Holding

The prosecution proved beyond reasonable doubt that A2 to A4 conspired with and abetted A1 in acquiring disproportionate assets, and the High Court's acquittal was based on erroneous findings and misapplication of law.

Summary

The Supreme Court allowed appeals against the acquittal of A2 to A4 (Sasikala, Sudhakaran, Elavarasi) in a disproportionate assets case under the Prevention of Corruption Act, 1988. The trial court had convicted them for conspiracy and abetment with A1 (Jayalalitha, since deceased) in amassing assets worth Rs.66.65 crores during her tenure as Chief Minister of Tamil Nadu (1991-1996). The High Court acquitted them, computing disproportionate assets at only 8.12% and applying a 10% margin from Krishnanand Agnihotri. The Supreme Court found the High Court's calculations erroneous, including inflated income from loans, gifts, and agricultural income, and undervaluation of assets and marriage expenses. It held that the evidence proved criminal conspiracy and abetment, and that income tax returns are not binding on criminal courts. The conviction and sentence of A2 to A4 were restored, while appeals against A1 abated due to her death.

Issues considered

Whether the High Court erred in acquitting the respondents by miscalculating disproportionate assets?
Whether the expression 'satisfactorily account' under Section 13(1)(e) of the PC Act requires the accused to prove lawful source of income?
Whether income tax returns and orders are conclusive proof of lawful income in a criminal trial?
Whether gifts received by a public servant constitute lawful income under the PC Act?
Whether the High Court's reduction of construction costs and marriage expenses was justified?
Whether the charge of criminal conspiracy and abetment was proved against A2 to A4?
Whether private individuals can be prosecuted for abetment of criminal misconduct by a public servant?
Whether the Trial Court's order of confiscation of properties under Section 452 CrPC was valid?

Legislation cited

Code of Criminal Procedure, 1973s. 452
Constitution of Indias. 136
Criminal Law Amendment Ordinance, 1944s. 10, s. 11, s. 12, s. 13, s. 3, s. 4, s. 5
Indian Evidence Act, 1872s. 45
Indian Penal Code, 1860s. 109, s. 120B, s. 161, s. 165, s. 165A
Prevention of Corruption Act, 1988s. 13(1)(e), s. 13(2), s. 20, s. 28, s. 29, s. 3, s. 5(6)

Subjects

Prevention of Corruption Actdisproportionate assetscriminal conspiracyabetmentbenami transactionsincome tax proceedingsexpert evidencesatisfactorily accountgifts to public servantArticle 136acquittal reversal

Judgment

[2017] 5 S.C.R. 525

STATE OF KARNATAKA A
v.
SELVI J. JAYALALITHA & ORS.
(Criminal Appeal Nos.300-303 of2017)
FEBRUARY 14, 2017 B

[PINAKI CHANDRA GHOSE AND AMITAVA ROY, JJ.J
PREVENTION OF CORRUPTION ACT, 1988:
Unique features, purpose of incorporation and its scope -
Discussed. C
s.13(1)(e) - Criminal misconduct - Al to A4 entered into a
conspiracy and in furtherance of the same, Al who was a public
servant at the relevant time came into possession of assets
disproportionate to the known sources of her income during the
check period and got the same dispersed in the names of A2 to A4 D
and the firms and the companies involved to hold these on her behalf
with a masked front - Conviction by trial court - Acquittal by High
Court - On appeal, held: The reasoning given by the trial court in
respect of criminal conspiracy and abetment is correct in the face
of the evidence indicating the circumstances of active abetment and
conspiracy by A2 to A4 in the commission of the above ojfences E
u/s.13(1)(e) of the 1988 Act - This is evident from the circumstances
that Al had executed a General Power of Attorney in favour of A2
in respect of Jaya Publications - The circumstance of executing the
power of attorney in favour of A2 indicated that with a view to
keep herself secured from legal complications, Al executed the said F
power of attorney knowing fully well that under the said powers,
A2 would be dealing with her fonds credited to her account in Jaya
Publications - Constitution of various firms during the check period
was another circumstance establishing the conspiracy between the
parties - 10 firms were constituted on a single day - Jn addition, A2
and A3 started independent concerns and apart from buying G
properties, no other business activity was undertaken by them -
The circumstances proved in evidence undoubtedly established that
these firms were nothing but extentions of Namadhu MGR and Jaya
Publications and they owed their existence to the benevolence of
Al and A2 - These firms and companies were operatingji·om the H
525
526 SUPREME COURT REPORTS [2017) 5 S.C.R.

A residence of Al and it cannot be accepted that she was unaware ol
the same even though she feigned ignorance about the activities
carried on by A2 to A4 - They were residing with Al without any
blood relation between them - Although A2 to A4 claimed to have
independent sources of income but the fact of constitution of.firms
and acquisition of large tracts of land out of the .funds provided by
B
Al indicated that, all the accused congregated in the house ol Al
neither for social living nor Al allowed them free accommodation
out of humanitarian concern, rather the facts and circumstances
proved in evidence undoubtedly pointed out that A2 to A4 were
accommodated in the house of Al pursuant to the criminal
c conspiracy hatched by them to hold the assets of Al - There was
frequent and spontaneous if!flow of funds from the accounts of A-1
to those of the other co-accused and the .firms/companies involved
which demonstrated the collective culpable involvement al
respondents in the transactions - The judgment of trial court restored
in toto against A2 to A4 - Since A-1 died during pendency ol
D
appeals, appeals related to her abated.
s. l 3(J)(e) - Interpretation of the expression "satisfactorily
account" in the context of the offence of misconduct uls.5(J)(e) of
Act of 1947 and s.13(J)(e) of Act 1988 - Word "satisfactorily"
used by the legislature deliberately cast a burden on the accused
E not only to offer a plausible explanation as to how he came to
acquire his large wealth but also to satisly the Court that his
explanation was worthy of acceptance.
s.l 3(J)(e) - Probative worth of Income Tax Proceedings qua
lawfulness of the source of income :... IT returns and orders would
F not ipso facto either conclusively prove or disprove the charge and
can at best be pieces of evidence which have to be evaluated along
with the other materials on record - Neither the income tax returns
nor the orders passed in the proceedings relatable thereto, either
definitively attest the lawfulness of the sources of income of the
G accused 1•ersons or are of any avail to them to satisfactorily account
the di;proportionateness of their pecuniary resources and properties
as mandated by s.13(J)(e) ol the PC Act.
s. J 3(J)(e) - Gifts received by public servant - Receipt of
huge amount of Rs.2 crores and foreign remittance as presents and
H gi.fis as the Chief Minister of State - Gi.fis as claimed to have been
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 527

made to Al were not only prohibited by law, having regard to her A
office and the role attached thereto, but also constituted an offence
thereunder - Disclosure of such gifts in the income tax returns of
A 1 and the orders of the income tax authorities on the basis thereof,
do not validate the said receipts to elevate the same to lawfit.l income
to repel the charge uls. l 3(l)(e) thereof- Gifts to Al, a public servant B
in the context of ss.161 to l 65A lPC now integrated into the Act are
visibly illegal and forbidden by law - The endeavour to strike a
distinction between "legal" and "unlawful" as sought to be made
to portray gifts to constitute a lawfill source of income is thus wholly
misconstrued - Penal Code, 1860 - ss.161 to l 65A.
s. l 3(l)(e) - Disproportionate assets -According to respondent c
No. 1, as against the jigure of Rs.24.29 crores being the value of
new/additional construction of buildings during the check period,
as computed by the prosecution, her assertion was of Rs.6.52 crores
- Prima facie, the plea of the prosecution that in assessing the
expenditure of new/additional buildings, the High Court had not D
only taken a reduced constructed area of 1668.39 sq. Ji. instead of
2174.69·sqsft., thereby introducing a shortfall of506.3 sqs., it also
applied the rate of Rs.28,0001- per sq. ft. based on the construction
cost of a sentry shed, as the base value to work out the amount of
investments made towards the new/additional buildings/constructions
is borne out by the records - The approach of the High Court on E
both counts in the face of the evidence on record is not
acceptable - The adoption of Rs.28, 0001- per sq. ft. as the base
value, which was the cost of construction of a sentry shed, per se
was erroneous, having regard to the fact that a sentry shed and the
new/additional constructions/buildings are not comparable. F
s.l 3(1)(e) - Addition of Rs.4 crores by High Court towards
income of Jaya Publications and Namadhu MGR to the .figure cited
by the DVAC on account of Scheme deposit - Propriety of- Held:
High Court was not justified in allowing an additional sum of Rs.4
crores as income of Jaya Publications merely on the basis of the G
oral evidence of the 31 witnesses - Moreso, since the accused had
failed to produce the primary documents in original before the
auditors and the income tax authorities in support of scheme
deposit - Trial court had duly considered these factors more
particularly the inordinate delay in submission o,f income tax returns
H
528 SUPREME COURT REPORTS [2017] 5 S.C.R.

A much after the submission of the charge-sheet, along with the other
attendant circumstances - Testimony of subscribers to the scheme
was also rightly rejected by trial court as they were hardened party
workers.
s.13(l)(e) -Addition of Rs.1 crore by High Court towards
B income of Super Duper Pvt. Ltd. - This amount is claimed to be
legitimate income of A-3 from his business initially carried on as
proprietor of Super Duper TV and later incorporated as Super Duper
Pvt. Ltd. - Trial Court in contradistinction took pains to examine
the trail of the income claimed by the company and the feasible
investments thereof- It also took note of the huge it?flow and outflow
c of cash to and from the accounts of the firms/companies of which
the respondents were partners/directors during the check period so
much so that the income claimed by A3 under t!ps head ceased to
retain its independent identity so as to be accepted 'ds the discernible
earnings of the company for transacting its business activities as a
D distinctly separate institution - The summary treatment of the
evidence on this issue by the High Court lacks the desired approach
and, therefore, cannot be sustained - The addition awarded by it of
income of Rs.1 crore to Super Duper T. V. · Pvt. Ltd. thus cannot be
upheld.
E s.13(1)(e)-Loan byA-1 toA-2-Addition of Rs.1.53 crores
sought as loan from A-2 and her proprietary firms - Having regard
to the persons and entities involved in the transactions, in the
absence of other convincing evidence, the said receipts/deposits
cannot be accepted to be lawful income as envisioned in s.13(l)(e)
of the Act.
F
s. l 3(1)(e) - Addition of Rs. 46. 71 lacs as agricultural
income - High Court enhanced the agricultural income of A-1 to
Rs.52.50 lacs - Held: In absence of any independent evidence in
support of this claim, having regard to the state of law that income
tax returns/orders are not automatically binding on the criminal
G court, the effortless acceptance thereof by the High Court was in
disregard to this settled proposition - High Court erred in accepting
. income tax return and orders passed thereon and in adding Rs.46. 71
lakhs under the head of agricultural income.
s.13(l)(e) -Addition of loan amount of Rs.18.17 crore by
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 529

High Court - Held: The High Court wrongly totalled the amount to A
inflate figures to Rs.24.17 crores which in fact ought to have been
Rs. l 0. 67 crore on correct calculations - Addition of Rs.18.17 crores
as done by High Court was erroneous and not sustainable.
s.J3(l)(e)-A-l s income from three companies - The deposits
and withdrawals represented through the different entries in the B
bank accounts suggested multiplication of transactions stemming
from the same corpus - The maze offinancial exchanges in fragments
involving different combinations hint at the attempt to inflate
individual and collective income of the respondents - The banking
transactions, though resorted to for proclaiming genuineness thereof.
having regard to the overall factual conspectus did not appear to c
be real.
s.J3(J)(e) - Expenditure incurred by A-1 in connection with
marriage of A-3 - High Court reduced from Rs.6.45 crores and
accepted the figure of Rs.28.68 lakhs towards expenditure towards
marriage to be share of expense ofA-1 - PW-181 Assistant Engineer D
PWD in his report mentioned inter alia, the areas of the various
pandals together with the decorative attachments and after
accounting for the cost thereof and the price of the furniture used
and the amenities provided, estimated the expenditure to be Rs.5.91
crores towards the pandals and other arrangements to secure the E
intended facilities for the couple, guests and other participants -
His findings in his report could be construed to be of an expert
witness and further could be used as corroboration for the testimony
of PW200 who indeed had supervised the same works himse(l and
as claimed by the prosecution on the instructions/advise of A2 -
PW200, Chief Engineer, P~D did assert on oath that he was F
instructed by A2 to complete the panda/ works as early as
possible - He deposed as well that Al and A2 had inspected the
work by visiting the site about a week prior to the marriage - In the
face of the evidence in particular of the elaborate arrangements at
the venues and the expenses incurred on other items associated G
with the event, the Trial Court did not err in not accepting the.figure
of Rs.28.68 lacs as the expenditure incurred by Al on the basis of
her reply to the queries made by the Income Tax Department.
Corruption - It not only has a demoraliSing bearing on those
who are ethical, honest, upright and enterprising, it is visibly H
530 SUPREME COURT REPORTS [2017] 5 S.C.R.

A antithetical to the quintessential spirit of the jimdamental duty of
every citizen to strive towards excellence in all spheres of individual
and collective activity to raise the nation to higher levels of endeavour
and achievement- Every citizen has to be a partner in this sacrosanct
· mission for a stable, just and ideal social order as envisioned by
our forefathers and fondly cherished by the numerous se(f-effacing
B
crusaders 9J a free and independent Bharat, pledging their countless
sacrifices and selfless commitments for such cause. (Per Amitava
Roy, J.)
PREVENTION OF CORRUPTION ACT, 1947:
c s.5(1)(e) - Interpretation of - Held: A bare perusal of clause
(e) of s.5(1) of 1947 Act reveal that the criminal misconduct of the
public servant, as envisaged therein, would ensue if he/she or any
person on his/her behalf was in possession or had, at any point of
time during the period of his/her office, been in possession of
pecuniary resources or property, disproportionate to his/her known
D sources of income, which the public servant cannot sati!>factorily
account - Significantly, for such misconduct, the possession of the
disproportionate pecuniary resources or property, which the public
servant is unable to satisfactorily account, can be held either by
him/her or any person on his/her behalf is essential - This offence
E thus, enfolds in its sweep a definitive involvement and role of persons
other than the public servant, either as a abetter or a co-conspirator
in the actualisation of the crime - Consequently, thus such abettors
or co-conspirators or partners in this item of offence, if proved,
cannot escape the legal consequences for their participatory role.
F CODE OF CRIMINAL PROCEDURE, 1973:
s.452 - Invocation of s.452 by special judge under PC Act to
order confiscation/for.f'eiture of the properties otherwise attached
under the Criminal Law Amendment Ordinance, 1944 - Permissibility
of - Held: Permissible - In terms of s.5(6), Special Judge is
. G authorised to exercise all powers and/unctions exercisable by a
District Judge under the Ordinance - Jn the instant case, the o.f)ences
at the trial were u/ss.13(1)(e), 13(2) of the PC Act, ss.109 and 120B
!PC encompassed within paragraphs 4A and 5 of the Schedule to
the Ordinance - These offences were unimpeachably within the
contours of the PC Act and triable by a special Judge thereunder -
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 531

Therefore, the order of confiscation/forfeiture of the properties A
standing in the name of six companies, as involved, made by the
trial court is sustainable - Criminal Law Amendment Ordinance,
1944.
CRIMINAL LAW:
Conspiracy - Proof of - Held: A conspiracy can be proved B
by circumstantial evidence as having regard to the nature of the
offending act, no direct evidence can be expected.
CONSTITUTION OF INDIA:
Art.136 - Scope of interference with an order of acquittal/ C
conviction under Art.136 of the Constitution - Held: Once the
Appellate Court comes to the conclusion that the view taken by the
lower court was clearly unreasonable, then that by itself would be
a compelling reason for interference - It is a courts duty to convict
a guilty person when the guilt is established beyond reasonable
doubt, no less than it is its duty to acquit the accused when such D
guilt is not so established.
EVIDENCE ACT, 1872:
s.45 - Expert opinion/evidence - Probative. worth of - Held:
An expert is one who has made a subject upon which he speaks or . E
renders his opinion, a matter of particular study, practice or
observation and has a special knowledge thereof- His knowledge
must be within the recognized field of expertise and he essentially
has to be qualified in that discipline of study - It has been
propounded that an expert is not a witness of fact and its evidence
is really of an advisory character and it is his duty to furnish to the F
Judge/Court the necessary scientific criteria for testing the accuracy
of the conclusions so as to enable the Judge/Court to .form his/its
independent judgment by the application of such criteria to the
facts proved by the evidence - By virtue of s.45 of the Evidence Act
1872, which makes the opinion of an expert admissible, not only an
G
expert must possess necessary special skill and experience in his
discipline, his opinion must be backed by reason and has to be
examined and cross-examined to ascertain the probative worth
thereof - The evidentiary value of the opinion of an expert depends
on the facts upon which it is based and also the validity of the
process by which the conclusion has been reached - The Court is H
532 SUPREME COURT REPORTS (2017] 5 S.C.R.

