I, fy, IN THE HIGH COURT OF SIKKIM AT GANGTol( (Criminal Appellate Jurisdiction) DATED : 09-0812011 CORAM HON'BLE MR. JUSTICE S. P. WANGDI, ACTING CHIEF JuSTICE. _Criminal Appeal No.05 of 200Z Shri Nar Bahadur Bhandari, S/o Late Balaram Bhandari, Congress Bhawan, Development Area, Gangtok, East Sikkim. •.. Appellant versus State of Sikkim Represented by the Central Bureau of Investigation, C.G.O. Complex, Lodhi Road, New Delhi .... Respondent For the Appellant : Mr. Bhaskar Sen, Senior Advocate with Mr. Bhaskar Ra]. Pradhan and Shri K. T. Bhutia, Senior Advocates, Ms. Yangchen D. Gyatso, Shri Karma Tshering Bhutia and Shri Yadev Sharma, Advocates. Shri Nar Bahadur Bhandarj in person FortheRespondent : Shri I. D. Vaid, Special Public Prosecutor with Shri Shailender Singh, Inspector, CBI. 2011:SHC:8 r^S- \ ® JUDGMENT Wrmcidi,ACJ. This appeal is directed against the judgment dated 26- 05-2007 passed by the learned Special Judge, Prevention of Corruption Act, East & North Sikkim at Gangtok in S.T. (P.C. Act) Case No.1/2004 convicting the appellant under section 51(1)(e) of the Prevention and Corruption Act, 1947 and order dated 08-05-2007 sentencing him to suffer imprisonment for one month and pay a fine of Rs.5,000/- in default to undergo further simple imprisonment of one week. 2. Brief facts of the case is that, R.C. Case No.5/84- CIU(A)2615/84 was registered against the appellant, Nar Bahadur Bhandari, former Chief Minister of Sikkim, on the allegation that while holding the office of the Chief Minister of Sikkim from October, 1979 to May, 1984, he misused his official position as public servant and acquired assets disproportionate to his known sources of income in his own name and in the name of his dependant or benami which include a multi-storeyed building at Gangtok worth Rs.30,00,000/-and other properties at Gangtok valued at rupees fifty thousand. 3. On investigation initially conducted by Mr. D.N. Choudhury, the then Deputy Superintendent of Police, 2011:SHC:8 y 0 EE 3 Central Bureau of Investigation, it was revealed that the appellant while holding the post of Chief Minister of Sikkim from 18-10-1979 to 11-05-1984 considered as the ``check period" by misusing his official position as public servant, acquired in his own name or in the name of his wife, assets quite disproportionate to his known sources of income which he failed to explain satisfactorily. It has been alleged by the prosecution that before becoming the Chief Minister of Sikkim, the appellant had limited sources of income, both he and his wife being employed as School Teachers in a pay scale of Rs.90-3-410. In 1974, he resigned from service and launched a political party and contested the elections held in 1974 unsuccessfully. He again contested in the 1979 Assembly Elections and returned elected from Soreng constituency and his political party having won by the ma].ority of the seats, was appointed as the Chief Minister at the beginning of the ``check period" i.e. 18th October, 1979. 4. In the later part of his term, he was removed from the post of Chief Minister on llth May, 1984, the date considered as the end of the ``check period''. It is alleged that the appellant owned and possessed a small house known as ``Primula Cottage" before the ``check period" valuing not more than Rs.39,175.00 and house hold assets worth Rs.63,741.00. He further had Bank balance of 2011:SHC:8 4 Rs.1,634.70 in the name of his wife, Smt. Dil Kumari Bhandari. The father of the accused/appellant was an agriculturist and did not inherit any property from him except a dry land measuring 0.75 acre which he sold at Rs.10,000/-. Finding it difficult to live in a rented accommodation at Gangtok, he petitioned to the then Mahara].a of Sikkim for a house site which was granted to him and, upon it he built the aforesaid small house known as ``Primula Cottage" valued at Rs.39,175.00, in which he lived with his wife and children. During 1981-83, a period falling within the ``check period'', a five storeyed R.C.C. structure was constructed by him over the land, the value of which exceeded his total income earned by him during the entire ``check period". As per the prosecution, incomes of the appellant earned by him during the ``theck.period'' were as follows:- (1) Income from salary of Shri Nar Bahadur Bhandari (2) Income from salary of Smt. Dil Kumari Bhandari from October, 79 to Feb.80 (3) Income from rent received from house at Church Road, Gangtok and pan shop Rs.1,36,406.68 Rs. 2,321.55 Rs.1,11,654.00 +. (4) Loans obtained from State Bank of Sikkim by Smt. Dil Kumari Bhandari forconstruction of house Rs. 52,000.00 (5) Income from dividend and interest earned Rs. 11,184.60 2011:SHC:8 5 (6) Income from M/S Pine Printers in which Mrs. Dil Kumari Bhandari was a partner Rs. 53,537.00 (7) Income from ``Aaja Ko Sikkim" a paper owned by Mrs. Dil Kumari Bhandari Rs. 39,555.00 (8) Private loan from Mr. P.P. Goyal Rs. 30,652.95 Tota I : Rs.4,37,311.78 5. The expenditure incurred by the appellant during the ``check period" was found to be as stated below:- (1) House hold expenditure (2) Expenses on education of children (3) Repayment of loan with interest (4) Hotel expenses incurred on guests (5) Licence fee and ground rent paid for pan shop (6) Insurance premium of Smt. Dil Kumari (7) Licence fee for TV/Radio VCR (8) Expenses incurred by Shri Bhandari as C.M. but not reimbursed. Bhandari with Peerless General Insurance Co. Rs. 81,190.56 Rs. 31,930.00 Rs. 33,094.00 Rs. 3,817.00 Rs. 1,150.00 Rs. 1,511.00 Rs. 277.00 Rs. 66,540.00 -.