Full Judgment Text
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CASE NO.:
Appeal (crl.) 773 of 2000
PETITIONER:
R. Janakiraman
RESPONDENT:
State of Tamil Nadu, through CBI, SPE, Madras
DATE OF JUDGMENT: 04/01/2006
BENCH:
S. B. Sinha & R. V. Raveendran
JUDGMENT:
J U D G M E N T
RAVEENDRAN, J.
This appeal is preferred against the judgment dated
21.01.2000 passed by the High Court of Madras dismissing Criminal
Appeal No. 127 of 1993 filed by the Appellant thereby confirming the
judgment dated 25.01.1993 passed by the Special Judge, Madurai in
Calendar Case No.2 of 1987, convicting and sentencing him under
section 5(1)(e) read with section 5(2) of the Prevention of Corruption
Act, 1947 (for short ’the Act’).
2. The case of prosecution, in brief, was as follows :-
2.1) The appellant joined the Southern Railway on 5.7.1958. He
was promoted as a Permanent Way Inspector and later as Assistant
Engineer on 28.5.1981. The appellant’s family consisted of himself,
his wife and two children. He had six brothers and three sisters and
had no ancestral properties.
2.2) On information received that the appellant was corrupt and
had amassed assets disproportionate to his income, R.C. No. 33 of
1986 was registered on 28.5.1986 by the Superintendent, Central
Bureau of Investigation, Madras. Chelladurai, Inspector CBI [PW-
23] took up the case for investigation and obtained a warrant for
inspection of the appellant’s house No. 16, North Colony, Railway
Quarters, Dindigul, from the Chief Judicial Magistrate, Chennai. On
29.5.1986, PW-23 along with his party and two independent
witnesses went to the house of the accused. Appellant was not
present but his son was present. The search was commenced at 8
A.M. The appellant came around 11.30 A.M. and his wife came
around 2.45 P.M. There were three steel almirahs kept in the house
of the appellant and on opening them with the keys provided by the
appellant, a sum of Rs. 2,94,615/- in cash was found in ten different
containers (biscuit tins, briefcases, etc.,) which was seized. Certain
documents were also seized.
2.3) As per the charge-sheet dated 18.5.1987, the check-period
was 1.5.1976 to 29.5.1986 and the value of the assets held by the
appellant at the beginning of the check period (1.5.1976) was
Rs.13,449/17; and the value of the total assets of the appellant at
the end of the check period (as on 29.5.1986) was Rs. 6,69,852/- as
under:-
(i)
Fixed deposits & NSCs
Rs.1,81,688.13
(ii)
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Credit balance in three S/B Accounts
Rs. 47,345.90
(iii)
Shares and sundry deposits
Rs. 2,085.00
(iv)
Household articles
Rs. 31,076.00
(v)
House at No.10, Swarnapuram, Salem
(with registration expenses of Rs.4302.79)
Rs.1,13,042.75
(vi)
Cash in hand (recovered during search)
Rs.2,94,615.00
Total
Rs.6,69,852.78
The total income earned by the appellant during the check period
was Rs.2,81,497.93 (salary, interest on FDs, interest on bank
balances, house-rent, house rent advance and housing loan) and the
total expenditure incurred for the family during that period was
Rs.88,645.92. Thus, the maximum likely savings during that period
was Rs.1,92,852.01. Thus, the value of total assets as on 29.5.1986
could not have exceeded Rs.192,852.01 (savings) plus Rs.13,449.17
(assets at the beginning of the check period) in all Rs.2,06,301.18.
By deducting the said amount of Rs. 2,06,301.18 from Rs.
6,69,852/-, the value of the assets acquired by the appellant beyond
his known sources of income was found to be Rs.4,63,551.60. Thus
the charge was that the appellant was in possession of assets of the
value of Rs.4,63,551/60 in excess of his known sources of income
which he could satisfactorily account and thereby he committed an
offence with section 5(1)(e) of the Act punishable under section
5(2).
3) The explanation offered by the appellant (as gathered from the
statement under Section 313 Cr.P.C., exhibited documents and
written arguments) was as follows :-
(i) Loans received from PW-11 and PW-15 = Rs. 2,50,000/-
(ii) Loans received from brothers and brothers-in-law = Rs. 40,000/-
(iii) TA received [not taken into account by PW-23] = Rs. 25,922/60
(iv) Bonus received [not taken into account by PW-23]= Rs. 8,000/-
(v) Excess evaluation by PW-23 of the House at Salem
[taken as Rs. 1,08,740/- as against the
actual cost of construction being Rs.80,000/-] = Rs. 28,740/-
(vi) Difference in value of assets as on 1.5.1976
[Rs.63,198.61 claimed by the appellant less
Rs.13,449.17 assessed by PW-23] = Rs. 49,749/44
(vii) Difference in income received during the
check period 1.5.1976 to 29.5.1986
(Rs.3,16,076.30 claimed by the appellant
and Rs.2,81,497.97 assessed by PW-23)
(Note:The said difference relates to
difference in receipt of interest on fixed deposits) = Rs. 34,578.37
---------------
Total = Rs.4,36,990.41
-----------------
The appellant submitted that the extent of assets beyond the known
sources of income was not, therefore, Rs.4,63,551/40 as charged,
but only Rs.26,561/-. The appellant contended that a margin of 10%
is permitted and as the unexplained assets were only to an extent of
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Rs.26,561/- which was less than even 10% of the total income, the
courts below committed an error in holding that the assets
possessed by the accused were disproportionate to his known
sources of income, so as to justify the raising of presumption under
Section 5(3).
