IMPORTANT POINT
The burden of proof in establishing benami ownership and the admissibility of evidence in proving disproportionate assets were the central legal points established in the judgment.

JUDGMENT :

K. SURENDER, J.

1. The appellant is questioning his conviction for the offence under Section 13(1)(e) of Prevention of Corruption Act, 1988 and sentenced to rigorous imprisonment of one year and fine of Rs. 1,000/- vide judgment in CC No. 49 of 2003 dated 03.04.2008 passed by the Principal Special Judge for SPE & ACB Cases, City Civil Court, Hyderabad.

2. In all, learned Special Judge found that an amount of Rs. 2,40,025/- worth assets were disproportionate to his known source of income.

3. The ACB, having conducted raid in the premises of the appellant, charge sheeted the appellant for being in possession of Rs. 10,56,770/- assets disproportionate to his known source of income during the cheque period 27.01.1976 to 07.02.1988. According to the ACB, the income of the appellant was Rs. 17,88,176/- and the expenditure was Rs. 15,69,449/-. However, the assets stood at Rs. 10,56, 770/-. Accordingly, the disproportion of assets was arrived at Rs. 8,38,043/-.

4. Learned Special Judge adduced evidence on behalf of the appellant and the ACB. The ACB examined PWs. 1 to 35 and marked Exs.P1 to P68. In defence, the appellant examined DWs. 1 to 6 and marked Exs.D1 to D6.

5. Learned Special Judge having considered the evidence on record arrived at conclusion that the total income of the appellant was Rs. 18,89,565/- and the expenditure was Rs. 11,07,244/-. The likely savings of the accused also would at Rs. 7,82,341/- (Rs. 18,89,565 - 11,07,244/-). Since the total assets were worth at Rs. 10,22,366/- the disproportion was arrived at Rs. 2,40,025/- (Rs. 10,22,366 - Rs. 7,82,341).

6. Learned counsel appearing for the appellant would submit that the trial Court had committed an error in assessing:

(a) Item No. 3 of the assets which are household articles at Rs. 79,420/- though the value stood at Rs. 10,000/-. Accordingly, Rs. 60,000/- is to be deducted from the assets.

(b) Item 4 of the assets which is gold ornaments were pledged and Rs. 70,650/- was taken. Since the gold ornaments were sthridhana which were given to the wife of the appellant by her parents at the time of marriage, the said amount of Rs. 70,650/- has to be deducted from the assets.

(c) Item No. 9 which are promissory notes to the extent of Rs. 4,50,000/- were taken into consideration as assets by the trial judge. However, the said promissory notes stand in the name of the mother of the appellant and they cannot be added in the assets of the appellant.

(d) Rs. 20,000/- which was paid as gold loan by the wife pledging her six bangles was not considered as income, though stated by PW-9.

7. Learned counsel submitted that if the trial Court had considered that the amount mentioned in the promissory note was considered and held as benami by the mother of the appellant, the burden lies on the ACB authorities to first prove that the asset considered under the promissory notes belong to the appellant. He relied on the judgment of Hon’ble Supreme Court in the case of M. Krishna Reddy vs. State Deputy Superintendent of Police, Hyderabad, AIR 1993 SC 313, wherein it is held as follows:

“19. Needless to say that this Court on a series of decisions have laid down the guidelines in finding out the benami nature of a transaction. Though it is not necessary to cite all those decisions, it will suffice to refer to the rule laid down by Bhagwati, J. as he then was in Krishnanand Agnihotri vs. State of M.P. In that case, it was contended that the amounts lying in fixed deposit in the name of one Shanti Devi was an asset belonging to the appellant and that Shanti Devi was a benamidar of the appellant. The learned Judge speaking for the Bench has disposed of that contention holding thus:

“It is well settled that the burden of showing that a particular transaction is banami and the owner is not the real owner always rests on the person asserting it to be so and this burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of be