--_---------------------------------------------------------____.- Total: Rs.2,19,509.56 6. It is, therefore, the case of the prosecution that considering his total income at Rs.4,37,311.78 and his total expenditure at Rs.2,19,509.56 his savings could not have been more than Rs.2,17,802.22 at the end of the ``check 2011:SHC:8 i. + ® 6 period". However, the accused was found in possession of the following assets acquired in his name and in the name of 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.) (2) Pan shop valued at Rs. 15, 06,921.00 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 (5) Bank balance in the name of Shri Nar Bahadur Bhandari and Mrs. Bhandari (6) Investment in shares and Debentures (7) Furniture(including transportation charges) (8) Jeep SKM 93(including repair cost) (9) Weston TV/National VCR (10) Pistol (including cartridges) (11) Investment in Pine Printers (12) Other house hold items (13) Cost of the additions made in Primulla Cottage During 1980-81 as assessed by CTE Rs. 12,000.00 Rs. 22,065.09 Rs. 49,005.00 Rs. 30,650.00 Rs. 38,222.00 Rs. 30,800.00 Rs. 15,735.75 Rs. 86,323.95 Rs. 70,912.00 Rs. 47,323.00 -------_---------------------------------------------------_____--._ Total : Rs.19,20,447.79 2011:SHC:8 Qi, 7 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. 8. 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, accordingly, convicted and sentenced him. 2011:SHC:8 8 9. 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. 2011:SHC:8 ty (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:- 2011:SHC:8 10 ELQnJhe.questlonofvaluatlohof"pr]mu|acottaqq= 10. 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. 2011:SHC:8 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] 11. 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 2011:SHC:8 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] 12. 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; 2011:SHC:8 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. 13. 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 2011:SHC:8 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. 14. 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. 15. 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 2011:SHC:8 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. 16. 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. 17. 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 2011:SHC:8 .>.. 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 is true that in the said SP' report in R.C. 6/1984 it has been stated, inter alia, by the Superintendent of Police, Mr. R.N. Kaul "Investiaation has further revealed that .„ .............. „ .... Shri N.B. Bhandari aifted these Plots to his wife in Febmuarv, 1981 on execution of a gift deed. Smt, D.K. Bhandari w/o Shri Nar Bahadur Bhandari started construction of multi-storeyed building on the said plots in May, 1981, after the approval of the building plan by the executive officer, Ganatok Municipal CorDoration." It is true that the said report of the Superintendent of Police dated 19.6.1985 was made and forwarded after the completion of the investigation in R.C. 6 of 1984. It is true that I filed the final report in R.C. case No.6 of 1984 in this Court in the vear 1998 beina final reDort No.4/1998 dated 23.9.1998 under mv sianature, It is true that I had not conducted the investiaation in R.C. 6/84. It is true that in the final report in R.C. 6/1984 I have stated vide Dara 2 of the reDort that "Thorouah investiaation has been conducted in this case and it has been found that plot No.573 and 574, Gangtok station block at Church Road was allotted to Shri N.B.Bhandari in 1975 by the then Chogyal of the Sikkim. Later on, in Mav, 1981 Shri Bhandari constructed a multi- storeyed R.C.C. building on the said plots in the name of his wife, Mrs. Dil Kumari Bhandari and for this DurDose he DreDared a aift deed of the Dlot in favour of his wife Mrs. Dil Kumari Bhandari. It is true that what I have mentioned in DaraaraDh 2 of my final report dated 23.9.98 in R.C. 6 0F 1984 is not in the Superintendent of Police's report in R.C. 6 of 1984, It is not correct that I have filed this final 2011:SHC:8 17 report dated 23.9.98 in R.C. 6 of 1984 to implicate the accused by making false averment before this Hon'ble Court to implicate the accused in the present case.,, [emphasis supplied] 18. It was, therefore, submitted that the prosecution had indulged in manipulation of records with the object to implicate the appellant at any cost. 19. 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 2011:SHC:8 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] 20. 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