4. The special court after considering the evidence came to the
conclusion that even if all other explanations and contentions of the
appellant were accepted, assets to an extent of Rs.3,05,985.39
remained unaccounted and unexplained. It accepted the claim of the
accused that the total of assets as on 29.5.1986 was
Rs.6,41,112.78. It also accepted his claim that the value of assets as
on 1.5.1976 was not Rs.13,449.17 but Rs.63,198.61 (in calculations,
wrongly taken as Rs.73,759/31 by the Special Court). It also
accepted certain other income which had not been taken into
account by PW-23, namely, Travelling Allowance (Rs.25,922.60),
bonus (Rs.8,000/-), interest on FDs (Rs.91,666.25 as against
Rs.57,583.91 considered by PW-23). It further accepted the claim of
the accused that the value of the Salem house was only Rs.80,000/-
(as against Rs.1,13,042.79 assessed by PW-23). It, however,
rejected the explanation relating to loans of Rs. 2,50,000/- allegedly
taken from PWs-11 & 15 and the borrowings aggregating to
Rs.40,000/- from relatives. It held that the prosecution had proved
that the appellant possessed assets in excess of all known sources of
income to an extent of Rs.3,05,985.39 and by raising the
presumption that such assets were procured by illegal means by
misusing his official powers and influence, found him guilty and
convicted him under section 5(1)(e) read with section 5(2) of the
Act. The appellant was sentenced to undergo imprisonment for one
year and pay a fine of Rs.1,000/- and, in default, to undergo
rigorous imprisonment for four months. The cash recovered
(Rs.2,94,615/-) was ordered to be confiscated.
5. Feeling aggrieved, the appellant filed an appeal before the
High Court [Crl. Appeal No. 127 of 1993]. By judgment dated
21.01.2000, the High Court confirmed the conviction and sentence
and dismissed the appeal. In fact, the High Court came to the
conclusion that the value of unaccounted assets was Rs. 4,13,802.16
and not Rs.3,05,985.39 as determined by the Special Court. It
accepted the contention of the appellant that the value of assets as
on 1.5.1976 (beginning of check period) was Rs.63,198.61 and not
Rs.13,449.17. It, however, rejected the appellant’s claim for certain
additions to the income (which had been accepted by the trial court),
namely, Rs.25,922.60 (travelling allowance), Rs.8,000/- (bonus),
Rs.34,083/- (being part interest on fixed deposits, that is by taking
the interest earned as only Rs.57,583.91 instead of Rs.91,666.25
claimed by the appellant) and Rs.511/- (S.B. Account interest). It
did not accept his contention that the value of the Salem house was
only Rs.80,000/- and took it as Rs.1,13,042/-, thereby increasing
the assets by an extent of Rs.28,740/-. Consequently, out of
Rs.6,69,852.78 (value of assets as on 29.5.1986), the High Court
deducted Rs.63,198.61 (being the value of assets at the beginning of
check period as claimed by the appellant) and Rs.1,92,852.01
(surplus of income over expenditure during the check period as
determined by it) and concluded that assets of the value of
Rs.413,802.16 remained unexplained.
