THE HON’BLE SRI JUSTICE N. RAVI SHANKAR CRIMINAL APPEAL No.693 of 2000 JUDGMENT: Appellant is the accused in C.C.No.16 of 1993 on the file of the Court of Principal Special Judge for SPE & ACB Cases-cum-IV Additional Chief Judge, City Civil Court, Hyderabad (trial court). He was tried on a charge under Section 13(1)(e) read with Section 13(2)of the Prevention of Corruption Act, 1988 (for short Act), relating to possession of assets/wealth disproportionate to his known sources of income. He pleaded not guilty. After considering the evidence let in by the prosecution and also the appellant, the trial court by its judgment dated 31.05.2000 convicted the appellant of the said charge and sentenced him to undergo rigorous imprisonment for one year and also to pay a fine of Rs.2000/- with a default clause prison sentence of two months. It is assailing that judgment the appellant/accused has come up with this appeal. 2. It must be mentioned here straightaway that no objection is raised regarding validity of the sanction given by the competent authority for prosecuting the appellant and no complaint is also made by the appellant regarding any procedural irregularities in the conduct of trial and both sides argued on the merits of the matter. 3. According to the prosecution the appellant joined service in Singareni Collieries Company Limited, Kothagudem of Khammam District, on 05.09.1963 as Assistant Engineer and by 03.10.1989 on which the searches were carried out in his houses/premises he was working as Deputy Chief Engineer (Civil) in Singareni Collieries Company Limited, Kothagudem of Khammam District and he is admittedly a public servant within the meaning of the Act. The check period taken by the prosecution is from 05.07.1963 to 03.10.1989. The particulars of the income and expenditure of the appellant during the check period are mentioned in Annexure-II and Annexure-III to the charge sheet and they are stated to be Rs.11,74,503-36 ps and Rs.5,85,179-53 ps respectively. The particulars of the assets of the appellant as gathered by the investigating officer are given in Annexure-I to the charge sheet and altogether 15 assets are shown and their value is given as Rs.11,48,032-45 ps. After deducting the expenditure from the income the probable savings of the appellant are given as Rs.5,89,323-83 ps and the difference between the value of the assets and the value of the savings is given as Rs.5,58,708-62 ps and the prosecution says that the appellant was in possession of disproportionate wealth or assets to the extent of the said Rs.5,58,708-62 ps. 4. The trial court, after considering the evidence i.e. oral evidence of P.Ws.1 to 14 examined by the prosecution and D.Ws.1 to 5 examined by the appellant and also after considering the documentary evidence consisting of Exs.P1 to P71 marked on behalf of the prosecution and Exs.D.1 to D.8 marked on behalf of the appellant, concluded or fixed the value of the assets of the appellant at Rs.8,14,357/-. It then fixed the income and expenditure of the appellant during the check period at Rs.11,06,407/- and Rs.4,06,125/- respectively and calculated his savings at Rs.7,00,232/-. Deducting the said savings from Rs.8,14,357/- (value of assets) the trial court found that the appellant was in possession of disproportionate wealth/assets to the extent of Rs.1,14,125/-. It accordingly convicted and sentenced the appellant on the said findings as aforesaid. 5. Before going into the merits of the matter, it should be mentioned here that in arriving at its conclusions on the value of assets, income and expenditure of the appellant the trial court deleted certain assets, certain items of expenditure and reduced certain items of income which were fixed by the prosecution after considering the evidence on record. Sri R.Ramachandra Reddy, the learned Standing Counsel for the Anti Corruption Bureau (ACB), could not bring to my notice any circumstance in the evidence to show that the above findings of the trial court regarding the value of the assets and income and expenditure fixed by it are contrary to evidence and unreasonable and call for interference. Hence it follows that the findings of the trial court on the above aspects need not be disturbed. 6. The question however remains whether the conclusion of the trial court that the appellant is guilty of the charge on the ground that he possessed disproportionate wealth to the extent of Rs.1,14,125/- can be sustained. In other words, the point is whether the findings recorded by the trial court are sufficient to find the appellant guilty of the charge brought against him. 7. Sri T.Bal Reddy, the learned Senior Counsel appearing for the appellant’s counsel raised four contentions in support of his argument that even on the findings of the trial court the conviction recorded by the trial court cannot be sustained and they were opposed by the learned Standing Counsel for the ACB. 8. The first contention of Sri T.Bal Reddy is this. He pointed out that the trial Court fixed the income of the