A not to subjugate its own judgment to that of the expert or delegate
its authority to a third party but ought to assess the evidence of the
expert like any other evidence.
BENAMI TRANSACTIONS:
Courts are usually guided by the following circumstances:
B The source from which the purchase money came; The nature of
possession of the property, after the purchase; Notice, if any. for
giving the transaction a benami colour; The position of the parties
and the relationship, if any, between the claimant and the alleged
benamdar; The custody of the title-deeds after the sale; and The
c conduct of the parties concerned in dealing with the property ajter
the sale.
PENAL CODE, 1860:
s.109 - Private individual can also be prosecuted/or offence
uls.109.
D
INTERPRETATION OF STATUTES:
Anti-corruption laws - Any interpretation of the provisions of
anti-corruption laws has to be essentially pwposive, in .fi1rtherance
of its mission and not in retrogression thereof (Per Amitava Roy, J.)
E Allowing the appeals, the Court
HELD: Per Pinaki Chandra Ghose, J.:
1.1. The Prevention of Corruption Act, 1947
Section 5 defined criminal misconduct by a public servant.
F Noticeably, by Section 6 of Act 40 of 1964 i.e. the Anti Corruption
Law (Amendment) Act, 1964, amongst others, the following
insertion by way of clause (e) was incorporated in Section 5.
"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 satisfactorily account,.
G
of pecuniary resources or property disproportionate to his
known sources of income.".
A bare perusal of clause (e) of Section 5(1) of 1947 Act would
reveal that the criminal misconduct of the public servant, as
envisaged therein, would ensue if he/she or any person on his/
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 533

her behalf was in possession or had, at any point of time during A
the period of his/her office, been in possession of pecuniary
resources or property, disproportionate to his/her known sources
of income, which the public servant cannot satisfactorily account.
Significantly, for such misconduct, the possession of the
disproportionate pecuniary resources or property, which the
B
public servant is unable to satisfactorily account, can be held
either by him/her or any person on his/her behalf. This offence
thus; enfolds in its sweep a definitive involvement and role of
persons other than the public servant, either as a abettor or a co-
conspirator in the actualisation of the crime. Consequently, thus
such abettors or co-conspirators or partners in this item of C
offence, if proved, cannot escape the legal consequences for their
participatory role. [Paras 139, 140) [742-F-H; 743-A-CI
K. Anbazhagan v. Superintendent of Police and others
120031 s Suppl. SCR 610 : (2004) 3 sec 767 -
referred to. D
1.2 The Prevention of Corruption Act, 1988
The 1947 Act was succeeded by a new version of anti
corruption law in the form of the Prevention of Corruption, 1988,
which seeks to consolidate and amend the law relating to the
prevention of corruption and for matters connected therewith. E
The Statement of Objects and Reasons of this statute, referred
to the provisions in Chapter IX of the Indian Penal Code, dealing
with public servants and those who abet the offences mentioned
therein, by way of criminal misconduct. The provisions in the
Criminal Law Amendment Ordinance, 1944 enabling attachment F
of ill gotten wealth, obtained through corrupt means, was also
adverted to. The Bill was clearly contemplated to incorporate all
these provisions with necessary modifications, so as to make
those more effective in combating corruption amongst public
servants. With that end in view, the ambit of "public servant"
was sought to be expanded. Additionally, the offences hitherto G
enumerated in Sections 161 to 165A IPC were recommended to
be incorporated in the legislation with enhanced penalties. Finality
of the order of the Trial Court upholding the grant of sanction for
prosecution and provision for day to day trial of cases were also
integrated as few other unique features of the initiative. [Paras H
534 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 142, 143) (743-E-F, H; 744-A-C)
1.3 Sections 7 to 12 of the Act correspond to Section 161
to 165A of the Indian Penal Code, thereby integrating the offences
in the legislation to be tried by a special forum as envisaged.
Resultantly, Sections 161 to 165A have been effaced from the
B Indian Penal Code for obvious reasons. Explanation to Section
13(i)(e) makes it limpid that the known sources of income of the
public servant, to satisfactorily account the pecuniary resources
or the property otherwise alleged to be disproportionate thereto,
has to be from a lawful source and further that the receipt thereof
had been intimated in accordance with the provisions of any law,
c rule or orders for the time being applicable to him/her, as the
case may be. This prescription indubitably emphasizes the
lawfulness or legitimacy of the income to enable the public servant
to satisfactorily account for the pecuniary resources or property
otherwise imputed to be disproportionate thereto. Not only the
D Act entertains presumption against the public servant, in the
eventualities as comprehended in Section 20 of the Act, it is
clarified in Section 28 that nothing in the statute would exempt
any public servant from any proceeding which might apart from
the Act, be instituted against him or her. Section 29, amongst
others has substituted in paragraph 4A of the Ordinance, an
E offence punishable under the 1988 Act, in lieu of the offence
under Section 5 of the 1947 Act. [Para 1531 (747-B-El
Mohd. Husain Umar Kochra Etc. v. K.S. Dalipsinghji
and Another Etc. (1969] 3 SCR 130 : (1969) 3 SCC
429 - referred to.
F
2. CONSPIRACY
A conspiracy can be proved by circumstantial evidence as
having regard to the nature of the offending act, no direct evidence
can be expected. [Para 161) (750-D-El
G Saju v. State of Kerala [2000) 4 Suppl. SCR 621:
(2001) 1 SCC 378; Noor Mohammad Mohd. Yusuf
Momin v. State of Maharashtra [1971) 1 SCR 119 :
(1970) 1 SCC 696; Yash Pal Mittal v. State of Punjab
[1978) 1 SCR 781 : (1977) 4 SCC 540; Ram Narayan
Popli v. Central Bureau of Investigation [2003) 1 SCR
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 535

119 : (2003) 3 SCC 641; Firozuddin Basheeruddin & A
Ors. v. State of Kera/a (2001) 7 SCC 596; Mir Nagvi
Askari v. Central Bureau of Investigation [20091 13
SCR 124 : (2009) 15 SCC 643 - relied on.
Regina v. Murphy (1837) 173 ER 502 - referred to.
3. Approach of Court in PC Cases B

The history of the enactment of the 1947 Act was traced in
*R.S. Nayak and a caveat was sounded to the effect that whenever
a question of construction arises upon ambiguity or if two views
are possible of a provision of an anti corruption law (then Act
1947), it would be the duty of the Court to adopt that construction C
which would advance the object underlying the statute, namely
to make effective the provision for the prevention of bribery and
corruption and at any rate not to defeat it. It was underscored
that procedural delays and technicalities of law should not be
permitted to defeat the object sought to be achieved by the statute D
and the overall public interest and the social object is to be borne
in mind while interpreting the various provisions thereof and in
deciding cases under the same. [Para 1671 (752-A-CI
*R.S. Nayak v. A.R. Antulay (198412SCR495: (1984)
2 SCC 183; State of MP. & Ors. v. Ram Singh (2000( E
1 SCR 579 : (2000) 5 SCC 88; Niranjan Hemchandra
Sashittal & Am: v. State of Maharashtra [2013] 4 SCR
767 : (2013) 4 SCC 642; Subramanian Swamy v.
Director, Central Bureau of Investigation & Am: [2014[
6 SCR 873 : (2014) 8 SCC 682 - relied on.
F
4. Probative worth of Income Tax Proceedings qua
lawfulness of the source of income
Even assuming that. the income tax returns, the proceedings in
connection therewith and the decisions rendered therein are
r_elevant and admissible in evidence as well, nothing as such, turns G
thereon definitively as those do not furnish any guarantee or
authentication of the lawfulness of the source(s) of income, the
pith of the charge levelled against the respondents. It is the plea
of the defence that the income tax returns and orders, while
proved by the accused persons had not been objected to by the
prosecution and further it (prosecution) as well had called in H
536 SUPREME COURT REPORTS [2017] 5 S.C.R.

A evidence the income tax returns/orders and thus, it cannot object
to the admissibility of the records produced by the defence but
even if such returns and orders are admissible, the probative
value would depend on the nature of the information furnished,
the findings recorded in the orders and having a bearing on the
charge levelled. In any view of the matter however, such returris
B
and orders would not ipso facto either conclusively prove or
disprove the charge and can at best be pieces of evidence which
have to be evaluated along with the other materials on record.
Noticeably, none of the respondents has been examined on oath
in the case in hand. Further, the income tax returns relied upon
c by the defence as well as the orders passed in the proceedings
pertaining thereto have been filed/passed after the charge-sheet
had been submitted. Significantly, there is a charge of conspiracy
and abetment against the accused persons. In the overall
perspective therefore neither the income tax returns nor the
orders passed in the proceedings relatable thereto, either
D definitively attest the lawfulness of the sources of income of the
accused persons or are of any avail to them to satisfactorily account
the disproportionateness of their pecuniary resources and
properties as mandated by Section 13(l)(e) of the Act. [Para
176) [755-A-Fl
E Commissioner of Income Tax, U.P. v. Devi Prasad
Vishwanath Prasad, (1969) ITR 194; Anantharam
Veerasinghaiah & Co. v. C.I. T., Andhra Pradesh
[1980) SCR 618 : (1980) Suppl. SCC 13; Iqbal Singh
Marwah & Am: v. Meenakshi Marwah & Am: [20051
F 2 SCR 708 : (2005) 4 SCC 370; CIT Patia/a v. Piara
Singh [1980) SCR 1122 : 1980 Supp. SCC 166; State
of Tamil Nadu by Inspector of Police Vigilance and
Anti-Corruption v. N. Suresh Rajan & Ors. [2014) I
SCR 135 : (2014) 11 SCC 709; Commissioner of
Income Tax, Gujarat v. S.C. Kothari [1972[ 1 SCR
G 950 : (1972) 4 SCC 402; Vishwanath Chaturvedi v.
Union of India & Ors. [2007) 3 SCR 448 : (2007) 4
sec 380 - relied on.
State of M.P. v. Shambhu Dayal Nagar [2006[ 8 Suppl.
SCR 319 : (2006) 8 SCC 693 - referred to.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 537

Gower - Modern Company Law - 4th Edn. (1979) A
(page 137); Company Law by Pennington - 5th Edition
1985 at page 53; American Professor L. Maurice
Wormser in his article "Piercing the veil of corporate
entity" - referred to.
5. Gift, if Lawful Source of Income for a holder of Public B
Office:
This Court in *R.S. Nayak case amongst others dealt with
the distinctive features of Sections 161 and 165 of the Indian
Penal Code. It enunciated that under the former Section, a
present is taken by a public servant as a motive or reward for c
abuse of office but under the latter, the question of motive or
reward is wholly immaterial and acceptance of a valuable thing
without consideration or with inadequate consideration from a
person who has or is likely to have any business to be transacted
is forbidden because though not taken as a motive or reward for
showing any official favour, it is likely to influence the public D
servant to show official favour to the person giving such valuable
thing. With the advent of the Act 1988, Sections 161 to 165A
have been omitted from the Code as those have been essentially
engrafted in the said Statute and thus the essence and spirit
thereof seemingly have a bearing on the constituents of Section E
13 of the Act. This would comport to the Statement of Objects &
Reasons of the legislation, which envisaged widening of the scope
of the definition of the expression "public servant" and
incorporation of the offences under Sections 161 to 165A in the
Act. As a corollary, while applying Section 13 thereof in the facts
of the given case, the attributes of the offences contained in F
erstwhile Sections 161 to 165A of the IPC cannot be totally
disregarded. [Paras 201, 2021 [765-D-F, H; 766-A-BI
Yash Pal Goel v. Commissioner ofIncome Tax (Appeals)
(2009) 310 ITR 75 (P&H); Smt. Kusumlata Thakral
v. Commissioner of Income Tax (Appeals) (2010) 327 G
ITR 424 (P&H); Commissioner of Income Tax I'.
Sandeep Goyal (2014) 369 ITR 471 (P&H); Income
Tax Officer v. Mukesh Bhanubhai Shah (2009) 318
(AT) 394 (ITAT IMuml); Sumati Dayal v.
Commissioner of Income Tax, Bangalore 119951 2 SCR H
538 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 1173 : (1995) Suppl. 2 SCC 453 - referred to.
6. Burden of proof and benefits of doubt
That the burden to prove a charge is on the prosecution
subject to the defence of insanity and any other statutory
exception. That proof beyond reasonable doubt is only a guideline
B and not a fetish and that a guilty man cannot get away with it
because truth suffers from infirmity, when projected through
human processes. [Paras 203, 2061 [766-C; 767-FI
Shivaji Sahabrao Bobade & Anr. v. State of
Maharashtra [1974) 1 SCR 489 : (1973) 2 SCC 793;
c Collector of Customs, Madras & Ors. v. D. Bhoormall
[1974) 3 SCR 833 : (1974) 2 SCC 544; lnder Singh
& Anr. v. State (Delhi Administration) [19781 3 SCR
393 : (1978) 4 SCC 161; Ashok Debbarma alias Achak
Debbarma v. State of Tripura [20141 4 SCR 287 :
D (2014) 4 sec 747 - relied on.
Woolmington v. The Director of Public Prosecutions
(1935) AC 462 - referred to.
7. Interpretation of the expression "satisfactorily account"
in the context of the offence of misconduct under Section 5(l)(e)
E of Act of 1947 and Section 13(l)(e) of Act 1988
This Court in **C.S.D. Swami v. The State held that the test
of plausible explanation was inapplicable, as under this statute,
the accused person was required to satisfactorily account for the
possession of the pecuniary resources or property
F disproportionate to its own sources of income and that the word
"satisfactorily" used by the legislature deliberately did cast a
burden on the accused not only to offer a plausible explanation
as to how he came to acquire his large wealth but also to satisfy
the Court that his explanation was worthy of acceptance. [Para
G 211] [768-F-G; 769-B)
**C.S.D. Swami v. The State [1960) 1 SCR 461;
M Narayanan Nambiar v. State of Kera/a [19631
Suppl. 2 SCR 724; State of Maharashtra v. Wasudeo
Ramchandra Kaidalwar [1981) 3 SCR 675 : (1981) 3
SCC 199; K. Ponnuswamy v. State of T. N. [20011 1
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 539

Suppl. SCR 97 : (2001) 6 SCC 674; P. Nallammal & A
Anr: v. State [1999] 1 Suppl. SCR 135 : (1999) 6 SCC
559; K. Veeraswami v. Union of India & Ors. [19911 3
SCR 189 : (1991) 3 SCC 655; V.D. Jhingan v. State
of Uttar Pradesh [19661 3 SCR 736;
N. Ramakrishnaiah (dead) through LRs. v. State of
B
Andhra Pradesh [20081 14 SCR 733 ; (2008) 17 SCC
83; State of MP. v. Awadh Kishore Gupta & Ors. [20031
5 Suppl. SCR 672 : (2004) 1 SCC 691 - relied on.
Ravinder Singh v. State of Haryana [1975] 3 SCR
453 : (1975) 3 sec 742 - referred to.
c
8. Scope of interference with an order of acquittal/conviction
under Article 136 of the Constitution of India
In ***Ramaiah @ Rama v. State of Kanataka, this Court
held that once the Appellate Court comes to the conclusion that
the view taken by the lower court was clearly unreasonable, then D
that by itself would be a compelling reason for interference. It
was highlighted that it is a court's duty to convict a guilty person
when the guilt is established beyond reasonable doubt, no less
than it is its duty to acquit the accused when such guilt is not so
established. [Para 231] [777-D, F-GI
E
***Ramaiah @Rama v. State of Kanataka 12014] 7
SCR 995 : (2014) 9 SCC 365; State of Uttar Pradesh
v. Chet Ram & Ors. (1989) 2 SCC 425; Arunachalam
v. P.S.R. Sadhanantham & Anr: [19791 3 SCR 482 :
(1979) 2 SCC 297; State of Maharashtra v.
Narsinghrao Gangaram Pimple, (1984) 1 SCC 446; F
State of Punjab v. Karnail Singh [20031 2 Suppl.
SCR 593 : (2003) 11 SCC 271; Mritunjoy Biswas v.
Pranab alias Kuti Biswas & Anr: [2013] 7 SCR 1105 :
(2013) 12 SCC 796; State of U.P. v. Gokaran & Ors.,
1984 Suppl. SCC 482; Mst. Dalbir Kaur & Ors. v.
G
State of Punjab [1977] 1 SCR 280 : (1976) 4 SCC
158; Chandrappa & Ors. v. State of Karnataka [20071
2 SCR 630 : (2007). 4 SCC 415; Shea Swarup v. R.
Emperor AIR 1934 PC 227 (2); K. Gopal Reddy v.
State of Andhra Pradesh (1979( 2 SCR 265 : (1979)
1 sec 355 - relied on. H
540 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Harbans Singh & Am: v. State of Punjab AIR 1962
SC 439 : [19621 Suppl. SCR 104 - referred to.
9. Benami transactions:
There has to be either some direct evidence or strong
circumstantial evidence to raise an inference that the property
B alleged to be benami had been purchased with the funds/
resources of someone other than the person in whose name the
property is shown in the document. In the instant case, there
was also a charge of conspiracy and abetment and, therefore, the
factors as above would have to be tested on the anvil of the overall
c circumstances to ascertain as to whether a reasonable inference
therefrom can be drawn of a benami transaction as alleged. This
is more so as by the very nature of the offence of conspiracy, the
activities in connection therewith are expectedly hatched in
secrecy. (Paras 233, 234) [777-G; 778-G-H; 779-A-BI

D
Jaydayal Poddar (deceased) through L.Rs. & Am: v.
Mst. Bibi Hazara 119741 1 SCR 70 : (1974) 1 SCC 3
- relied on.
10. PROBATIVE WORTH OF EXPERT EVIDENCE
An expert is one who has made a subject upon which he
E speaks or renders his opinion, a matter of particular study,
practice or observation and has a special knowledge thereof. His
knowledge must be within the recognized field of expertise and
he essentially has to be qualified in that discipline of study. It has
been propounded that an expert is not a witness of fact and his
evidence is really of an advisory character and it is his duty to
F
furnish to the Judge I Court the necessary scientific criteria for
testing the accuracy of the conclusions so as to enable the Judge/
Court to form his/its independent judgment by the application of
such criteria to the facts proved by the evidence. Referring to
Section 45 of the Evidence Act 1892, which makes the opinion of
G an expert admissible, it has been underlined th at not only an expert
must possess necessary special skill and experience in his
discipline, his opinion must be backed by reason and has to be
examined and cross-examined to ascertain the probative worth
thereof. That it would be unsafe to convict the person charged
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 541

on the basis of expert oprn1on without any independent A
corroboration has also been indicated. It has been held that the
evidentiary value of the opinion of an expert depends on the facts
upon which it is based and also the validity of the process by
which the conclusion has been reached. The decisions underline
that the Court is not to subjugate its own judgment to that of the B
expert or delegate its authority to a third party but ought to assess
the evidence of the expert like any other evidence. [Para 2351
1779-C, D-H; 780-Al
Mahmood v. State of U.P. (1976) 1 SCC 542; Chatt
Ram v. State of Haryana (1980) 1 SCC 460; State of
H.P. v. Jai Lal & Ors. [19991 2 Suppl. SCR 318 :
c
(1999) 7 SCC 280; Ramesh Chandra Agrawal v.
Regency Hospital Limited & Ors. 12009j 14 SCR 424 :
(2009) 9 sec 709; Dayal Singh & Ors. V. State ol
Uttaranchal [20121 10 SCR 157 : (2012) 8 SCC 263
- relied on. D
State of H.P. v. Jai Lal [19991 2 Suppl. SCR 318 :
(1999) 7 sec 280 - referred to.
11. Hears.ay evidence can be used to corroborate
substantive evidence. [Para 2361 [780-Bj
E
Pawan Kumar v. State of HmJ'ana [20031 1 Suppl.
SCR 710: (2003) 11 SCC 241; Krishnanand Agnihotri
v. The State of Madhya Pradesh, AIR 1977 SC 769 :
(1977) 1 sec 816 - referred to.
12. The respondent Al has been charged with the offence
F
of conspiracy as well as criminal misconduct under Section 13(l)(e)
read with Section 13(2) of the PC Act and A2 to A4 in particular,
of conspiracy and abetment in the commission of the above
offence under the Act. There are basically four broad heads for
scrutiny: (1) Income (2) Expenditure (3) Assets (4) Conspiracy
and abetment. !Para 2401 1781-E-H; 782-A-BI G
12.1 INCOME:
It was urged on behalf of Rl/Al that her claim of income of
Rs.52,50,000/- under head of Agriculture income stood proved
wholly on the basis of the relevant income tax returns and the
H
542 SUPREME COURT REPORTS [2017] 5 S.C.R.