6. The said decision is challenged in this appeal by special leave.
The learned counsel for the appellant contended that the High Court
committed a serious error in over-estimating the cost of the Salem
house and by refusing to take note of the following five items of
income during the check period :-
(i) Rs.2,50,000.00 Loans received from PW-11 and PW-15
(ii) Rs. 40,000.00 Loans received from brothers and brother-
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in-law
(iii) Rs. 34,578.37 Interest on deposits (part)
(iv) Rs. 22,922.60 Travelling allowance received by appellant
(v) Rs. 8,000.00 Bonus received by appellant
-----------------
Rs.3,55,500.97
Rs. 28,740.00 (Excess in the valuation of Salem House taken
as Rs.1,08,740/- instead of Rs.80,000/-)
-----------------
Rs.3,84,240.97
-----------------
The appellant contended that if these amounts had been taken into
account by the High Court, it would have found that the unexplained
assets or income over expenditure was only Rs.29,561/-, well within
the 10% margin recognized and permitted by this Court. (Reference
may be made to Krishnanand Agnihotri vs State of MP - AIR
1977 SC 796 \026 wherein this Court held where the value of
unexplained portion is less than 10% of the total income, it would
not be proper to hold that the assets found in the possession of the
accused were disproportionate to his known sources of income, so as
to justify the raising of the presumption under Section 5(3) of the
Act).The learned counsel for the appellant further submitted that the
findings in favour of the accused cannot be altered in appeal by the
accused against conviction. He pointed out that the trial court had
accepted his claim for additions to income of Rs.22,922.60 (TA),
Rs.8,000/- (Bonus) and Rs.34,578.37 (interest on deposits) and also
reduction in the total value of assets by Rs.28,740/- (in all
aggregating to Rs.94,240/97) and these could not have been
reversed by the High Court in an appeal by the accused.
7. After the matter was argued for some time, learned counsel on
both sides agreed that the entire matter boiled down to the
acceptance of the genuineness of the alleged loan of Rs.2,50,000/-
from PW-11 and PW-15. They agreed that even if the claims of the
appellant relating to Travelling Allowance [Rs.22,922.60/-], Bonus
[Rs.8,000/-], difference in interest on FDs [Rs.34,578.37], and
difference in valuation of the house [Rs. 28,740/-] are accepted, the
appeal will fail if the alleged loan of Rs. 2,50,000/- was not accepted.
If the explanation for Rs.2,50,000/- which is the major chunk of the
unexplained excess (being part of Rs. 2,94,615/- found in cash in
appellant’s house) is not accepted, there may be no need to examine
the correctness of the other items. We will, therefore, first deal with
the alleged loan of Rs. 2,50,000/-.
8. The appellant’s case is that he had taken a loan of
Rs.1,25,000/- from PW-11 and another sum of Rs.1,25,000/- from
PW-15 on 24.5.1986 (five days before the search) and the same
was evident from the promissory notes [Ex. P-64 & P-65], guarantee
letters [Ex.P-66 & P-67], confidential letter [Ex.P-68], equitable
mortgage deed [Ex.P-69] and the entries in the account books of
PW-11 and PW-15 [Ex.P-70 to P-81]. He submits that the said
documentary evidence proved beyond doubt that he had received
Rs.2,50,000/- as loan from PW-11 and PW-15.
9. We may briefly refer to the evidence of PW-11 and PW-15 who
were the alleged creditors.
9.1) Chandiram (PW-11) stated that he was carrying on money-
lending business at Salem in partnership with his mother and three
brothers, from the year 1984 under the name and style of ’Pahlaprai
Sons’; that Satram Das (PW-15) was his paternal uncle and he was
also doing money lending business under the name and style of
’Satramdas Mahesh Kumar’; that whenever money was to be lent, he
was taking a promissory note, guarantee letter, confidential form
etc. from the borrower; and that he maintained a promissory note
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book, day book, cash book wherein the transactions were entered by
one Kattanmal, the common Accountant for himself and PW-15. He
further stated that he was a friend and acquaintance of Kasinathan
and Ramchandran (brothers of appellant) as he used to play tennis
with them for about 15 years; that he knew the appellant and his
another brother Narayanaswamy through Kasinathan and
Ramchandran; that on 30.5.1986, the appellant’s three brothers
came to his office and asked him and PW-15 for a loan of Rs. 2 to
Rs.3 lakhs, stating that the loan was required by their brother
Janakiraman (appellant) in connection with the purchase of a house
at Coimbatore; that he and PW-15 stated that they could not lend
such a big amount; that appellant’s brothers stated that if they (PW-
11 & PW-15) were not able to lend such amount, they may at least
make an ’adjustment entry’ in their account books by showing that a
loan was given on 24.5.1986; that when PW-11 and PW-15 stated
that they had not done such a thing before, the appellant’s brothers
stated that they had come to them with faith and hope and offered
to pay a commission of three to four thousand rupees for merely
making an entry that the said amount was advanced by them to
appellant.
9.2) PW-11 further stated that when he asked them why they
wanted such a specific entry for such amount as on 24.5.1986, they
stated that appellant had already paid such amount as advance to
buy a house at Coimbatore and therefore, they wanted such an entry
to show that the said amount was borrowed by the appellant; that as
they went on pleading, finally PW-11 and PW-15 agreed to help
them; that PW-15 prepared two promissory notes for Rs.1,25,000/-
each showing the dates as 24.5.1986, though the said promissory
notes (Ex. P-64 & P-65 ) were, however, actually written on
30.5.1986. One promissory note [Ex. P-64] was executed in favour
of M/s. Satramdas Mahesh Kumar. The other promissory note (Ex. P-
65) was executed in favour of Pahlaprai Sons [partnership firm of
PW-11]. Two guarantee letters were also filled up by Kasinathan [Ex.