appellant during the check period at Rs.11,06,407/- and ultimately concluded that the value of the disproportionate wealth possessed by him is Rs.1,14,125/- and since this roughly constitutes 12.5% of the total income fixed by the trial court the appellant is entitled to an acquittal in view of Memo No.700/SC.D/88-4 dated 13.02.1989 issued by the General Administration (SC.D) Department of the Government of Andhra Pradesh. This memo is in the nature of certain instructions issued by the Government regarding the expeditious investigation of ACB cases and the measures to be taken. It contains various instructions as to what measures are to be taken for expeditious investigation of ACB cases under the Act. Sub-para-iv of Para-2 of this memo reads as follows. “In deciding whether a case of disproportionate assets is fit for prosecution or not, the Anti-Corruption Bureau must take into account the tenure of the service of the accused Government servant, his general reputation, his habits and style of living and the extent of disproportionate and other facts and circumstances of the case. Considering the fact that it is not possible for a Government Servant to prove his defence with mathematical exactitude, it is desirable to take a liberal view of the excess of the assets over the receipts of the known sources of income and a reasonable margin up to 20% of the total income of the Accused Government Servant may be allowed, while computing the disproportionate assets after taking the above mentioned factors into consideration” 9. Basing on the above sub-para, Sri T.Bal Reddy says where the margin between the value of the disproportionate wealth and the total income of the Government servant i.e. the accused is less than 20%, the Government itself have instructed that prosecutions are not to be taken up and therefore the above memo itself was a good ground for the ACB to drop the case and that the ACB has unnecessarily prosecuted the appellant and consequently the appellant should be acquitted of the charge. 10. This contention however cannot be accepted for the simple reason that the above memo is only in the nature of a guideline to the ACB police for expeditious disposal of the cases registered by it under the Act in the circumstances stated therein and it has no statutory force. 11. The second contention of Sri Bal Reddy relates to Item No.12 of the assets shown in Annexure-A to the charge sheet. This Item No.12 is bank balances and FDRs and according to the prosecution they relate to SB accounts of the appellant, his wife and their children. The prosecution has shown their value at Rs.51,830-75 ps. Out of this amount a sum of Rs.11,834/- was shown as the interest amount credited from time to time on the said SB accounts. Before the trial court, the appellant pleaded that said amount of Rs.11,834/- has to be treated as income but not as an asset and therefore only the balance of Rs.39,995-84 ps was to be shown as asset. In fact in the details of the incomes furnished in Annexure-II to the charge sheet the prosecution itself has shown Item No.7 i.e. a sum of Rs.11,834/- as interest accumulated on SB accounts. Sri Bal Reddy’s argument therefore is that this amount should be treated as income and if it is so treated the value of the disproportionate wealth as fixed by the trial court may fall within the margin of 10% of the total income and consequently the appellant is entitled to the acquittal on that ground alone. 12. The trial court discussed Item No.12 very elaborately. It concluded that no doubt this amount of Rs.11,834-91 ps was interest credited on the SB accounts. It however held that since this interest was not withdrawn but added to the principal the entire amount has to be treated as asset only and it rejected the appellant’s plea on that ground. Sri Bal Reddy says this reasoning of the trial court is not correct. 13. Sri Ramachandra Reddy appearing for the ACB on the other hand has relied upon a decision of the Supreme Court given in N.Ramakrishnaiah v. State of A.P.[1] and contended that basing on the principle laid down in this decision relating to the interpretation of the words “known sources of income” occurring in Section 13(1)(e) of the Act interest on SB accounts cannot be treated as income. The principle laid down in the above decision is that when a particular investment such as a bank deposit is shown as an asset, interest thereon cannot be treated as income as it will not fall within the purview of “known sources of income” falling within Section 13(1)(e) of the Act. In this decision it has been laid down by the Supreme Court that “known sources of income” means only the incomes actually earned by the public servant and not any accrued income from any investment made by him if such an investment being a tainted one itself is made a subject matter of the charge. 