Case: Kedari Lal Vs. State of M.P. &amp; Others

and a fine of Rs. 15,000 in default whereof to undergo further sentence of rigorous imprisonment for 1 year.6. While dealing with Criminal Appeal preferred by the appellant, the High Court took the view that Rules 14, 17 and 19 of the M.P. Civil Services (Conduct) Rules, 1965 (“the Rules” for short) prohibit the public servant from accepting gifts or loan except in the manner prescribed therein. It was observed that given the expression “known sources of income” appearing under Section 13(1)(e) of the Act, the income must be such which was received from lawful source and that it must be in compliance of the Rules as well. The High Court held disclosure of receipt of money in the Income Tax Returns was of no assistance to the appellant unless the Rules were duly complied with. The High Court thus affirmed the view taken by the Trial Court and dismissed the appeal confirming the sentence.7. The correctness of the judgment passed by the High Court is challenged in this appeal by Special Leave. During the pendency of this appeal, this court was pleased to direct the release of the appellant on bail. 8. Appearing in support of the appeal, Mr. Siddharth Luthra, learned Senior Counsel submitted that every receipt of amount was duly intimated by the appellant to the department contemporaneously and such amounts were also reflected in his Income Tax Report, filed well before the initiation of the prosecution in the instant case. It was further submitted that after taking into account the amount so intimated, the balance of Rs. 37,605 at best remains unexplained. But such amount being less than 10% of the total income, the appellant was entitled to the benefit in terms of decisions of this Court. 9. Mr. C. D. Singh, learned advocate appearing for the State supported the view taken by the court below. Relying upon the decision of this court in N. Ramakrishnaiah (D) through LR’s Vs. State of A.P. (2008 (17) SCC 83 ), it was submitted that the loans and gifts received by the petitioner would not constitute “known sources of income” as defined under Section 13(1) (e) of the Act. 10. The expression “known sources of income” in Section 13(1) (e) of the Act has two elements, first the income must be received from a lawful source and secondly the receipt of such income must have been intimated in accordance with the provisions of law, rules or orders for the time being applicable to the public servant. In N. Ramakrishnaiah (Supra), while dealing with said expression, it was observed:- “…For the public servant, whatever return he gets of his service, will be the primary item of his income. Other income which can conceivably be income qua the public servant will be in the regular receipt from (1) his property, or (b) his investment.” The categories so enumerated are illustrative. Receipt by way of share in the partition of ancestral property or bequest under a will or advances from close relations would come within the expression “known sources of income” provided the second condition stands fulfilled that is to say, such receipts were duly intimated to the authorities as prescribed. 11. We have gone through Rules 14, 17 and 19 of the Rules. Rule 14 lays down that a government servant on occasions such as weddings, anniversaries or religious functions may accept gifts up to certain limit, if he makes a report of such fact to the Government within a period of one month. Sub Rules (4) and (5) provide inter alia, that in any other case, the government servant shall not accept any gift without the sanction of the Government and if the gift exceeds Rs. 2000, except through an account payee cheque. Rule 17 deals with investment, lending and borrowing and provides inter alia that Government Servant may give to, or accept from a relation or a personal friend, a purely temporary loan. Rule 19 lays down that the government servant must intimate the details of property inherited or acquired by the Govt. Servant. There is no absolute embargo or prohibition in the Rules and all that is required is sanction or permission from the Government. 12. In the instant case, every single amount received by the appellant has been proved on record through the testimony of the witnesses and is also supported by contemporaneous documents and intimations to the Government. It is not the case that the receipts so projected were bogus or was part of a calculated device. The fact that these amounts were actually received from the sources so named is not in dispute. Furthermore, these amounts are well reflected in the Income Tax Returns filed by the appellant. In similar circumstances, the acquisitions being reflected in Income Tax Returns weighed with this court in granting relief to the public servant. In M. Krishana Reddy Vs. State (1992(4) SCC 49). It was observed in Para 14 :- “…..Therefore, on the face of these unassailable documents i.e. the wealth tax and income tax returns, we hold that the appellant is entitled to have a deduction of Rs.56,240/- from the disproportionate assets of Rs.2,37,842/-.” Similarly in D.S.P Chennai Vs. K. Ibasagarain (2006 (1) SCC 420 ), the fact that the money was treated in the hands of the wife of the public servant and that she was assessed by the Income Tax Department was taken note of while accepting the explanation given by the public servant.13. If the amounts in question, which were duly intimated and are reflected in the Income Tax Return are thus deducted, the alleged disproportionate assets stand reduced to Rs. 37,605, which is less than 10 % of the income of the Appellant. In Krishnanand Vs. State of Madhya Pradesh (1977 (1) SCC 816 )and in M. Krishna Reddy (Supra), this court had granted benefit to the public servants in similar circumstances. We respectfully follow said decisions.14. In our view there is no violation of Section 13(1)(e) read with Section 13(2) of the Act.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]12. In the instant case, every single amount received by the appellant has been proved on record through the testimony of the witnesses and is also supported by contemporaneous documents and intimations to the Government. It is not the case that the receipts so projected were bogus or was part of a calculated device. The fact that these amounts were actually received from the sources so named is not in dispute. Furthermore, these amounts are well reflected in the Income Tax Returns filed by the appellant. In similar circumstances, the acquisitions being reflected in Income Tax Returns weighed with this court in granting relief to the public servant. In M. Krishana Reddy Vs. State (1992(4) SCC 49). It was observed in Para 14on the face of these unassailable documents i.e. the wealth tax and income tax returns, we hold that the appellant is entitled to have a deduction of Rs.56,240/from the disproportionate assets ofin D.S.P Chennai Vs. K. Ibasagarain (2006 (1) SCC 420 ), the fact that the money was treated in the hands of the wife of the public servant and that she was assessed by the Income Tax Department was taken note of while accepting the explanation given by the public servant.13. If the amounts in question, which were duly intimated and are reflected in the Income Tax Return are thus deducted, the alleged disproportionate assets stand reduced to Rs. 37,605, which is less than 10 % of the income of the Appellant. In Krishnanand Vs. State of Madhya Pradesh (1977 (1) SCC 816 )and in M. Krishna Reddy (Supra), this court had granted benefit to the public servants in similar circumstances. We respectfully follow said decisions.14. In our view there is no violation of Section 13(1)(e) read with Section 13(2) of the Act.