against the appellant is possession of assets and pecuniary resources disproportionate to his known sources of income during the check period. The only asset found disproportionate to the appellant's known sources of income in the impugned judgment of the learned Special Judge, is a 51/2 storeyed building known as ``Primula Cottage''. In a case of this kind, the foundational requirement is the correctness of the valuation of the property being the basis of the assessment of the alleged disproportionate assets. The prosecution has failed to discharge this burden and, therefore, rendering the charge unsustainable. (ii) That the prosecution has failed to prove that the property is a benami property of the appellant or that the building was being held by the appellant in the name of his wife. No evidence at all has been led to prove benami as required under the law, a requirement which is strict and mandatory. (iii) That while assessing the income of the appellant, the prosecution has emphasised on looking into the income of Smt. D.K. Bhandari and not that of the appellant. (iv) That the prosecution has failed to prove that the ``Pine Printers" and News Paper ``Aaja Ko Sikkim'' belonged to the appellant. On the contrary, it has rather been proved by the prosecutioh witnesses that it belonged to Smt. D.K. Bhandari, out of which she earned considerable income. (v) That the learned Special Judge has failed to take into account the income of Smt. D.K. Bhandari out of house rent which has been revealed by the prosecution witnesses themselves. (vi) That the learned Special Judge while rendering the impugned ].udgment ought to have taken into consideration the factum of loan taken by Smt. D.K. Bhandari from N.T. Ladhaki established from the seizure memo Ext.P-121 and the admissions of the Investigating Officer during his cross-examination. Mr. Bhaskar Sen elaborated on the above points in seriatim as under:- 10 ELQnJhe.questlonofvaluatlohof"pr]mu|acottaqq=

By referring to the evidence of K.A. Nankani, PW-33, who is a retired S.E., C.P.W.D. attached to the Central Vigilance Commission, New Delhi, as technical examiner at the material time, it was submitted that from his depositions, two significant facts clearly emerge i.e. (a) the repoits Exhibits P-66 and P-67 were in respect of two buildings situated at Church Road, Gangtok belonging to Smt. D.K. Bhandari; and (b) the basis of the valuation was not at all stated except to mention that it was on the basis of the standard methods prescribed by the Government of India but bereft of any material particulars as to such standards. The statement of PW-33 is reproduced below:- ``...'................... In fact I had done the valuation of the two buildings of Mr. N.B. Bhandari and submitted two separate reports. Again said the evaluation reports are with regard to the two buildings belonging to Mrs, D.K. Bhandari. Exhibit P-66 is the report with regard to the building situated at Church Road, Gangtok. Exhibit P-66/a is my signature. Exhibit P-67 is the evaluation report with regard to another building situated at Church Road, Gangtok. Exhibit P-67/a is my signature. The said two reports were forwarded to the CBI by my office vide forwarding letter exhibit P-68. I made the evaluation of the buildings in question on the =ao-Stj:rn°iet:teo:t:#j:[dFTue:hu°a€jsonpro°fscmr}beedva]riv# can at best be from 5 to loo/o here and there. The ffi#::nfs,:ftm:t=E#h#::#t:# EE=HE#Eit:iE=ffi,E]E|EiE±i."EiEunmlfi, ifE|!EEifEEIETEEEJljEEifn±Eif[ffii] electrical installations. The cost of land where the building is situated has not been included in my report. 11 With regard to the other two storeyed building the total cost of construction comprising of same components as mentioned with regard to the first building to Rs.86,498/-. £Boes Ex^NIN.ATION By cOuNSEL FOR ^cdisE It is true that when I deposed before this Court earlier I had stated that I made the evaluation of the two building to Mr. N.B. 8 times and thereafter the same can be sold. ¥dvt:h:::t::t:f:i:F€:£gaft=::bra=v:tn;d%:aor;i;I:n:i,c§oo:or:n:w:§o:f period of construction but I have mentioned the time of starting and the time of completion of the building. " [empliasjs supplied]

The deposition of K. J. Singh, PW-34 who had assessed the electrical fittings of the building in question was also referred to and relied upon by the learned senior counsel which is reproduced as under:- ``During 1984 I was attached to the Central Vigilance Commission as Technical Examiner REe::s;ij::i:;iihfa::;ie:;!f;!vn;a!I::n:i:;:;f the other is two storeyed. After completion I 12 submitted the report to my office at Delhi. Exhibit P-69 is my report with regard to the five storeyed building and exhibit P-69/a is my report. Exhibit P- 70`is my report with regard to the two storeyed buHding and exhibit P-70/a is my report. My evaluation was based on the schedule of rates (electrical) internal Part I, 1972 and 1980. Since the REht; ii;i:i electrical installation is Rs.46,996/- and for another building the total evalauation is Rs,1,938/-. £BIOSS EXAMINATION BY COUNSEL FOR ACCUSJEL It is true that in my report I have not giv the quantity of different items and their makes the schedule of rates itself takes clear of t different makes. It is true that the electric installations in each floors have not been given my report separately. " [emphasis sup|)Iied]

It was argued that on perusal of the valuation reports, Exbts.66 and 67, considered in the light of their depositions referred to above, the valuation arrived at by the technical examiners of the Central Vigilance Commission, PWs. 33 and 34, are not at all reliable as : - (i) The standard method prescribed by the Government of India stated to be the basis for the valuation was not produced and exhibited; (ii) Admittedly, the case of the land upon which the building is situated has not been included in the valuation; (iii) The Sikkim Public Works Department was not consulted as regards the rates prevalent in Sikkim; 13 (iv) The details of assessment of different items of the building have not been given in the report; (iv) PW-33 candidly was not aware of the rates of various construction materials like timber, sand, boulders, stones, chips, etc. in Sikkim; (vi) The valuations were not based on rates available in the original vouchers but purportedly based on standards laid down by the Government of India which was not produced; (vii) There is contradiction as to whether the Government schedule of rates of C.P.W.D. was applied at all or not and even if so, the schedule of rates were not produced.

It was submitted, therefore, that the schedule of rates and the methods having not been produced and exhibited in Court, neither the appellant nor the Court had the means to examine its correctness rendering the valuation report most unreliable. Relying upon the ].udgment dated 21-06-2011 of this Court in Cr/. Case Wo,4/2008, in the matter Of Padam Lal Gurung vs. State of Sikkim which also involved a case under section 5(1)(e) read with section 5(2) of the P.C. Act, 1947 in which reliance was placed upon the I.udgment dated 03-06-2010 in Criminal Appeal No.4/2007 in the matter of Cenfra/ Bureau of Investigation vs. Nar Bahadur Bhandari and, the case Of 14 a.T. Bhutia vs. State of Sikkim : 2010(4) Crimes ]66fsJKj, Mr. Sen submitted that since the valuation in this case falls in the same category as the ones rejected in those cases, it ought not be accepted. That non production of the SORs of 1972 and 1980 prevalent at Gangtok for C.P.W.D. works, amounts to suppression of material evidence and, therefore, inference under section 114(g) of the Evidence Act, 1872 ought to be drawn against the prosecution.

Thus, it was submitted that the very foundation of the case of disproportionate assets having not been established, the prosecution case has to fail on this account alone. (ii) On the question of Benami.

The prosecution has not been able to discharge the heavy burden cast upon it by law to prove that the building "Primula Cottage" is held by Smt. D.K. Bhandari on behalf of the appellant. The allegation that the building was constructed and owned by the appellant has not been established and no evidence has been led at all to prove this. The assertion on behalf of the prosecution that the building was constructed by the appellant in the name of his wife on the land allotted to him by the then ruler of Sikkim after he got it transferred in her name to accommodate his ill gotten money, is not supported by any evidence either direct or 15- '__ 15 circumstantial. That the circumstances pointed out by the prosecution as leading to such hypothesis have not been proved and, that even assuming that those circumstances are proved, they do not lead to the sole hypothesis of the fact that the building is held benami by Smt. D.K. Bhandari on behalf of the appellant.

Reference was also made to a closure report dated 19-06-1985 of Case No.RC-6/84-SPE/CIU(A) submitted by the S.P., C.B.I.:SPE:CIU(A) connected with a charge against the appellant that as the Chief Minister of the State, during the period 1979 to May, 1984, he entered into a criminal conspiracy with the officials of Power Department, Government of Sikkim, in pursuance of which he abused his official position and influenced them to hire a portion of his multi-storied building at Church Road, Gangtok at an exorbitant rent. It was submitted that contrary to the allegation in the present case, the C.B.I. had accepted in the report that Smt. D.K. Bhandari was the owner of the ``Primula Cottage" building which was also involved in that Case.

It is further the submission of Mr. Sen that the prosecution having withheld the above closure report from Court, it was the appellant who filed a copy thereof as Exhibit-A and that even a copy of the Final Report dated .>.. i 16 23-09-1998 submitted to the Court by the C.B.I. in that case, was filed by the prosecution on the appellant issuing a notice, That the contents of paragraph 2 of paragraph 6(b) of the closure report to the State Government dated 19-06-1985 Exbt.A and final report dated 23-09-1998 are quite different, the later being manipulated to implicate the appellant falsely. Mr. Sen referred to the following portions of the deposition of Ganesh Verma, the Investigating Officer, PW-52 which are as follows:- ``It is true that I was aware of the said SP'S report in R.C. 6 of 1984 dated 19.6.1985. It is true that I am aware of the contents of the said SP's report dated 19.6.1985.

It was, therefore, submitted that the prosecution had indulged in manipulation of records with the object to implicate the appellant at any cost.