P-66 and P-67]; one in favour of M/s. Satramdas Mahesh Kumar and
the other in favour of Pahlaprai Sons. One confidential form [Ex. P-
68] was filled up by Kasinathan. Narayanaswamy signed both
promissory notes and the ’confidential form’. All the three brothers of
appellant signed the guarantee letters. To create a document to
show that the appellant’s house at Salem was also given as security
by way of equitable mortgage for such loan, appellant’s brother
Ramachandran along with PW-11’s clerk went to a stamp vendor to
obtain an ante-dated stamp paper with the date of 23.5.1986 in the
name of the appellant. Thereafter, the appropriate entries were
made in the pronote entry book and in the respective day book and
cash book, showing Rs.1,25,000/- was advanced by the firm of PW-
11 and another Rs.1,25,000/- by the firm of PW-15. After the
entries were made, the three brothers of the appellant took the
promissory notes, guarantee letters, confidential form, equitable
mortgage document stating that they will get the signatures of the
appellant and later brought back those documents and delivered
them on 1.6.1986 with the signatures of the appellant. Along with
the said loan documents, they also gave two alleged ’title deeds’,
that is, a certificate showing the ownership of the appellant in regard
to the house at Salem [Ex. P-82] and two electricity bills [Ex. P-83
series]. PW-11 stated that the aforesaid documents were created to
make the lending transaction to appear genuine even though no
money was advanced.
9.3) PW-11 also stated that only on 19th & 20th June, 1986, when
CBI raided his office and house and seized the said documents [Ex.
P-64 to P-83], he and PW-15 came to know about CBI discovering
cash of about Rs.3 lakhs in appellant’s house on 29.5.1986 and
learnt they were cheated by making them agree to show ’adjustment
entries’ to create evidence of borrowing by the appellant to explain
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away the huge cash. He also stated that his statement (Ex. P-91)
was recorded by one Ramalingam, Assistant Director, Intelligence
Wing of Income Tax Department, Chennai. Subsequently on
01.8.1986, PW-11 and PW-15 were arrested and released on
personal bonds. They consulted their lawyer in regard to these
transactions and he suggested that they should disclose the real
facts relating to the transactions before a Magistrate at Chennai.
Accordingly, they applied to the Metropolitan Magistrate, Saidapet,
Chennai, to record their statements and they were asked to appear
before Saidapet Metropolitan Magistrate No. IV on 11.8.1986. They
appeared on that date before the said Magistrate and the Magistrate
asked PW-11 whether he was willing to give a voluntary statement
and also informed him to think over before giving such statement as
such statements might be used against him and gave a day’s time to
him about it. That next day, he appeared before the Magistrate and
Magistrate again gave him a warning and asked whether he was
willing to give a voluntary statement. When he reiterated his desire,
the Magistrate recorded his statement under section 164 Cr.P.C. (Ex.
P-93). Thereafter, he was asked to appear before C.B.I. Inspector
who also recorded his statement. He also stated that he received
summons from C.J.M., Coimbatore on 14.5.1987 and he appeared on
that day and confirmed his statement and the CJM granted pardon.
9.4) PW-11 admitted in the cross-examination that merely for
money or friendship, they would not normally make false entries;
that he had sufficient cash balance on 24.5.1986 to advance
Rs.1,25,000/- and that even in his uncle’s accounts, there was
sufficient cash balance to advance Rs.1,25,000/-; that normally the
execution of promissory notes and lending of the amount was
simultaneous; that there was nothing to show that the entries shown
as relating to the lending were really made on 30.5.1986 and not on
24.5.1986. He also stated that though appellant’s brothers agreed to
give commission to him and PW-15, actually no commission was
given to either of them. He also denied that he and PW-15 offered to
give statements under section 164 Cr.P.C. before the Magistrate at
Chennai only under pressure from the CBI. He admitted that the CBI
did not examine them until they gave the statements under section
164 Cr.P.C.
9.5) To the similar effect is the evidence of PW-15 [J. Chatram
Doss]. His sworn statement under section 131 of Income Tax Act
recorded by PW-14 is Ex.P-92 and his statement under section 164
Cr.P.C. recorded by the Addl. Metropolitan Magistrate, Chennai is
Ex.P-96.
