HON’BLE SRI JUSTICE B. CHANDRA KUMAR Crl.A.No. 332 of 2006 Date: 13-04-2010 Between B.V. Ganga Raju Appellant And State rep. by the inspect of Police, C.B.I., Visakhapatnam or Spl. P.P. Respondent HON’BLE SRI JUSTICE B. CHANDRA KUMAR Crl.A.No. 332 of 2006 JUDGMENT: This Appeal is directed against the judgment, dated 23-02-2006 passed in C.C.No.11 of 2000 on the file of the Special Judge for CBI Cases, Visakhapatnam (hereinafter referred to as ‘learned Special Judge’), whereby and whereunder the Appellant herein was found guilty of the offence punishable under Section 13 (1) (e) read with Section 13 (2) of the Prevention of Corruption Act, 1988 (hereinafter referred to as ‘Act’), and accordingly, he was convicted and sentenced to suffer Rigorous Imprisonment for a period of three years and also to pay a fine of Rs.1,00,000/-, in default to suffer Rigorous Imprisonment for six months. 2. The Appellant will be referred to as Accused Officer hereinafter for the sake of convenience. 3. The brief facts of the case are as follows: The Accused Officer was born on 30-04-1951. He is the eldest son of late B. Lovaraju, who was a businessman doing Kirana & General business. The mother of the Accused Officer Smt. B. Saraswathi is a house wife and his six brothers are doing business separately and some of them jointly among themselves and his sister Smt. P. Kamala is a house wife. The parents of the Accused Officer acquired immovable properties i.e., (1) One two storied building in a plot of 160 square yards near Purna Market, Visakhapatnam, purchased during 1947 in the name of B. Saraswathi; (2) One vacant site measuring 420 square yards opposite to Saraswathi Theatre, Dabagardens, Visakhapatnam purchased during 1957 in the name of late B. Lova Raju; (3) One two storied house in a plot of 320 square yards opposite to IOCL Petrol Bunk, Main Road, Gajuwaka constructed during 1966/1985 in the name of late B. Lova Raju; and (4) One acre of agricultural land at Station Road, Salur, Vizianagaram District, purchased during 1985 in the name of late B. Lovaraju. 4. The Accused Officer did not receive any share from the above said properties. His father B. Lovaraju expired during September, 1993. His mother has been managing the joint family properties, income and expenditure as two of his younger brothers are not yet married and dependents on the joint family and that the Accused Officer has been leading a separate family with his wife and two sons and filing I.T. Returns as an individual and did not claim any income or expenditure pertaining to the joint family. The Accused Officer studied B.Com. and joined as L.D.C. in Customs Department at Visakhapatnam on 16-08-1972 and worked as such till 30-09-1977 and got selected and appointed as Preventive Officer in Customs Department, Visakhapatnam with effect from 01-10-1977. He was promoted as Superintendent in Customs Department, Visakhapatnam w.e.f. 01-09-1996. He worked as Preventive Officer (Rummaging) at Visakhapatnam from 01-10-1977 to 30-03-1980; Preventive Officer (Docks) at Visakhapatnam from April, 1980 to March, 1981; Preventive Officer (Rummaging) from April, 1981 to March, 1982; Preventive Officer (Warehouse) from April, 1982 to March, 1983; Preventive Officer (Town Intelligence) from April, 1983 to March, 1984; Preventive Officer (Docks) from April, 1984 to March, 1985; Preventive Officer (Rummaging) from April, 1986 to August, 1988; air Customs Officer (Madras International Airport) from 01-09-1988 to 02-11-1991; Preventive Officer (Town Intelligence) from 08-11-1991 to 02-05-1993; Preventive Officer (Dy. Custodian) from 03- 05-1993 to 04-08-1993; Preventive Officer (HSY Bonds) from 05-08- 1993 to 03-04-1994; Preventive Officer (Docks) from 04-04-1994 to 30- 05-1994 and Air Customs Officer (New Delhi International Airport) from 31-05-1994 to 01-08-1996. 5. The Accused Officer married Smt. B.V. Savithri during August, 1980 and she is the daughter of late V. Suryanarayana, who was a businessman at Peddapuram, East Godavari District. Smt. B. V. Savithri was given stridhana of 20 tolas of gold jewellery, some household articles and furniture by her parents and a gold ring and a gold chain were presented to the Accused Officer by his in-laws at the time of his marriage. His wife did not inherit any immovable or movable property from her parents. 