Referring to section 5(1)(e) of the Act, it was submitted that there was no evidence on the record that any person on behalf of the appellant was in possession of ``Primula Cottage" building, as required under the provision. That there was no allegation of benami. By making reference to the submissions of the learned Public Prosecutor recorded in paragraph 15 of the impugned I.udgment, it was submitted that the points canvassed as requirement of proof to establish a case of disproportionate assets under Section 5(1)(e) of the P.C. Act, 1947, are the incomplete reproduction of paragraph 13 of the case of State of Maharashtra vs. Wasudeo Ramchandra Kaidalwar : f]98]/3 SCC ]99, with point (2) amongst the points in that paragraph being the most vital, having been left out, Paragraph 13 referred to is reproduced below:- ``13 ........................ The ingredients of the offence of criminal misconduct under Section 5(2) read with Section 5(1)(e) are the possession of pecuniary resources or property disproportionate to the known sources of income for which the public servant cannot -satisfactorily account. To substantiate the charge, the prosecution must prove 18 the following facts before it can bring a case under Section 5(1)(e), namely, (1) it must establish that the accused is a public servant, (2) the nature and EEEEEEEHliE=EjinEEfi=d¥E#EE as to what were his known sources of income i.e. quite objectively, that such resources or property found in possession of the accused were disproportionate to his known sources of income. Once these four ingredients are established, the offence of criminal misconduct under Section 5(1)(e) is complete, unless the accused is able to account for such resources or property. The burden then shifts to the accused to satisfactorily account for his possession of disproportionate assets. The extent and nature of burden of proof resting upon the public servant to be found in possession of disproportionate assets under Section 5(1)(e) cannot be higher than the test laid by the court in Jh/.ngan case, i,e. to establish his case by a preponderance of probability ....... „..„ ..... " [emphasis supplied]

By referring to paragraph 6 of the impugned judgment, it was pointed out that except for the income indicated in Serial No.1 of the list of purported income of the appellant, rest are all that of his wife, Smt. D.K. Bhandari. Relying upon paragraph 12 in the case of P.L. Gurung vs. State of Sikkim (supra), it was submitted that clubbing of the incomes and assets of the husband and wife was impermissible unless Benami transaction is alleged and proved. The calse Of KrishnaNand Agnihotri vs. The State of Madhya Pradesh : (1977)1 SCC 816 was referred to, the relevant portions of which are reproduced below:- ``25. The next item of assets to which we must refer is the land at Varanasi which was purchased for i:::::i:-:::i::-:=:::i?::-:=: appellant was that this land was purchased by the 19 father of Shanti Devi for her benefit and the consideration for the sale was also provided by the father of Shanti Devi. Ramadhar Avasthi DW 22, the father of the first husband of Shanti Devi, clearly stated in his evidence that Anant Ram, the father of Shanti Devi had purchased a plot of land for Shanti Devi for Rs.2500 and this was supported by Bachhalal DW 11 who was one of the attesting Eii:!j!iii!§iifEiiifi±iiijPliiiiiifiiiijRE REiiEiifiiiiiHitiiEiJiijii]iEiiiiiifi evidence, we find that the prosecution has failed to ERELRE Sheela Devi had means of her own. We have already pointed out above that from 1950 to 1953 Sheela Devi was a teacher in Arya Kanya Inter College, Mirzapur and she was also giving tuitions which brought her an income of about Rs.3900 (vide the evidence of Tilak Raj DW 3 and Kali Prasad Srivastava DW 4) and she was also carrying on Insurance agency business. She could, therefore, very well have the sum of Rs.6688 in her bank account. Moreover, it may be noted that even after Sheela Devi went away to reside separately from the appellant, this bank account continued to stand in 20 p±rQueeftytbe+iQpctJan±± [emphasis sLipplied]

The law postulatesthat in a case of the present kind, the initial burden lies on the prosecution to establish whether the appeHant has acquired and is jn possession of property disproportionate to his known sources of income and the burden would shift upon the appellant only after that, to satisfactorily account for the money received jn his hand. The learned counsel referred paragraph 15(a) in P.I. aurung's case rsupraj where on this point reliance had been placed upon the cases of C.S.a. Swamt. vs. Tfie Sfafe : AIR 1960 SC 7 and DSP, Chennai vs. Inbasagaran : r2006JI Sac 420, which are reproduced below:- "15(a). Inc.S.D. Swami (Supra), ithasbeen held by the Hon'ble Supreme Court that in Section 5(3) of the P.C. Act, 1947, a complete departure has been made from criminal jurisprudence still the initial burden lies on the prosecution and in that context it has been observed as follows:- "(4) It is true that S. 5(3) of the Act, does not create a new offence but only lays down a rule of evidence, enabling the court to raise a presumption of guilt jn certain circumstances - a rule which is a complete departure from the established principle of criminal jurisprudence that the burden always lies on the prosecution to prove all the ingredients of the offence charged, and that I glsepr:#ehne cT:¥:: f:ahLftesd ::aj::t it:..:.::,rsed to (iJ- . (b) We may refer to the case of asp, Cheuna/. Ms. Inbasagaran I (2006) 1 SCC 420 21 ``15 .................. There are no two opinions in the matter that the initial burden lies on the prosecution. In the case of C.S.D. Swami v. State this Court has taken the view that in Section 5(3) of the Prevention of Corruption Act, 1947 a complete departure has been made from the criminal ].urisprudence, still the initial burden lies on the prosecution and in that context it has been observed s follows; (SCR p.466) `` ........ Section 5(3) of the Act, does not create a new offence but only lays down a rule of evidence, enabling the court to raise a presumption of guilt in certain circumstances - a rule which is a complete departure from the established principles of criminal jurisprudence that the burden always lies on the prosecution to prove all the ingredients of the offence charged, and that the burden never shifts on the accused to disprove the charge framed against him.''

16. Therefore, the initial burden was not the prosecution to establish whether the accused has acquired the property disproportionate to his know source of income or not. But at the same time, it has been held in a case of State of M.P. v. Awadh Kishore Gupta that the accused has to account satisfactorily for the money received in his hand and satisfy the court that his explanation was worthy of acceptance........................ (lc) Thus, it is now a settled principle that the initial burden is on the prosecution to establish whether the accused has acquired the property disproportionate to' his known sources of income or not and the burden shifts upon the accused only thereafter when the accused has to account satisfactorily for the money received in his hand and satisfy the Court that his explanation was worthy of acceptance. (e} The above has been the consistent view expressed by the Hon'ble Supreme Court and in the cas? Of G.M. Tank vs. State of Gujarat & Anr. : AIR 20q6 SC 2]29 it has been held that: 22 ``20. The provisions contained in Section 5(1)(e) is self-contained provision. The the burden is on the accused to account for the sources for the acquisition of disproportionate assets. As in all other criminal cases wherein the a_c_cused is charged with an offence, the prosecution is recluired to discharge the burden of establishing the charge beyond reasonable doubt...........„ (f) Therefore, the law that has been postulated as regards the burden of proof of the accused being in possession of property disproportionate to his known sources of income, is upon the prosecution initially. There is no change in this position in Section 13(1)(e) of the P.C. Act, 1988, which is the replacement of 5(1)(e) of the P.C. Act, 1947, and the burden of proof of the guilt of accused is like any other criminal cases, i.e., proof beyond reasonable doubt. "

The learned Senior Counsel submitted that under sub-paragraph A of paragraph 25 of the impugned judgment, there are six circumstances said to have been established against the appellant but, none of the circumstances taken individually or collectively would show that the property belongs to Mr, N.B. Bhandari. Mr. Sen placed the case of Bakhshish Singh vs. State of Punjab (1971)3 SCC 182 which re-states the principle of proof based on circumstantial evidence with specific reference to paragraphs 9 and 10 which are reproduced below:- ..j7 ``9. The law relating to circumstantial evidence has been stated by this Court in numerous decisions. It is needless to refer to them as the law on the point is well-settled. In a case resting on circumstantial \ -i i,. ® 23 evidence, the circumstances put forward must be satisfactorily proved and those circumstances should be consistent only with the hypothesis of the guilt of the accused. Again those circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.

10. Even if we accept the entirely of the evidence accepted by the Trial Court as well as by the High Court, we do not think that the guilt of the accused is satisfactorily established. "

Reference were also made to the cases of taxman Naik vs. State of Orissa : (1994)3 SCC 381 paralgraph 11 and Dhananjoy vs. State of West Bengal : (1994)2 SCC 220, paragraph 7.

It was submitted that the very evidence led by the prosecution has clearly established the following:- a. That ``Primula Cottage" was constructed by Smt.D.K.Bhandari and is owned by her; That the ``Pine Printers" and ``Aa].a Ko Sikkim" were owned by Smt. D.K. Bhandari from which she used to earn good income; C. That Smt. D.K. Bhandari had been handed over with Rs.11,20,000/- in cash after the election in September, 1979 which was later spent by her on the construction of the 51/2 storeyed building named ``Primula Cottage''. That the appellant had a monthly allowance of Rs.10,000/- which although was not allowed by the learned trial Court but had been fully established by the testimony of the prosecution witnesses. 24 e. That Smt. D.K. Bhandari had considerable rental income. f. That Smt. D.K. Bhandari had taken loan of Rs.6,00,000/- from N.T. Ladhaki for construction of the house.

The learned Counsel urged that the learned trial Court proceeded on three erroneous premises while deciding the case against the appellant which are stated below:- i. In economic offences, oral evidence has to be supported by documentary evidence. ii. The appellant having failed to produce the documents seized from him during the investigation and held by the prosecution, adverse inference ought to be drawn against him. iii. That evidence of hostile witnesses cannot be relied upon.

Mr. Sen submitted that the above approach of the Court was grossly erroneous and un-acceptable in law. It was stated that in the first instance the oral evidence being sought to be discredited is that of the prosecution and that the application of the principle of adverse inference contemplated under Section 114(g) in the manner indicated above, is opposed to the law of evidence and that, non- acceptance of the evidence of a hostile witness is contrary to the settled principles. Reference was made in this regard to the case of P.i. Gurung fsupra) in which the principle has 25 ® been discussed by relying upon the decisions of Rabi-ndra Kumar Dey vs, State of Orissa : AIR 1977 SC 170 and Balu Sonl.a Shinde vs. State of Maharashtra : (2002)7 SCC 543.

