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1959 Supreme(SC) 133

SUPREME COURT OF INDIA
B.P. SINHA, P.B. GAJENDRAGADKAR AND K.N. WANCHOO JJ.
C. S. D. Swami, Appellant
Versus
The State, Respondent.
Criminal Appeal No. 177 of 1957.
Advocates appeared
Mr. G. S. Pathak, Senior Advocate, (Mr. R. Ganapathy Iyer, Advocate and Mr. G. Gopalakrishnan, Advocate of M/s. Gagrat and Co. with him), for Appellant; Mr. C. K. Daphtary, Solicitor-General of India, M/s. G. C. Mathur and R. H. Dhebar, Advocates, with him), for Respondent.

Advocates:
C.K.DAFTARY, E.GANAPATHY IYER, G.C.MATHUR, G.GOPALAKRISHNAN, G.S.PATHAK, R.H.Dhebar

The presumption under S. 5(3) of the Prevention of Corruption Act shifts the burden of proof to the accused to prove that he is not guilty of criminal misconduct.

Headnote:

PREVENTION OF CORRUPTION ACT - S. 5(3) - PRESUMPTION OF GUILT - BURDEN OF PROOF - SATISFACTORILY ACCOUNTING FOR PECUNIARY RESOURCES DISPROPORTIONATE TO KNOWN SOURCES OF INCOME.

Fact of the Case:

The appellant, a former employee of Imperial Chemical Industries, was working as Director of Fertilizers in the Ministry of Agriculture. He was accused of accepting bribes from various firms in connection with the import of fertilizers. The prosecution alleged that the appellant had been habitually accepting or obtaining, for himself or for others, illegal gratifications from a number of named firms and others, in connection with the import and distribution of fertilizers, and that he had been habitually receiving presents of various kinds by abusing his position as a public servant.

Finding of the Court:

The High Court found that the evidence of the prosecution witnesses was unreliable and that the case of payment of particular sums of money by way of bribes had not been established. However, the High Court relied on the presumption under S. 5(3) of the Prevention of Corruption Act and found that the appellant had not satisfactorily accounted for the receipt of large sums of money in cash and by cheques during the years 1947 and 1948, which sums were wholly disproportionate to his known source of income, namely, his salary as a Government servant. The High Court, therefore, confirmed the conviction and sentence of six months' rigorous imprisonment passed by the trial court.

Issues: 1. Whether the appellant had satisfactorily accounted for the receipt of large sums of money in cash and by cheques during the years 1947 and 1948, which sums were wholly disproportionate to his known source of income? 2. Whether the presumption under S. 5(3) of the Prevention of Corruption Act shifts the burden of proof to the accused to prove that he is not guilty of criminal misconduct?

Ratio Decidendi: 1. The burden of proof lies on the accused to satisfactorily account for the possession of pecuniary resources or property disproportionate to his known sources of income. 2. The presumption under S. 5(3) of the Prevention of Corruption Act is a legal presumption to be drawn from the proof of facts in the earlier part of the sub-section. Once the requirements of the earlier part of sub-s. (3) of S. 5 have been fulfilled, the court is called upon to make the presumption that the accused person is guilty of criminal misconduct within the meaning of S. 5(1)(d).

Final Decision: The appeal was dismissed and the conviction and sentence of six months' rigorous imprisonment was upheld.

Judgment

SINHA, J. : This appeal by special leave is directed against the judgment and order of the High Court of Judicature for the State of Punjab at Chandigarh, dated April 11, 1957, affirming those of the Special Judge, Delhi, dated January 19, 1955, convicting the appellant under S. 5(2) of the Prevention of Corruption Act (2 of 1947). The sentence passed upon the appellant was six months rigorous imprisonment.

2. The facts leading up to this appeal, may shortly be stated as follows: During and after the Second World War, with a view to augmenting the food resources of the country, the Government of India instituted a "Grow More food Division" in the Ministry of Agriculture. S. Y. Krishnaswamy, a Joint Secretary in that Ministry, was placed in charge of that Division, with effect from January 2, 1947. The appellant was working in that Department as Director of Fertilizers. He was a former employee of the well-known producers of fertilizers, etc., called "Imperial Chemical Industries." Fertilizers were in short supply and, therefore, large quantities of such fertilizers had to be imported from abroad. As chemical fertilizers were in short supply not only in India but elsewhere also, an international body known as the "International Emergency Food Council" (I.E.F.C.) had been set up in United States of America, and India was a member of the same. That body used of consider the requirements of different countries in respect of fertilizers, and used to make allotments. Russia was not a member of that organization. Towards the end of 1946, a Bombay firm, called Messrs. Nanavati and Company , which used to deal in fertilizers and had business contacts with Russia, offered to supply ammonium sulphate from Russia to the Government of India. In the years 1947 and 1948, considerable quantities of ammonium sulphate were obtained through Messrs. Nanavati and Company aforesaid. One D. N. Patel, who was a former employee of Messrs. Nanavati and Company, joined a partnership business under the style of Messrs, Agri. Orient Industries Limited of Bombay . This firm obtained a contract from the Government for the supply of twenty thousand tons of ammonium sulphate from United States of America, in February, 1950. In the course of this business deal, the said Patel experienced some difficulty in obtaining Government orders regarding some consignments. The appellant was approached in that connection, and it is alleged that Patel paid to the appellant Rs. 10,000 at Bombay as bribe for facilitating matters. But in spite of the alleged payment, difficulties and delays occurred and the consignments, even after they had reached their destination in India, were not moving fast enough, thus, causing considerable loss to the firm in which Patel was interested. Patel, therefore, approached Shri K. M. Munshi who was then the Minister for Food and Agriculture in Delhi, and disclosed to him the alleged payment of bribe of Rs. 10,000 as also the fact that the appellant had been receiving large sums of money by way of bribes for showing favours in the discharge of his duties in the Department. The Minister aforesaid directed thorough enquiries to be made, and the matter was placed in the hands of the Inspector-General of Special Police Establishment. A departmental committee was also set up of three senior officers of the Department to hold a departmental inquiry, and ultimately, as a result of that inquiry, the Minister passed orders of dismissal of the appellant, in August, 1950. A further inquiry in the nature of a quasi-judicial inquiry, was held by the late Mr. Justice Rajadhyaksha of the Bombay High Court, in 1951. The inquiry related to matters concerned with the import of fertilizers into India. After receipt of the report of the inquiry by the late Mr. Justice Rajadhyaksha, in January, 1952, and after the consideration of the matters disclosed in that report, a first information report was lodged on April 4, 1952, and through investigations were









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