A orders passed thereon. The High Court had readily accepted this
evidence and had thereby enhanced the income of Al under this
head to Rs.52,50,000/- by adding Rs.46,71,600/- to the sum of
Rs.5, 78,340/- mentioned by the DVAC. In absence of any
independent evidence in support of this claim, having regard to
the state of law that income tax returns/orders are not
B
automatically binding on a criminal court, the effortless acceptance
thereof by the High Court is in disregard to this settled legal
proposition. Thereby the High Court has accorded unassailable
primacy to such income tax returns/orders and have made those
final and binding on the criminal court without any appreciation
c of the legal postulations that income tax returns/orders passed
thereon are not binding on criminal court and that the facts
involved are to be proved on the basis of independent evidence
and that the income tax returns/orders are only relevant and
nothing further. [Paras 254, 255) [786-D-Hl
D 12.2 LOANS:
The second additional head of income involved by the
respondents constituted loans in addition to the bank loans cited
by DVAC as taken note of by the High Court to add
Rs.18,17,46,000 to the income of the respondents. This item of
E income significantly is suggestive of the ·collective orientation of
the respondents qua the charge as one corporate unit. The tone
and tenor of the contents of the applications for loan and the
composition of the firms/companies availing the benefit thereof,
suggest that the respondents were in collaboration with each other
in the transactions which demonstrate their combined
F involvement therein. As the impugned judgment of the High
Court revealed, it referred to generally the testimony of PW 182
and PW 259 and had observed that the respondents had borrowed
loans from the banks as well as from the private parties which
however were not taken into consideration. While noting the
G loans availed by the respondents from different firms .and
companies, as named therein, the High Court did, however limit
itself only to the loans borrowed from the nationalised banks but
wrongly totalled the amounts to inflate figure to Rs.24,17,31,274/-
which in fact ought to have been Rs.10,67,31,224/- on a correct
arithmetic. The High Court, thereafter, adjusting
H
STATE OF KARNATAKA v. SELVl J. JAYALALITHA & ORS. 543

Rs.5,99,85,274/-, i.e. the income quantified by the DVAC A
added Rs.18,17,46,000/- (Rs.24,17,31,274 - Rs.5,99,85,274) to
the income of the respondents. The High Court has not only
erred in including the entire amount of loan encompassed in ten
items, but also premised its finding on income on an inflated and
patently incorrect figure of Rs.24,17,31,274/-. This addition of B
Rs.18,17,46,000/- to the income of the respondents, as done by
the High Court, is obviously erroneous and thus cannot be
sustained. Even the High Court though had referred to private
loans, availed by the respondents, it did not include the same in
the total income of the respondents. The plea of the respondents
that the income from private sources had not been considered at C
all, is thus untenable, more particularly in absence of any challenge
by them against the above exclusion by the High Court. [Paras
256, 271, 2721 [787-A-C; 791-C-Hl
12.3 GIFTS:
The receipt of money or pecuniary resources in order to D
qualify as income within the meaning of Section 13(1) (e) of the
Act, in case of a public servant should essentially be attached to
his/her official post and that any windfall or gain of graft, crime or
immoral secretions prima facie would not be a receipt from the
known sources of his/her income. The Trial Court was of the E
view that though the receipt of birthday presents by themselves
might not amount to windfall or immoral secretions, the receipt
of huge amount of Rs.2 crores and foreign remittance as presents
and gifts, as the Chief Minister of a State, was susceptible to
serious doubts and suspicion about the nature of the receipts.
The fact that the practice of offering such gifts had been F
discontinued after 1992 and the possibility of such offerings not
being made if A 1 was not in office, was pondered over. The Trial
Court rejected the alleged gifts, said to have been received by
Al to constitute a lawful source of income. The oral testimony of
PWs 215 and 259 as to the practice of entertainment of gifts and G
donations qua the political figures of the states on celebratory
occasions is of no consequence to ascribe any legitimacy to such
receipts as a lawful source of income under the 1988 Act. In
view of the incorporation of Sections 161 to 165A IPC in their
letter and spirit in the 1988 Act, gifts as claimed to have been
H
544 SUPREME COURT REPORTS (2017] 5 S.C.R.

A made to Al were not only prohibited by law, having regard to her
office and the role attached thereto, but also constitute an offence
thereunder. By no means, therefore, the gifts in any form, as
offered to Al during the relevant period, can be construed, be
accepted as a lawful source of income. Disclosure of such gifts in
the income tax returns of Al and the orders of the income tax
B
authorities on the basis thereof, do not validate the said receipts
to elevate the same to lawful income to repel the charge under
Section 13(1)(e) thereof. [Paras 284, 287] [795.-D-F; 797-B-E]
R.S. Nayak v. A.R. Antulay & Anr. [19861 2 SCR 621
: (1986) 2 sec 716 - relied on.
c
M1: Krishna Reddy v. State, Deputy Superintendent of
Police, Hyderabad (1992) 4 sec 45; Kedari Lal V.
State of Madhya Pradesh & Ors. (2015) 14 SCC 505
- held inapplicable.

D The Commissioner ofExpenditure Tax, Andhra Pradesh
v. P.V.G. Raju [19761 1SCR1017: (1976) 1 SCC
241; Sasi Ente1prises v. Assistant Commissioner of
Income Tax [20141 2 SCR 175 : (2014) 5 SCC 139;
Kale Khan Mohammad Hanif v. C.J. T., (1963) 50 ITR
1 (SC); A.R. Antulay v. R.S. Nayak & Am'. [19881 1
E Suppl. SCR 1 : (1988) 2 SCC 602 - referred to.
13. INCOME OF SASI ENTERPRISES BY WAY OF
RENTAL INCOME, AGRICULTURAL INCOME AND
REPAYMENT OF LOAN.

F
13.1 The respondents having claimed the income of
Rs.95,92,776/- as against Rs.6,15,900/- quantified by the DVAC,
the onus was on them to prove the same. Even judged by the
bench mark of balance of probabilities, the High Court in order
to reverse the determination of the Trial Court, on the same set
of evidence ought to have applied itself to examine and assess
G the evidence in this perspective. The High Court, having regard
to its approach has failed as an appellate forum and as a higher
court of facts to appreciate the evidence in the correct legal
context. [Paras 300, 301 [ (798-E; 802-B-D[
13.2 Rental Income of Al
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 545

Whereas the DVAC quoted Rs.40,01,127/- to be the income A
under this head, according to the defence, the same ought to
have been Rs.43, 75,132/-. It has been urged on behalf of Al that
she had received an amount of Rs.90000/- by way of monthly
advance and Rs.2,32,000 by way of rental income during the check
period. Reliance was placed on bank account statements during B
the relevant period. The Trial Court accepted this evidence and
noted that though the total rent paid did sum up to Rs.43,75,132/-,
the prosecution had taken this figure to be Rs.40,01,127/-. It,
however, declined to interfere on the ground that rental income
was taxable under the Income Tax Act. The High Court, on
the other hand, without any discussion of the evidence added C
Rs.3,22,000/- to the rental income as the prosecution had omitted
to do so. As the evidence adduced by the defence did establish
that Rs.43,75,132/- had been paid as rent for the two premises in
question, the High Court was justified in adding Rs.3,22,000/-.
[Paras 302, 304, 305, 306[ [802-D-E; 803-A, B-DI
D
13.3 Income of Jaya Publications and Namadhu MGR:
13.3.1 The appellant-State took exception to the addition
of an amount of Rs.4 crores by the High Court towards income
of Jaya Publications and Namadhu MGR in addition to the figure
cited by the DVAC. The Trial Court, took into account the E
particulars of income of Jaya Publications as claimed by the
defence for the assessment years 1992-93 to 1996-97 sought to
be proved through the oral evidence of DW 88 and various
documents. The break up of the income from various sources,
as furnished by the firm, disclosed that its income through scheme
deposit over the above period was Rs.14,10,35,000/- and qua F
other sources including sales, job work, advertisements, interest,
agricultural income, rentals etc. Rs.1,15,94,848/-. The Trial Court
was conscious of the fact that the defence in support of its claim
of the income had called in evidence the testimony of 31
witnesses, who spoke about the deposits made by them under G
the scheme, in addition to DW 88 and that further reliance was
placed on the special audit report obtained by the income tax
auth~rities, orders of the commissioner of income Tax (Appeals)
as well as the balance sheets filed along with the returns. The
Trial Court rightly noticed that the returns for the assessment
H
546 SUPREME COURT REPORTS [2017] 5 S.C.R.

A years 1991-92, 1992-93, 1993-94 were filed much belatedly on
6.11.1998 and that in these returns, the nature of the business of
the firm "'.as shown as "printing, publishing and dealing in
properties". It also noted that in the balance sheet, enclosed to
the return of the year 1991-92, an amount of Rs.13,54,000/- was
shown in the liability column. The amounts of Rs.82,14,000/- and
B
Rs.3,05,40,000/-, being scheme deposit, were also shown in the
liability column in the balance sheets enclosed with the returns
for the assessment years 1992-93 and 1993-94. The Trial Court
noticed as well that the return for the assessment year 1994-95
was filed only on 17.3.1998 and that the balance sheet attached
c thereto, showed scheme deposit of Rs.51,31,50,00/- in the liability
column. That the return for the assessment year 1995-96 was
also filed only on 17.3.1999 much belatedly, was noticed as well.
The Trial Court rightly mentioned that this return as well as the
return for the assessment years 1996-97 did not mention about
D the scheme deposit. The evidence of the 31 witnesses with
regard to the deposits made by them of amounts varying from
Rs.12000/- to Rs.18000/- was more or less of the same model
and owing allegiance to the political party. Some of them also
proved their application for becoming subscribers but though they
stated to have been issued receipts for the deposits made, none
E produced the same. [Paras 307, 313, 314, 3151 [803-E; 805-D-H;
806-A-E]
13.3.2 The Trial Court on an overall assessment of the
evidence concluded that the story of scheme deposit was
introduced by the defence only after the charge-sheet was filed
F i.e. through the income tax returns filed in the year 1998. That
no evidence was produced before the Court to show that the
scheme was floated in the year 1990, was recorded. While
rejecting the claim of this head of income by the defence, the
Trial Court sought to draw sustenance from the fact that the
assessee had not produced the primary documents either before
G the special auditors or the assessing officers and also rejected
the applications, as manufactured. The testimony of subscribers
was dismissed also on the ground that they were hardened party
workers. The High Court, though had traversed the above facts
in lesser detail, dealt with the oral and documentary evidence
H and noted that the defence claim of scheme deposit of
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 547

Rs.13,89,19,475/-, as accepted by the concerned CIT (Appeals), A
was subjudice before the High Court, Madras. The High Court
reiterated as well that the income tax returns for the relevant
assessment years were filed very belatedly and"that no plausible
explanation, therefor was forthcoming. The High Court
categorically held that delayed and unexplained submission of B
income tax returns did give rise to doubt of the genuineness
thereof. This notwithstanding, the High Court only in the face of
the oral evidence of the 31 witnesses claiming themselves to be
the depositors/subscribers for the newsletter, returned a finding
that the whole claim of the assessee could not be rejected only
on' the ground of delay in filing of the income tax returns. Acting c
solely on this consideration, the High Court, thus allowed addition
of a sum of Rs.4 crores as income of Jaya Publications.
Considering the different phases of the process undertaken by
the income tax authorities, the failure of the assessee to produce
the primary documents in original before the auditors and the
D
income tax authorities in support of such scheme deposit and
more particularly the inordinate delay in submission of income
tax returns much after the submission of the charge-sheet, along
with the other attendant circumstances considered by the Trial
Court, the High Court was not justified in allowing an additional
sum of Rs.4 crores as income of Jaya Publications on account of E
scheme deposit merely on the basis of the oral evidence of the
31 witnesses. [Paras 319, 320, 3261 1808-C-H; 809-A; 810-F-HI
13.4 Income of Al by way of interest on bank deposit:
A further sum of Rs.18,49,210/- was claimed on behalf of
Rt/Al as her income by way of interest on bank deposits. The F
Trial Court examined the evidence of the officers of the concerned
banks with reference to the copies of the contemporaneous
statements of accounts and had accepted the figures available
. thereunder. It, however, declined to accept the profit and loss
account statements adduced on behalf of the said respondent in G
support of the enhanced claim in absence of any other reliable
evidence to that effect. Even assuming that the contention on
behalf of this respondent that profit and loss accounts were indeed
part of the respective income tax returns and had, in any case,
been separately tendered and marked in evidence at the trial, in
H
548 SUPREME COURT REPORTS [2017] 5 S.C.R.

A law the same per se was not an unassailable authentication of the
erobative worth of the contents thereof, so much so to repudiate
the approach of the Trial Court to be incurably erroneous. Further
the High Court seems to have omitted to adjudicate this issue.
(Paras 327, 328) (811-D-H)
B R. V.E. Venkatachala Gounder v. Arulmigu
Viswesaraswami & V.P. Temple and another [20031 4
Suppl. SCR 450 : (2003) 8 sec 752 - held
inapplicable.
13.5 Income of Super Duper T. V. Pvt. Ltd.
C Rs.1,00,00,000/-.
13.5.1 The Trial Court recorded that this company was one
of those floated by A2, A3 and A4 during the check period and
that it had introduced a deposit scheme whereunder the cable
operators made cash deposit of Rs.5000/- or multiples thereof
D and that in that process the company received deposit of
Rs.1,06,10,100/-. The Trial Court noted, amongst others, that
as per the Cable Television Network Rules, 1994 enforced on
and from 29.4.1994, only refundable security deposits was
permissible and that though receipt books and counter-foils of
the payee-in- slips to show that the amount of Rs.5000/- each
E collected from large number of subscribers were credited to
account, there was nothing on record to show how the investments
were made for the purchase of equipments claimed to have been
supplied by the company to various subscribers and that in any
case, this amount could not have been available with the A3 as
F the stable corpus of income for purchase of immovable properties,
as claimed. The Trial Court recorded the huge cash inflow and
outflow to and from the account of the company. Noticeably, such
deposits and withdrawals had been, vis-a-vis several accounts
involving Al to A4 and the firms and companies floated by them
during the check period of which they were partners/directors,
G as the case may be. All these were noted by referring to the
accounts and the individual transactions. The Trial Court having
regard to the enormity of bank transactions inter se amongst the
respondents and their firms/companies declined to sustain the
contention of A3 that they were possessed of independent source
H of income and the same was available with him and A2 for
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 549

acquisition of properties in their names. [Paras 332, 3331 [813- A
A-B, E-H; 814-A)
13.5.2 The High Court chiefly relied on the evidence of
DW-85, who introduced himself as the Manager/Administrator
of the company during 1995-96 and the fee receipt books and
the counter-foils pertaining to the claimed deposit of Rs.5000/- B
per member as non-refundable entrance fee. Further, it accepted
the investments/documents exhibited at the trial with regard to
payments received by the company from the public/public sector
undertakings in connection with the business transactions
entered into. It also noticed the assessment of the returns of the
company by the income tax authorities and assessed the same to c
be Rs.1,00,00,000/-. The High Court missed the facets of the
charges levelled against the respondents and confined itself
seemingly to the statements of the claimed depositors and the
deposit books and the counter-foils in connection therewith. The
Trial Court in contradistinction took pains to examine the trail of D
the income claimed by the company and the feasible investments
thereof. It also took note of the huge inflow and outflow of cash
to and from the accounts of the firms/companies of which the
respondents were partners/directors during the check period so
much so that the income claimed by A3 under this head ceased
to retain its independent identity so as to be accepted as the E
discernible earnings of the company for transacting its business
activities as a distinctly separate institution. The summary
treatment of the evidence on this issue by the High Court lacks
the desired approach and, therefore, cannot be sustained. The
addition awarded by it of income of Rs.1,00,00,000/- to Super F
Duper T.V. Pvt. Ltd. thus cannot be upheld. [Paras 334-336)
[814-B-Hl
13.6 Refund of Wealth Tax to Al:
Having regard to the concept of wealth tax and the
comprehension of assets and net wealth attracting such levy, this G
refund, though contemplated by the Wealth Tax Act, 1957, ipso
facto does not certify the lawfulness of the wealth on which initially,
a tax was charged and later refunded. In absence of any other
evidence to satisfactorily prove the legitimate origin and status
of the wealth relatable to the refund, the same cannot be accepted H
550 SUPREME COURT REPORTS [2017] 5 S.C.R.

A to be an income from the lawful source as envisaged in Section
13(l)(e) of the Act. More over there appears to be no discussion
or analysis of this claim of income by the Rl/Al either by the
Trial Court or by the High Court. [Para 3381 [815-C-DI
13.7 Income of Al from Mis Sasi Enterprises:
B At the relevant time, Al and A2 were the partners of Sasi
Enterprises and A2 was one of the partners of M/s Fax Universal
as well. The exchanges of the reserves are, therefore, for all
practical purposes inter se Al and A2. The claim of the defence
to accept the above amount to be lawful income in the attendant
c facts and circumstances, lacked persuasion. [Para 3391 [815-GI
13.8 Loan by Al from A2:
Admittedly, A2 was the sole proprietor of both, Fresh
Mushroom and Vinod Video Vision at the relevant time and thus
the deposits, though speciously are evidenced by bank
D transactions are visibly, inter se, Al and A2 and her firms. These
receipts essentially have to be tested in the backdrop of the charge
of conspiracy and abetment so as to determine their genuine
evidential worth. Having regard to the amalgam of the persons
and the entities involved in the transactions, in the absence of
E other convincing evidence, the said receipts/deposits cannot be
accepted to be lawful income as envisioned in Section 13(l)(e) of
the Act. [Paras 341, 3431 [816-B-C, Fl
Commissioner of Income Tax v. P. Mohanakala [20071
6 SCR 680 : (2007) 6 SCC 21 - relied on.
F 13.9 Al's Income from Jaya Publications, CANFIN Homes
and Namadhu MGR: [816-F-GI
13.9.1 During the check period, Jaya Publications, apart
from disbursing Rs.1,01,49,900/- in favour of Al did also repay
her loan of Rs.75 lakhs. Noticeably, as has been recorded by the
G Trial Court, while discussing the aspect of loan taken by Al from
CANFIN Homes, prior to such loan, she had deposited Rs.l ·
crore in the fixed deposit with the said financial institution on
6.~.1992. This, as the Trial Court has, brought on record is vide
the testimony of PW-95, Regional Manager, CANFIN Homes.
This witness has disclosed further that the above loan amount
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 551

was taken on this fixed deposit. He stated that on 25.8.1995, Al A
again took loan of Rs.75 lakhs on this fixed deposit, however
qua a different loan account. In re the third head, admittedly
Namadhu MGR is only a publication of Jaya Publications but has
a separate bank account. Al's claim of having drawn Rs.94,33,000/
- as well from Namadhu MGR is seemingly also in the capacity of B
a partner of Jaya Publications. [Paras 345, 3461 [817-D-GI
13.9.2 The deposits and withdrawals represented through
. the different entries in the bank accounts suggest multiplication
of transactions stemming from the same corpus. The maze of
financial exchanges in fragments involving different combinations
hint at the attempt to inflate individual and collective income of C
the respondents. The banking transactions, though resorted to
for proclaiming genuineness thereof, having regard to the overall
factual conspectus do not appear to be real. The claim of income
of Rs.2,70,82,900/- of Al by way of receipts from Jaya
Publications, therefore is unconvincing. In other words, Al has D
failed to satisfactorily prove this constituent of income. [Para
3471 (817-G-H; 818-AI
13.10 Additional Income Claimed by A2 to A4:
A2 to A4 claim that the prosecution had not taken into
account Rs.26,50,57,478/- being their individual income as well E
as that of their firms/companies. The High Court had dealt
exclusively with loans taken from the nationalized banks as
income of the respondents. Though a reference has been made
of loans availed by the respondents from various firms as named
therein, the High Court had not taken into the account the same F
and had limited itself only to the loans availed by the respondents
from the nationalized banks. In that view of the matter, the itenis
of income under scrutiny, had also been left out of consideration
by the High Court. Thus the grievance of the respondents that
the evidence with regard to these items of income had ·not been .
considered by the Trial Court, is not of decisive significancecmore G
particularly in absence of any challenge made by them to the
omission as well of the High Court in this regard. The High Court
did not as well accept these items of income referring to them
as private loans. [Paras 348, 3551 [818-B; 820-D-FI
H
552 SUPREME COURT REPORTS [2017] 5 S.C.R.