It is nextcontended thatthe evidence relied upon by the appellant are those of the prosecution witnesses who have not been re-cross-examined on the vital aspects and, therefore, have to be accepted as having been admitted by the prosecution. It was thus stated that the prosecution was bound by the evidence of the prosecution witnesses. Mr. Sen cited the decision in a case of Ra/.a Ram vs. Stare of Rofasthan .. (2005)5 SCC 272, the relevant portlion of which is reproduced below:- ``9. But the testimony of PW 8 Dr. Sukhdev Singh, who is another neighbour, cannot easily be surmounted by the prosecution. He has testified in very clear terms that he saw PW 5 making the deceased believe that unless she puts the blame on the appellant and his parents she would have to face the consequences like prosecution proceedings. It did not occur to the Public Prosecutor in the trial court to seek permission of the court to heard (sic declare) PW 8 as a hostile witness for reasons only known to him. Now, as it is, the evidence of PW 8 is ffRE%h:c%§s:sbo:;=::st£:;drp§£sto8h:a

It was then contended that the circumstance (d) under para 25(A) of the impugned judgment that Smt. D.K. Bhandari had no independent income, out of which she could have constructed a building like ``Primula Cottage'' valued 26 more than Rs.15,00,000/-is an approach which is unknown in law, because Smt. D.K. Bhandari is not an accused in the case. The burden of proof even otherwise lies upon the prosecution to discharge and the appellant was not obliged under the law to do so. The fact that Smt. D.K. Bhandari indeed has income was fully established by the prosecution witnesses.

It was submitted .that in the present case, the prosecution had failed to produce certain vital documents which were seized by the prosecution and, therefore, adverse inference ought to be drawn against the prosecution. Those would have clearly established that Smt. D.K. Bhandari had sufficient income to construct the building.

It was then submitted that in a case of the present kind, it is mandatory for the prosecution to have conducted a preliminary enquiry before launching investigation. This having not done, the case of the prosecution fails on .this account alone. The following decisions were cited in support of this contention: -

30.I ln t:he case of P. Sirajuddin, Etc. vs State of Wadhas .' (]970j] Sac 595, it has been held as follows:- ``17. In our view the procedure adopted against the appellant before the laying of the first information report though not in terms forbidden by law, was so unprecedented and outrageous as to shock one's sense of I.ustice and fair play. No doubt when allegations about dishonesty of a person of the 27 appellant's rank were brought to the notice of the Chief Minister it ws his duty to direct an enquiry into the matter. The Chief Minister in our view pursued the right course. The High Court was not impressed by the allegation of the appellant that the Chief Minister was moved to take an initiative at the instance of a person who was going to benefit by the retirement of the appellant and who was said to be a relation of the Chief Minister. The High Court rightly held that the relationship between the said person and the Chief Minister, if any, was so distant that it could not possibly have influenced him and we are of the same view.

Before a public servant, whatever be his status, is publicly charged with acts of dishonesty which amount to serious misdemeanour or misconduct of the type alleged in this case and a first information is lodged against him, there must be some suitable preliminary enquiry into the allegations by a responsible officer, The lodging of such a report against a person, specially one who like the appellant occupied the top position in a department, even if baseless, would do incalculable harm not only to the officer in particular but to the department he belonged to, in general. If the Government had set up a Vigilance and Anti- Corruption Department as was done in the State of Madras and the said department was entrusted with enquiries of this kind, no exception can be taken to an enquiry by officers of this department but any such enquiry must proceed in a fair and reasonable manner. The enquiring officer must not act under any preconceived idea of guilt of the person whose conduct was being enquired into or pursue the enquiry in such a manner as to lead to an inference that he was bent upon securing the conviction of the said person by adopting measures which are of doubtful validity or sanction.

The means adopted no less than the end to be achieved must be impeccable. In ordinary departmental proceedings against a Government servant charged with delinquency, the normal practice before the issue of a charge-sheet is for some one in authority to take down statements of persons involved in the mater and to examine documents which have a bearing on the issue involved. It is only thereafter that a charge-sheet is submitted and a full-scale enquiry is launched, When the enquiry is to be held for the purpose of finding out whether criminal proceedings are to be restored to the scope thereof must be limited to the examination of persons who have knowledge of the affairs of the delinquent officer and documents bearing on the same to find out whether there is prima facie evidence of guilt of the officer. Thereafter the ordinary law of the land must take its course and further inquiry be proceeded with in terms of the Code of Criminal Procedure by lodging a first information report. " I EIIl- 28

30.2 ln the case of Ashok Tshering Bhutia vs, State of Si-kki.in.. f20I]J4SCC402 it has been held as follows:- :i,:::de::jff E:or:o:i::di:oj:is::;::i::I:::::::i;::I::i:f being raised first time before this Court, it is not worth further cbnsideration. More so, the aforesaid observations do not lay down law of universal application. "

Mr. I.D. Vaid, the learned Special Public Prosecutor, on the other hand, submitted that section 5(1)(e) of the P.C, Act, 1947 specifically provides that if a public servant or any person on his behalf is in possession of property disproportionate to his known sources of income which he cannot satisfactorily account for, he will be liable for punishment prescribed under section 5(2) of the Act. He submits the charge framed against the appellant, clearly spelt out that the appellant had been in possession of pecuniary resources of property in his name, in the name of his wife, Smt. D.K, Bhandari and others, to the extent of Rs.16,37,270/- which were disproportionate to his known T}r' sources of income, for which he could not satisfactorily 29 account for, thereby committing an offence punishable under section 5(2) read with section 5(1)(e) of the P.C. Act, 1947.

It is submitted that in answer to the charge, the appellant had stated that he was not aware of the sources from which his wife Smt. D.K. Bhandari had constructed the house and that ``Pine Printers" Press also belonged to her exclusively. That this stand of the appellant is an after thought as the case was registered in 1984, but the statement was made only in the year 1996 when the charge was framed. It is stated that the sequence of events of the land being allotted to the appellant by the then Maharaja in 1975 vide Exhibit P-58, the appellant transferring to his wife Smt. D.K. Bhandari vide Gift Deed dated 28-02-1981, Exhibit P-59 and, the construction of the building by his wife during the ``check period" were circumstances which clearly led to the conclusion that it was done for an oblique purpose because as per Mr. Vaid, there was no necessity of such a transfer, as the appellant and his wife were living together and the wife is naturally an ``Ardhangini" i.e. better half of the husband, the appellant. Therefore, the only object of such transfer was to accommodate the appellant's ill gotten money.

Mr. Vaid submits that there are established circumstances, namely, transfer of the land to his wife, 30 refusal of the appellant to answer the charge on the first date and the plea that the house was constructed by his wife Smt. D.K. Bhandari as an after thought which proves that the building `Primula Cottage' is being held by Smt. D. K. Bhandari on behalf of the appellant. As regards the question on the reliability of valuation of the properties raised on behalf of the appellant, it was submitted that it was prepared by K.A. Nankani, PW-33, who was technically qualified, on the basis of the standard method accepted by the Government and that the appellant had accepted the valuation when questioned under section 313 of the Code of Criminal Procedure.

That the building in question was constructed by the wife would have been best proved by her but the appellant failed to produce her as a witness and also did not lead any other evidence. Having withheld the best evidence available, an adverse inference would naturally have to be drawn against the appellant. That the expenditure incurred by the appellant have been well established by various witnesses, namely PW-1, PW-3, PW-8, PW-9, PW-12, PW-15, PW-17, PW-27, PW-35 and PW28.

As per the learned Special Public Prosecutor, the value of the asset i.e.``Primula Cottage" is Rs.15,05,155/-, the expenditure during the ``check period"was Rs.4,04,510/-, 31 and the income Rs.6,84,531/- and, therefore, the appellant had acquired assets to the extent of Rs.12,25,134/-which were disproportionate to his known sources of income which he could not satisfactorily explain. This fact is fortified when it has come in evidence that the appellant and his wife, Smt. D,K. Bhandari, hailed from moderate families both having worked as Teachers before the appellant joined politics and became the chief Minister of sikkim. That the alleged claim of Rs.11,20,000/-received by the wife of the appellant, Smt. D.K. Bhandari, does not fall within the meaning of known sources of income. Referring to the decjistion oF N. Rama Krishnaiya vs, State of Andhra Pradesh .` (2009J Cr/.J. ]767, it was submitted that a receipt from windfall or gains of graft, crime or material secretion by persons would not be receipt of ``known sources of income" for a public servant. Even otherwise, as per Mr. Vaid, the evidence of PW-3, PW-45 and PW-46 upon whom the appellant relies are not supported by any cogent evidence, namely, Bank accounts, documents, etc. PW-45 and PW-46 have been specifically cross-examined on this and duly controverted on behalf of the prosecution. Mr. Vaid placed a number of I.udgments in support of his submissions on the various aspects which are as follows:- 32

±n the case of K. Ponnuswamyvs. State of Tamil Wadr .. f200]j6 SCC 674, the following has been noticed on the facts of that case:- ``6. Before the appellant came into the political arena he was employed as a Lecturer in Government Arts College. It has been shown that in 1973 the appellant had taken a crop loan from Bank of India for a sum of Rs.13,OOO. That amount had not been repaid by the appellant. Ultimately a suit came to be filed and the amount had to be collected in execution of decree in that suit. In 1985 the appellant had borrowed a sum of Rs.5000 from R. Palanivelu (PW 16) who was also working as a Lecturer along with him. For this loan the appellant had executed a promissory note. The financial condition of the appellant was such that he was unable to repay the loan. Ultimately a suit had to be filed against him and a decree came to be passed. Even after passing of the decree the amount was not repaid. The decree had to be executed. The decretal amount had to be recovered from the salary of the appellant. This clearly shows that before he became a Minister the appellant's financial condition was very weak. "