6. The Accused has two sons, namely, B.V. Srinivas, who was 13 years old and studying VIII standard, and B. Abhishek, who was 8 years old and studying III standard during the relevant period. His wife and two sons are only dependants upon the Accused Officer. The Accused Officer acquired major assets like house, two flats, one house plot at Visakhapatnam and seven house plots at Madhurwada, and deposits with various banks, LIC and post offices and Matador Van, Investments in M/s Hi-life Agencies, Nellore, electrical and electronic appliances, household articles, furniture etc. 7. On specific information that the Accused Officer had acquired assets disproportionate to his known sources of income. Therefore, a case in R.C.No.5(A)/1996/C.B.I./VSP was registered under Sections 13 (1) (e) read with Section 13 (2) of the Act and FIR was issued in Ex.P-127. PW-32, who was working as Inspector of Police, CBI, Visakhapatnam, obtained search warrants from the CBI Court, Visakahapatnam on 26-03-1996 and simultaneously searches were conducted in the houses of the Accused Officer, his mother and brothers and his brother-in-law at New Delhi, Visakhapatnam and Peddapuram. PW-32, the Investigating Officer, himself conducted house search at Peddapuram. Several documents were seized as shown in Ex.P-1 search list. Certain documents in Exs.P-94 to P-96 and P-70 were seized under Ex.P-93, search list, during the search conducted at the house of the Accused Officer at New Delhi. Inventory list was prepared in Ex.P-97. Exs.P-83 and P-99 to 103 were seized in Ex.P-98, search list, from the house of B.V. Krishna at Bowdara Road, Visakhapatnam. The seized documents were deposited into the Court on 02-04-1996. Two locker keys were seized on 03-04-1996. On 22-04-1996 locker No.320 held by the Accused Officer was opened in Vysya Bank, Suryabagh Branch, Visakhapatnam in his presence and the inventory list was prepared at the spot in Ex.P-59. On 23-04-1996, another locker No.20 held by the Accused Officer and his wife with SBI, Dondaparty Branch, Visakhapatnam, was opened and nothing was found in that locker. Exs.P-18 to P-20 are the documents collected from PW-21. After collecting some other documents, examining several witnesses and after obtaining sanction from the Government, the charge sheet was filed against the Accused Officer. 8. The sum and substance of the charge against the Accused Officer is that during the check period from 01-01-1987 to 26- 03-1996 the Accused Officer earned total income is Rs.15,26,767/- and total expenditure is Rs.8,42,732/- and the total value of the acquired assets is Rs.26,73,365/- and the likely savings during the check period is Rs.6,84,035/- and that the Accused Officer, being a public servant, has been found in possession of the assets of Rs.18,35,911/- disproportionate to his known source of income and therefore, he has committed the offence under Section 13 (1) (e) read with 13 (2) of the Act. 9. The particulars of the assets at the time of beginning and closing of the check period were shown in statements A and B respectively. The income and other receipts during the check period were shown in statement-C. The expenditure during the check period was shown in statement-D. 10. Since the Accused Officer pleaded not guilty and claimed to be tried, the prosecution examined PWs.1 to 33 and got marked Exs.P-1 to P-49. On behalf of the Accused Officer, DWs.1 to 3 were examined and Exs.D-1 to D-12 were got marked. 11. The learned Special Judge, having appreciated the oral and documentary evidence, came to the conclusion that the Accused Officer was in possession of the assets disproportionate to his known source of income and accordingly, convicted and sentenced him as stated above. 12. The learned Senior counsel Sri C. Padmanabha Reddy submitted that the learned Special Judge failed to consider the evidence in proper perspective and erred in finding the Accused guilty of the charges framed against him. It is further submitted that learned Special Judge erred in accepting the value of two flat Nos.A/24 and A/25 i.e., Rs.9,22,798/- in Seashell Apartments, Waltair Uplands, Visakhapatnam, for the reason that the evidence of PW-7, builder, PW- 1, Manager, and also PW-32, the Investigating Officer, shows that the wife of the Accused Officer had paid only Rs.1,25,000/- for each flat and the remaining due amounts were paid by the end of September, 1996 i.e., after the check period. It is also submitted that according to PW-32, he had collected receipts for Rs.2,50,000/- showing the payment for the said two flats and that he had not collected any material to show that the wife of the Accused Officer paid any amounts other than Rs.2,50,000/- during the check period. 13. The learned senior counsel contended that PW-7, P.V.Ramanayya Raja, admitted in the cross-examination that the amount for two flats was paid by November, 1996. But, PW-21, the Manager of the Construction Company, admitted that by March 1996, the wife of the Accused Officer paid Rs.1,25,000/- for each flat and that the balance amount was paid subsequently. It is further argued that PW-32, the Investigating Officer, himself admitted that he did not investigate as to when the remaining amount was paid by the wife of the accused Officer to the builder. It is further argued that the documents seized by the Investigating Officer himself support the case of the accused and therefore, the value of two flats has to be taken at Rs.2,50,000/-. 