A -13.11 The next batch of income as claimed by the
respondents is comprised of advances received by A2 from
Bharani Beach Resorts, Riverway Agro Products (P) Limited and
Mis Meadow Agro Farms (P) Limited by cheques amounting to
Rs.22 Iakhs, Rs.52 lakhs and Rs.32.90 lakhs respectively.
According to the respondents, the transactions having been
B effected through cheques, Section 269SS of the Act had no
application and further Section 276DD having been deleted by
the Direct Tax Laws (Amendment) Act 1987 w.e.f. 1.4.1989,
reference thereto, the transactions being undertaken thereafter,
was wholly misplaced. Whereas, the High Court did not take into
c account these receipts of A2, the Trial Court, apart from being of
the view that cognizance of such transfers of fund by way of lawful
transactions cannot be taken in the face of Section 269SS of the
Income Tax Act and the provisions of the Companies Act, rejected
these also on the ground that the respondents had failed to adduce
D acceptable evidence with regard to the resources of these two
companies to advance such huge amounts. In the opinion of this
court, even without reference to Sections 269SS and 276DD of
the Income Tax Act, the plea that the agreement for sale of
property against which Bharani Beach Resorts had advanced Rs
22 lakhs to A2, had not been proved, cannot be lightly brushed
E aside. Vis-a-vis the other evidence on record, as adduced by the
respondents in support of the advances received, in absence of
evaluation thereof by the High Court, in the face of rejection of
this item of income by the Trial Court, this Court is disinclined to
sustain the claim of the respondents. [Paras 360, 362, 3631 [821-
F-H; 822-A-B, E-Gf
F
13.12 The next item of income cited on behalf of A2 to A4,
is by way of earnings of A2 to the tune of Rs.2.2 crores as a partner
of several firms. Vis-a-vis the income by way of Rs.2,90,000/-by
A2 from the sale of her properties to Meadow Agro Farms (P.)
Ltd., the High Court as well, according to the compilation
G furnished by the respondents, did not account therefor. With
regard to the claim of Rs.4,35,622/- as cash balance available
with A2 as on 1.7.1991, on her own showing, this amount was in
deposit as on 31.3.1991. In absence of better evidence, this
amount is not accepted as available at her disposal as on 1.7.1991,
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 553

the date of commencement of the check period. [Paras 364, 3681 A
[822-H; 823-A, G-H; 824-AI ~;
14. ASSETS
v
14.1 According to respondent No. 1, as against the figure
of Rs.24,29,40,490/- being the value of her assets during the
check period, as computed by the prosecution, her assertion is B
of Rs.6,52,34,410/-. The evidence of the prosecution witnesses
disclose that the members of the inspection team did minutely
notice all the salient characteristics of the new/additional buildings
under surveillance together with their exquisite and expensive
structural attachments, trappings, fineries and adornments having c
formidable potential of enhancing their overall worth. Having
regard to the nature and size of the survey, insistence on proof
·beyond reasonable doubt with mathematical exactitude would be
both unwarranted, inexpedient and un-pragmatic. Th.e
appreciation made by the Trial Court of the evidence on record
and the final determination of the extent of expenditure incurred D
cannot be discarded as absurd. The High Court adopted the
"per square foot method" in evaluating t,!Je value of the new/
additional buildings. [Paras 414, 420, 423, 424, 4261 [835-F-G;
839-E; 840-E-G; 841-BI
14.2 Prima facie the plea of the prosecution that in assessing E
the expenditure of new/additional buildings, the High Court had
not only taken a reduced constructed area of 1668.39 sqs. instead
of 2174.69 sqs. (for the 17 items considered by it), thereby
introducing a shortfall of 506.3 sqs., it also applied the rate of
Rs.28,000/- per square based on the construction cost of a sentry F
shed, as the base value to work out the amount of investments
made towards the new/additional buildings/constructions is borne
out by the records. The adoption of Rs.28,000/- per square as
the base value, which is the cost of construction of a sentry shed,
per se is erroneous, having regard to the fact that a sentry shed
and the new/additional constructions/buildings are incomparable G
on many counts. Even if it is assumed, as has been pleaded by
the defence that the base value so applied was only for
appreciating the expenditure towards the skeletal framework of
the constructions, the method adopted by the High Court in the
final computation of the investments by making lump sum H
554 SUPREME COURT REPORTS [2017] 5 S.C.R.

A additions towards cost of marbles, granites/interior decorations,
staircase, overhead tank and other furnishings, having regard to
the description of the constructions/buildings does not appear to
be either realistic or rational and does not merit affirmation. In
any case however even assuming that the arithmetic undertaken
by the High Court is correct, it having accepted the value of assets
B
to be Rs.66,44, 73,573/-, the remainder would still value at
Rs.43, 75,38,688/-. ,ln other words, in calculating the
disproportionate assets, the amount of Rs.43, 75,38,688/- has to
be applied even if there is a reduction in value of assets by
Rs.22,69,34,885/ i.e. (Rs.29,82,71,254.32 - Rs.5,10,54,060).
c [Paras 428, 429, 430) [841-H; 842-A-F)
14.3 However, the High Court though did accept the
valuation of the assets for the purpose of computation to be
Rs.66,44,73,573/- as valued by the prosecution, for the purpose
of ascertaining the disproportionate assets, it took into account
D only the cost of new or additional construction of buildings as
assessed by it at Rs. 5,10,54,060/- thus reducing the value thereof
as made by the prosecution by a sum of Rs.22,69,34,885/-. The
omission on the part of the High Court to exclude the other four
items of assets, on which as well it had scaled down the value, in
working out the extent of disproportionate assets however had
E not been questioned by the respondents before this Court. The
reduction of the cost of new or additional construction of buildings
to Rs.5,10,54,060/- as effected by the High Court is patently
erroneous. Consequently the quantification of the
disproportionate assets is also visibly wrong. [Para 441) [846-E-
F H)
15. EXPENDITURE
15.1 As regards the erection of marriage pandals, the Trial
Court assessed the oral and documentary evidence adduced by
the parties. It took note, amongst others, of the testimony of
G PW-181 who was the Assistant Engineer, PWD at the relevant
point of time and to whom, according to the witness, the work of
estimating the expenses incurred towards the pandals, both at
the marriage and reception venues was entrusted. The High
Court readily discarded the testimony of PW181 and the report
H primarily on the gr.ound that this witness had no personal
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 555

knowledge or idea of the structures raised at the venue of the A
marriage and of the reception and that his version with regard
thereto was on the basis of derived inputs though it mentioned
that the witness, as attested by him, did consult the architect, the
Art Director, the electrician etc. who accompanied him to the
site and that he had been given as well a drawing of the wedding
B
choultry and the measurements of the panda) along with the
sketch of the decorative arches etc. It held the view that .the
witness had prepared the report on the basis of what the witness
had heard and seen from the drawings and the sketches and was
not personally aware of the authenticity thereof and that he did
not ask for quotations or confirm the sketches. That his report c
was deficient and scanty in essential particulars to inspire
confidence for its acceptance was recorded. On this aspect, the
High Court also referred to the evidence of PW200 who claimed
to have been entrusted to oversee the works related to the
pan dais by A2. This witness had confirmed that he visited both
D
the venues and that a plan for the pandals as well as stage
arrangements, as prepared by architect had been handed over to
him. He narrated in details about the specifications of the
structures and the payments therefor. He also admitted to have
received a sum of Rs.16 Jakhs from the father of the bride in this
regard. The High Court, however observed that this witness, E
amongst others, did neither tell the police about the expenses of
leveling nor disclose the particulars about the number of air
conditioner machines used. The High Court further commented
that he did not supervise the work of Art Director and that this
witness could not remember as to how much money was spent
for the marriage. ·The High Court touched upon the evidence of f
other witnesses and in particular elaborated on the testimony of
PW228 from whom the file containing the original vouchers, bills,
invoices in connection with the marriage had been seized. It
also analyzed the queries made by the Income Tax Department
and the reply given thereto by Al by her Jetter wherein, she G
provided the breakup of the expenditure incurred by her. The
testimony of DWl, the maternal uncle of the bride, more
specifically to the effect that the entire expenses had been borne
by the bride's family to the tune of Rs.92 lakhs by remittances
through the bank account opened on 14.08.1995 was taken note
H
556 SUPREME cou'RT REPORTS [2017] 5 S.C.R.

A of. The evidence of the party workers claiming their contribution
in the expenditure through collection was also recorded and
eventually the High Court accepted the statement of Al furnished
to the Income Tax Department disclosing the expenditure by
her of Rs.28,67 ,520/- towards marriage to be her share of
expenses. [Paras 444, 471) [847-G-H; 855-F-H; 856-A-F)
B
15.2 Apart from rejecting the testimony of PW181, Assistant
Engineer PWD being second hand in nature, the High Court
seemingly accepted in substance the version of the defence
witnesses observing that at the relevant time Al was the Chief
C Minister of the State and was incidentally then the General
Secretary of AIADMK party as well. It recorded further that the
bride was none else than the grand-daughter of famous cine actor
Shivaji Ganeshan. It observed that the prosecution for no reason
forthcoming, had omitted to examine the bride's father who would
have been the best person to state about the actual expenses on
D the marriage. The High Court as well seem to have accepted
that it was the customary practice for the bride's family to bear
the expenses of the marriage normally and though it was of the
view that such expenditure was comprised of verifiable and non-
verifiable components, it was difficult to ascertain the non-
verifiable segment while verifiable expenditure could be assessed
E through investigation. The High Court eventually accepted the
figure of Rs.28,67,520/-, as cited by the Al to be the amount
expended by her in the marriage and limited the liability of the
respondent- accused, as stated above, to Rs.28,68,000/-. Thereby
the High Court reduced the expenditure of Rs.6,45,04,222/-
F towards marriage expenditure by the Rl/Al, as mentioned by
the prosecution, to Rs.28,68,000/-. [Para 4721 [856-G-H; 857-
A-B]
15.3 In his report, PW181 mentioned, inter alia, the areas
of the various pandals together with the decorative attachments
G and after accounting for the cost thereof and the price of the
furniture used and the amenities provided, estimated the
expenditure to be Rs.5.91 crores towards the pandals and other
arrangements to secure the intended facilities for the couple,
guests and other participants. Although PW181 was not an eye-
witness to the marriage arrangements and had not personally
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 557

undertaken the works pertaining to the pandals and other A
associated arrangements, yet as was observed by the Trial Court,
findings in his report could be construed to be of an expert witness
and further could be used as corroboration for the testimony of
PW200 who indeed had supervised the same works himself and
as claimed by the prosecution on the instructions/advise of A2. B
The evidence of PW181, that the Architect and the Art Director
had provided him with the plan and the sketch map on which the
pandals and other stru.ctures at the venues had been constructed,
cannot be discarded as hearsay. In this view of the matter, the
approach of the Trial Court to weigh the probative worth of the
testimony of PW181 in conjunction with PW200 cannot be C
repudiated to be impermissible in law or outrageously fallacious.
[Para 476] [859-C-GI
15.4 PW200, Chief Engineer, PWD, Tamil Nadu did assert
on oath that he was instructed by A2 to complete the pandal works
as early as possible. He also referred to a plan to that effect D
furnished by the Architect in presence of the contractors
entrusted for the execution thereof. The witness claimed to have
arranged land at the identified sites to be levelled and also
provided in details of the number, size and specification of the
pandals together with the purposes thereof. The witness was
candid to state that the father of the bride had paid Rs.14 lakhs E
towards the expenditure and that therefrom, he disbursed
payments. He deposed as well that Al and A2 had inspected the
work by visiting the site about a week prior to the marriage. He
claimed to have signed the applications for securing temporary ·
electric connections for the panda ls for which payments were made F
by cheques on behalf of Al. In this patent premise, the conclusion
of the Trial Court that the evidence of PW200 was direct and of
first hand in nature with regard to the arrangements at the pandals
cannot be faulted with. Its finding that his testimony thus lent
sufficient corroboration to that of PW181 also cannot be dismissed
as preposterous. The testimony of DW-80, who was also a G
signatory to the report of PW181 to the effect that the same had
been prepared without any inspection and that the measurements
mentioned therein were not real had not been rightly preferred
to the otherwise consistent versions of PW181 and PW200. The
evaluation of the evidence of the other witnesses touching upon H
558 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the remaining aspects of the expenditure incurred on the
marriage, as conducted by the Trial Court, also did not merit
rejection in toto. The rejection of the evidence of the party
workers cla_iming collection of various amounts from its cadres
and utilization thereof towards the purposes and arrangements
mentioned by them also in absence of any persuasive
B
corroborative evidence does not merit any repudiation. In the
face of the evidence in particular of the elaborate arrangements
at the venues and the expenses incurred on other items
associated with the event, the Trial Court did not err in not
accepting the figure of Rs.28,68,000/-, as the expenditure incurred
c by Al on the basis of her reply to the queries made by the Income
Tax Department. [Paras 477, 4781 [859-G, H; 860-A-GJ
15.5 Though it is not unknown, that very often the bride's
family shares or bears the expenditure of marriage, dependent
on the practice prevalent, it is not an invariable phenomenon and
D permits of exception in varying fact situations and therefore no
rigid assumption either way is tenable. In any case, necessary
deductions would have to be drawn on the basis of the evidence
adduced. As the investigation into the expenditure on the
marriage had to be conducted. more than two years after the event,
it is logical that the exercise involved was expected to be informed
E with some assumptions, which if realistic and logical, would not
as such vitiate the assessment as incurably infirm or non-est.
On an overall consideration of the evidence adduced by the
parties, the computation of the expenditure incurred by Al in
the marriage as made by the High Court is unacceptable in the
F teeth of the materials on record to the contrary. In view of
concurrent findings of the two forums on the rest of the items of
expenditure, a fresh exercise with regard thereto in the present
proceedings is not undertaken. [Paras 479, 480) [861-B-.DI
16. CONSPIRACY AND ABETMENT
G 16.1 The evidence on record demonstrates that companies
of which A_-2 ·to A-4 were directors though were in existence from
before the commencement of the check period and of which A3
and A4 were not the directors then, did neither have any
significant business activity nor transaction nor any profit earning
H pursuit to their credit. This the Trial Court rightly noticed was
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 559

apparent from the relevant returns and balance sheets. The A
contemporaneous evidence also evinced that these companies
were not possessed of sufficient resources to acquire properties
to the extent amassed during the check period. Neither did these
companies have fixed assets nor did they avail or give loans to
evince financial soundness or stability permitting acquisition of B
the assets and properties as made during the check period.· In
all, in these six companies, A3 and A4 were nominated as additiomd
directors/directors in the year 1994 and soon thereafter their
registered office stood shifted. The original directors resigned
leaving the reins of the companies wholly with A3 and A4 in
particular. Soon after A3 and A4 were inducted as additional C
directors/directors, bank accounts were opened. Simultaneously
A2 to A4 formed several partnership firms with the principal place
of business thereof also at the new address. Co-incidentally the
dates of registration of most of these firms were common in
batches and the duration of their existence were mentioned to
D
be at will. Significantly, A3 and A4 resigned from the above six
companies markedly on the eve of the expiry of the check period.
[Para 497] [870-G, H; 871-A-D]
16.2 The Trial Court, in details, took notice of the testimony
of the witnesses examined as well as the documents on the aspect
of acquisition of properties by these six companies. The witnesses' E
included erstwhile directors of these companies, bank officials
who stated about the opening of their accounts as well as
advancement of loans, the concerned sub-registrars, who
registered the sale deeds of lands purchased by these companies,
officials from the office of the Company Registrar and the Real F
Estate Agent, who acted as the agent/attorney of the vendors,
whose lands were purchased by these companies. The materials
examined by the Trial Court evidenced heavy deposits/
withdrawals of cash and transfers thereof hitherto absent before
A3, A4 had taken over the companies. The amounts varied very
often in the range of Rs.10 lakhs and above. Transfers of heavy G
amounts to and from other accounts of A2 to A4 and their firms
also surfaced. The income-tax returns/balance sheets belatedly
filed also demonstrated exchanges of deposits inter se the
accounts of A2 to A4 and their firms as well as these companies.
[Para 498] [871-D-GJ H
560 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 16.3 In respect of the acquisition of the immovable
properties, the evidence attested that soon after A3 and A4 had
become directors of these companies, they got involved in the
negotiations and survey of lands intended to be purchased. The
sales were got executed through the attorneys of the owners of
the lands for which deeds of power of attorney were obtained
B
from such owners. Not only uneven bargains but also inadequate
consideration/price by undervaluing the properties was noticeable
in the transactions. Evidence on record disclosed that instructions
were issued from the higher authorities to the Registrars/Sub-
Registrars to respond to the directions issued from the office of
c Al for documentation and registration of the deeds involving such
purchases and as a matter of fact, on various occasions, such
precepts did come and were readily complied with. Several
registrations were executed in the house of the vendors and at
times, also in the concerned office of the Registrar/Sub-Registrar.
D The sale deeds executed, which are not disputed so far as those
relate to these companies, did not indicate that the purchases
had been made from their assets existing prior thereto. The
evidence of the witnesses did suggest as well that the registratiOn
norms were flexed and that resultant irregularities in the process
were ignored and cast aside to oblige the respondents. Evidence
E of direct involvement of A3 and A4 in the purchase of shares and
properties is discernible from the evidence adduced. In some
cases, A2 was also present at the time of negotiations for such
purchases. [Para 499] [871-H; 872-A-E)
16.4 The Trial Court also noticed the evidence that the
F companies had been transferred to A3 and A4 at paltry sums. On
a totality of the scrutiny of the evidence on record which
significantly is adequately exhaustive, the Trial Court held that
at the relevant time of acquisition of the properties, all the six
companies were exclusively in the control and management of
A2 to A4. The statement of the erstwhile directors/promoters of
G the companies that they did not purchase any property in their
names either before or after the formation of such companies
was also taken note of. The Trial Court noted as well that A2 to
A4 had taken over the management of the companies even
without buying the requisite shares and concluded that these
H entities in fact did not have the trappings of a company. It was
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 561

determined as well that none of these companies had any account A
in their names before A3 and A4 had taken over the charge thereof
and that there was no evidence to demonstrate that the funds of
these companies had been utilised to purchase properties in their
names. It recorded as well, that the funds were transferred to
the accounts of these companies either from the accounts held in
8
the names of Namadhu MGR, Mis Jaya Publications or other
firms of the respondents which unassailably proved that the
resources for the acquisition of the properties of these compani.es
had in fact been availed from Al or the joint accounts of Al and
A2. The Trial Court deduced that all the circumstances conjointly
substantiated that the acquisition of these companies were never C
intended to be the assets thereof and were also not treated to be
their properties at any point of time. According to the Trial Court,
it was only after the attachment of the properties that the
respondents raised the contention that the ownership thereof
did vest in the companies and thus could not be said to have
been held benami for Al. The Trial Court also recorded that after D
the resignation of A3 and A4, there was no appointment of
directors and that seemingly for that reason, the order of
attachment passed in 1997 was not assailed for nearly two years.
It thus rejected the contention of the respondents that the
properties acquired in the name of the companies did belong to E
these entities and could not have been assimilated in the assets
of Al. [Para 500) [872-F-H; 873-A-B, F-H; 874-A-BI
16.5 Qua 'the respondents' plea that the companies
incorporated under the Companies Act cannot hold property
benami for another person, the trial court entered a finding that F
none of the documents of title registered in the names of the
companies did bear the seal thereof. That in 90% of the registered
deeds, the companies were not represented by their secretary
or director and that the address of the companies were not
recorded in such deeds, was noted. The Trial Court concluded
that the registrar who registered these properties and PW 181 G
who negotiated with the purchasers, distorted the rules to help
Al and they went out of the way to oblige her. That in some of the
deeds, the names of the purchasers were not included and that
the properties were undervalued was reiterated. The admission
of the District Registrar that he proceeded with the registration H
562 SUPREME COURT REPORTS [2017] 5 S.C.R.