10) The evidence of PW-11 and PW-15 are clear and categorical
that Rs.2,50,000/- was not advanced to appellant on 24.5.1986 or
any other date and that documents (Ex.P-64 to P-69) and the entries
(Ex.P-70 to P-81) were created only on 30.5.1986 to help appellant
to explain the huge cash found in his possession. Nothing has been
elicited in the cross-examination to disbelieve their evidence. The
learned counsel for the appellant, however, referred to the following
factors and contended that the evidence of PW-11 and PW-15 that
they had not lent any amount to appellant, should be rejected as not
trustworthy in view of the following:-
i) Such evidence being contrary to the very documents
executed in favour of PW-11 and PW-15 (Ex.P-64 to P-
69) and the entries made in the books of PW-11 and PW-
15 (Ex.P-70 to P-81), should be excluded having regard
to section 92 of the Evidence Act, 1872.
ii) The documents executed by the appellant [Ex.P-64 to P-
69] showed that they were all executed on 24.5.1986
and that Rs.2,50,000/- in all was advanced by PW-11
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and PW-15 to appellant on 24.5.1986. The entries in the
account books of PW-11 and PW-15 (Ex.P-70 to P-81))
also demonstrated this position. Further, a deed creating
mortgage by depositing of title deed was also executed
on 24.5.1986 (Ex.P-69) on a stamp paper purchased in
the name of appellant on 23.5.1986 and this clearly
showed that there was a lending transaction on
24.5.1986 itself. PW-11 had also specifically admitted
that neither he nor PW-15 will make any adjustment
entries only for the sake of money or friendship.
iii) PW-11 and PW-15 have made false statements under
Section 164 Cr.P.C. to support the prosecution case at
the instance of CBI who apparently applied threats
through the officer of the Income Tax Department (PW-
14). As PW-11 and PW-15 were residents of Salem,
there was absolutely no need for them to go over to
Chennai to make the statement under section 164
Cr.P.C. before the Magistrate. The fact that they were
made at Chennai shows that it was done at the instance
of CBI whose main office was situated at Chennai.
iv) PW-11 and PW-15 were granted pardon in view of the
statements made under section 164 Cr.P.C. and such
statements by co-accused/accomplices cannot be relied
upon to hold the appellant guilty.
11. The contention that evidence of PW-11 and PW-15 are contrary
to the documentary evidence [Ex.P-64 to P-81] and therefore,
should be excluded under section 92 of Evidence Act, 1872 is not
tenable.
11.1) In Tyagaraja Mudaliyar vs. Vedathani [AIR 1939 PC 70],
the Privy Council observed that oral evidence is admissible to show
that a document executed by a person was never intended to
operate as an agreement, but was brought into existence solely for
the purpose of creating evidence about some other matter.
11.2) In Krishna Bai vs. Appasaheb [AIR 1979 SC 1880], this
Court observed : "..........when there is a dispute in regard to the
true character of a writing, evidence de hors the document can be
led to show that the writing was not the real nature of the
transaction, but was only an illusory, fictitious and colourable device
which cloaked something else, and that the apparent state of affairs
was not the real state of affairs."
11.3) We may next refer to the following observations in
Gangabai vs. Chhabubai [1982 (1) SCC 4] interpreting section
92:-
"11..............Section 91 of the Evidence Act provides that when
the terms of a contract, or of a grant, or of any other
disposition of property, have been reduced to the form of a
document, and in all cases in which any matter is required by
law to be reduced to the form of a document, no evidence shall
be given in proof of the terms of such contract, grant or other
disposition of property, or of such matter, except the document
itself, Sub-section (1) of Section 92 declares that when the
terms of any contract, grant or other disposition of property, or
any matter required by law to be reduced to the form of a
document, have been proved according to the last section, no
evidence of any oral agreement or statement shall be admitted,
as between the parties to any such instrument or their
representatives in interest, for the purpose of contradicting,
varying, adding to, or subtracting from, its terms. And the first
proviso to Section 92 says that any fact may be proved which
would invalidate any document, or which would entitle any
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person to any decree or order relating thereto; such as fraud,
intimidation, illegality, want of due execution, want of capacity
in any contracting party, want or failure of consideration, or
mistake in fact or law. It is clear to us that the bar imposed
by sub-section (1) of Section 92 applies only when a
party seeks to rely upon the document embodying the
terms of the transaction. In that event, the law declares that
the nature and intent of the transaction must be gathered from
the terms of the document itself and no evidence of any oral
agreement or statement can be admitted as between the
parties to such document for the purpose of contradicting or
modifying its terms. The sub-section is not attracted when
the case of a party is that the transaction recorded in the
document was never intended to be acted upon at all
between the parties and that the document is a sham.
Such a question arises when the party asserts that there was a
different transaction altogether and what is recorded in the
document was intended to be of no consequence whatever. For
that purpose oral evidence is admissible to show that the
document executed was never intended to operate as an
agreement but that some other agreement altogether,
not recorded in the document, was entered into between
the parties." (emphasis supplied)
11.4) The above view was reiterated in Ishwar Dass Jain vs.
