Holding

Section 5(1)(e) of the Prevention of Corruption Act, 1947 permits consideration of wealth irrespective of the date of acquisition, and the High Court’s exclusion of pre‑1964 assets is incorrect.

Summary

Krishnarao Dudappa Shinde, a police inspector, was convicted under Section 5(1)(e) of the Prevention of Corruption Act, 1947 for possessing wealth disproportionate to his known sources of income. The Bombay High Court acquitted him, holding that assets acquired before the Act’s commencement on 18‑December‑1964 could not be considered because the conduct was not an offence at that time. On appeal, the Supreme Court examined whether the provision could be applied retrospectively to pre‑1964 wealth. The Court held that Section 5(1)(e) is a rule of evidence and may consider wealth irrespective of when it was acquired, and that the High Court’s view was erroneous. However, the Supreme Court noted that the High Court had not addressed other issues in the case and therefore set aside its order only with respect to the scope of Section 5(1)(e) and remitted the matter for further consideration. The appeal was partly allowed.

Issues considered

Whether assets acquired before the commencement of the Prevention of Corruption Act, 1947 can be taken into account under Section 5(1)(e) for conviction of disproportionate wealth.

Legislation cited

Prevention of Corruption Act, 1947s. 5(1)(e), s. 5(3)

Subjects

Prevention of Corruption ActDisproportionate assetsRetrospective effectCriminal misconductPublic servantSection 5(1)(e)Evidence ruleConviction

Judgment

[2009) 1 S.C.R. 756

A STATE OF MAHARASHTRA
v.
KRISHNARAO DUDHAPPA SHINDE
(Criminal Appeal No. 1052 of 2002)

FEBRUARY 5, 2009
B
[DR. ARIJIT PASAYAT AND ASOK KUMAR
GANGULY, JJ.]

Prevention of Corruption Act, 1947 - s.5(1)(e) - Criminal
c misconduct in discharge of official duty - Conviction u/
s.5(1)(e) - Order of High Court that any acquisition of wealth
disproportionate to his known sources of income prior to 1964
not to be taken into account since prior to 1964, it was not an
offence - On appeal, held: High Court dealt with the scope
D and ambit of s.5(1)(e) and did not examine the other aspects
~.,,,
- Matter remitted back to High Court for considering the other
aspects.

The question which arose for consideration in this
appeal was whether High Court was justified in holding
E that any acquisition of wealth said to be disproportionate
to the known sources of income of the accused prior to
1964 could not be taken into account since prior to 1964
the same was not an offence uls. 5(1 )(e) of the Prevention
of Corruption Act, 1947.
F
Partly allowing the appeal, the Court

HELD: High Court did not examine the other aspects
and only dealt with the applicability of Section 5(1)(e) of
the Prevention of Corruption Act, 1947 on the factual
G
position. While the order of the High Court is set aside
so far as it relates to the scope and ambit of Section
5(1 )(e) of the Act, the matter is remitted to it for
considering the other aspects which according to the
respondent were in issue before the High Court in appeal
H 756
STATE OF MAHARASHTRA v. KRISHNARAO DUDHAPPA 757
SHIN DE

filed by the accused person. [Para 8] [761-E-F] A

State of Maharashtra v. Kaliar Kofi Subramaniaum
Ramaswamy 1977 (3) SCC 525; Ramanand Pundalik Kamat
vs. State of Maharashtra ILR 1973 Born 1066 and Sajjan
Singh vs. State of Punjab 1964 (4) SCR 630, referred to. 8
Case Law Reference:
1977 (3) sec 525 Referred to Para 2
ILR 1973 Born 1066 Referred to Para 2
c
1964 (4) SCR 630 Referred to Para 6
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 1052 of 2002.

From the Judgment and final Order dated 30.4.2002 of the D
High Court of Judicature at Bombay in Crl. Appeal No. 930 of
1985.