In the case of K. Veeraswany .. f]g9]J3 SCC 655, it has been held as follows:- ``71............................. The ingredients of the offence of criminal misconduct under Section 5(2) read with Section 5(1)(e) are the possession of pecuniary resources or property disproportionate to the known sources of income for which the public servant cannot satisfactorily account. To substantiate the charge, the prosecution must prove the following facts before it can bring a case under Section 5(1)(e), namely, (1) it must establish that the accused is a public servant, (2) the nature and extent of the pecuniary resources or property which were found in his possession, (3) it must be proved as to what were his known sources of income i.e. known to the prosecution, and (4) it must prove, quite objectively, that such resources or property found in possession of the accused were disproportionate to his known sources of income. Once these four ingredients are established, the offence or criminal misconduct under Section 5(1) is complete, unless the accused is able to account for such resources or property. The burden then shift:s to the accused to 33 satisfactorily account for his possession of disproportionate assets. The extent and nature of burden of proof resting upon the public servant to be found in possession of disproportionate assets under Section 5(1)(e) cannot be higher than the test laid by the Court in Jhangan case ±9 i.e. to establish his case by a preponderance of probability. That test was laid down by the Court following the dictum of Viscound Sankey, L.C. in Woolmington v. Director of Public Prosecutions. "

72. The soundness of the reasoning in Wasudeo Ramachandra Kaidalwar case 18 has been doubted. Counsel for the appellant urged that the view taken on Section 5(3) cannot be imported to clause (e) of Section 5(1) and the decision, therefore, requires reconsideration. But we do not think that the decision requires reconsideration. It is significant to note that there is useful parallel found in Section 5(3) and clause (e) of Section 5(1). Clause (e) creates a statutory offence which must be proved by the prosecution, It is for the prosecution to prove that the accused or any person on his behalf, has been in possession of pecuniary resources or property disproportionate to his known sources of income. When that onus is discharged by the prosecution, it is for the accused to account satisfactorily for the disproportionality of the properties possessed by him, The section makes available statutory defence which must be proved by the accused. It is a restricted defence that is accorded to the accused to account for the disproportionality of the assets over the income, But the legal burden of proof placed on the accused is not so onerous as that of the prosecution. However, it is just not throwing some doubt on the prosecution version. The legislature has advisedly used the expression ``satisfactorily account". The emphasis must be on the word ``satisfactorily". That means the accused has to satisfy the court that his explanation is worthy of acceptance. The burden of proof placed on the accused is an evidential burden though not a persuasive burden. The accused however, could discharge that burden of proof ``on the balance of probabilities" either from the evidence of the prosecution and/or evidence from the defence.

74. Counsel for the appellant however, submitted that there is no law prohibiting a public servant having in his possession assets disproportionate to his known sources of income and such possession becomes an offence of criminal misconduct only when the accused is unable to account for it. Counsel seems to be focussing too much only on one part of EEEri 34 clause (e) of Section 5(1). The first part of clause (e) of Section 5(1) as seen earlier relates to the proof of assets possessed by the public servant. When the prosecution proves that the public servant possesses assets disproportionate to his known sources of income, the offence of criminal misconduct is attributed to the public servant. However, it is open to the public servant to satisfactorily account for such disproportionality of assets. But that is not the same thing to state that there is no offence till the public servant is able to account for the excess of assets. If one possesses assets beyond his legitimate means, it goes without saying that the excess is out of ill- gotten gain. The assets are not drawn like nitrogen from the air. It has to be acquired for which means are necessary. It is for the public servant to prove the source of income or the means by which he acquired the assets. That is the substance of clause (e) of Section 5(1)."

In t:he case Of Gajendra Singh v. State of uttar Pradesh .. AJR ]975 SC ±703, it has been held as follows:- ``7. ``We are, however, not impressed with reasoning put forward by the counsel for appellant. In our opinion, the non-examination Shri Rambeti is the strongest possible circumstance to discredit the defence version, because she alone could have been in the best position to explain whether the injuries were caused as a result of the shot fired by Shyampal Singh or ].ust accidentally.''

The learned special public prosecutor re-emphasised his submissions that Smt. D.K. Bhandari, who was the best witness to prove that the building was hers and that she had the necessary resources for its construction, did not appear in the witness box. It was stated that Smt. D.K. Bhandari did not respond to at least three notices issued by the Investigating Officer, PW-53. In above premises, the prosecution had been successful in establishing beyond any reasonable doubt that the appellant was in possession of +`g •fi 35 assets value of which were beyond his known sources of income which he failed to explain satisfactorily and, therefore, conviction and the sentence passed against him were justified.

Replying to the contentions of the learned Special Public Prosecutor, Mr. B.R. Pradhan, learned Senior Counsel submitted that under Section 101 of the Evidence Act, 1872, the burden of proof is upon the one who asserts and, therefore, it is for the prosecution to prove the allegations beyond any reasonable doubt which they have has failed to discharge. The adverse inference being sought to be drawn against the appellant for non-production of Smt. D.K. Bhandari as the best evidence would rather lie against the prosecution as admittedly she is the best evidence to state on that. That it has been the case of the appellant right from inception, that the building in question belongs to his wife, yet the prosecution has chosen not to investigate on this and has persisted on pursuing the case against the accused. Alternatively, it has been argued that even accepting that the value of the building is Rs.13,54,689/-as arrived at by the Ld. Trial Court and, assuming that the building was constructed by the appellant, it will be found that it falls within limits of his income and not in access of it because : 36 the appellant had received Rs.6,00,000/- as party fund has not been refuted; and ii. that the appellant had received Rs.10,000/- per month during the ``check period" total of which amounts to Rs.6,50,000/- has remained uncontroverted; and iii. as admitted by the Investigating Officer, PW-53 loan document was Rs.6,00,000/- seized under Exhibit-121 was suppressed.

All these three incomes taken together would amount to Rs.17,40,000/-and, on deduction of the value of the building being Rs.13,54,689/- which is the alleged disproportionate asset, there is a surplus of Rs.3,80,311/- with the appellant. This position would continue even if the receipt of Rs.11,20,000/- by Smt. D.K. Bhandari is not accepted. Therefore, the case of the prosecution fails also on this account.

Having heard the learned counsels on both the sides and on consideration of the evidence and the materials on record, I find that there is no dispute on the position that the bulk of the alleged disproportionate assets is the building ``Primula Cottage" value of which as arrived at by the Ld. Trial Court is Rs.13,54,639/-. It would, therefore, be necessary to find out as to whether the valuation of this building assessed by the prosecution is reliable or not as the entire case would hinge on this. We may, therefore, examine the evidence led by the prosecution. I, •E riE- 37

Mr. K.A. Nankani, PW-33, who evaluated the civil works, is a retired Superintending Engineer, C.P.W.D., attached to the Central Vigilance Commission in 1984 as a Technical Examiher and submitted his valuation report Exbt. P-66. As the Exbt.P-66 is the valuation in respect of the ``Primula Cottage" building we shall be restricting our discussions only on that. We have already extracted the entire deposition of PW-33 earlier and, therefore, for the sake of brevity, we need not do so again. He has stated that the valuation of the building in question was done on the basis of standard methods prescribed by the Government of India but in his cross-examination, he has admitted that in the valuation he has not given the details of different items while arriving at the total valuation. That he did not assess the property as per the Gangtok schedule of rates of the C.P.W.D. as the building in question was constructed as per the plinth area rate prescribed by the Government of India. He did not know the cost of 150 cft. load of cost of sand at Delhi or at Calcutta. That at the time of evaluation he did not enquire about the cost of sand, boulders, stones, chips at Gangtok, as it was not considered necessary. He did not know that the cost of timber in Sikkim was much cheaper at the relevant time. That the valuations made by him are not 38 in accordance with the original vouchers and are based on the standards laid down by the Government of India.

Mr. K. J. Singh, PW-34who isalsoa Superintending Engineer, C.P.W.D. and attached to the Central Vigilance Commission as Technical Examiner (Electrical) stated that he did the evaluation of the electrical fittings of the properties of Smt. D.K. Bhandari, situated at Church Road, Gangtok and submitted his reports Exhibits P-69 and P-70 (Exbt. P-69 being the relevant report) based on the schedule of rates (Electrical) of 1972 and 1980. For the valuation of the 51/2 storeyed building he had applied the 1980 schedule at C.P.W.D. rates prevalent at Gangtok in respect of the electrical installations.

From the above, therefore, i.t is an admitted position that the standard methods prescribed by the Government of India alleged to be the basis of the assessment have not been produced and exhibited. The details of different items by which the total evaluation of the buildings was arrived at have not been indicated. It is also quite evident and admittedly so, that the evaluation was not done as per the Gangtok schedule of rates of the C.P.W.D. and that the witness was unaware of the value of the various construction materials namely sand, boulders, stone, chips etc. at Gangtok. It is also evident that valuations were not done in 39 accordance with the original vouchers. The 1972 and 1980 schedule of rates of the C.P.W.D. at Gangtok, based upon which the valuation of the electrical fittings was arrived at have not been produced and rendered in evidence.

The learned special public prosecutor fairly concedes that it was essential for the prosecution to have produced all those including the sheets of paper on which the calculations had been done. Under such circumstances, the correctness of the valuation neither could be tested nor examined by the Court. On careful scrutiny of the valuation reports Exbts.P-66 and P-69, we find that those are quite vague and devoid of any material particulars as regards the calculations forming the basis of the valuations. These vital facts do not appear to have been taken note of by the learned trial Court. Under similar circumstances this Court in Cr/. Appea/ Wo.4/2008 •in Padam Lal Gurung vs. State of Sikkim; Crl. Appeal No.4/2010; Central Burealu of Investigation vs. N.B. Bhandari and in O.T. Bhutia vs. State of Sikkim (2010) 4 Cr/'mes 466 fsupraJ, quashed the prosecution cases as the valuation of the assets which formed the basis of the alleged disproportionate assets were found to be unreliable for the same inadequacies found in the present case.