14. It is further submitted that when there is direct evidence with regard to the payment of the cost of the two flats, there is no need to give any importance to the estimates prepared by PW-17, CPWD Engineer, for the reason that he inspected the said two apartments 2 ½ years after the end of the check period and that any investments on those two flats subsequent to the check period cannot be considered. 15. With regard to Item No.10, the learned senior counsel submitted that though some slips were seized from the house of PW-3, those slips cannot be connected with the wife of the Accused Officer. It is further argued that PWs.4 and 7 did not support the case of the prosecution and no mediator was examined. It is also submitted that the Investigating Officer admitted that he did not confront the name of the wife of the accused with PW-3 by showing Exs.P-2, P-3 and P-13. It is further argued that PW-3 had denied the contents of Ex.P-13. Thus, the main submission of the learned senior counsel is that the lower Court committed error while appreciating the evidence on Item No.10. 16. It is also argued that absolutely there is no evidence to show that the cash of Rs.5,10,000/- was deposited by the wife of the Accused Officer with PW-3 and in the circumstances, there is no need to examine the wife of the Accused Officer, since the initial burden lies on the prosecution to prove its case beyond reasonable doubt. It is further argued that when PW-3 himself turned hostile and the contents of Ex.P-13, do not correlate with the alleged slip said to have been seized from the house of PW-3, there is no satisfactory evidence to show that the amount of Rs.5,10,000/- belongs to the wife of the Accused Officer. 17. It is also argued that there is no substantial evidence to prove that the value of the household articles was Rs.74,165/-. It is also argued that the learned Special Judge ought not have considered the value of the silver jewellery at Rs.45,680/- when there is ample evidence on record to show that they are joint family property. It is also argued that the learned Special Judge failed to appreciate the evidence with regard to pay and allowances, rental income and rewards received from the Customs Department. 18. It is also argued that the Accused Officer has borrowed a loan of Rs.70,000/- from his brother B.V.Krishna and also intimated the same to the authorities as per Ex.P-11 and there is nothing to disbelieve the contention of the Accused Officer that he had borrowed an amount of Rs.70,000/- from his brother. Therefore, this item should have been added to the income of the accused. It is further argued that the Accused Officer had been working for about 14 years prior to the date of check period and therefore, he must have saved some amount during that period and that those savings were not taken into consideration. 19. Sri P. Kesava Rao, learned Special Standing Counsel for CBI submitted that admittedly two flats were purchased in the name of the wife of the Accused Officer and when the Accused Officer had taken a specific plea that the amount was paid after the check period, it is for him to prove that the remaining sale consideration was paid after the check period. It is further argued that the possession of the flats was already delivered to the wife of the Accused Officer and that the flats were subsequently sold and it appears to be improbable to say that the builder had permitted the wife of the Accused Officer to sell the flats even before the total consideration was paid to him. 20. It is further argued that since the payments to the flats were within the knowledge of the Accused Officer, the burden lies upon him to prove that the total sale consideration was paid to the builder and the prosecution cannot be asked to prove a negative fact. 21. It is further argued that the wife of the Accused Officer was the competent person to speak about the payments, but she was not examined. He has relied on the decisions reported in C.S.D.SWAMY, APPELLANT VS. THE STATE, RESPONDENT [1] and STATE OF M.P. VS. AVADH KISHORE GUPTA [2]. Thus the main contention of the learned Special Standing Counsel for CBI is that since the matter was specifically within the knowledge of the Accused Officer, he has to satisfactorily account for it and it is for him to prove his case. 22. As far as the amount paid by the wife of the Accused Officer to her brother (PW-3) is concerned, it is submitted that PW-3 himself signed as a witness showing the seizure of the documents from his house and all these documents contain the name of the wife of the accused. The evidence of PW-1, who categorically deposed about the presence of PW-3, was not disputed when PW-1 was cross- examined. The figures in Ex.P-2 are tallying with the figures mentioned in the Panchanama conducted at the house of PW-3. PW-3 admitted that the name of the person referred to in Ex.P-31 is Bavirisetti Savithri i.e. the wife of the Accused Officer. It is further argued that the evidence of PW-4 that he went away without taking Ex.P-16 is unnatural and un-believable. 