Madahvi Divan and Ravindra Keshavrao for the Appellant.

R. Sundaravardhan and Shivaji M. Jadhav for the E
Respondent.

The Judgment of the Court was delivered by

DR. ARIJIT PASAYAT, J.1. Challenge in this appeal is to
the judgment of a Division Bench of the Bombay High Court. F
By the impugned judgment the High Court set aside the
judgment of the trial Court, and directed acquittal of the
respondent.

2. Background facts in a nutshell are as follows: G
The respondent a government servant was Inspector of
Police at the time when a raid was conducted in his house on
28.12.1971. He was convicted for offence punishable under
Section 5( 1)( e) of the Prevention of Corruption Act, 1947 (in
short the ·Act') and was sentenced to under minimum sentence H
758 SUPREME COURT REPORTS (2009] 1 S.C.R.

A of one year and was directed to pay a fine of Rs.2,50,000/-.
The only point which was examined by the High Court was
whether the respondent could be convicted for acquisition of
wealth disproportionate to his known sources of income prior
to 1964 i.e. from the date of inception of service on 29.5.1944
B till the date of raid under Section 5(1 )(e) which came into force
only on 18.12.1964. The High Court was of the view that any
acquisition of wealth said to be disproportionate to his known
sources of income prior to 1964 could not be taken into account
since prior to 1964 the same was not an offence. Reliance was
c placed by two judgments for the purpose one of this Court in
State of Maharashtra v. Ka/iar Kofi Subramaniaum
Ramaswamy (1977 (3) SCC 525), and the other of the Bombay
High Court in Ramanand Pundalik Kamat v. State of
Maharashtra (ILR 1973 Born 1066).

D 3. The primary stand of learned counsel for the appellant
is that the scope and ambit of Section 5(1 )(e) of the Act has
been lost sight of.
4. Learned counsel for the respondent on the other hand
E supported the judgment.
5. Section 5(1 )(e) of the Act reads as follows:
"5. Criminal misconduct in discharge of official duty: 1. A
public servant is said to commit the offence of criminal
misconduct..
F
(e) if he, or any person on his behalf is in possession or
has at any time during the period of his office, been in
possession for which the public servant cannot satisfactory
account of pecuniary resources or property
G disproportionate to his known sources of income."
6. A three-Judge Bench of this Court in Sajjan Singh v.
State of Punjab (1964(4) SCR 630) noted as follows:

"12. Mr Lall contends that when the section speaks of the
H accused being in possession of pecuniary resources or
STATE OF MAHARASHTRA v. KRISHNARAO DUDHAPPA 759
SHINDE [DR. ARIJIT PASAYAT, J.]

__,,._ property disproportionate to his known sources of income A
only pecuniary resources or property acquired after the
date of the Act is meant. To think otherwise, says the
learned counsel, would be to give the Act retrospective
operation and for this there is no justification. We agree
with the learned counsel that the Act has no retrospective B
operation. We are unable to agree however that to take
into consideration the pecuniary resources or property in
..,. .
the possession of the accused or any other person on his
behalf which are acquired before the date of the Act is in
any way giving the Act a retrospective operation. c
13. A statute cannot be said to be retrospective 'because
a part of the requisites for its actions is drawn from a time

-- .
antecedent to its passing? (Maxwell on Interpretation of
Statutes, 11th Edn., p. 211; see also State of Bombay v.
. ~ Vishnu Ramchandran). Notice must be taken in this D
connection of a suggestion made by the learned counsel
that in effect sub-section 3 of Section 5 creates a new
offence in the discharge of official duty, different from
what is defined in the four clauses of Section 5(1). It is said
that the act of being in possession of pecuniary resources E
or property disproportionate to known sources of income,
if it cannot be satisfactorily accounted for, is said by this
sub-section to constitute the offence of criminal misconduct
in addition to those other acts mentioned in clauses a, b,
"'-
c and d of Section 5(1) which constitute the offence of F
criminal misconduct. On the basis of this contention the
further argument is built that if the pecuniary resources or
property acquired before the date of the Act is taken into
consideration under sub-section 3 what is in fact being
done is that a person is being convicted for the acquisition G
of pecuniary resources or property, though it was not in

.... •
..... violation of a law in force at the time of the commission of
such act of acquisition. If this argument were correct a
conviction of a person under the presumption raised under
- Section 5(3) in respect of pecuniary resources or property H
760 SUPREME COURT REPORTS [2009] 1 S.C.R.