The relevant portions of the I.udgment in P. L. Gurung's case may be referred to below:- `-rl \Y ® 40 "(m} The above being the ouality of evidence ±b;i::i::,:fEh::a:i:tin:;I::::;i::i:ti:e::jEsw:::,iii: and contradictions appearing in the evidence, the valuation reports which admittedly are basecl upon erroneous and inflated rates on different items of the building and others based upon assumptions or upon rates said to be under the schedule of a particular ¥!:°on:°;iei:j§ar;::i:;ia;§§:a!t¥§ri§:dij:eg Court in the case of aentra/ Bureau of Investigation vs. Nar Bahadur Bhandari .in Criminal Appeal No.4 of 2007 decided on 03-08- 2010 where, in a similar circumstance, it has been held as follows:- "11. The trial court reduced the value of construction from the Rs.78,99,840/- to Rs.59,75,000/-. In order to prove that the valuation of the construction was of Rs.78,99,840/-, PW 8, L#:#j#:n EST::neee:st t€[Vj,:, aL¥9C8[edha:° d€3:s£: He stated that valuation was :-::::=::i:-:=-::::======_:==:=::-=;i: and Delhi Schedule Rates are applicable to Delhi. He stated that the valuation was made by way of approximation.

12. Further, assumina :h:e§::d:h:=Sduo:;;eD:=nl:hI;;P:::::h:=t£;re¥raw8:r:e::=C:°;ii:ct8,b:enDi;h: appropriate value of the said construction. " In the case of Central Bureau of Investigation vs. Nar Bahadur Bhandari in Criminal Appeal No.4 of 2007 decided on 03-08-2010 where, in a similar circumstance, it has been held as follows:-

11. The trial court reduced the value of construction from the Rs.78,99,840/- to Rs.59,75,000/-. In order to prove that the valuation of the construction was of Rs.78,99,840/-, :#:t'a:i:encutjvs:n::gjnef=(CjY]|)n:Fachtegdg;:CB]h:: deposed ......... He stated that valuation was Bea,#::h:::,:aRjaste°sf. Dehhejjt:I::thDre|F?apiT:tt:SAar=8 41 EEEEE=HjEEEiEE[HETifEEEi:E„iiRTifEHTEEFfuEEifE and Delhi Schedule Rates are applicable to Delhi. ................... He stated that the valuation was made by way of approximation ...........

12...........'.... i:::i::::_I:=:=-::::::::::::i:_:: [emphasis supplied]

The law being such which has direct application to the present case, I am of the considered view that the valuation of the building "Primula Cottage" being completely unreliable, the charge of the prosecution of the appellant being in possession of assets value of which are disproportionate to his known sources of income which he failed to explain satisfactorily, cannot sustain. On this aspect, Mr. Vaid submitted that the valuation has not been disputed by the appellant as he had stated in his statement under Section 313 Cr.P.C. that `It is a matter of record'. The case Of N. P. Jharia vs. The State of Madhya Pradesh .. 2007 CW,£J. 3745 fscj was referred to by him in support of his contention.

The submission of Mr. Vaid does not appear to be convincing. The statement of the accused under Section 313 Cr.P.C. is not a substantive evidence, but requires to be considered in the light of the surrounding circumstances, This apart, it is the court which has to be satisfied as to 42 whether any fact in a case stands proved or not. Justice is not only to be done but must appear to have been done. Considering the nature and quality of evidence as already discussed, the valuation of the building does not inspire confidence of this Court. W. P. Jhari.a's case was one where the valuation was not in question. The decision of the Hon'ble Supreme Court reported in 2007 Cr/.I.J. 3745 arose from the ].udgment of the Madhya Pradesh High Court reported in 2001 Cr/.i.J. 32]2 which sets out the brief facts of the case, paragraph 6 of which may be referred to, which is reproduced below: - ``6. In this appeal it has been argued that (a) the calculation of the income and expenditure by the trial Court is erroneous and against the evidence on record, (b) there was in fact no further investigation or reinvestigation and the charge sheet has been submitted on the same evidence on which the investigating agency had formed the opinion that no case is made out and (c) the order sanctioning the prosecution is without application of mind as the relevant material was not considered. These are the three points which arise for determination in this appeal.,,

However, in spite of the above position, we may further examine on the charge of the prosecution of the building in question being held by Smt. D.K. Bhandari, his wife on behalf of the appellant. It may be relevant to note here that apart from the recital made in the passing that the property is being held benami, the prosecution has not made any effort to prove this allegation but has proceeded on the assumption that the appellant had acquired it during "check 43 period" in the name of his wife, Smt. D.K. Bhandari. The law as regards the proof of benami is well settled by a catena of decisions of the Apex Court and it would be sufficient to cite the c.ase Of State of Madhya Pradesh v. Krishna Nand Agni-hotri. (]977j the relevant portion of which reads as under:- ``26. It is difficult to see how in the face of this overwhelming evidence it could be concluded that the sum of Rs.11,180 lying in fixed deposit in Shanti Devi's name was an asset belonging to the !E:a;d:ij;:a::::t!::i¥ ffis::a:::i:ieE::t:ei:pi:::a:£i::t:i:ni::hi:::i::i:e:a:e::::::%:;: the parties and not unoften, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of the serious onus that rests on him, nor justify the acceptance of mere conjectures or surmises as a substitute for proof. (Vide Jayadayal Poddar v. Mst. Sibi Hazra). It is not enough merely to show i[jjriiiiiiijiiiiiiiii]iiiijiijiEiiiiiiTiiifflij!iiiiiiiiiiijiiEiiiiEi[iiiji:ii[i]iiiiiiEi failed to show that the sum of Rs.11,180 lying in fixed deposit in Shanti Devi's name belonged to the appellant. " [emphasis supplied] 44

We may for convenience also reproduce the relevant portion of the report in Case No.RC-6/84-SPE/CIU(A) which reads as follows:- "4. ALLEGATION incurred h uge expenditure towards fittings/attachments in the said building to make it suitable for office accommodation.

6.(b) Facts Disclosed by enquiry Investigation has further revealed that plot No.573 & 574, Gangtok were allotted to Shri Nar Bahadur Bhandari in 1975, by the then Chogyal of Sikkim, when he petitioner to the Chogyal to allot him some land for construction of a small dwelling house, as he could not afford to stay in a rented house. Shri Nar Bahadur Bhandari constructed a small dwelling house in a portion of the said plot in 1975-76 at an estimated cost of Rs.64,000/-. S±rl ¥i,i.s;o;n:;;:i:icl:i;i §etd; Vr::rut::e§:,=dE,::#:t:%h:i::nr±eos:nd%nfl::aonrt::±te:r:d==h:t:: dated 30.03.82. On receipt of the said offer, the Divisional Engineer (Telephones) Gangtok took approval of the competent authority to hire the said building and also requested the Supdt. Engineer, SPWD, Gangtok vide his letter dated 15.10.82 to assess the rent of I_be building of Smt D.K, Bhandari. 45 ... The Divisional Engineer vide his letter dated ¥m8='gI:%:ilo::StK::B;e:r:t:r±D:,KEeon:?he€;:e8r::r!eii-:r:::St=#=at¥;:a[ over the building to.the D.E. Telephone vide her letter dated 15.12.82 on the pretext that water and power connection were not available and the rent assessed by the SPWD was to meagre. LP. Tiwari did not indicate that the office of the However, in the said proposal, Shri iiREEitlmiiiiEHiHffl=iiiiEHEHEE ETELffiFT±ffl[EE ............ Pending approval of the Cabinet, Shri L.P. Tiwari issued a formal letter of acceptance of the tender of Shri Phul Chand Aggrawal on 22.9.83, EEEEEEffiifEEEHEjjE:E[EEEjEE:T=T„EEErdEj On 1.2.83. Investigation has also disclosed that Smt. D.K. Bhandari did not make any offer to Power Deptt, Govt. of Sikkim, Gangtok for renting out the EHEEEEEE EEEEEEEEEjE]EillEjEifEjEEEH=raEEE]Fj Engineer, SPWD, Ga ngtok. (ii) Shri L.P. Tiwari ordered for the shiflting of the office to the building of Smt. D.K. Bhandari without the approval of the Govt. of Sikkim. i±ETE[i]itiiHi+E¥±NIi]fi[i=EHEHiJiEEEfflEiE=±EEEii=E+i+ifEui¥iiE]iijiii the Power Deptt. was awarded on 4.6.83. Thus there was no emergency circumstances to shift the office in Feb.1983. The rent paid for the period Feb. to May,1983 is wholly un].ustified.