A solely because the properties were purchased by Al was taken
cognizance of. It was thus of the view that the intention of the
respondents in taking over the companies was for acquiring large
number of properties in their names for diverting the funds
unlawfully amassed by Al during her tenure as Chief Minister of
the State. It thus concluded that the properties registered in the
B
names of these companies and which formed the subject matter
of GOMs issued by the State of Tamil Nadu were really the
properties acquired and held by A2 to A4 for and on behalf of Al.
Apart from the fact that these properties had been acquired during
the check period, the general phenomenon decipherable is that
C the acquisitions had been made in the names of the newly for.med
or acquired firms/companies with their directorial composition
as noticed henceabove and the two existing firms, of which Al
and A2 were partners. [Paras 501, 502[ [874-B-GI
16.6 It is a trite proposition that in the case of conspiracy,
D each member thereof becomes the agent of the other and in law
is bound by their actions inter se. So far as Al and A2 are
concerned, one is the agent for other as partners of the two· firms
and additionally A2 is the attorney of Al and is a co-conspirator,
as imputed. As testified by PW198, a blanket instruction had
been issued by Al that the directions as made by A2 from time to
E time ought to be followed and consequently the latter was to
decide in which account the huge cash deposits were to be made.
The numerous inter accounts transfers would only corroborate
massive unaccounted cash deposits being made, the origin
whereof had been A-1. For all intents and purposes, these
F accounts were construed to be one. The evidence of PW47,.PW
71 and PW 159 taken together attest that officials were used to
locate and purchase lands at various places. In terms of the
testimony of PW159, in most of the sales, it was A2 who had
directed as to the names of the firms/individuals to be mentioned
in the sale deeds and in whose names the sales were to be
G registered. The amounts had been paid from amongst various
accounts of the accused/firms/companies. In many cases, the sale
transactions had taken place below the guideline value as has
been deposed by PW159 and PW 221. The testimony of PW 15,
PW 40, PW43, PW 56, PW 76, PW 89, PW 160, PW 77 and PW237
H · is amongst others to the effect that the vendors were kept unaware
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 563

of the purchasers' identity and in some cases were also put under A
duress to agree to the transactions. Their statements also divulge
that not only was Al aware of these transactions but on several
occasions, the registrations thereof were performed at her
residlnce. [Paras 504, 505, 5061 [877-F-H; 878-A-DI
Aron Salomon (Pauper) v. A. Salomon and Company B
Limited 1897 AC 22 - referred to.
16.7 The Trial Court noted that under Section 3 of the
1988 Act, the Special Judge had the power to try not only an
offence punishable under the said statute but also one for
conspiracy to commit or attempt to commit or abetment of any c
offence thereunder. The Trial Court thus held that private
individuals could be prosecuted by the Special Court under the
Act on the ,ground that they had conspired with and abetted the
act of criminal misconduct committed by a public servant within
the meaning of Section 13(l)(e) of the 1988 Act. !Para 508) (879-
H;~~~ D
17.1 The unimpeded, frequent and spontaneous inflow of
funds from the account of Al to those of the other co-accused
and the firms/companies involved, overwhelmingly demonstrate
the collective culpable involvement· of the respondents in the
transactions in the face of their overall orientations so as to render E
the same to be masked banking exchanges though involving
several accounts but mostly of the same bank. No other view is
possible. True that in course of the investigation, some
documents had been seized which were not adduced in evidence
being construed to be irrelevant for substantiating the charge, F
but it did not certainly tantamount to suppression thereof so as
to afflict the trial with the vice of unfairness and non-transparency
as alleged. Additionally, the courts did intervene as permissible
in law wherever merited to ensure against any prejudice qua the
parties. The fact that the documents seized but not brought on
evidence by the prosecution had not been destroyed and were G
available to the respondents for their inspection, at all relevant
times, is, per se, an index of fair and impartial trial. The defence
as a matter of record did at some point of time close its side of
evidence by examining only two witnesses, whereafter following
the inspection of the documents, as desired by the respondents, H
564 SUPREME COURT REPORTS [2017] 5 S.C.R.

A after. Al had returned to power, examined as many as 99
witnesses. Prior thereto, 76 ·prosecution witnesses were
permitted to be recalled for further cross-examination. The
remonstrance that the Trial Court did not take into consideration
the defence evidence is also not borne out by the records. As
B would be evident from its judgment, the testimony of several
witnesses examined by the respondents received in-depth
appreciation by the Trial Court wherever relevant. The contention
that the Trial Court had conducted the trial in a manner prejudicial
to the respondents in the overall context, both factual and legal,
thus cannot be sustained. [Paras 527, 5281 [890-B, C-GI
c 17.2 That the Trial Court was meticulous, sensitive, vigilant
and judicious in appraisal, stands authenticated by the fact that
in valuing the assets, as warranted, it excluded a sum of Rs.32
lakhs towards the price of sarees and further reduced the value
of gold and diamond to the extent of Rs.2 crores. It also allowed
D reduction in the marriage expenses by more than 50% and further
discounted the value of constructions by permitting a depreciation
of 20%. Whereas qua income, reference of the testimony of the
defence witnesses is decipherable amongst others pertaining to
the scrutiny involving Namadhu MGR, Super Duper T.V., gifts
offered to Al, rental income and income tax returns, the Trial
E Court did also assess the defence evidence while judging the
case on the issues of marriage of A3, expenditure and as well as
valuation of buildings. The cavil to the contrary thus cannot be
entertained. (Paras 529, 5301 [890-H; 891-A, C-DI
17.3 The Criminal Law Amendment Ordinance, 1944 which
Fwas enforced w.e.f. 23.8.1944 is an yield of the exercise of powers
under Section 72 of the Government of India Act, 1935 and is
directed to prevent the disposal or concealment of property
procured by means of the offences enlisted in the Schedule
thereto. Clause 3 of the Ordinance provides that where the
G State Government or as the case may be, the Central Government
has reason to believe that any person has committed, whether
after the commencement of the Ordinance or not, any scheduled
offence and whether or not any court has taken cognizance
thereof, it may authorise the making of an application to the
District Judge within the local limits of whose jurisdiction, the
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 565

said person ordinarily resides or carries on business, for A
attachment of any money or other property, believed to have been
procured by means of such offence. It also permits that if such
money or property cannot for any reason be attached, the prayer
in the application may be extended to other property of the said
person of the value as nearly as may be equivalent thereto. The B
provisions did make applicable Order XXVII of the First Schedule
to the Code of Civil Procedure, 1908 to the proceedings for an
order of attachment under the Ordinance as they did apply to the
suits by the Government. [Paras 531, 5321 [891-F-G; 892-B-DI
17.4 Clause 4 contemplates ad interim attachment by the
jurisdictional District Judge, in the eventualities as mentioned C
therein and while doing so, he is required to issue to the person
whose money or other property was being attached, a notice
accompanied by copies of the order, the application and affidavits
and of the evidence, if recorded, asking him to show cause on a
date to be specified in the notice as to why the order of attachment D
should not be made absolute. Clause 5 empowers the District
Judge to make the ad interim order of attachment absolute, if
either no objection is filed by the person affected or not varied
after necessary enquiry on a consideration of the objection if
fi~ed, and the evidence is adduced. In terms of clause 10 of the
Ordinance, an order of attachment of property made shall unless E
it is withdrawn, continue to be in force, in a contingency where a
court has taken cognizance of the alleged scheduled offence
whether, be10re or after the time when the order was applied
for, until orders are passed by the District Judge in accordance
with the provisions of the Ordinan.ce after the termination of the F
criminal' proceedings. Clause 11 provides for appeals against the
order(s) of the District Judge, in the matter of attachment before
the jurisdictional High Court. Whereas clause 12 makes it
incumbent on the court trying a scheduled offence, when apprised
. of an order of attachment of the property involved under the
Ordinance, to record a finding, in case of conviction, as to the G
amount of money or value of other property procured by the
accused by means of the offence, Clause 13 mandates the manner
of disposal of such attached property upon _termination of the
criminal proceedings. Thereunder, when the final judgment or
order of the criminal court is one of conviction, the District Judge H
566 SUPREME COURT REPORTS [2017] 5 S.C.R.

A shall order that from the property of the convicted person
attached under the Ordinance or out of the security given in lieu
of such attachment, tlt,:re shall be forfeited to Government such
amount or value as is found in the final judgment or order of
the criminal court, to have been procured by the convicted
B person, by means of the offence together with the costs of
attachment as determined by the District Judge. Sub-clause 4
deals with a situation where the amounts ordered to be forfeited
or recovered exceed the value of the property of the convicted
person attached, thus permitting in that eventuality, the steps to
follow. Sub-clause (6) ordains that every sum ordered to be
C forfeited in connection with any scheduled offence other than
one specified in item 1 of the schedule, would after dec;luction of
the cost of attachment as determined by the District Judge, be
credited to the Government or the local authority to which the
offence has caused loss or where there is more than one such
D government or local authority, to be distributed amongst them
in the propQrtion to the loss sustained by each. [Paras 5331 [892-
E-H; 893-A-E)
17 .5 In the appeals, filed by the State of Karnataka
pertaining to the release of the properties recorded in the name
of the six companies involved, consequent upon the acquittal of
E the respondents, the parties are essentially at issue on the.
applicability or otherwise of Section 452 of the Code of Criminal
Procedure, 1973 invoked by the Trial Court to order confiscation/
forfeiture of the properties otherwise attached under the
Ordinance. The course ad~pted by the Trial Court cannot be
F faulted with. In terms of Section 5(6) of the Act, it was authorised
to exercise all powers and functions exercisable by a District
Judge under the Ordinance. The offences at the trial were under
Sections 13(l)(e), 13(2) of the Act, Sections 109 and 1208 of the
Indian Penal Code encompassed within paragraphs 4A and .5 of
the Schedule to the Ordinance. These offences were
G unimpeachably within the contours of the Act and triable by a
special Judge thereunder. Having regard to the frame and content
of the Act and the limited modifications to the provisions of the
Code of Criminal Procedure, in their applicability as occasioned
thereby and the authorisation of the special Judge trying the
H offences thereunder to exercise all the powers and functions
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 567

invocable by a District Judge under the Ordinance, the order of A
confiscation/forfeiture of the properties standing in the name of
six companies, as involved, made by the Trial Court is
unexceptionable. In any view of the matter, with the peremptory
termination of the criminal proceedings.xesultant on this
pronouncement, the direction of the Trial Court towards
B
confiscation/forfeiture of the attached property is restored and
would be construed to be an order by this court as well. [Paras
535, 536) [893-F-G; 894-D-G)
Mirza Iqbal Hussain through Askari Begum v. State of
Uttar Pradesh (1982) 3 SCC 516; State of West Bengal
v. S.K. Ghosh AIR 1963 SC 255 : [1963) SCR 111 - c
referred to.
18.1 As the sole public servant has died being Al in this
matter, though the appeals against her have abated, even then
A2 to A4 are liable to be convicted and sentenced in the manner
as has been held by the Trial Judge. The Trial Court was right in D
holding that even private individuals could be prosecuted for the
offence under Section 109 of I.P.C. Under Section 3 of the 1988
Act, the Special Judge had the power to try offences punishing
even abetment or conspiracy of the offences mentioned in the
PC Act and the Trial Court correctly held in this matter that E
private individuals can be prosecuted by the Court on the ground
that they have abetted the act of criminal misconduct falling under
Section 13(l)(e) of the 1988 Act committed by the public servant.
[Paras 541, 542) (898-C-G; 896-D-E, F, G)
18.2 Furthermore, the reasoning given by the Trial Court F
in respect of criminal conspiracy and abetment, after scrutinizing
the evidence of this case, is correct in the face of the
overwhelming evidence indicating the circumstances of active
abetment and conspiracy by A2 to A4 in the commission of the
above offences under Section 13(l)(e) of the 1988 Act. This would
be evident ·from the following circumstances:- G
(i) Al had executed a General Power of Attorney in favour of A2
in respect of Jaya Publications. The circumstance of executing
the power of attorney in favour of A2 indicates that with a view to
keep herself secured from legal complications, Al executed the
H
568 SUPREME COURT REPORTS [2017] 5 S.C.R.

A said power of attorney knowing fully well that under the said
powers, A2 would be dealing with her funds credited to her
account in Jaya Publications; (ii) Constitution ·or various firms
during the check period is another circumstance establishing the
conspiracy between the parties. It has come in evidence that 10
firms were constituted on a single day. In addition, A2 and A3
B
started independent concerns and apart from buying properties,
no other business activity was undertaken by them. The
circumstances proved in evidence undoubtedly establish that
these firms are nothing but extentions of Namadhu MGR and
Jaya Publications and they owed their existence to the
c benevolence of Al and A2; (iii) The aforesaid firms and
companies were operating from the residence of Al and it cannot.
be accepted that she was unaware of the same even though she
feigned ignorance about the activities carried on by A2 to A4.
They were residing with Al without any blood relation between
D them; (iv) Although A2 to A4 claims to have independent sources
of income but the fact of constitution of firms and acquisition of
large tracts of land out of the funds provided by Al indicate that,
all the accused congregated in the house of Al neither for social
living nor Al allowed them free accommodation out of
humanitarian concern, rather the facts and circumstances proved
.E in evidence undoubtedly point out that A2 to A4 were
accommodated in the house of Al pursul,lnt to the criminal
conspiracy hatched by them to hold the assets of Al; (v) Ex.D.61
reveals that before the Income Tax Authorities, the
representative of Al himself had put forth an argument that Rs.l
crore was advanced by Al to Sasi Enterprises towards share
F 'capital and further it was submitted that on the security of the
said amount, loan was borrowed by Al, and thus she cannot claim
non-involvement with the firms; (vi) The flow of money from
one account to the other proves that there existed active
conspiracy to launder the ill-gotten wealth of Al for purchasing
G properties in the names of the firms; (vii) The conspiracy among
the accused persons is also proved by, the evidence of Sub-
Registrar, North Beach, Sub-Registrar office-PW.159 and the
evidence of PW.71 Radha Krishnan, Horticultural officer. The
Trial Court correctly came to the conclusion on such reasoning.
The judgment of the Trial Court is restored in toto against A2 to
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 569

A4. However, though in view of the inextricable nexus of Al A
with A2 to A4, reference to her role as well as the evidence
pertaining to her had been made, she having expired meanwhile,
the appeals, so far as those relate to her stand abated. [Paras
541, 542) [896-H; 897-A-H; 898-A-E)
State Through Central Bureau of Investigation, New B
Delhi v. Jitender Kumar Singh [2014) 2 SCR 621 :
(2014) 11 sec 724 - relied on.
K. Anbazhagan v. State of Karnataka and Ors. [20151
7 SCR 355 : (2015) 6 sec 86 and (2015) 6 sec 158;
State of Maharashtra & Ors. v. Som Nath Thapa & Ors. c
AIR 1996 SC 1744: [199611 Suppl. SCR 189: (1996)
4 SCC 659; Kehar Singh & Ors. v. State (Delhi
Administration) (1988] 2 Suppl. SCR 24 : (1988) 3 SCC
609; MG. Agarwal v. State of Maharashtra AIR 1963
SC 200 : [1963) SCR 405; State of Bihar v. Latu Prasad
D
& Anr. (2008) Crl.L.J. 2433; Amba Lal v. Union of India
[1961) 1 SCR 933; Prithipal Singh & Ors. v. State of
Punjab &Anr. [20121 14 SCR 862 : (2012) 1 SCC 10;
Valliammal (D) by L.Rs. v. Subramaniam & Ors. [20041
3 Suppl. SCR 966 : (2004) 7 SCC 233; State of
Rajasthan & Ors. v. Gotan Lime Stone Khanji Udyog E
Private Limited & Anr. [20161 1 SCR 216 : (2016) 4
SCC 469; Heirs of Vrajlal J. Ganatra v. Heirs of
Parshottam S. Shah [1996) 2 Suppl. SCR 67 : (1996) 4
SCC 490; Sura} Mal v. State (1979) 4 SCC 725; Mohd.
Mumtaz v. Nandini Satpathy (II) [19871 1 SCR 680 :
(1987) 1 SCC 279; State of M.P. v. Mohan/al Soni F
(2000) 6 SCC 338; Ananda Bezbaruah v. UOI (1994)
Crl.L.J. 12, para 8-14; State ofA.P. v. J. Satyanarayana,
JT 2000 (10) SC 430; DSP, Chennai v. K. lnbasagaran
(2006) 1 SCC 420; Delhi Development Authority v.
Skipper Construction Co. (P) Ltd. & Anr. [19961 2 Suppl. G
SCR 295 : (1996) 4 SCC 622 - reforred to.
Gower - Modern Company Law - 4th Edn. (1979)
(page 137); Company Law by Pennington - 5th Edition
1985 at page 53; American Professor L. Maurice
Wormser in his article "Piercing the veil of corporate · H
570 SUPREME COURT REPORTS [2017] 5 S.C.R.