23. The learned Special Standing Counsel for CBI submitted that PW-3, who is no other than the brother of wife of the Accused Officer, admitted that the person referred to as Bavirisetti Savithri of Visakhapatnam in Ex.P-2 is the wife of the Accused Officer. He further submitted that the lower Court, on proper appreciation of evidence on record, rejected the contention of the Accused Officer that he had borrowed an amount of Rs.70,000/- from his brother. 24. In the light of the rival contentions, the points that arise for consideration are: 1. Whether the lower Court was justified in taking the value of two flats at Rs.9,22,798/- and whether the version of the Accused Officer has to be accepted?; 2. Whether the wife of the Accused Officer had deposited Rs.5,10,000/- with PW-3?; 3. Whether the value of the silver jewelry i.e., Rs.45,680/-, which were found in the locker, is the joint family property?; 4. Whether the Accused Officer has borrowed an amount of Rs.70,000/- from his brother B.V.Krishna?; 5. Whether the contention of the Accused officer that his savings as on the date of commencement of the check period shall be taken into consideration, can be accepted?; 6. Whether the Accused Officer and his wife made payments to Mr.B.V.Krishna and whether the same should be taken into consideration?; and 7. Whether the findings of the learned Special Judge that the Accused Officer was found in possession of disproportionate assets to a tune of Rs.11,48,203/- is justified? POINT NO.1: 25. Item No.4 of Statement–B is two flats i.e., A-24 and A-25 in Sea-Shell Apartment, Waltair uplands, Visakhapatnam. PWs.7, 17, 20, 21 and 24 are the relevant witnesses and Exs.P-18 to P-20 and P-106 are the relevant documents to this item. PW-7 is the Managing Director of Yugesh and Madhav Builders Private Limited, Visakhapatnam. According to him, they constructed Sea-Shell Apartments during the year 1991-92. He deposed that the Accused Officer purchased two flats in the said apartment in the name of his wife on 11-12-1991. Each flat was measuring 999 Sq. feet and the corresponding land was admeasuring about 49 Sq. yards. Exs.P- 18 and P-19 are the xerox copies of the sale deeds, dated 11-12-1991 for an amount of Rs.78,161/- for each flat. The sale consideration referred in Exs.P-18 and P-19 for two flats includes the cost of site and the value of the structure to the lintel level. According to PW-7, cost per square feet was fixed at Rs.425/-. Thus the total cost of each flat comes to Rs.4,24,525/-. Thus the total cost of two flats comes to Rs.8,49,150/-. Seven cash receipts were marked as Ex.P-20 showing the total payment of Rs.2,50,000/- for two flats. The cost per square feet was Rs.425/- which includes the cost of construction. The construction was completed and possession of the flats was handed over to the wife of the Accused during February 1994. According to PW-7, by March, 1996, an amount of Rs.1,25,000/- per each flat i.e., a total of 2,50,000/- was paid. He further deposed that in view of the close relationship with the father of the Accused Officer, possession of the flats was delivered to the wife of the Accused Officer. He further deposed that the wife of the Accused Officer committed default in payment of instalments and that in November 1996, she had sold away one of the flats. 26. PW-17 is the Assistant Engineer in the Central Public Works Department, Hyderabad. He deposed that as per the instructions of the CBI Inspector, he, along with his Junior Assistant, inspected two flats and estimated their value. Ex.P-106 is the Valuation Report. In Ex.P-106, PW-17 had shown the total value of two flats as Rs.9,22,798/- at the rate of Rs.800/- per square feet. He did not take measurements in the presence of the Accused Officer and his wife. He did not issue any notice to the wife of the Accused Officer to be present at the time of taking of measurements. He was suggested that he did not follow the standard schedule of rates while preparing his report. Admittedly, the check period was from 01-01-1987 to 26-03-1996. Admittedly, PW-17 was directed to estimate the value of those two flats in the year 1996 and he had inspected those two flats on 27-08-1998. It is not clear whether any improvements were made in between 26-03-1996 and 27-08- 1996. It appears that there is no other evidence to show the payments made by the wife of the Accused Officer to the construction company. Then, probably, we have to take into consideration the evidence of PW-17. But when there is evidence showing the payments made by the wife of the Accused Officer towards the cost of these two flats, it may not be proper to take the cost of the flats as estimated by PW-17. 