Sohan Lal [2000 (1) SCC 434] and it was held that the bar under
section 92(1) would arise only when the document is relied upon,
but, at the same time, its terms are sought to be varied and
contradicted.
11.5) In Parvinder Singh vs. Renu Gautam [2004 (4) SCC 794],
this Court observed :-
"The rule as to exclusion of oral by documentary evidence
governs the parties to the deed in writing. A stranger to the
document is not bound by the terms of the document and is,
therefore, not excluded from demonstrating the untrue or
collusive nature of the document or the fraudulent or illegal
purpose for which it was brought into being. An enquiry into
reality of transaction is not excluded merely by availability of
writing reciting the transaction.
11.6) We may cull out the principles relating to section 92 of the
Evidence Act, thus :-
i) Section 92 is supplementary to section 91 and corollary
to the rule contained in section 91.
ii) The rule contained in section 92 will apply only to the
parties to the instrument or their successors-in-interest.
Strangers to the contract (which would include the
prosecution in a criminal proceeding) are not barred from
establishing a contemporaneous oral agreement
contradicting or varying the terms of the instrument. On
the other hand, section 91 may apply to strangers also.
iii) The bar under section 92 would apply when a party to
the instrument, relying on the instrument, seeks to
prove that the terms of the transaction covered by the
instrument are different from what is contained in the
instrument. It will not apply where anyone, including a
party to the instrument, seeks to establish that the
transaction itself is different from what it purports to be.
To put it differently, the bar is to oral evidence to
disprove the terms of a contract, and not to disprove the
contract itself, or to prove that the document was not
intended to be acted upon and that intention was totally
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different.
Applying the aforesaid principles, it is clear that the bar with section
92 will apply to a proceeding inter-parties to a document and not to
a criminal proceeding, where the prosecution is trying to prove that
a particular document or set of documents are fictitious documents
created to offer an explanation for disproportionate wealth. Oral
evidence can always be led to show that a transaction under a
particular document or set of documents is sham or fictitious or
nominal, not intended to be acted upon.
12. The contention that a statement under Section 164 Cr.P.C. of
an accomplice/co-accused cannot be used as evidence against an
accused, on the facts of this case, is rather misleading. It is no doubt
well-settled that in dealing with a case against an accused person,
the Court cannot start with the confession of a co-accused and it
must begin with other evidence adduced by the prosecution and
after it has formed its opinion with regard to the quality and effect of
such evidence, it is permissible to turn to the confession in order to
lend support or assurance to the conclusion of guilt which the court
is about to reach on the other evidence, vide Haricharan vs. State
of Bihar [1964 (6) SCR 623] and Dagdu & Ors. Vs. State of
Maharastra [1977 (3) SCC 68]. But in this case, the statements
made by PW-11 & PW-15 before the Magistrate at Chennai are not
the only evidence on which reliance is placed. It is used more as a
corroboration. We may also note that PW-11 and PW-15 were not
’co-accused’ or ’accomplices’ or ’abettors’ of the appellant in regard
to the charge of disproportionate assets. They came into the picture,
only after appellant’s house was raided, in an effort by the appellant
to explain the cash found to an extent of Rs. 2,50,000/-.
13. The contention that Ex.P-64 to P-69 and the entries in account
books (Ex.P-70 to P-81) bear the date 24.5.1986 and therefore, they
cannot be relied upon to show that the documents were executed
and entries were made on 30.5.1986 is untenable. PW-11 and PW-
15 clearly and categorically explained the circumstances in which
those documents came into existence on 30.5.1986. Several
circumstances probabilise their statements. We may refer to them
briefly :-
i) There is no evidence to show that the appellant was
negotiating for purchase of any property at Coimbatore or that
he wanted money for purchase of such property. Neither the
particulars of such property at Coimbatore nor the terms of
such sale have been disclosed.
ii) The stamp paper on which the alleged mortgage by deposit of
title deeds (Ex. P-69) is of the value of Rs.7/-. It shows that
stamp paper was sold to appellant on 23.5.1986. The case of
the appellant is that the said stamp paper was purchased at
Salem on 23.5.1986. But the stamp paper shows that it was
sold by stamp vendor named P.K. Nagaraja Rao at Karur,
which is a town far away from Salem where PW-11 and PW-15
carried on their business, and far away from Dindigul where
appellant was residing. It is unimaginable that a person
residing in Dindigul and proposing to borrow an amount from
persons carrying on business at Salem would go to Karur to
purchase a stamp paper of Rs.7/-. On the other hand, it fully
supports the evidence of PW-11 that the appellant’s brothers
wanted an ante-dated stamp paper on 30.5.1986 and PW-11
sent his clerk along with the appellant’s brothers to the Bazar
to procure such ante-dated stamp paper from some stamp
vendor at Salem who apparently kept a stock of such stamp
papers illegally and sold them.