A entity" - referred to.
Per Amitava Roy, J. (supplementing): l. Any interpretation
of the provisions of anti-corruption law has to be essentially
purposive, in furtherance of its mission and not in retrogression
thereof. Innovative nuances of evidential inadequacies,
B processual infirmities and interpretational subtleties, artfully
advanced in defence, otherwise intangible and inconsequential,
ought to be conscientiously cast aside with moral maturity and
singular sensitivity to uphold the statutory sanctity, lest the
coveted cause of justice is a causality. [Para 41 [899-E, Fl
c 2. Corruption is a vice of insatiable avarice for self-
aggrandizement by the unscrupulous, taking unfair advantage of
their power and authority and those in public office also, in breach
of the institutional norms, mostly backed by minatory loyalists.
Both the corrupt and the corrupter are indictable and answerable
to the society and the country as a whole. This is more particularly
D in re the peoples' representatives in public life committed by the
oath of the office to dedicate oneself to the unqualified welfare of
the laity, by faithfully and conscientiously discharging their duties
attached thereto in accordance with the Constitution, free from
fear or favour or affection or ill-will. A self-serving conduct in
E defiance of such solemn undertaking in infringement of the
community's confidence reposed in them is therefore a betrayal
of the promise of allegiance to the Constitution and a condemnable
sacrilege. Not only such a character is an anathema to the
preambulor promise of justice, liberty, equality, fraternal dignity,
unity and integrity of the country, which expectantly ought to
F animate the life and spirit of every citizen of this country, but also
is an unpardonable onslaught on the constitutional religion that
forms the bedrock of our democratic polity.fP-ara 51 [899-F-H;
900-A-BJ
3. This pernicious menace stemming from moral
G debasement of the culpables, apart from destroying the sinews
of the nation's structural and moral set-up, forges an unfair
advantage of the dishonest over the principled, widening as well
the divide between the haves and have nots. Not only this has a
demoralising bearing on those who are ethical, honest, upright
H and enterprising, it is visibly antithetical to the quintessential
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 571

spirit of the fundamental duty of every citizen to strive towards A
excellence in all spheres of individual and collective activity to
raise the nation to higher levels of endeavour and achievement.
This virulent affliction triggers an imbalance in the society's
existential stratas and stalls constructive progress in the overall
well-being of the nation, besides disrupting its dynamics of fiscal B
governance. It encourages defiance of the rule of law and the
propensities for easy materialistic harvests, whereby the society's
soul stands defiled, devalued and denigrated. Such is the militant
dominance of this sprawling evil, that majority of the sensible,
rational and discreet constituents of the society imbued with moral
values and groomed with disciplinal ethos find themselves in C
minority, besides estranged and resigned by practical compulsions
and are left dejected and disillusioned. A collective, committed
and courageous turnaround is thus the present day imperative to
free the civil order from the suffocative throttle of this deadly
affliction. Every citizen has to be a partner in this sacrosanct D
mission, if we aspire for a stable, just and ideal social order as
envisioned by our forefathers and fondly cherished by the
numerous self-effacing crusaders of a free and independent
Bharat, pledging their countless sacrifices and selfless
commitments for such cause. [Paras 6, 7, 8) [900-C-G)
Case Law Reference E

(1977) 1 sec 816 referred to Para 26
[2015) 7 SCR 355 referred to Para 28
[2000) 4 Suppl. SCR 621 relied on Para 51
(1996) 1 Suppl. SCR 189 referred to Para 51 F
[1988) 2 Suppl. SCR 24 referred to Para 51
(2003) 1 SCR 119 relied on Para 51
[1971) 1 SCR 119 relied on Para 51
[1963) 2 SCR 405 referred to Para 51 G
(2001) 7 sec 596 relied on Para 51
(2008) Crl.L.J. 2433 referred to Para 63
[1966) 3 SCR 736 relied on Para 65
[1981) 3 SCR 675 relied on Para 65
H
1
572 SUPREME COURT REPORTS [2017] 5 S.C.R.

A (1992) 4 sec 45 held inapplicable Para 65
(1961] 1 SCR 933 referred to Para 65
[1991) 3 SCR 189 relied on Para 65
(2012] 14 SCR 862 referred to Para 65
B [1974) 1 SCR 70 relied on Para 66
[2004) 3 Suppl. SCR 966 referred to Para 66
[1996) 2 Suppl. SCR 67 referred to Para 66
[1960) 1 SCR 461 relied on Para 68
[1999] 1 Suppl. SCR 135 relied on Para 68
c
[1987) 1 SCR 680 referred to Para 69
(2000) 6 sec 338 referred to Para 69
JT 2000 (10) SC 430 referred to Para 69
(2006) 1 sec 420 referred to Para 69
D (2015) 14 sec 505 held inapplicable Para 69
[1999) 2 Suppl. SCR 318 referred to Para 71
(1979) 4 sec 725 referred to Para 71
[2003) 5 Suppl. SCR 610 referred to Para 134
E [1969] 3 SCR 130 referred to Para 154
[1978) 1 SCR 781 relied on Para 157
(2009) 13 SCR 124 relied on Para 163
[2000) 1 SCR 579 relied on Para 166
F (1984) 2 SCR 495 relied on Para 167
(2013] 4 SCR 767 relied on Para 168
[2014) 6 SCR 873 relied on Para 169
(1969) ITR 194 relied on Para 170
[1980) SCR 618 relied on Para 173
G
[2005) 2 SCR 708 relied on Para 177
[1980] SCR 1122 relied on Para 178
[2014] 1 SCR 135 relied on Para 179
(1972) 1 SCR 950 relied on Para 181
H [2007) 3 SCR 448 relied on Para 184
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 573

[2006) 8 Suppl. SCR 319 referred to Para 185 A
[1996) 2 Suppl. SCR 295 referred to Para 189
[2016) 1 SCR 216 referred to Para 192
[2007) 6 SCR 680 relied on Para 193
[1995) 2 SCR 1173 referred to Para 194
B
(2009) 310 ITR 75 (P&H) referred to Para 196
(2010) 327 ITR 424 (P&H) referred to Para 196
(2014) 369 ITR 471 (P&H) referred to Para 196
(2009) 318 (AT) 394(ITAT [Mum)) referred to Para 196
[1986) 2 SCR 621 relied on Para 201 c
[1974) 1 SCR 489 relied on Para 204
[1974) 3 SCR 833 relied on Para 205
[1978) 3 SCR 393 relied on Para 206
[2014] 4 SCR 287 relied on Para 207
[1975] 3 SCR 453 referred to Para 208 D
[1963) Suppl. 2 SCR 724 relied on Para 212
[2001) 1 Suppl. SCR 97 relied on Para 214
[2003) 5 Suppl. SCR 672 relied on· Para 216
[2008) 14 SCR 733 relied on Para 221 E
(1989) 2 sec 425 relied on Para 222
[1979] 3 SCR 482 relied on Para 222
(1984) 1 sec 446 relied on Para 223
[2003] 2 Suppl. SCR 593 relied on Para 224
[2013) 7 SCR 1105 relied on Para 225. F
1984 Suppl. sec 482 relied on Para 226
[1977) 1 SCR 280 relied on Para 227
[2007) 2 SCR 630 relied on Para 228
AIR 1934 PC 227 (2) relied on Para 229 G
[1979) 2 SCR 265 relied on Para 230
(2014) 7 SCR 995 relied on Para 231
[1962) Suppl. SCR 104 referred to Para 231
(1976) 1 sec 542 relied on Para 235,
H
574 SUPREME COURT REPORTS [2017] s s.C.R.

A (1980) 1 sec 460 relied on Para 235
[1999] 2 Suppl. SCR 318 relied on Para 235
(2009] 14 SCR 424 relied on Para 235
(2012) 10 SCR 157 relied on Para 235
B (2003) 1 Suppl. SCR 710 referred to. Para 236
[1988) 1 Suppl. SCR 1 referred to Para 284
(1976) 1 SCR 1017 referred to Para 286
[2003) 4 Suppl. SCR 450 held inapplicable Para 329
c (2014) 2 SCR 175 referred to Para 354
(i963) 50 ITR 1 (SC) referred to Para 516
(1963) SCR 111 referred to Para 535
(1982) 3 s~c 516 referred to Para 537
D
[2014) 2 SCR 621 relied on Para 541
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
Nos. 300-303 of2017.
From the Judgment and Order dated 11.05.2015 of the High Court
E ofKamatakaatBangalorein CRLANos. 835, 836,837 and838 of2014
WITH
Crl. A. Nos. 304-307, 308-313 and 314-319 of 2017.
. 1

B.V. Acharya, Siddharth Luthra, Shekhar Naphade, B. Kumar,
F Harin P. Raval, Sr. Advs., B. L. Acharya, Sandesh Chouta, Joseph
Aristotle S., Mrs. PriyaAristotle, Sandesh Chouta, V. G. Pragasam, Ni tin
Saluja, Ms. Anitha Shenoy, Ms. Vishruti Vijay, Soumyaroop Sanyal,
C. Manishankar, S. Senthil, A. Asokan, Ms. A. Shubhangi Tuli, Gaurav
Agrawal, J. Karupaiah, K.C. Panneerselvam, N. Barani Kumar,
K. Dhananjeyan, S. N. D. Kulasekaran, K. Krishnamoorthy, R. Rakesh
G Sharma, D. Vairamoorthy, R. Gopala Krishnan, Jay Kishor Singh,
Raghavendra S. Srivatsa, Ms. Dirya, Anand, Abhay Kumar, Harikumar
G. Nair, Gautam Bharadwaj, Goutham Shivhankar, Mayank Pandey,
R. Gopala Krishnan, Advs. for the appearing parties.
Intervenor-in-person Dr. Roxna Swamy, Adv.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 575

The Judgments of the Court were delivered by A
PINAKI CHANDRA GHOSE, J. 1. Leave granted.
2. These appeals project a challenge to the judgment and order
dated 11.5.2015 rendered by the High Court ofKamatka in the appeals
preferred by the respondents herein, thereby acquitting them of the charge
under Sections 120B and 109 of Indian Penal Code, 1860 (for short B
"IPC") read with Sections 13(l)(e) and 13(2) of the Prevention of
Corruption Act, 1988 (for short" 1988 Act") as framed against them and
also resultantly setting-aside the order of the Trial Court for confiscation
of properties, both movable and immovable, of the concerned firms, as
mentioned therein. In the meantime, after the conclusion of the c
arguments, the respondent No. I expired and, thus in law, the appeals
against her have abated. Nevertheless, in view of the gamut of the
imputations and the frame-work of the charges as well as the nature of
the evidence, oral and documentary, available on records, reference to
her role and involvement, based thereon in collaboration with other
respondents would have to be essentially examined. The respondents- D
accused would hereinafter be referred to as respondents/accused/Al/
A2/A3/ A4, as the case may be, contingent on the context.
3. Charges were framed against Al - former Chief Minister of
the State of Tamil Nadu and the co-accused viz. A2, A3 and A4
(respondents herein), for commission ofthe alleged offences punishable E
under Section 13(l)(e) read with Section 13(2) of the 1988 Act and
further under Section 120-B and Section 109 oflPC. It is the case of the
prosecution that Al (since deceased) was the Chief Minister of Tamil
Nadu from 24'h June, 1991 till 13'h May, 1996. Prior to this, she was a
member of the Rajya Sabha from April, 1984 till 27'h January, 1989 and F
further she was a member of Tamil Nadu Legislative Assembly from
27th January, 1989 till 30'h January, 1991. She also acted in the films
during 1964-1972. Facts reveal that she was the daughter of late Smt.
N.R. Sandhya, who also acted in films during 1960's. Smt. N.R. Sandhya
diedin the year 1971 andbyvirtueofhermother's Will dated 01.11.1971,
Al became the owner of the following properties viz., G
(i) Land and building at No.36, Poes Garden, Chennai-86;
(ii) House at Plot No.36, Door No.8/3/1099 in Sri Nagar Officer's
Colony at Hyderabad City;
H
576 SUPREME COURT REPORTS [2017] 5 S.C.R.

A (iii) Lands totally measuring 10.20 acres in Sy.No.52 and Sy.No.SO of
Jeedimetla village and Sy. No.9311 of Pet Basheerabad Village in
Metchal Taluk in Ranga Reddy Dist. of Andhra Pradesh with Grape
Garden, Farm House and Servants quarters;
(iv) Land in Sy.No.93/2 to the extent of 3.15 acres in Pet Basheerabad
B · village in Andhra Pradesh;
In addition to the above properties, A 1 was also in possession of -
(v) Agricultural land measuring 3.43 acres in Cheyyur Taluk now in
Anna Dist. (as per Doc. No.4564/81, dt.16.12.1981 of SRO North
Madras);
c
(vi) An old Ambassador car and an old Contessa car;
(vii) A new Maruti car bearing registration No.TMA-2466 worth
Rs.60,435/- and
(viii) Company shares.
D
Thus, the assets which were in the possession of Al up to 1987 were
found to be worth only Rs.7.5 lakhs. Besides, she also claimed to have
possessed balance in her bank accounts to the extent of Rs. I lakh and
certain items of jewellery.
4. A2 - Tmt. Sasikala Natarajan is the wife of one Mr. M.
E Natarajan who had joined Government service as a Publicity Assistant
in the Department of Information and Public Relation, Government of
Tamil Nadu, in the year 1970 and thereafter promoted in succession
eventually as Deputy Director in the year 1986 in the same department.
He tendered his resignation from Government service on I" November,
F 1988 which was accepted by the Government of Tamil Nadu with
retrospective effect on 3rd April, 1991.
5. A2, as it appears from the facts, is the daughter one C.
Vivekanandan, a Medical Compounder, and her marriage with said
Natarajan was held in the early 1970's. A2 was initially an occasional
G visitor to the residence of Al at No.36, Poes Garden, Chennai-86; and
started permanently living there with Al from 1988 onwards and was
acknowledged and declared by A I as her friend-cum-sister. A2 continued
to live with Al since then.
6. A3 -Tr. V.N. Sudhakaran is the son of A2's elder sister Smt.
H Vanithamani and T.T. Vivekanandan. He started residing at No.36, Poes
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 577
[PINAKI CHANDRA GHOSE, J.]

Garden, Chennai-86 in the year 1992 while pursuing his studies at New A
College, Chennai. Al had acknowledged and proclaimed A3 as her
"foster son" and had conducted his marriage with one Sathiyalakshmi at
Chennai on 7.9.1995, in a lavish celebrations.
7. A4, Tmt. J. Elavarasi is the wife of late V. Jayaraman, the
elder brother of A2. The said V. Jayaraman was a Government servant B
and he died in December, 1991 due to electrocution while attending to
works in the Grape Garden ofAl at Hyderabad. Following her husband's
death, A4 came to live at No.36, Poes Garden, Chennai-86, from the
beginning ofl 992.
8. The case of the prosecution is that, as on 1.7.1991, Al was c
found in possession of properties and pecuniary resources in her name
and in the name of A2 Smt. N. Sasikala, who was living with Al at No.
36, Poes Garden, Chennai to the extent ofRs.2,01,83,9571- including the
properties acquired in the name of Mis. Jaya Publications, Mis. Sasi
Enterprises and Namadhu MGR, which had been floated by Al and A2
with themselves as partners. But, after 1. 7 .1991, there was sudden spurt D
in the acquisition of assets and during this period, Al and A2 floated
several firms in the names of A2, A3 andA4 viz.,
i. Mis. J. Farm Houses;
ii. Mis. J.S. Housing Development; E
iii. Mis. Jay Real Estate;
iv. Mis. Jaya Contractors and Builders;
v. Mis. J.S. Leasing and Maintenance;
Vl. Mis. Green Farm Houses; F
v11. · Mis. Metal King;
Vlll. Mis. Super Duper TV (P) Ltd.,
ix. Mis. Anjaneya Printers Pvt. Ltd.,
x. Mis. Ramraj Agro Mills Ltd., G
XI. Mis. Signora Business Enterprises Pvt., Ltd.,
xii. Mis. Lex Property Development Pvt., Lid.,
xiii. Mis. Riverway Agro Products Pvt., Ltd.,
H
578 SUPREME COURT REPORTS [2017] 5 S.C.R.

A XIV. Mis. Meadow Agro Farms Pvt., Ltd.,
xv. Mis. Indo Doha Chemicals & Pharmaceuticals Ltd.,
xvi. Mis. A.P. Advertising Services;
XVII. Mis. Vigneswara Builders;
B xw1. Mis. Lakshmi Constructions;
xix. Mis. Gopal Promoters;
xx. Mis. Sakthi Constructions;
xxi. Mis. Namasivaya Housing Development;
c XXll. Mis. Ayyappa Property Developments;
xxi11. Mis. Sea Enclave;
xxiv. M/s. Navasakthi Contractors and Builders;
xxv. Mis. Oceanic Constructions;
D
xxvi. Mis. Green Garden Apartments;
xxvii. Mis. Marble Marvels;
xxviii. Vinod Video Vision;
xxix. Fax Universal;
E
xxx. Fresh Mushrooms;
xxxi. Mis. Super Duper TV., and
xxxii. M/s. Kodanadu Tea Estate;

F 9. The further case of the prosecution is that during the check
period i.e. from 1. 7.1991 to 30.4.1996, there were no business activities
at all in respect of many of the above firms, and in respect of others, the
activities were more in the nature of acquiring assets like lands,
machinery, building etc., which were not production oriented. No income-
tax returns were filed by these firms. No assessment for commercial
G tax has also b~en done with respect to the business of these firms. Al
also did not file her Income-tax returns for the assessment years 1987-
88 to 1992-93 till November, 1992 and when this issue was sought to be
raised in Parliament, A 1 filed the income-tax returns for the above period
in November, 1992. Subsequent to 1.7.1991, assets in the form of
H movable and immovable properties and pecuniary resources like bank
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 579
[PINAKI CHANDRA GHOSE, J.]

