Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Kar) 24384

THE HIGH COURT OF KARNATAKA
M.G.S. Kamal, J
Karnataka Lokayukta Police – Appellant
Versus
H.V. Krishnaswamy – Respondent
CRL.A No. 414 of 2022

Advocates:
For the Appellants/Petitioners: K Prasanna Shetty
For the Respondents: Manjula N. Tejaswi

In cases of disproportionate assets, the investigation must comprehensively consider all legitimate sources of income, including those of family members and documented loans, rather than relying on a mechanical calculation that ignores available evidence of economic growth and inflation over the check period.

Headnote:(A) Prevention of Corruption Act, 1988 - S. 13(1)(e) and S. 13(2) - Disproportionate assets - Investigating agency failed to take into account legitimate income of the accused and his family members, including salary of spouse, business income, sale proceeds from property, and rental income - Investigation was found mechanical and failed to consider documents furnished by accused during investigation - Appellate court upheld acquittal, noting that household income must be considered in disproportionate assets cases and that trial court’s finding of lack of perversity or illegality in evidence assessment was sound. (Paras 3, 5, 6, 7, 8)

Facts of the case:
The accused, a former public servant, was charged with amassing assets disproportionate to his known sources of income during the period 1985-2006. The prosecution estimated excess assets at approximately 78% of his income. The trial court acquitted the accused after finding that the Investigation Officer (IO) had excluded significant legitimate income documents from his calculations and failed to verify claims regarding loans and family business earnings.

Findings of Court:
The High Court concurred with the trial court, noting that the IO had failed to consider the wife’s independent income, rental income, and various loans. Finding the investigation mechanical and lacking nuanced appreciation of economic fluctuations over the twenty-year check period, the Court declined to interfere with the acquittal.

Issues: Whether the trial court erred in acquitting the accused of disproportionate assets charges despite the investigating officer's failure to consider several sources of legal income.

Ratio Decidendi: In disproportionate assets cases, the investigation must include all legitimate family income and account for economic fluctuations over long periods; failure to consider documented evidence of legal income resulting in a mechanical investigation warrants acquittal.

Result: Appeal dismissed; acquittal maintained.

THIS CRL.A IS FILED U/S.378(1) AND (3) CR.P.C PRAYING TO a) GRANT LEAVE TO PROSECUTE THE APPEAL AGAINST THE JUDGMENT OF DISCHARGE / ACQUITTAL ORDER DATED 13.01.2021 PASSED BY THE COURT OF PRINCIPAL DISTRICT AND SESSIONS JUDGE, KOLAR IN SPL.C.(C)NO.04/2010. b) SET ASIDE THE JUDGMENT / ORDER DATED 13.01.2021 PASSED BY THE COURT OF PRINCIPAL DISTRICT AND SESSIONS JUDGE, KOLAR IN SPL.C.(C)NO.04/2010. c) CONVICT THE RESPONDENT FOR THE OFFENCES P/U/S 7, 13(1)(e) R/W 13 (2) OF THE PREVENTION OF CORRUPTION ACT, AND CONSEQUENTLY SENTENCE THE RESPONDENT FOR THE CHARGES LEVELED AGAINST HIM.

THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL

ORAL JUDGMENT

This appeal is by the Karnataka Lokayukta Police, Kolar being aggrieved by the judgment and order dated 13.01.2021 passed in Special Case (Corruption) No.4/2010 on the file of Principal District and Sessions Judge, Kolar (hereinafter referred to as "trial Court"), by which the trial Court has acquitted the accused/respondent herein for the offence punishable under Section 13(1)(e) read with Section 13(2) of Prevention of Corruption Act, 1988.

The case of the prosecution is that accused was working as General Manager of KSFC, Central Office, Vasanthanagar, Bengaluru during the check period between 04.12.1985 and 09.06.2006 and he was found to have legal income of Rs.1,03,16,586/-. That during the said period he has spent an aggregate amount of Rs.1,17,27,676/- and his total assets and liabilities for the said period was found to be Rs.1,84,31,944/- and as such accused was found in possession of excess amount in a sum of Rs.81,15,358/- which is 78.63% of his total legal income which was not properly explained by him. As such, a charge sheet was filed for the offences punishable under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988, for he possessing disproportionate assets to the known source of income.

The prosecution examined 19 witnesses as PW1 to PW19 and produced 57 documents as Ex.P1 to Ex.P57. Statement of the accused was recorded under Section 313 of Cr.PC. Incrementing evidence brought against the accused has been denied. The accused examined himself and 24 other witnesses as DW1 to DW25 and exhibited 133 documents as Ex.D1 to Ex.D133.

The trial Court framed the following points for its consideration;

"1. Whether the prosecution has proved beyond reasonable doubt that when the accused was working as General Manager in KSFC, Central Office, Vasanthanagar, Bangalore and during the check period from 4.12.1985 till 9.6.2006, he was found to have legal income of Rs.1,03,16,586/- and during this period, he has spent a total amount of Rs.1,17,27,676/- and his total assets and liabilities during this period was found to be amount of Rs.1,84,31,944/- and as such, he was found in possession of excess Rs.81,15,358/-, which is 78.63% of his total legal income, not properly explained by him and hence, he was found to be in possession of Rs.81,15,358/-, which is disproportionate to the assets of his known source of income and thereby he has committed an offence punishable U/s.13(1)(e) read with section 13(2) of Prevention of Corruption Act, 1988?

2. What Order?".

On appreciation of the evidence answered the same in the negative and consequently passed the impugned judgment and order of acquittal. Being aggrieved by the same, State represented by Lokayukta police is before this Court.

Learned counsel appearing for the appellant/Lokayukta Police, assailing the impugned judgment and order to submits;

(a) that when the Lokayukta police had conducted the search at the house of the accused at Koramangala, they had recovered cash, gold jewels, silver articles and several documents pertaining to the properties under Mahazar -Ex.P1 and they had also recovered cash and gold jewellery from bank locker of Indian Overseas Bank as per Mahazar-Ex.P2, which has not bee

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2026 Supreme(Online)(Kar) 24384

THE HIGH COURT OF KARNATAKAM.G.S. Kamal, JKarnataka Lokayukta Police – AppellantVersusH.V. Krishnaswamy – RespondentCRL.A No. 414 of 2022

THE HIGH COURT OF KARNATAKA
M.G.S. Kamal, J
Karnataka Lokayukta Police – Appellant
Versus
H.V. Krishnaswamy – Respondent
CRL.A No. 414 of 2022