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iii) The creation of an equitable mortgage by depositing
documents other than title deeds is not valid or permissible.
We extract below the contents of Ex.P-69 :-
"On this day, 24th of May, 1986, I have deposited with
you on 23.5.1986, the undermentioned title deeds
belonging to my property namely (1) one plot with
terraced house \026 site bearing (S. No. 8/3) Plot No.10, in
Swarnapuri Extention, Salem - 636 004, with intent by it
in respect of the amount due to you under the pronote
executed by me on for Rs.2,50,000/- with interest at
24% per annum thereon.
Equitable mortgage in favour of M/s Satramdas Mahesh
Kumar and M/s Pahlaprai Sons, 43-D, First Agaharam,
Salem.
(R. Janakiraman)
Signature
Details of title deeds handed over for the purpose of
equitable mortgage above said :
Copy of the sale deed in my favour dated ................
Copy of the loan sanction from the Railway Board.
Copy of the sale deed given because original is with
Railways.
Dated : 24.5.1986 at Salem (R. Janakiraman)
Signature
’Sd : Narayana Swamy’
Equitable mortgage is created by depositing the original title deeds.
But in this case, the original title deeds are not deposited. Not even
the two documents referred in Ex. P-69 are deposited. What are
deposited (Ex. P-82 and P-83) were not title deeds but only a
certificate issued by the Swarnapuri Cooperative House Building
Society Ltd., dated 1.2.1984 certifying the appellant is owner of Plot
No. 10, Swarnapuri Extension (Ex.P-82) and two receipts issued by
Tamil Nadu Electricity Board showing that the appellant had paid
some electricity charges (Ex.P-83). PW-11 and PW-15 being
experienced money-lenders, if really were lending Rs.2,50,000/-,
would have certainly insisted upon original title deeds or at least the
documents mentioned in Ex.P-69 being deposited. This shows that
the equitable mortgage was also a ’make-believe’ and not real.
14. The recovery of Rs.2,94,115/- in cash from the steel almirahs
of the appellant is not disputed. The appellant does not disown the
amount but admits that it belongs to him. His explanation as to how
he obtained the said money is clearly unacceptable. The persons
from whom he allegedly borrowed the said money, Rs.2,50,000/-,
have denied having lent the said amount. We, therefore, find no
error in the concurrent findings of the trial court and the High Court
that the appellant had not borrowed the said amount from PW-11
and PW-15 and that the same was part of the ill-gotten money
acquired as illegal gratification.
15. The appellant having failed to satisfactorily account for the
assets beyond his known sources of income to the said extent of
Rs.2,50,000/-, is guilty of an offence under section 5(1)(e) of the
Act. In view of our said finding, it is really unnecessary to examine
the other disputed amounts namely alleged loan from brothers and
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brothers-in-law (Rs.40,000/-), travelling allowance [Rs. 22,922/60],
bonus [Rs.8,000/-], difference in interest on fixed deposits
[Rs.34,578/37]; and difference in cost of construction (Rs.28,740/-).
We may, however, refer to two other questions on which arguments
were advanced by the learned counsel for the appellant.
16. The first relates to his argument that finding in his favour
recorded by the Trial Judge cannot be altered to his detriment, in
his appeal against conviction. He referred to four items (travelling
allowance, bonus, difference in interest on Fixed Deposits and
difference in cost in valuation of the house) on which the High Court
had reversed the findings of the Special Judge in his favour.
Reliance is placed on the decision of this Court in the State of
Andhra Pradesh vs. Thadi Narayana [1962 (2) SCR 904].