deposits etc., were found acquired not only in the name ofAl, but also in A
the names ofA2, A3 and A4 and the firms floated in their names. Scrutiny
of various bank accounts maintained in the names of Al toA4 and in the
names of the above firms disclosed that huge credits in cash had been
frequently made into various accounts which were not commensurate
with the income of the individuals and of the firms concerned. There
B
were frequent transfers of amounts between one account to the others
to facilitate illegal acquisition of assets. The huge quantum of such assets,
when viewed in the context that Al was holding the office of the Chief
Minister and that A2, A3 and A4 were living under the same roof with
Al and not having sufficient means to acquire the assets in their names,
established that the assets were actually acquired by A 1. c
10. It is further alleged that, pursuant to the criminal conspiracy
between Al, a public servant and her associates viz., A2, A3 andA4, to
acquire and possess properties and pecuniary resources by Al in her
name and in the names of A2, A3 and A4 and in the names of various
firms floated by them, they amassed properties and pecuniary resources D
to the tune ofRs.66,64,73,573/- (later corrected as Rs.66,65.,20,395/-),
which was grossly disproportionate to the known sources of income of
Al andA2 toA4 during tlie check period from 1.7.1991 to 30.4.1996.
According to the prosecution, the income from the known sources of Al
during this period, such as rental income, interest derived from various
bank deposits and other deposits held by her in her name and in the E
names ofA2, A3 andA4, agricultural income, loans and the salary received
by her as Chief Minister of Tamil Nadu, worked out to a total of
Rs.9,34,26,054/-, whereas during this period the expenditure incurred by
Al including repayment of principal amounts and interest on loan, and
other outgoings were assessed at Rs.11,56,56,833/-. Thus, as on F
30.4.1996, Al being a public servant was found to have acquired and
possessed pecuniary resources and properties in her name and in the
names of A2, A3 and A4 and the firms floated by them, which were
overwhelmingly disproportionate to her known sources of income to the
extent ofRs.66,65,20,395/- (Rupees Sixty Six Crores Sixty Five Lakhs
Twenty Thousand Three hundred and Ninety Five only) which is an G
offence of criminal misconduct within the definition of Sec.13(l)(e)
punishable under Section 13(2) of 1988 Act and A2, A3, and A4 conspired
with A 1 and abetted the commission of the above offence.
11. On 14.6.1996, Dr. Subramanian Swamy (PW-232), the then
President of Janata Dal lodged a complaint against A I before the Principal H
580 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Sessions/Special Judge, Madras, under Section 200 ofCr.P.C., alleging
that Al, after assuming the public office as Chief Minister of Tamil
Nadu, had acquired properties and earned income disproportionate to
her known sources of income. The said complaint was registered as
Crl.M.P. No.3238of1996 and by order dated 21.06.1996, the Principal
Sessions Judge/Special Judge directed investigation under Section 17 of
B
1988 Act and Section 202 of Cr.P.C. and further directed to collect
necessary materials and submit a-report before the Court within a period
of two months. Pursuant to the said order, PW-240 - Smt. Letika Saran,
a senior JPS Officer, took up the investigation, collected records and
documents from various sources.
c 12. During the investigation, the said order passed by the Principal
Sessions Judge/Special Judge was challenged before the High Court of
Madras. The investigation was stayed for a brief period and thereafter
the High Court was pleased to direct the Director of Vigilance and Anti
Corruption, Madras (hereinafter also referred to as "DVAC") to take
D appropriate steps to investigate into the allegations made in the complaint
and ultimately, an FIR was filed against Al on 18.9.1996 as per Ext.P-
2266.
13. During investigation, after conducting search of the residential
premises of Al and various other locations, the Investigating Officer
E found several incriminating materials and voluminous documents were
seized and statements of a large number of witnesses were recorded.
The incriminating evidence collected during such investigation disclosed
the complicity ofA2 to A4 in the alleged offence. Hence, an application
was filed before the Special Judge on 22.01.1997 for addition ofA2,A3
and A4 as co-accused and for incorporation of additional offences under
F Section 120-B oflPC read with Sections 13(2) and 13(l)(e) of 1988 Act
and Section l 09 of IPC. On completion of such investigation, PW-259
(Shri Nallamma Naidu) laid the charges against all the accused on
4.6.1997 which was duly registered as Sp!. C.C. No.7/97 on the file of
the IX Additional Sessions Judge (Special Court, 1), Chennai.
G 14. The ball was set into motion and following charges were
framed by the Special Judge, Chennai:
Firstly:- That you Al to A4 during the period between
1. 7.1991 and 30.4.1996 in Chennai and other places in Tamil
Nadu, you Al being a public servant, along with you A2 to
H A4, were parties to a criminal conspiracy with the object of
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 581
[PINAKI CHANDRA GHOSE, J.]

acquiring and possession pecuniary resources of income to A
the extent of Rs.66,65,20,3951- in the names of you Al and
in the names of you A2 to A4 and the thirty two (32) business
enterprises floated in the names of A2 to A4, for which you
(Al) could not satisfactorily account and you (A2 to A4)
abetted A I by holding a substantial portion of the pecuniary B
resources and property in your names (A2 to A4) on behalf
of you and thereby you Al to A4 committed an offence
punishable ulSec.s 120-B l.P.C. rlw 13(2) rlw l 3(l)(e) of
Prevention of ·Corruptipn Act, 1988 and within the
cognizance of this Court.
Secondly:- That you Al in pursuance of the said criminal C
conspiracy, during the said period and the said places, being
a public servant to wit the Chief Minister of the State of
Tamil Nadu, acquired and possessed in your name and in
the names of A2 to A4 and in the names of the business
enterprises floated in the names of A2 to A4, pecuniary D
resources and property disproportionate to your known
sources of income to the extent of Rs.66,65,20,3951- for
which you could not satisfactorily account, and thereby you
Al committed an offence punishable ulSec. 13(2) rlw
l 3(l)(e) of Prevention of Corruption Act, 1988 and within
the cognizance of this Court. E

Thirdly:- That you A2 to A4 in pursuance of the said criminal
conspiracy during the said period and the said places
abetted Al who was a public servant, by intentionally aiding
her in the possession of pecuniary resources and property
disproportionate to her known sources of income and for F
which she could not satisfactorily account, by holding a
substantial portion of the said pecuniary resources and
property in your names and in the names of the business
enterprises floated in your names, and thereby you A2 to A4
committed an offence punishable ulSec. 109 J.P. C. rlw 13(2) G
rlw 13(l)(e) of Prevention of Corruption Act, 1988 and within
the cognizance of this Court.
15. The charges were denied by the accused persons. During the
pendency of the trial, the D.V. & A.C. was permitted further investigation
under Section 173(8) of Cr.P.C. and was granted letters rogatory by the H
582 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Designated Court for collecting evidence and materials relating to the
alleged accumulation of disproportionate assets/wealth by Al in
conspiracy with A2 outside the country. On the basis of the evidence
collected during further investigation, a separate FIR in Crime No.2/
AC/2000 was filed by the prosecution on 2.9.2000 against Al and A2
B which culminated into a charge-sheet dated 23.3.2001 registered as
. Spl.C.C. No.2/2001.
16. Subsequent thereto evidence was recorded from time to time.
Thereafter, steps were ·taken under Section 313 Cr.P.C. So far as Al
was concerned, she was permitted to answer a questionnaire which
was delivered to her with a direction to answer it on 25.2.2003, which
C was adhered to by Al. A2 to A4 were also questioned as per Section
313 Cr.P.C. which was duly concluded on 26.2.2003. Thereafter, defence
witnesses were examined. Thereafter, by its judgment dated 18.11.2003
in Transfer Petition (Criminal) Nos.77-78/2003, the Supreme Court
transferred the said matter to the State ofKamataka and in terms of the
D said judgment, the Government of Karnataka by its order dated
27 .12.2003 duly accorded sanction for establishment of the Special Curt
at Bangalore and by Notification dated 19 .02.2005, duly appointed Shri
B.V. Acharya, Senior Advocate and former Advocate General of
Kamataka as Public Prosecutor to conduct the said matter.

E 17. Thereafter, the said matter bearing Spl.C.C. No.7/1997was
renumbered as Spl.C.C. No.208/2004 and Spl.C.C. No.2/2001 was
renumbered as Spl.C.C. No.209/2004 on the file of the Special Judge
(i.e. 361h Addl. City Civil & Sessions Judge at Bangalore. Subsequent
thereto certain steps were taken on behalf of the accused and the matter
travelled up to this Court/Supreme Court whereafter the trial was resumed
F before the Special Judge. The accused were called upon to examine
their witnesses and subsequently 99 witnesses were produced before
the Court and concluded their evidence. Narration of all eventful factual
interventions has been avoided being not decisively essential for the
adjudication.
G 18. It appears that the Trial Court after hearing the parties culled
out the following points for determination: '.
(a) Whether the prosecution proves beyond all reasonable
doubt that Al, being a public servant acquired and possessed
in her name and in the names of A2 to A 4 and in the names
H of business enterprises floated in their names, pecuniary
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 583
[PINAKI CHANDRA GHOSE, J.]

resources and assets of the value of Rs. 66, 65,20,3951- A
disproportionate to her known source of income during the
check period from 01.07.1991 and 30.04.1996, which she·
could not satisfactorily account?
(b) Whether the prosecution further proves beyond
reasonable doubt that Al to 4 were parties to a criminal B
conspiracy with the object of acquiring and possessing
pecuniary resources and assets to the extent of
Rs.66,65,20,3951- in the names of Al and in the names of
A2 to 4 and the 32 business enterprises floated in the names
of A2 to 4 and thereby committed the offence punishable u/
Sec. 120-B of Indian Penal Code Rlw. Sec.13 (2) Rlw. Sec. C
I 3 (1) (e) of Prevention of Corruption Act, 1988?
(c) Whether the prosecution further proves beyond all
reasonable doubt that A2 to A4 abetted the commission of
the above offence by intentionally aiding A 1 in the
acquisition and possession of-pecuniary resources and D
properties disproportionate to her known source ofincome
by holding substantial
portion thereof in their names and in the names of 32 "
business enterprises floated in the names of A2 to A4,
rendering them liable for conviction for the offence E
punishable u/Sec. 109 Indian Penal Code Rlw. Sec. 13(2) RI
w. Sec. l 3(l)(e) of Prevention of Corruption Act, 1988?
(d) What order ?
19. The Trial Courf appraised the evidence adduced in respect of F
the points formulated by it and duly dealt with the charges framed against
the accused. The Trial Court elaborately dealt with the matter after
considering the evidence, facts as well as the judgments cited before it,
the contentions raised and after dealing with all aspects of the matter, .
inter alia held that:
G
" ...... There is no argument from any quarters that the choice of
the check period has caused any prejudice or disadvantage to
the accused in any manner. Hence, in my view, the period of 5
years selected by the prosecution is reasonably sufficient to give
a fair and comprehensive picture of the known source of income
and pecuniary resources and property in the possession of the H
584 SUPREME COURT REPORTS [2017] 5 S.C.R.

A accused so to arrive at a fair decision on the issues involved in
this proceedings."
20. From the facts it appears, the prosecution has listed the details
of assets held by the accused at the beginning of the check period .i.e.
1.7 .1991 in Annexure-1 (Ext.P-2327). The saidAnnexure is reproduced
B hereunder:
ANNEXURE- I
(ASSETS AS ON 1.7.1991)

SI. Description of the property Standing in the Value of the
No name of property
c (Rs.)

I. Land and building at No. 36, M's Natya Kala 1,32,009.00
Poes Garden Chennai-86 (Sy.No. Nikethan, rep. by
1567 of Tenampet)purchased Smt N.R Sandhya
from R Sarala and Selvi J.
D Jayalalitha

2. Door No. 8/3/1099, Ward No. 50,000.00
8,Block No. 3 in plot No. 36 to "
the extent of 651.18 Sq. Mtrs.
building in Sri Nagar Officers
Colony, Hyderabad city
E purchased from Koka Sambasiva
Rao, S/o Hariprakash Rao at
Door No. 813/1099 in Sri Nagar
Officers Colony, Hyderabad city

3. Tuo Farm houses, Servant 1,65,058.50
F quarters and o1her buildings "
within the Grape ~rden
compound in Jeec.illretla village
and Pet Basheerbad in Qut
Bullapur (Manda!) of Rangi
Reddy Dist., in Sy. No. 50 and
G 52/E of Jeedimetla village and
Sy. No. 93E and 93 U of Pet
er
Basheerbad village otal extent
11.35 acres)

H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 585
[PINAKI CHANDRA GHOSE, J.]

4. Land in Sy. No. 9313 to the ,, 13,254~0
A
extent of 3.15 acres( 1.36
Hectares) at Pet Basheerbad
village in Medchal Tq. in A-P.,

5. Agricultural land measuring 3.43 Selvi J. 17,060.00
acres in Cheyyhur village in Sy. Jayalalitha B
No. 36612,5,6 purchased from
M.N. V enkatacha la Mudaliar,
Slo Natesa Mudaliar, No.
104618, Thiruvotriyur Main
Road, Kaladipettai, Chennai.

6. Land and flat No. 7, R.R. Flats, Smt. N. 3 ,13,530.00 c
314 , Antu Street, Santhome, Sasikala
Chennai4 of Smt N. Sasikala C
- Rs. 2,75,0001- S - Rs. 35,7501-
F - Rs. 2,7801-

7. Building at Door No. 19, Mis Jaya 5 ,70,039.00
Pattammal Street, Chennai in Publications D
Plot No. 83, R.S. No. 4087, (Selvi J.
Extent 18907 Sq. ft. purchased Jayalaitha
from V.H. Subramanian, Slo H. and Smt. N.
Venkatasubban, 15, Venkatraman Sasikala)
Street, Srinivasa Avenue,
Chennai-28
I E
8. Shop No. 14, Ground Floor at Mis Sasi 98,904.00
602, Anna Salai, Chennai-6 Enterprises
purchased from Mohd. Hanif,
No. 7, Gulam Abbas Ali Khan,
I" Street, Thousland Lights,
Chennai-6 in the name of Mis F
Sasi Enterprises C - Rs. 85 ,0001-
S - Rs. 13,0451-F - Rs. 8591-

9.J Undivided share of land only at ,, 2 ,I 0,919 .00
Door No. 14, Khadar Navaz
Khan Road, Nungambakkam in
R.S. No. 58151 to the extent of G
68112000 undivided share in 11
grounds and 736 Sq. ft. of land
purchased from Mis Holiday
Sports Pvt. Ltd., office at 14,
Khadar Navaz Khan Road,
Chennai-6
H
586 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 10. Land and building at Door No. Selvi J. 3,60,509.00
213/B, St. Mary's Road in Sy. Jayalalitha
NO. 72, New No. 212, Extent
1206 Sq.ft. Ft purchased from
'
K. Selvaraj, S/o Munusamy
Naidu, 44, Vanniyampathy
B Street, Mandaveli, Chennai-28

11. Shop No. 18 of 189 Sq. ft. in 1,05,409.00
ground floor at Door No. 602, "
Mount Road together with
54/42656th of undivided share of
land in 17 grounds and 1856 Sq.
c ft. in R. S. No. 3/10 and 3/11 of
Block No. 71 of Mylapore
purchased from Mustafa M.
Lohani, S/o Moiz K. Lohani and
2 others of 134, Angappan
Naikan Sreet, 3rd Floor,
Chennai-1
D
12. Land and building at Tanjore in Mis Sasi 1,57,125.00
Sy. No. 1091 to the extent of Ente1prises
2400 Sq. Ft. purchased from (partners-
V.N. Somasundaram, S/o V. Selvi J.
Namachiayam, 14, Thilagar Ja yalaalitha
E Street, Ayyappa Nagar, Trichy. and Smt N.
Sasikala)

13. Vacant site at H.D.Road, in 3'" M/s Sasi 1,15,315.00
Dvn, 6th Ward, Haar Nombu Ente1prises
Chavadi in Tanjore to the extent
of 5100 Sq. ft. in T.S. No.1091
F purchased from K Loganathan,
· S/o K.N. Kuppusamy of 1279,
Old Nellu Mettu St. East Gate,
Tanjore.

14. Vacant site at' Ward No. 6 in 2,02,778.00
Mahar Nombu Chavadi to the
G extent of 8970 Sq. ft. in T.S. No.
1091 of Tanjore purchased from
Muthu 'Lakshmi, W/o V.N.
Somasundaram of No. 11
Thilagara Street, Ayyappan
Nagar, Trichy.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 587
, [PINAKl CHANDRA GHOSE, J.]

15. Land and building at Smt.N. 5 ,85,420.00 A
Abishekapuram, Ponnagar in Sasikala
Trichy in plot No. 102, 3rd Cross
Road, New Ward No.Kin Block
No. 30, T.S. No. 107 (totally
measuring 3525 Sq. ft. purchased
from Mirasi of 22-A Willion
·Road, Cantonment, Trichy. B
16. Dry land to the· extent of 3.23 Mis Sasi 75,210.00
acres in Sy. No. 402-2 of Enterprises
Sundarakottai village,
Mannargudi Tq. Tanjore Dist.,
purchased from Ummool Pajriya
Ammal,
Raouthar,
W/o
Naina
Anwartheen
Mohd.
c
Raouthar, S/o Anwardeen
Raouthar, No. 4, Hussain Road,
Koothannallore, N eedamangalm,
Tanjore.

17. Land and building at Thiru Vi. Mis Jaya 5 ,28,039.00
D
KAindustrial Estate, Guindy in Publications
Sy. No. 55 & 56, Block No. VI,
Extent 5658 Sq. ft. Shed No. C-
8, Adyar purchased from K.
Viswanathan, S/o S.K.R.
Karuppan Chettiar, 184,
Vembuliamman Koil Street,
Union Carbide Colony, E
Kottivakkam, Chennai-41 - Sole
prop. of Mis Heatex Equipments

18. Maruthi. car bearing Reg. No. Selvi J. 60,435.00
TMA 2466 (new) Jayalalitha

19. Contessa car bearing Reg. No. 2 ,56,238.00 F
"
TN-09/0033 .

20. Swaraj Mazda van bearing Reg. l ,76, 172.67
"
No. TS! 9090

21. Trax jeep bearing Reg. No. TSJ l ,04,000.00
"
7299 G
22. Swaraj Mazda van bearing Reg. 2,99,845.00
"
No.TSR333

23. Trax jeep bearing Reg. No. TSJ 1 ,04,000.00
"
7200
H
588 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 24. Cash balance as on 1.7.1991 in Smt N. I 3,60 i.98
Canara Bank at Kellys branch Sasikala
with SB Acc. No. 38746 opened
on 30.12.1988 in the name of
Smt. N. Sasikala

25. Cash balance as on 1.7.1991 in Selvi J. 9,18,210.29
B Central Bank oflndia, Jayalalitha
Secunderabad with SB Acc. No.
20614 opened on 19.5 .1989 in
the name of Selvi J. Jayalalitha

26. Cash balance as on 1.7.1991 in Namadhu 5,51, 826.94
Canara Bank ofMylapore branch MGR
c with CA No. 1952 opened on
23.10.1989 in the name of
Namadhu MGR in which Selvi J.
Jayalalitha and Smt. N. Sasikala
are partners

27. Cash balance as on 1.7.1991 in Smt.N. 1,40, 198.25
D Canara Bank of My la pore Sasikala
branch with SB Acc. No. 232 I 8
opened on 23.5.1990 in ihe name
ofSmt. N. Sasikala

28. Cash balance as on 1.7.1991 in Mis Jaya 7,83,860.97
Canara Bank ofMylapore branch Publications
E
with CA No. 2047 opened on rep. by Se !vi
26.9.1990 on transfer from J. Jayalalitha
Kellys branch in the name of andSmt. N.
Selvi J. Jayalalitha and Smt. N. Sasikala
Sasikala

F 29. F.D. No. 451/1990, dt. 19.6.1990 64,520.00
"
with Canara Bank of Mylapore

30. Cash balance as on I. 7.1991 in Selvi J. 2,57 ,886.25
the Bank of Madurai, Anna Jayalalitha
Nagar branch with SB Acc. No.
5158openedon28.2.1990in the
G nameofSelvi J. Jayalalith

31. Cash balance as on 1.7.1991 in 2,40,835.02
"
Canara Bank ofMylapore branch
with CA No. 2018 opened on
12.l 0.1990 in the name of Se Ivi
J. Jayalalitha
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 589
[PINAKI CHANDRA GHOSE, J.]