14. The appellant could not lead any evidence to show that the above investment in SB accounts was not tainted in any manner and it has to be excluded altogether and though the trial court did not rely upon the above decision its conclusion that the said interest on the above SB account deposits cannot be treated as income must be held to be right on the principle laid down in the above decision. The second contention is therefore rejected. 15. The third contention of Sri T.Bal Reddy relates to Item No.1 in the list of assets i.e. a house bearing No.27-60-1462 (old No.) and new No.30-22-99, 100 & 101 situated at Vijayawada acquired from the sisters-in-law and mother-in-law of the appellant and the renovations made to it. The value of this asset is shown as Rs.1,80,000/- by the prosecution. The trial court has also discussed this item very elaborately. It should however be noted that the prosecution has fixed the original cost of this house at Rs.40,000/- and the additions made to it is at Rs.1,40,000/- and fixed the total value at Rs.1,80,000/- and the trial court as urged by the prosecution accepted the said value. It must now be noted that even according to the prosecution this house originally belonged to the father-in-law of the appellant. The appellant’s father-in-law admittedly had three daughters and one of them is the wife of the appellant. It is even the version of the prosecution that the appellant’s wife had a 1/4th share in it which is valued at Rs.10,000/- and she obtained a relinquishment deed i.e. Ex.P1 by paying Rs.30,000/- to other sharers i.e. her two sisters and mother by paying Rs.10,000/- to each of them. 16. The contention of Sri Bal Reddy is that the prosecution has wrongly shown the value of appellant’s wife’s share i.e. Rs.10,000/- in the value of the assets owned by him and that in any event this sum of Rs.10,000/- which represents the money value of the share of appellant’s wife in the property of her father cannot be shown as his asset as his wife obtained it from her father. It should be noted that prosecution has given the total value of this item as Rs.1,80,000/- and even according to the prosecution Rs.40,000/- of it represents the value of the old house and Rs.1,40,000/- represents the additions and renovations made to it. In my opinion, the prosecution ought not to have added the above sum of Rs.10,000/- which is the value of the appellant’s wife’s share as she got that share from her father and as appellant cannot be said to have contributed anything for her share. The trial court simply accepted the plea of the prosecution and included it in the assets of the appellant. Sri Ramachandra Reddy, the learned Standing Counsel for the ACB, could not show any reason for including this amount of Rs.10,000/- in the assets of the appellant. Hence in view of the above reasons I am of the opinion that this amount of Rs.10,000/- has to be subtracted from the value of Item No.1 of the assets and this contention of the appellant is accordingly accepted. 17. With regard to the valuation of renovations of Item No.1, as already mentioned the prosecution valued them at Rs.1,40,000/- based on the evidence of P.W.10 N. Narayana Rao the then Deputy Executive Engineer of ACB who valued the house and gave Ex.P.48 report. He fixed the total value at Rs.1,40,000/- after giving a deduction of 10% towards personal supervision. The plea of the appellant is that the value of the renovation cannot be more than Rs.99,800/-. The trial court discussed the evidence relating to this item No.1 in detail and gave its reasons as to why it was accepting the version of P.W.10 regarding the valuation of renovations and additions. The learned counsel for the appellant could not bring to my notice any circumstance to show that the trial court has committed any error in appreciating the evidence relating to the valuation of the additions and renovations. Accordingly the contention relating to the version of additions and renovations pertaining to Item No.1 is rejected while as already mentioned the contention of the appellant that a sum of Rs.10,000/- has to be excluded is accepted. 18. The fourth contention of Sri T.Bal Reddy relates to Item No.6 of the assets i.e. the value of the house hold articles found in the appellant’s house at Hyderabad which was valued at Rs.1,59,119/- by the prosecution and which version was accepted by the trial court. This house is situated at Gandhi Nagar, Hyderabad. The search was conducted on 03.10.1989 in pursuance of a search warrant issued by the trial court. Ex.P.38 is the inventory pertaining to the articles found in the house. Ex.P.38 reads that at the time of search Smt. B.Jamuna, wife of the appellant, and Smt Mary Shashikala, daughter of the appellant, were present at the house. Sri Bal Reddy pointed out that certain items in this Ex.P.38 inventory and contended that the said items ought not to have been included at all in calculating the value of the house hold articles as they are things of ordinary use which are found in any house hold. P.W.13 Sri G.Bala Reddy the Deputy Director of ACB, Hyderabad, who is the investigating officer himself has stated in his evidence that at the time of search it was found that the said house was in the occupation of the son of the accused and the search was carried out in the presence of the wife and daughter of the appellant and the rates mentioned by the daughter and daughter-in-law also of the appellant were incorporated in Ex.P.38 inventory regarding the items found there. This evidence of the investigating officer shows that even the daughter-in-law of the appellant was present in the house and herself and her husband i.e. the son of the appellant were also residing there and the wife of the appellant was also residing there. 