Gold jewellery within CBDT-prescribed limits cannot be treated as disproportionate assets in corruption cases.

In brief

The question

1. Whether the CBDT guidelines regarding the permissible limits of gold possession apply to criminal proceedings under the Prevention of Corruption Act

The court held

The court held that the gold was seized erroneously and calculated improperly as disproportionate assets.

It also directed

The High Court quashed the order of cognizance dated 28.01.2021 passed by the Special Judge, Vigilance, Patna, in Special Case No. 20 of 2015 as it applied to the petitioner. The application was allowed.

01Facts

The petitioner, a Child Development Project Officer (CDPO) in Patna, was initially trapped by the Vigilance Department in 2013 for allegedly taking a bribe (Vigilance P.S. Case No. 54 of 2013).

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During a subsequent search of her residence, authorities found documents showing investments and seized 646.400 grams of gold jewellery.

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Consequently, a Disproportionate Assets (DA) case was registered under Section 13(1)(e) of the Prevention of Corruption Act, concluding the petitioner held assets worth Rs. 12,71,693/- beyond her known sources of income.

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The petitioner challenged the cognizance order dated 28.01.2021, contending that the gold belonged to her, her unmarried daughter, and other family members, falling within permissible limits.

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02Issues

i.1. Whether the CBDT guidelines regarding the permissible limits of gold possession apply to criminal proceedings under the Prevention of Corruption Act

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ii.2. Whether the order of cognizance passed by the Special Judge, Vigilance, was sustainable given the quantity of gold seized

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03Law Applied

Prevention of Corruption Act, 1988, specifically Section 13(1)(e) regarding disproportionate assets and Section 13(2).

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Instruction No. 1916 dated 11.05.1994 and the Press Release by the Ministry of Finance (CBDT) dated 01.12.2016, which establish that a married woman is entitled to possess 500 grams of gold, an unmarried lady 250 grams, and a male 100 grams without need for proof of source.

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04Reasoning

While the prosecution argued that CBDT guidelines are exclusive to the Income Tax Department and inapplicable to corruption cases, the court found that the petitioner’s family structure—consisting of herself (a married woman) and an unmarried daughter at the time of the search—entitled them to a combined permissible limit of 750 grams of gold jewellery under the executive instructions.

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Since the total seized quantity (646.400 grams) was well within this 750-gram threshold, the court held that the Vigilance Department committed a fundamental error in its calculation of disproportionate assets.

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