27. According to PW-20, who had also purchased a flat bearing No.9 in the second floor of Sea-Shell Apartments, deposed that he purchased the said plot at the rate of Rs.525/- per square feet. He says that the total amount paid by him was Rs.5,54,000/-, and Rs.10,000/- towards water connection charges and Rs.12,000/- towards electricity supply. 28. According to PW-21, G.Sattiraju, he was working as Manager of Yugesh and Madhav Builders Private Limited since 1992. He deposed that the wife of the Accused Officer purchased two flats in the year 1991 and the possession of those two flats was handed over to her. The cost of construction per square feet was Rs.425/-. The father of the Accused Officer, and PW-7, the Managing Director of Yugesh and Madhav Builders Private Limited, were good friends and therefore, those two flats were sold by PW-7 to the wife of the Accused Officer at concessional rate i.e., Rs.425/- per square feet. He says that Ex.P-20, bunch of receipts issued to the wife of the Accused Officer by the construction company, shows that by March 1996, the wife of the Accused Officer made payments at Rs.1,25,000/- for each flat. 29. According to PW-24, he purchased a flat in Sea-Shell Apartments at the rate of Rs.475/- per square feet. PW-32, who obtained search warrants and collected documents from the builders, deposed that on 06-05-1996, he seized Exs.P-18, P-19 and P-20 from PW-21. He says that Ex.P-29 is the correspondence letters between the wife of the Accused Officer and the construction company. Thus, admittedly, the bunch of receipts seized by PW-32 is Ex.P-20. Admittedly, the total amount paid under Ex.P-20 comes to Rs.1,25,000/- for each flat by March, 1996. 30. Though the possession of the two flats was delivered to the wife of the Accused Officer in 1994, according to PW-21, a total amount of Rs.2,50,000/- was paid for two flats by March, 1996. Ex.P-20 shows that the payments were made through cheques. It is not the case of the prosecution that the documents under Ex.P-20 are not genuine documents and they are fabricated subsequently. When the Investigating Officer himself had categorically deposed that by March, 1996 the total amount paid for two flats was only Rs.2,50,000/-, it appears that the lower Court was not justified in taking the cost of two flats as estimated by PW-17. The total amount paid as per Exs.P-18 and P-19 comes to Rs.1,46,222/- and the total amount paid under Ex.P-20 comes to Rs.2,50,000/-. Thus the oral and documentary evidence adduced on behalf of the prosecution shows that the wife of the Accused Officer has paid Rs.4,06,322/- by March, 1996 i.e., before the completion of the check period. Admittedly, the wife of the Accused Officer committed default in paying installments and subsequently, she sold one of the flats after the check period. 31. In view of the above discussion, I hold that the total consideration of two flats paid by the wife of the Accused Officer should be taken at Rs.4,06,322/- only and not the cost estimated by PW-17. 32. This point is answered accordingly. POINT NO.2: 33. The prosecution case is that Smt. B. Venkata Savithri, the wife of the Accused Officer, had deposited an amount of Rs.5,10,000/- with her brother PW-3 during the years 1991-96. The stand of the Accused is totally denial. We have the evidence of PWs.1, 3, 4, 8 and 32 and Exs.P-1 to P-17 and P-27 on this point. 34. PW-32 is the Investigating Officer, who conducted searches in the house of PW-3 and his father at Peddapuram on 26- 03-1996. 35. PW-1 is one of the mediators in whose presence the search was conducted and a list of documents as shown in Ex.P-1 search list was seized. He has been working as income tax Inspector at Kakinada. He accompanied PW-32 at the time of search and signed in Ex.P-1 search list. According to PW-1, a copy of Ex.P-1 was served on PW-3 and he signed on it. He further deposed that Ex.P-2 is the made up file containing folios 1 to 28 pertaining to slips indicating the inflow and outflow of the cash of Bavirisetti Venkata Savithri, Visakhapatnam on different dates. Ex.P-3 is the made up file containing folios 1 to 18 pertaining to 12 promissory notes and two copies of a letter addressed to Area Sales Manager,