19. To examine the above contention of Sri Bal Reddy Ex.P.38 inventory consisting of description of various items and their values has to be looked into. He laid much stress on the following items and pleaded that they should be excluded. Item No.10 are Bajaj make tube lights with fixtures valued at Rs.100/-. Item No.12 are two window curtains valued at Rs.40/-. Item No.19 is an umbrella valued at Rs.40/-. Item No.20 is a helmet valued at Rs.100/-. Item No.21 are books of various kinds valued at Rs.200/-. Item No.27 are two wall mirrors valued at Rs.50/-. Item No.33 is again a Bajaj make tube light with fixture valued at Rs.100/-. Item No.34 is a wooden folding cot valued at Rs.100/-. Item No.37 is a wooden stool valued at Rs.40/-. Item No.48 are 31 cotton sarees each valued at Rs.80/- and their total value is shown as Rs.2,480/-. Item No.49 are petty coats valued at Rs.420/-. Item No.50 are blouses valued at Rs.900/-. Item No.55 are Banians valued at Rs.50/- and all these items are said to have been found in the living room. Then following items are said to have found in the master bed room. Item No.105 which are again petty coats valued at Rs.860/-. Item No.106 is a Kurtha Paizama valued at Rs.100/-. Item No.109 are baby dolls valued at Rs.100/- . Item No.110 is a small baby care chair valued at Rs.50/-. Item No.111 and 112 are again towers and blouses valued at Rs.180/- and Rs.1400/- respectively. Item No.113 are window curtains valued at Rs.80/-. Item No.120 is a mosquito net valued at Rs.100/-. Item No.122 is a rexine air bag valued at Rs.50/-. Item No.123 are old clothes of all varieties valued at Rs.400/-. Item No.136 are two buckets valued at Rs.50/-. The value of these items nearly works out to more than Rs.6000/-. 20. It should be noted here that the trial court in calculating the income of the appellant has excluded from it the net salary income of the appellant’s son which was fixed at Rs.87,510/- by the prosecution. This itself suggests that the appellant’s son had some income. The investigating officer went on to include even the value of the old clothes found in the house at Hyderabad apart from petty coats and cotton sarees and other items which are mentioned supra all of which are sundry items which may be purchased by ladies from time to time on different occasions as per their needs and the house hold needs. The other items are of ordinary use found in any household. I am of the opinion that Sri Bal Reddy is right in contending that the value of the above items which nearly works out to more than Rs.6000/- has to be excluded as they are not costly items and cannot be treated as house hold articles of considerable value as they could have as well been purchased by the appellant’s son that too not at a time but over a period from time to time. 21. Now if the sum of Rs.10,000/- representing the share of the appellant’s wife in the house belonging to her father which she got and the above sum of Rs.6,000/- pertaining to various sundry items found in the house at Hyderabad, the aggregate of which comes to Rs.16000/- is excluded from the value of the disproportionate wealth of Rs.1,14,125/- fixed by the trial court, the same would stand reduced to Rs.98,125/-. It may now be noted that this sum of Rs.98,125/- is definitely less than 10% of the total income of the appellant which is fixed by the trial court itself at Rs.11,06,407/-. The trial court however did not grant this 10% margin/allowance as the value of disproportionate assets fixed by it exceeded 10% of the income arrived at by it. For the reason given above it ought to be granted now as laid down by the Supreme Court in Krishnanand Agnihotri v. State of M.P.[2]. The learned Standing Counsel for the ACB also did not dispute this aspect. If that is granted it follows that the findings of the trial court for the above reasons that the appellant is guilty of the charge cannot be sustained and the appellant has to succeed in this appeal. 22. Accordingly this criminal appeal is allowed setting aside the conviction and sentences recorded by the trial court. The fine amount if any paid by the appellant shall be refunded to him after the expiry of time available to the prosecution for pursuing further remedies against this judgment. The bail bonds of the appellant shall also stand cancelled after the expiry of the said time. ______________________ N.RAVI SHANKAR, J 1st November 2011 CVRK [1] 2009 CRI LJ 1767 [2] AIR 1977 SC 796