6.(i)(c): Explanation of the suspected/accused persons HEEEEEEEEEitEEEHE[]FT#EE

6.(i)(d) Discussion of Evidence both for and against the suspected/accused persons. Eii 46 §g:e;%[:e:j±:jujt;:cij:I::§Eb:u§!g:I:i;s;o:;;e:=::pij:I3: JEL8796/-p.in EEEE]TEE,IH±EEEEE=EEiEFTEEEHETEEEE and on the same rates, Govt. of Sikkim had hired other buildings at Gangtok. Even the Divisional offered same rent to Smt. D.K. Bhandari for lst & 2nd floor. 2ffiaE-- That Shri L.P. Tiwari ordered the shifting of the Head EEE!EEEnEE#!EEH[EHJE=Ei]||,|fflE[EqEifi!+EqHjif'EEEE'ifE!ITHiITEI`EI[iitEi when in fact he had shifted the office in Feb. 1983 itself. Thus, there was no reasons/grounds to shift the !#EiiE!iEErHifiitrEnE|Expin±EEERE

6.(i)(e): Opinion as to whether the allegation is fully proved and against whom. The allegation made in the FIR has not been proved. However, certain lapses have been found against Shri L.P. Tiwari, which are given in para 6(i) (d) above. N othing has been found against Shri N.B. Bhandari. Conclusion (i) Keeping in view the facts discussed above, the case is sent up for such action as may be deemed fit against Shri L.P. Tjwari, Secretary-cum-Chief Engineer, Power Department, Govt. of Sikkim, Gangtok. (ii) No action against Shri Nar Bahadur Bhandari is recommended, Sd/- Superintendent of Police CBI:SPE-CIU-(A) New Delhi [emphasis supplied] 47

Apart from the above, from the evidence of at least 19 prosecution witnesses, it has been proved beyond doubt that the building was constructed by Smt. D.K. Bhandari and owned and possessed by her. Out of them, we may refer to the statements of PW-3, PW-6, PW-7, PW-10, PW-28, PW- 31, PW39, PW52 and PW-53. The relevant portions of whose statements are reproduced below in seriatim:- PW-3: ::i:,n:::k:n:o;t::::a:r:rt::=:ury=::,C:i;n:°:V±:d::esnTeh:s::ffa#:: Bhandari. " PW-6: In the year 1980 I was the Executive Officer of the then Gangtok Municipal Corporation. As Administrative Officer of the said Corporation I was looking after all the administrative functions of the corporation. Apart from the administrative work I was also to recommend for the approval of the BIue Print Plans for constructions of iiiliii:iiiii[iiiiiililiRE same. But the same is reflected in the notings, according to which the Bank Receipt number is 22060, & 22061.

From the depositions of the different prosecution witnesses extracted above, and the admitted position of the CBI in its report in RC-6/84-SPE/CIU(A) that the building in question was owned by Smt. D. K. Bhandari, wife of the appellant, it stands clearly established that it was constructed by Smt. D.K. Bhandari and owned by her and not by the appellant.

Apart from the above witnesses there are other prosecution witnesses who are tenants of the building being PW-14 and PW-18 who have deposed that they were tenants under Smt. D.K. Bhandari and paid rent to her. We also have PW-21, PW-22, PW-15 and PW-16 who are the hardware dealers who sold building materials like paint and 54 sanitary ware, payments of which were made by Smt. D.K. Bhandari. These witnesses have in most categorical terms corroborated the statement of PW-31, Churchil Subba, as regards the construction of the building under the over all supervision of Smt. D.K. Bhandari as he used to make purchases of the building materials on her behalf. These are overwhelming evidence which are contrary to the allegation of the prosecution that the building was held Benami by her on behalf of the appellant.

The learned trial court has rejected the evidence of these witnesses on a finding that there was no cogent evidence that the money for construction of the building was arranged by Smt. D.K. Bhandari herself and that, the best person to prove this fact being Smt. D. K. Bhandari, having not been produced, adverse inference under section 114(g) ought to be drawn against him. In my view, the approach of learned trial Court does not appear to be correct. Under such circumstances, what ought to be the duty of the Court has been laid down in the case of Mohan/a/ Shamjf Son; vs. union of India .. 1991 Supp (1) SCC 271 where .It has been held as follows: - "10. It is a cardinal rule in the law of evidence that the best available evidence should be brought before the court to Drove a fact or the Points in issue. But it is left either for the prosecution or for the defence to establish its respective case by adducing the best available evidence and the court is not empowered under the provisions of the Code to compel either I- 55 the prosecutlon or the defence to examine any particular witness or wit.naec`^- -- Li . __- _'', vyQ±eated.

Considering the fact that the question as to whether Smt. D. K. Bhandari was holding the property `benami' being vital and jf the Ld. Trial Court or the prosecution was of the opinion that she was being held back by the appellant, then e.\ther the Court on its own motion or on the prayer of the prosecution, ought to have resorted to the provision of Sec. 311 Cr.P.C. and Summoned her for being examined her as a witness. This having not been done, it js impermissible for the prosecution to invoke the principle of adverse inference EiTeq 56 against the appellant. The allegation that Smt. Bhandari did not appear before the I.0. despite notices, is in my view unacceptable as there are provisions in the Cr.P.C. to compel such appearance.

In the present case, when the prosecution witnesses themselves have corroborated the appellant's version and proved his case which is so apparent, producing additional evidence by the appellant would be unnecessary and redundant. It is not incumbent under the law upon Smt. D.K. Bhandari or for the appellant to prove her sources of income, which is a burden to be discharged by the prosecution. Apart from her not being an accused, the evidence on record is replete with the proof that she had sufficient income and, therefore, had the capability to construct the building. We may refer to the evidence of PW- 3, PW-31, PW-32, PW-45 and PW-48 who have clearly proved that Smt. D.K. Bhandari had surplus money from the party fund, income from "Pine Printers" and ``Aa].a Ko Sikkim'', income from house rent and income from loan. The relevant portions of whose statements are reproduced below:- PW-3: ey`' After the election was over there was a party meeting where there was discussion about the funds of the party.

From the above extracts of the oral testimony of various witnesses, the following facts appear to be clearly esta bl ished : - (a) That the appellant and his wife after resigning from their services as Teachers, had joined politics and launched a political party ``Sikkim Janata Parishad''. (b) Having lost, in the first election held in 1975 appellant again contested with his new party in 1979 in which he won by majority of the seats and became the Chief Minister. (c) The appellant had received large amount of donations for running the political party. After the elections of 1979, there was a surplus fund of Rs.11,20,000/-which was kept in the custody of Smt. D.K. Bhandari, wife of the appellant which 65 she later diverted for construction of the building ``Primula Cottage" at Church Road, Gangtok. (d) Smt. D.K. Bhandari owned a press named ``Pine Printers" and ran a news paper "Aaja Ko Sikkim" during the check period from which she earned sufficient income. (e) Smt. D.K. Bhandari had taken a building loan of Rs.1,00,000/-from the State Bank of Sikkim. (f) Smt. Bhandari had taken loan of Rs.6,00,000/- from N.T. Ladhaki for construction of the building. (g) Construction of ``Primula Cottage" building was done under the supervision and control of Smt. D.K. Bhandari who had made all payments against purchases of construttion materials. (f) The appellant received Rs.10,000/- per month from the party as allowance entitled to him as the President.

Therefore, there can be no manner of doubt that the building ``Primula Cottage'', in fact, was owned by Smt. D.K. Bhandari and that she had the necessary pecuniary resources and means to construct that building.

It is of significance to note that the above circumstances have been established by the prosecution witnesses in their oral testimony, the material parts of which 66 have remained uncontroverted and un-demolished. It is quite clear from the list of assets enumerated earlier except for the one contained in Sl. No.1, i.e., income from salary of the appellant, the rest are obviously those of his wife Smt. D.K. Bhandari. In other words, the prosecution has proceeded under the presumption that the income of the wife is the income of the appellant, i.e., their incomes have been clubbed together and, that benami nature of the holdings by the wife was inherent in them not requiring any proof. 6L. ±n the case of Arjun Dev Kohli v. State of Jammu and Kashmir and another reported -in 1999(4) Cri.L.I. 4967, a Bench of the Court relying upon the decisions of the Hon'ble Supreme Court held as follows: - ``24.Mr. Bakshi the learned counsel, has invited the attention of the Court to bring round his point citing AIR 1977 SC 796: (1977 Cri.L.J. 566) (Krishnanand Agnihotri vs. State of M.P.). In that case, it was contended that the amounts lying in fixed deposit in the name of Shanti Devi as an asset belonging to the appellant and that Shanti Devi was a benamidar of the appellant.

26. He has also relied upon the ].udgment reported as AIR 1980 SC 727 (Bhim Singh v. Kan Singh). In that case, the dispute was with regard to the sale of house by Mahara]. by means of Patta, the consideration was deposited by `8', but the Patta was issued in the names of the plaintiffs. The Court held it that the treatment was not benami and `8' had acquired the suit house with his money, with the intention of constituting `A' as the absolute owner thereof. The Supreme Court re].ecting the contention of the defendant with regard to the benami transaction held that : 67 "Two kinds of benami transactions are generally recognised in India. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, transaction is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money and he is the real owner.

The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner. The question whether a transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is also statutorily recognised in S.82 of the Indian Trusts Act, 1882, AIR 1957 SC 49, Relied on. " "The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus (1) Ike burden of showinci that a transfer is a benami transaction lies on the Person who asserts that it is such a transaction: /2` If it is Droved that the purchase money came from a person other than the Derson in whose favour the DroDertv is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character pf the transaction is governed by the intention of the person who has contributed the purchase money and (4) the c]uestion as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motive governing their action in bringing about the transaction and their subsequent conduct, ek„ 29 ..... I ....... ' ...... I ................. ' ....... I . ' .................. ' . . ...... „ ,.......... „ ...........,.. „.,The evidence such as sale deed and memorandum of partition, referred in the judgment of the Special Tribunal is also on record of the respondent No.2 and being such evidence in his possession, it was obligatorv on the part of the respondent No,2 to know the status of the property and collect evidence with regard to the benami transaction. No evidence to that effect has been found on record, as prima facie proof of the DroDertv is benami transaction," [emphasis suppljed] 68

We may refer to the case Of Subhash Kharate v. State of Madhya Pradesh: 2000 Cri.L.I. 1178(MP) whiich also deals with properties standing in the name of the wife clubbed with that of the accused husband. Similar is the position in the cases of P, Safyamurthy v. State of Andhra Pradesh ', 1992(4) SCC 39, State Inspector of Police Vishakhapatnam vs. Surya Salnkaram Karri .. (2006) 7 SCC 172 and N. Sreemala v.State of Andhra Pradesh 2003 Cri.L.I. 2956(AP).