A acquired before the Prevention of Corruption Act would be
a breach of fundamental rights under Article 20( 1) of the
Constitution and so it would be proper for the court to
construe Section 5(3) in a way so as not to include
possession of pecuniary resources or property acquired
B before the Act for the purpose of that sub-section. The
basis of the argument that Section 5(3) creates a new kind
of offence of criminal misconduct by a public servant in the
discharge of his official duty is however unsound. The sub- ~

section does nothing of the kind. It merely prescribes a rule
c of evidence for the purpose of proving the offence of
criminal misconduct as defined in Section 5(1) for which
an accused person is already under trial. It was so held
by this Court in C.D.S. Swamy v. State and again in
Surajpal Singh v. State of U.P.. It is only when a trial has
commenced for criminal misconduct by doing one or more
D
of the acts mentioned in clauses a, b, c and d of Section ~·~

5(1) that sub-section 3 can come into operation. When
there is such a trial, which necessarily must be in respect
of acts committed after the Prevention of Corruption Act
came into force, sub-section 3 places in the hands of the
E prosecution a new mode of proving an offence with which
an accused has already been charged.

14. Looking at the words of the section and giving them
their plain and natural meaning we find it impossible to say
F that pecuniary resources and property acquired before the
date on which the Prevention of Corruption Act came into
force should not be taken into account even if in
possession of the accused or any other person on his
behalf. To accept the contention that such pecuniary
G resources or property should not be taken into
consideration one has to read into the section the
additional word "if acquired after the date of this Act" after ;...
the word "property". For this there is no justification.
15. It may also be mentioned that if pecuniary resources
H

~
I
STATE OF MAHARASHTRA v. KRISHNARAO DUDHAPPA 761
SHINDE [DR. ARIJIT PASAYAT, J.]

or property acquired before the date of commencement A
of the Act were to be left out of account in applying sub-
section 3 of Section 5 it would be proper and reasonable
to limit the receipt of income against which the proportion
is to be considered also to the period after the Act. On the
face of it this would lead to a curious and anomalous B
position by no means satisfactory or helpful to the accused
himself. For, the income received during the years previous
to the commencement of the Act may have helped in the
acquisition of property after the commencement of the Act.
From whatever point.we look at the matter it seems to us c
clear that the pecuniary resources and property in
possession of the accused person or any other person on
his behalf have to be taken into consideration for the
.... purpose of sub-section 3 of Section 5, whether these were
acquired before or after the Act came into force." 0
7. The view expressed by the High Court is apparently in
conflict with the view expressed by this Court in Sajjan Singh's
case (supra).
8. Learned counsel for the respondent submitted that E
even if the accused has no case on the legal question raised
on facts the respondent was bound to succeed. We find that
the High Court did not examine the other aspects and only dealt
with the applicability of Section 5( 1)( e) of the Act on the factual
position highlighted above. While we set aside the order of the
High Court so far as it relates to the scope and ambit of Section F
5(1 )(e) of the Act, we remit the matter to it for considering the
other aspects which according to learned counsel for the
respondent were in issue before the High Court in appeal filed
by the accused person. Since the matter is pending since long
we request the High Court to take up the matter at an early date G
and make an effort to dispose of the same within a period of
~ four months from the date of receipt of our judgment.
9. The appeal is allowed to the aforesaid extent.

N.J. Appeal partly allowed. H