16.1) We will refer to the facts as also the principles laid down in
Thadi Narayana (supra) to show that they are inapplicable to the
case in hand. In that case, the accused was tried for offences under
sections 302 and 392 Indian Penal Code. The Sessions Judge
acquitted the accused under sections 302 and 392 IPC but convicted
her under section 411 IPC. The accused appealed to the High Court
against the conviction under section 411 IPC. The State did not
appeal against the acquittal in respect of the charges under sections
302 and 392 IPC. The High Court while setting aside the order of
conviction under section 411 IPC also set aside the order of
acquittal under sections 302 and 392 IPC and ordered a retrial on
the original charges. This Court held that while exercising power
under section 423(1)(b) of the old Code of Criminal Procedure
[corresponding to section 386(b) of the new Code] in an appeal
against conviction, the High Court had no jurisdiction to set aside
the order of acquittal passed in favour of the accused by the
Sessions Judge (in respect of the offences under sections 302 and
392 IPC). It was pointed out that as section 423(1)(b) of Cr.P.C.
was confined to appeals against the orders of conviction and
sentence, what falls for decision in such appeals is only the
conviction and sentence and matters incidental thereto; and if the
order of acquittal is not challenged in an appeal and if the High
Court does not take action in exercise of its powers of revision, the
order of acquittal becomes final and cannot be challenged indirectly
in an appeal by the accused against the order of conviction and
sentence. It was held :-
In a case where several offences are charged against an
accused person the trial is no doubt one; but where the
accused person is acquitted of some offences and convicted of
others the character of the appellate proceedings and their
scope and extent is necessarily determined by the nature of the
appeal preferred before the Appellate Court. If an appeal is
preferred against an order of acquittal by the State and no
appeal is filed by the convicted person against his conviction it
is only the order of acquittal which falls to be considered by the
Appellate Court and not the order of conviction. Similarly, if an
order of conviction is challenged by the convicted person but
the order of acquittal is not challenged by the State, then it is
only the order of conviction that falls to be considered by the
Appellate Court and not the order of acquittal. Therefore the
assumption that the whole case is before the High Court when
it entertains an appeal against conviction is not well-founded
and as such it cannot be pressed into service in construing the
expression "alter the finding".
It was further held that the expression ’alter the finding’ in section
423(1)(b)(2) [corresponding to section 386 (b) (ii) of the new
Code] has only one meaning, and that is alter the finding of
conviction and not the finding of acquittal. This Court then
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proceeded to consider the question as to what are the kinds of
cases in which the power to ’alter the finding’ can be exercised,
thus: -
"The answer to this question is furnished by the provisions of s.
236, 237 and 238. Section 236 deals with cases where it is
doubtful what offence has been committed, Sec. 237 with cases
where a person may be charged with one offence and yet he
can be convicted of another, and s. 238 with cases where the
offence proved includes the offence charged and another
offence not so charged. Where a person is charged with a
major offence, such as for instance under s. 407 of the Indian
Penal Code, he may be convicted either of that offence or of a
minor offence, as for instance under s. 406. That is the result
of s. 238 of the Code. Now, if a trial court charges, and
convicts an accused person of, an offence under s. 407 and
sentences him the Appellate Court may alter the finding of guilt
of the accused from s. 407 to s. 406 and in that case it may
retain the same sentence or reduce it. It is, however, clear that
in exercising the power conferred by s. 423(1)(b)(2) the
sentence imposed on an accused person cannot be enhanced,
and that may mean that the conviction of a minor offence may
not be altered into that of a major offence. In our opinion,
therefore, the power conferred by s. 423(1)(b)(1) is intended
to be exercised in cases falling under ss. 236 to 238 of the
Code. We would accordingly hold that the power conferred by
the expression "alter the finding" does not include the power to
alter or modify the finding of acquittal. The finding specified in
the context means the finding as to conviction, and the power
to alter the finding can be exercised in cases like those which
we have just indicated."
16.2) The facts of this case are completely different. The Special
Judge convicted and sentenced the appellant under section 5(1)(e)
read with section 5(2) of the Act. In an appeal by the accused
against the said conviction and sentence, the High Court neither
modified the finding of guilt under Section 5(1)(e) nor the sentence
under Section 5(2). All that it has done is while affirming the finding
of guilt recorded by the Special Judge in regard to the
disproportionate wealth, to recalculate the exact amount of
disproportionate wealth with reference to the evidence, which is
permissible under section 386(b)(ii) which provides that the
appellate court may, in an appeal from a conviction, alter the
finding, maintaining the sentence. If an appellate court may alter
the finding of guilt of the accused from one section to another, while
maintaining the sentence, we see no reason why the extent of the
offence should not be changed in an appeal against conviction. We
are, therefore, of the view that the High Court did not exceed its
jurisdiction in exercising the power of appeal under section 386 IPC.
17. The second question is in regard to the claim of the appellant
that travelling allowance should be treated as income. The appellant
submitted that he had received, in all, a sum of Rs.22,922.60 as
travelling allowance during the check period and the said amount
should be taken under the head of receipt/income during that
period. This Court in C.S.D. Swami v. The State [AIR 1960 SC 7]
has held that prosecution would not be justified in concluding that
travelling allowance was also a source of income (for the purpose of
ascertaining the income from known sources during the check
period) as such allowance is ordinarily meant to compensate the
officer concerned for his out-of pocket expenses incidental to the
journeys performed by him for his official tour/s. As traveling
allowance is not a source of income to the Government servant but
only a compensation to meet his expenses, the prosecution while
calculating the sources of income during the check period, need not
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take it into account as income. However, it is open to the
Government servant to let in evidence to show that he had in fact
saved something out of the travelling allowance. It is for the court
then to accept or not whether there was such actual saving. But the
question of automatically considering the entire travelling allowance
as a source of income does not arise. In this case, as the appellant
did not lead any specific evidence to show that he had made any
savings from out of the travelling allowance, the claim for inclusion
of TA in income, is untenable.
18. The appeal has no merit and is, accordingly, dismissed.