±n the case of T. Subramaniam v. State of Tamil Wadu.. 2006f]J SCC 401, it has been held that the explanation given by the appellant immediately after the incident clearly explains all the circumstances and raises not only a reasonable but very serious doubt about the amount having been received by him as illegal gratification and that if two views are possible on the basis of the material on record the only one which leads to a sole and an escapable conclusion of guilt of the accused would be accepted.

When we test the present case on the anvil of the law postulated above, it is quite manifest that the prosecution has not at all discharged the burden of proof required. On the contrary, it is on record that the appellant had most unambiguously and in categorical terms been 69 stating right from the beginning that the house was constructed by his wife, Smt. D.K. Bhandari and that he had no knowledge as to her sources of income from which such construction was made by her. This is also an admitted position of the presecution. We may refer to the closure report in case No.RC-6/84-SPE/CIU, (Exbt.A), which also involved the very ``Primula Cottage" building in which the Investigating Officer, while submitting his closure report of the case to the Government, has recorded that the appellant had stated that the house belonged to Smt. D.K. Bhandari. It may be noted that the report is of the year 1985. PW-39, the Investigating Officer in this case also stated in categorical terms in his deposition that the appellant had appeared before him and that the building in question belonged to his wife and he had nothing to do with it. Even before the learned trial Court on being asked on the charge the appellant has given the same reply which again is repeated in his reply to the question put to him under Section 313 of the Cr.P.C. It was, therefore, essential for the prosecution to have led evidence to prove beyond any reasonable doubt that the property was being held benami by Smt. D.K. Bhandari. This requirement is also clearly laid down in Section 5(1)(e) which contemplated that ``if he or any person on his behalf is in possession of property disproportionate to his known sources of income''. tub 9`. 70

Thus, the very section also mandates the prosecution to prove that any person on behalf of the appellant, (in present case his wife) was indeed holding the questioned property which admittedly the prosecution has failed. On the contrary, the prosecution witnesses have corroborated the consistent stand of the appellant. Mr. Vaid's submjssions that the wife being the ``Ardhangini'' and living together with the appellant would be sufficient to infer that the transfer of the land by him in favour of Smt. Bhandari was with the oblique motive to accommodate his ill gotten money, in my view, is difficult to accept. In law, there is no such presumption as such gesture by a husband towards his wife is quite natural and that a husband and wife can own and possess pecuniary resources and assets separately in their respective names earned by themselves. This aspect of the matter appears clearly to have been overlooked by the learned trial Court which renders the impugned judgment quite unsustainable.

From the evidence that have been discussed, it is seen that Smt. D.K. Bhandari had sufficient means to construct the building. This is subject to the legal position that she js not obliged to prove such capabjljty as she is not an accused. The prosecution has not at all made any effort to prove that the building js being held benami by Smt. D.K. 71 Bhandari. The six circumstances which the prosecution claims to have been established leading to purported inference that the building in question was built by the accused himself, in my view do not form a chain so intrinsically connected that it leads to the sole hypothesis of the appellant holding the property in question benami in the name of his wife.

Apart from the findings that have been recorded above which clearly displaces the claim of proof of the circumstances, the proposition of the Ld. Trial Court that the defendant has not taken the responsibility to prove that Smt. D.K. Bhandari was financially capable of constructing the building and that, on the contrary there are proof that she came from a moderate family and worked as School Teacher and as L.D.C. later, is alien to the well settled principle° of the burden of proof alluded to above. In any case, we find proof to the contrary. It is manifestly clear that the prosecution has failed to discharge the initial burden placed upon it under the law.

We also find that the learned trial Court by the impugned judgment has re].ected three significant incomes either of Smt, D.K. Bhandari or of the appellant which are:- (i) Loan of Rs.6,00,000/-received from N.T. Ladhaki for the purpose of construction of ``Primula Cottage" building; 72 (ii) Surplus fund amounting to Rs. 11,20,000/- of ``Sikkim Janata Parishad" after 1979 General Assembly Elections; and (iii) Monthly allowance @ Rs.10,000/- per month drawn by the appellant in the capacity of the President of the party out of the party fund.

These incomes have been rejected on the grounds indicated in each of the income which are dealt with in seriatim as under:- / (i) Loan of Rs.6,00,OOO/-

The learned trial Court held that if the loan documents were seized by the Police, it was incumbent for the appellant to have prayed for directions to be issued against the C.B.I. to produce the documents and that if the documents would have been explained his position then he would have certainly taken necessary steps for their production during the course of trial but the appellant failed to explain as to why reasonable steps have not been taken by the defence. The further view of the learned trial Court was in loan transactions, the original documents always remain with the creditor and, therefore, if the appellant has suppressed the doouments, the accused would have easily produced it from the creditor. In my view, the findings do not appear to be sound. It is an admitted position as revealed from the deposition of the Investigating Officer, PW-53, that the loan document was indeed seized by the CBI lSt 73 vide Seizure Memo Exbt.121 and was not returned to the appellant or his wife. Under such circumstances, the question of producing the original documents from the creditor did not and could not arise at all under the admitted poe.itjion. In the case Of Chittaranjan Choudhury vs. State of Bi-her .-f]987j 2 SCC 104, it has been held as follows: - "6 .................. This evidence is noticed only to be rejected. In our opinion where, as in the instant case, the defence is founded on a relevant and vital document seized from the custody of the accused and not deliberately produced, it is difficult to sustain the conviction of the accused. It was the duty of the prosecution to produce the release order No.115 in order to remove all doubts by showing that the goods which were being despatched by the appellant, were not covered by the release order......."

Therefore, the findings of the Ld. Trial Court are quite perverse and, I am of the view that it stands fully established that Smt. D.K. Bhandari had taken a loan of Rs.6,00,000/- from N.T. Ladhaki for the construction of ``Primula Cottage" building. (ii) SLu_rplus election fund of Rs.11,20,OOO/I

The learned trial Court has re].ected the unrebutted evidence of PW-3 that there was a surplus fund of Rs.11,20,000/- which was kept by Smt. D.K. Bhandari in liquid form and that later she utilised that amount for construction of her house and the evidence of PW-45 and PW-48 which corroborated the oral testimony of PW-33 was not believed, as they were hostile witnesses. The view of 74 the learned trial Court was that, in cases pertaining to economic offences, it is expected that oral evidences are supported by documentary evidence and since there was no documentary evidence to support oral evidence in the form of proper books of accounts and audit reports since party funds are required to be operated by observing financial rules, their evidence could not be believed. The learned trial Court was also of the view that adverse presumption could not be drawn against the prosecution for suppression of the loan documents as the appellant had not come with clean hands because "he who demand equity must come with clean hands. " Such reasonings of learned trial Court for re].ecting evidence are, to state the least, quite unknown in criminal jurisprudence and the law of evidence. In the first place, the statement of PW-3 that there was surplus fund of Rs.11,20,000/-has gone uncontrover[ed. This finding has been fully corroborated by PW-45 and PW-48. Oral evidence is one of the methods of proof provided under Section 59 and Section 60 prescribes that oral evidence must be direct. We may for convenience reproduce Sections 59 and 60 below: - n ``59. Proof of facts by oral evidence - 4±J facts, except the [contents of documents or _e_I_ectronic records] may be proved by oral evidence. 75

60. Oral evidence must be direct -Oral evidence must, in all cases whatever,, be direct_, that is to say - If it refers to a fact which could be _s_een_, it must be the evidence of witness _who says he saw it; If it refers to a fact which could be heard, it must be the evidence of a witness who says he heard it; If it refers to a fact which could be perceived by any other sense or in any other manner, it must be the evidence of a witness who says he perceived it by that sense or in that manner; If it refers to an opinion or to the grounds on which that opinion is held, it must be the evidence of the person who holds that opinion on those grounds. Provided that the opinions of experts expressed in any treatise commonly offered for sale, and the grounds on which such opinions are held, may be proved by the production of such treatises if the author is dead or cannot be found, or has become incapable of giving evidence, or cannot be called as a witness without an amount of delay or expense which the Court regards as unreasonable. Provided also that, if oral evidence refers to the existence of any material thing than a document, the Court may, if it thinks fit, require the production of such material thing for its inspection. " [emphasis supplled]

The aforesaid provisions clearly lay down that all facts may be proved by oral evidence and that the oral (.)' evidence must be direct. 76

In the present case, PW-3, PW-45 and PW-48 had been physically present at the time when Smt. D. K. Bhandari had been given custody of the surplus fund and also when the issue with regard to the settlement of the surplus fund diverted by Smt. D. K. Bhandari, was discussed. Therefore, oral evidence by such persons fall within the purview of Section 60 of the Evidence Act, 1872. Moreover, these are prosecution witnesses. Therefore, there can be no reason why their oral testimony should not be accepted.

Although, PW-45 and PW-48 have been declared hostile, their testimony to the effect that there was surplus fund of Rs.11,20,000/-of the party after the elections which was kept in the custody of Smt. D.K. Bhandari but was used by her for construction of the ``Primula Cottage" building have remained un-demolished. Moreover, these two witnesses cannot be called partisan witnesses as it is in the evidence that they had fallen apart with the appellant and were not even in talking terms with him. Even if PW-45 and PW-48 have been declared as hostile witnesses, it is a settled law that the evidence of such witnesses need not necessarily be re].ected. In this context, we may refer to the c:ase Of Balu Sonba Shinde vs. State of Maharashtra: (2002J7 SCC 543 in paragraph 14 of which it has been held as follows: - 77 "14. It is at this juncture the prosecutor - while it is true declared her a hostile witness and prayed for permission to cross-examine the witness - upon, however, the leave being granted, PW 5 totally decried the factual aspect as contained in the complaint ledged, though, however, the thumb impression was admitted declaration of a witness to be hostile does not iDso facts reject the evidence - and it is now well settled that the Dortion of evidence beina advantaaeous to the Parties mav be taken advantaae of - but the court before whom such a reliance is Dlaced shall have to be extremelv cautious and circumsDect in such acceptance. Reference in this context may be made to the decision of this Court in State of U.P. v. Ramesh Prasad Misra wherein this Court stated: (SCC p.363, para7) "It is eauallv settled law that t evidence of a hostile wit:ness would totally rejected if spoken in favour Drosecution or the accused. but it can subjected to dose scrutiny and that portion the evidence which is consistent with the case of the Prosecution or defence mav be acceDted. " [emphasis supplied]

We may also refer to the case Of Rabindra Kumar Deb vs. State of Orissa: AIR 1977 SC 170 (Para 12) where it has been held as under:- "12. It is also clearly well settled that the mere fact that a wit:ness is declared hostile bv the party calling him and allowed to be cross-examined does not make him an unreliable witness so as to exclude his evidence from consideration altogether. In Bhagwan Singh v. State of Haryana, (1976) 1 SCC 389, 391-92 = (AIR 1976 SC 202 at p. 203), Bhagwati, J., speaking for this Court observed as follows: "The prosecution could have been avoided requesting for permission to cross-examine the witness under Section 154 of the Evidence Act. But the fact that the court gave Permission to the Droseoutor to cross-examine his own witness, thus characterisina him as, what is described as a hostile witness, does not completely efface his evidence. The evidence remains admissible in the trial and there is no lei ial bar to base a conviction upon his testimonv if corroborated by other reliable evidence. " [emphasls sup|)lied] 78

Following the above ratio and on close scrutiny of the evidence of PW-45 and PW-48, I do not find any difficulty in accepting their oral testimony as they have fully corroborated the uncontroverted testimony of PW-3. It is significant to note that the evidence relied upon by the appellant are the testimonies of the prosecution witnesses and not that of the defence. When the prosecution witnesses have proved the case of the appellant, it would be superfluous and redundant to adduce any further evidence by him. The law is well settled that it is not necessary for the accused to adduce evidence aliunde. If the explanation which has been given by the accused is corroborated by the evidence of the prosecution, the burden of the accused stands discharged. In the case of K. Veeraswami-v. Un/.on of Jnd/-a.' ]g9]f3J Sac 655 in para 72 it has been held that ``The burden of proof placed on the accused is an evidential burden though not a persuasive burden. |!]e accused however_, could discharge that burden of proof ``on _the balance of probabilities" either from the evidence of the prosecution and/or evidence from the defence. " [emphasis supplled]

Considering the position of law, I have no hesitation to hold that it has been proved and established beyond reasonable doubt that there was a surplus fund of 79 Rs.11,20,000/-out of the party fund of the appellant after the elections of 1979 which was kept in custody of his wife Smt. D.K. Bhandari and that Smt. D.K. Bhandari utilised that amount for the construction of the ``Primula Cottage" building. The submission of the learned Special Public Prosecutor that such income cannot be treated as a valid income relying upon the decision of Andhra Pradesh H;gh Court in N. Rama Krishnaiya v. State of Andhra Predrest fsupraJ, in my view cannot be applied in the present case. It is in evidence that Smt. D.K. Bhandari and the appellant were both in politics and the fund of the political party are accepted forms of income. It may be relevant to note that during the material time, the stringent condition of the political parties requiring to maintain books of accounts and furnishing income tax returns were not in vogue particularly in the State of Sikkim. The income definitely is not a windfall but receipt by the political party of the appellant as contributions to the party fund. Therefore, the amount of Rs.11,20,000/-is an income which is valid falling within the meaning of known sources of income. (iii) Monthly allowance @ Rs.10,OOO/- from party

This income of the appellant has come in the oral testimony of PW-3 which was corroborated by PW-45. The learned trial Court has again re].ected the evidence of PW-5 80 on the ground that he is a hostile witness and that the appellant has failed to produce any documentary evidence in support of the claim. We have already found that the testimony of pw-3 has remained uncontroverted which has been corroborated by PW-45. PW-45 although declared as a hostile witness has maintained the position that the appellant received the allowance from the party fund. The prosecution has failed to demolish this part of the statements of PW-45. He is not a partisan witness, as he was not even in talking terms with the appellant. Such being established position derived from the testimony of the prosecution witnesses themselves, the need for the appellant to produce evidence aliunde to prove such fact by producing documents as opined by the learned trial Court would be irrelevant, superfluous and redundant. Under such circumstances, the finding of the learned trial Court on this account stand set aside and it is hereby held that the appellant was drawing an allowance of Rs.10,000/- per month from the party fund which would amount to Rs.6,50,000/-during the check period.

From the above, it is, evident that the prosecution in the first instance have not been able to establish as correct the valuation of the building considered as the disproportionate asset. This being the fundamental 81 requirement in a disproportionate asset case, the case of the prosecution fails on this account alone. Secondly, the allegation of the prosecution that the building in question is being held by the appellant benami in the name of his wife Smt. D.K. Bhandari has not been proved by the prosecution at all as required under the law. The prosecution, therefore, fails on this account also. Thirdly, although not necessary under the law, it has been fully established that Smt. D.K. Bhandari had the necessary means to construct the "Primula Cottage" building and that the questioned building is owned and was possessed by her. It is in evidence that after resigning from Government Service, the appellant and Smt. D. K. Bhandari had launched a political party ``Sikkim Janata Parishad" of which Smt. D.K, Bhandari was a member and played an active role and was responsible for seeking contributions to the party fund. It also stands established that she had owned the press ``Pine Printers" and ran a daily news paper ``Aaja Ko Sikkim" from which she earned sufficient income. It is also in the evidence that she had taken loan of Rs.1,00,000/-from the State Bank of Sikkim, Rs.6,00,000/- from N.T. Ladhaki and other miscellaneous incomes which we need not elaborate upon. These facts have emerged from the prosecution evidence and have stood the test of cross-examinations wherever, resorted to. Under 82 such circumstances, there can be no reason as to why such income of Smt. D.K. Bhandari need not be accepted.

We may consider this case in another aspect also, Assuming that clubbing the income of Smt. D.K. Bhandari with that of the appellant is permissible, we find the following : - (i) The total income of the appellant accepted by the trial Court (at page 25 of the impugned ].udgment under the head para 23) (ii)Monthly allowance of Rs.10,000/-from party fund received by the appellant during the check period Rs.6,78,843.24 Rs. 6,50'000.00 (iii) Loan taken from N.T. Ladhaki - Rs.6,00,000.00 (iv) Surplus party fund Rs.11,20,000.00 Total : - Rs.30,48,843.24 Expenditure accepted by the trial court - Rs. 2,19,509.56 _-------------------------------------------------------_______-.-_ Savings - Rs.28,29,333.68 Value of the only asset in possession of the appellant as per the prosecution and accepted by the trial court Rs.13,54,639.00 Therefore, Rs.27,29,333.68 (Savings) (-) Rs.13,54,639.00 (the value of building = Rs.14,74,694,68 accepted by Court) 83

From the above, therefore, even considering the value of the building to be correct, it is within the income of the appellant and his wife clubbed together, though not permissible, which they earned during the check period, The case therefore, fails on this account also.

Now, let us assume that Rs.11,20,000/- is not permissible to be included as a valid income, the total income would be as follows: - (i) Income accepted by the court - Rs. 6,78,843.24 (ii) Income of the appellant Monthly allowance @ Rs.10,000/-per month During the check period (iii)Loan from N. T. Ladhaki - Rs. 6,50,000.00 - Rs. 6,00,000.00 Total Rs.19,28,843.24 (iv)Expenditure accepted by court -( -) Rs. 2,19,509.56 Balance (Savings) - Rs.17,09,333.68 (v)Value of the building accepted by court - Rs.13,54,639.00 Therefore surplus = Rs. 3,54,694.68

It can, therefore, be seen that the appellant would have a surplus of Rs.3,54,694.68 even after deduction of the 84 value of the building thereby bringing it within the known sources of income of the appellant assuming that clubbing the income of his wife with his is permissible.

It may be noted that apart from the above, the learned trial Court has accepted certain other incomes which are as under:- (i) Incomeof house rentby Smt. D.K. Bhandari Rs.1,27,854.00 (ii) Income from loan taken from The State Bank of Sikkim by Smt. D.K. Bhandari Rs.1,26,622.00 (iii) Income from debentures Rs. 1,245.00 (iv) Income from ``Pine printers" Rs. 88,994.00 (v) Income from news paper ``Aaja Ko Sikkim" Rs.1,70,175.55 (vi) Income from sale of land by the appellant Rs. 22,000.00 Total = Rs.5,36,890.55 86E When we add these accepted incoine, to the surplus of Rs. 3,54,694.68 arrived at above, the savings of the appellant would come to Rs.8,91,585.23. The value of the ``Primula Cottage" building, even assuming the valuation to be correct, and that it is being held benami by his wife, clearly falls within the income of the appellant. air ---- =1 r.- 85

Therefore, considering the prosecution case on all accounts, I have no hesitation to hold that they have failed to prove the case as required under law.

For the reasons stated above, the appeal succeeds and is hereby allowed. The impugned judgment and sentence passed by the learned Special Judge, Prevention of Corruption Act, East and North Sikkim at Gangtok, is hereby quashed,

No order as to costs.

A copy of this judgment be transmitted to the learned Special Judge, P. C. Act, East and North Sikkim at Gangtok for its due compliance.

The records of the learned trial Court be sent back forthwith. 09.08"11 Justice Index : Yes/No -.`` Internet : Y€/ No rs, I erie