. A
32. Cash balance as on 1.7.1991 in 5,20,396.45
"
Canara Bank ofMylapore branch
with SB Acc. No. 23832 opened
on 16.4.1991 in too name of
Selvi J. Jayalalitha

33. Cash balance as on 1.7.1991 in Mis Sasi 2,29,578.49 B
Canara Bank ofMylapore branch Enterprises
with CA No. 2061 opened on
21.3.1991 in the name of Sasi
Enterprises in which both Selvi
J. Jayalalitha and Smt. N.
Sasikala are the partners
.
c
34. FD in Kothari Oriental Finance Selvi J. 1,00,000.00
in 1he name ofSelvi J. Jayalalitha
Jayalalitha

35.
.
" " " D
36.
" " "
37. FD with Sriram Finan:e in the 3,00,000.00
"
name of

38. 5,00,000.00
" " E
39. 20,00,000.00
" "
40. 7,00,000.00
" "
41. Investment in the form of Equity
shares in Madras Oxygen and
"
F
Acetylere Co., Ltd., Coimbatore
by J. Jayalalitha 'smother during
1969 and 1971and inherited by
Se! viJ. Ja yalali tha

42. Investment in the form of shares
in Kuna! Engireering Co., Ltd., " G
Ambattur, Madras-58 by Selvi J.
Jayalalitha on 22.5.1978 for
I 000 shares which have secured
500 bonus shares on 18.2.1983

H
590 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 43. Value of 2140 old sarees and 4,21,870.00
other dresses found at No. 36, "
Poes Garden at the time of
Search

44. 86 items of jewels of Selvi J. 17,50,031.00
"
Jayalalitha as evaluated by M/s
B VBC Trust on 31.3 .1991

45. 62 items of jewels claimed to be Smt N. 9,38,460.00
ofSmt N. Sasikala as evaluated Sasikala
by Mis VBC Trust on 31.3.1991

46. Silver wear weighing 70 0 kgs (as Selvi J. 28,00,000.00
c per the IT returns filed by Selvi Jayalalitha
J. Jayalalitha) (value worked out
at the rate of Rs. 4,000/- per kg.)

47. Amount deposited in MIDS I 0,00,000.00
No.716767,-dt. 30.4.1990 of "
Bank of Madurai, Anna Nagar
D for 2 years by Selvi J. Jayalalitha
which was in force as on 1.7.199

48. Cash balance as· on 1.7.1991 in 21,389.00
CDS - ITP Acc. No. 32 of Selvi "
J. Jayalalitha in Central Bank of
India, T. Nagarbranch, Chennai
- 17.
E
49. FD of Rs. 5 lakh deposited in 5,00,000.00
Sri ram In vestments Ltd., "
deposited on 12.11.1990 by'Selvi
J. Jayalalitha from her SB Acc. ·-·~-·

No. 5158 o BOM, Anna Nagar
branch which after subsequent
F renewals is to mature on
29.1.1998.
.

50. Advance amount paid for Mis Sasi 50,000.00
purchase of 72/12000 undivided Enterprises
share of land in 11 grounds and
1736 Sq. ft. in R.S. No. 58/5 at
G 14, Gems Court, Kadhar Navaz
Khan Road, Nungumbakkam,
paid by Ch. No. 513735, dt
23.4.1990 of CB, Madras which
was registered as document No.
641/1993 of SRO, Thousand
Lights branch, dt. 28.7.1993)
H .
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 591
[PINAKI CHANDRA GHOSE, J.]

A
51. MIDR No. 6619 with Central Selvi J. 3;00,000.00
Bank of India, Secunderabad Jayala\itha
deposited on 2.5.1990

52. Cash balance as on !. 7.1991 in l .80,o3 l .22
SB Acc. No. 38671 of Canara ·"
Bank, Kellys in the name of B
Selvi J. Jayalalitha

Grand Total 2,01,83,956.52

21. The Trial Court also gave the details of the income, derived by
c
the accused during the check period i.e. l. 7 .1991 to J0.4.1996, in
Annexure-III, (being Ext.P-2329) which is set out hereunder:
ANNEX URE-Ill
(Ex.P.2329)
D

(Income during the check period from 1.7.1991 to 30.4.1996)
SL Details of income Amount(Rs.) Exhibits
No
I. Loan obtained from Indian ·25,00,000 P.1258 ~P.1260 E
Bank, Abhiramapuram in the
name of Mis Sasi Enterprises of
which the outstan.ling principal
was Rs. 13,55,023/-
2. Loan obtained from Indian 28,00,000 P.1210 -1212
Bank, Abhiramapuram irt the F
name of Mis J. Fann Houses of
which the principal ofRs. 28
lakh was out&a nding besides Rs.
1,23,041/- as interest;
3. Loan obtained from Indian 7,00,000 P.ll71
Bank, Abhiramapuram in the P.1173 G
name of Mis J.S. Housing
Development of which the
principa I of Rs. 7 lakh was
outstanding besides Rs. 37,184/- ,,
as interest;
H
592 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
4. Loan obtained from Indian 5,00,000 P.1161
Bank, Abhiramapuram in the P.1163
name of Mis Jay Real Estate of
which the entire principal of Rs.
5 Jakh was outstanding besides
B Rs. 28,407/- as interest;
5. Loan obtained from Indian 75,00,000 P.1230
Bank, Abhiramapuram in the to
name of Mis Anjaneya Printers 1233
Pvt, Ltd., of which the principal 1004

c of Rs. 75 lakh was outstarrling
besides Rs..8,81,477/- as interest;
6. Loan obtained from Indian 17,86,000 P.1355
Bank, Abhiramapuram in the to
name of Maha Subhalakshmi 1357
Katy.ma Mandap am of which
D the principal of Rs. 17,86,000/-
was outstanding besides Rs.
1,95,802/- as interest;
7. Loan obtained from Indian 83,00,000 P.1328
Bank, Abhiramapuram in the -
E nameofM/sLexProperty P.1330
Development (P) Ltd., ofwhich P.1008
the outstanding principa I was Rs.
83 lakh;
8. Loan obtained from Indian 3,75,00,000 P.997
Bank, Abhiramapuram in the to
F
name ofKodanadu Tea Estate of P.1003
which the principal ofRs. 375
lakh was outstanding;
9. Loan taken from Can FinHom:s 75,00,000.00 P.548,
on FD No. 352/ 1994-95 on P.550
G 25.8.1995 by Selvi J. Jayalalitha. -
P.555,
P.2287
10. Incom: by way interest to Selvi 4,52,871.00 P.1377
J. Jayalalitha (vide her A/c in SB
No. 23832 ofCB/Mylapore);
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 593
[PINAKI CHANDRA GHOSE, J.]

11. Income by way of interest to 2,56,685 .00 P.1377 A
Selvi J. Jayalalitha (vide her P.1382
Fixed Deposits in FD No.
I 000192 - Rs. 79,890/-; 1398'92
- Rs. 73;233/-; 237/93- Rs.
54,247/-; 632/93 -Rs. 49,315/-
B
of Canara Bank, Mylapore for
Rs. 27 lakh credited in SB 23832
and CA 2018 of Canara bank,
Mylapore of SeIvi J.
J ayalalitha;
12. Interest from Kothari Orient 60,437.82 c
Finance Ltd., to Selvi J.
Jayalalitha (vide FDR No. 47740
(53389) & 63848);
13. Interest paid from Kothari Orient 60,434.78
Finance Ltd., to Selvi J.
J ayalalitha (vi de FDR D
Nos.48172, 53390 &64308);
14. from Kothari Orient Finance 50,434.78
Ltd., J. Jayalalitha (vide FDR
Nos. 53391 & 64280);
15. Interest from Can Finance to 8,76,896.00 P.1377 E
Selvi J. Jayalalitha (vide FDR
No. 186/1991-92);
16. Interest from Can Finance to 4, 71,808 .00 P.1377
Selvi J. Jayalalitha (vide FDR
No. 352/1994-95);
17. Interest from Sriram Investments 6,53,818.00 P.1382 F
to Selvi J. Jayalalitha (vide FDR
. No. 5006835) for Rs. 30 lakh; .

18. Interest from Sriram Investments 3,09,088 .60 P.1382
to Selvi J. Jayalalitha (vide FDR
No. 5007694) for Rs. 15 lakh; .
G
19. Interest from Sriram Investments 2,09,928.50 P.1382
to Selvi J. Jayalalitha (vide FDR
No. 5015954 for Rs. 15 lakh
20. Interest from Sriram Investments 1,39,947 .80 P.1382
to Selvi J. Ja yalalitha (vide FDR
No. 5015955 for Rs. 10 lakh; H
594 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 21. Interest from Sriram Investrnenls 84,522.80 P.1382
to Selvi J. Jayalalilha (videFDR
No. 5015956 for Rs. 5 lakh;
22. Interest from Sriram Investrnenls 1,27,871. 50 p .1382
to Selvi J. Jayalalilha (videFDR
No. 71533 for Rs. 5 lakh;
B
23. Interest from Sriram Investmenls 87,960.83 P.1382
to Selvi J. Jayalalilha (videFDR
No. 21330 for Rs. 5 lakh;
24. Interest from Sriram Investrnenls 1,34,977.00 P.1382 .
to Selvi J. Jayalalilha (videFDR
c No. 5025367 for Rs. 20 lakh;
Interest from Sriram Investmenls 4, 76,023.27 P.1382
25.
to Selvi J. Jayalalilha (videFDR
No. 45897 for Rs. 20 lakh;
26. Interest from Sriram Investmenls 2,06,237.00 P.1382
to Selvi J. Jayalalilha (videFDR
D No. 47437 for Rs. 3 lakh;
27. Interest from Sriram Investmenls 5,02,207.00 P.1382
to Selvi J. Jayalalilha (videFDR
No. 73211 for Rs. 20 lakh;
28. Interest from Sriram Investmenls 87,024.00 P.1382
to Selvi J. Jayalalilha (videFDR
E No. 31251 dt. 4.5.1990 for Rs. 7
lakh during the check period;
29. Interest paid to Selvi J. 47,265.81.00 P.1960
Jayalalitha (vide SB 5158 of
Bank ofMadurai, Anna Nagar,
Chennai;
F 30. Interest paid to Smt N. Sasikala 27,304.00 P.936
(vide her SB 22792 of CBI, P.937
Secunderabad);
31. Interest paid to Selvi J. 3,17,781.00 P.936
Jayalalitha ( vide SB 20614 of P.937
CBI, Secunderabad);
G
32. Interest paid to Selvi J. 1,61,451.48.00 P.936
Jayalalitha from Medium Term P.937
Deposit in CBI, Secunderabad
(vide NPD 669 - Rs. 27 ,272.08;
68/33- Rs. 77' 162.40; 60'9 - Rs.
14,874/-; 70/9-Rs. 42,143/-)
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 595
[PINAKI CHANDRA GHOSE, J.]

A
33. Agrl. Income from Grape 5, 78,340.00 P.938
Garden, Hyderabad in fu vour of
Selvi J. Jayalalitha;
34. Income by way of clearings in 3,42,520.40 P.936
the account in SB 20164 of CBI,
Secunderabad in favourofSelvi B
J. Jayalalitha towards rental
income for 36, Sri N agar
Colony, Hyderabad;
35. Interest paid to Selvi J. 14,446.00 P.975
Jayalalitha through SB 38671 of
Canara Bank, Kellys Branch c
opened on 19.12.1988;
36. Income from the monthly 82.600.00 P.1961
income deposit scheme ofSelvi P.1960
J. Jayalalitha from the deposit
amount of Rs. 10 lakhl (vi de
MIDS No. 716767 dt.
D
30.4.1990) of Bank of Madurai
which lasted till 8.6.1992 though
the FD matured on 30.4.1992 for
which the interesi was received
through SB 38671 of Canara
E
Bank, Kelly Branch ofSelvi J.
Jaya la litha
37. Interest from SB Acc. No. 2 3218 1,89,761.00 P.1510
of Canara Bank, Mylapore to N.
Sasikala;
38. Interest of Rs. 29,490/- from 2,57,118.00 P.1510 F
FDR No. 718/1992 of Canara P.1519
Bank, Mylapore to Smt. N.
Sasikala for Rs. 18 lakh; Rs.
53,260/- from FDR No.
954/1992; Rs. 48,822/- from
FDRNo.1397/1992;Rs. G
48,822/- from FDR No.
236/1993; Rs. 44,384/- from
FDR No. 633/1993; & Rs.
32,340/- from FDR No.
868/1993;
H
I·

596 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
39. Interest from Can Finance in 10,03,191.00 P.1510
FDR No. 189/1991-92 for Rs. 25
lakh 1D N. Sasikala;
40. Incorre by way of clearing in SB 2,23,000.00 P.937
22792 of CBI, Secmderabad of
B Srrt. N. Sasikala (rental irrome
for No.16, Radhika Colony,
Secunderabad);
41. Interest paid to Smt N. Sasikala 3,901.00 P.977
through SB 38746 of Canara
c Bank, Kellys Branch;
42. Interest from SB 24621 of 24,323.00 p .1572
Canara Bank, Mylapore to VN. -·
Sulhakaran;
43. Interest from FDR No. 13,562.00 P.1572
1401/1992 of Canara Bank,
D Mylaporefor Rs. 5 Jakh to V.N.
Sulhakaran
44. Interest from FDR238/1993 of 12,329.00 P.1576
Canara Bank, Mylapore for Rs. 5
lakh by renewal of FDR
E 140111992;
45. Hire charges from ACT India 9,18,910.00 P.659
Ltd., for 1he vehicle No. TSR
333 Swaraj Mazda wn owred
by V N. Sudhakaran from
3.2.1993;
F 46. Brokerage charges receiwd by 3,00,000.00 P.548
V.N. Sudhakaran for tb:
deposits made by Selvi J.
Jayalalitha in Can Fin. Horres
Ltd., (vide FDR Nos. 186/1991-
G 92 & 352/1994-95;
47. Loan obtained by Smt J. 35,00,000.00
Elavarasi from Royapetta
Benefit Fund (RBF Nidlu) Ltd,
(vide HML/787, dt. 7.10.1995);

H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS.· 597
[PINAKI CHANDRA GHOSE, J.]

48. Hire charges received from ACT 6,26,410.00 P.658 A
India Ltd., for the vehicle No.
TN-Ol/H-9999 ofSwaraj Mazda
van owned by Smt. J. Elavarasi
from 3.2.1993 to 30.4.1996;
49. Interest paid to Smt J. Elavarasi, 9,763.00 P.1613
guardian of Vivek by SB B
Ale.No. 25389 of Indian Bank,
Abhiramapuram;
50. Income by way of monthly 90,807.59 P.126-132
interest from 7/1991to4.6.1992
in respect of the FD of Rs. 7 lakh
in Sriram Investmen1S Ltd., ( vide c
~-
FD receipt No. 31251,
dt.4.5.1990) deposited through
Ch. No. 907521, dt. 4.5.1990of
Selvi J. Jayalalitha from her
BOM Acc. of Anna Nagar;
51. Salary of Selvi J. Jayalalitha as 27.00 P.694-697 D
CM of Tamil Nadu at Re. 1/- per
month drawn for 27 months;
52. Lease income of lndo Doha from 30,40,000.00 P.563, ·
SPIC in respect ofSIPCOT P.564
Industries in Cuddalore (Rs.
1,22,40,000/-) from 14.12.1994 E
to 8.4.1996 after deducting
.
payment to SPICOT (Rs. 72 .
lakh) and payment of Rs. 20 lakh
to James Frederick for purchases
of shares of IN DAG Products
Ltd., .
F
53. Rental income from S 7, 37,67,358.00 P.655-657
Ganapathy Colony, Thim-Vi-Ka
"""""' Industrial Estate, "Guindy,
building of Jaya Publications
given on lease from January,
1993 to April, 1996 from SPIC., G
54. Rental income from No. 19, 2,33,769.00 P.655-657
Pattammal Street, Mandaveli,
building ofSelvi J. Jayalalitha
given on lease from January,
1994 to April, 1996;
H
598 SUPREME COURT REPORTS [2017] 5 S.C.R.

A X-2
55. Rental income from 21, 3,82,500.00
Padmanabha Street, T. Nagar,
Chennai, building of Anjaneya
Printers Pvt., Ltd., given on lease
Fonn July, 1995 to April, 1996;
B 56. Interest derived in SB Ne No. 10,213.00 P.1138
4110 oflndianBank,
Abhirarrapuram in the name of
Master Vivek;
57. Rental income and Rertal 91,000.00
advance derived fur tre muse at
c No. I, Murphy Street, Akkarai
of J.S. Housing for the period
from07/1995 to 04/1996;
58. Rental income (including rental 1,94,000.00
advance of Rs. 20,000/-) from
D Flat No. 7, Antu Street,
Santhoire, Mylapore (RR Flats)
of Smt. N. Sasikala;
59. Rental income & advance from 2,70,900.00
SIDp No. 20 ofNo. 14,
KhadarNavazkhan Rd. (Gem
E
Court), Nungani>akkam,
Chennai for the period from
111992 to 411996 (Rs. 4000x 4)
+Rs. 4600x 35) +Rs. 5300 x
13) +Rs. 25000);
F 60. Rental income& advance from 4,50,000.00
No. 1, Wallance Garden, I"
Street, 4th Floor from 12/1994 to
0411996 (Rs. 25000 x 17) +(Rs.
75000);
G 61. Rental income & advance from 2,01,000.00
SIDp No. 9, Khadar Navazkhan
Rd. (Gem Coll't), Chennai for
the period from 1/1992 to4/1996
(Rs. 4000 x49) +Rs. 4500x3)
+ (Rs. 45000 as advance)
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 599
[PINAKI CHANDRA GHOSE, J.]

62. Rental income & advance from 1,44,000.0 A
Soop No. 8, Khadar Navazkhan
Rd. (Gem Coirt), Chennai for
the period from July, 1993 to
30.4.1996 (Rs. 3600 x 34) +(Rs.
21600 as advance)
B
63. Amounts receiwd towards l,01,231.00 P.991,
Family Benefit Fund & Gratuity P.994
by Smt. J. Elavarasi during
August & October, 1993 & Jun::,
1994 on the death of her
husband V. Jayararnan; c
64. Net income from Maha 14,50,097.60 P.1966
Sibhalakshmi Kalyana
Mandapam, Arumbakkam,
Chennai for the period from
8/1993 to 4/1996
Grand Total 9,34,26,053.56 D

22. The Trial Court relied upon the oral and documentary evidence
in respect of the said income and also the objections raised on behalf of
the accused and thereafter came to the conclusion as follows:
"Thus, answering the objections raised by the accused as above E
and in the light of the above discussion, my finding on the total
income of the accused during the check period is as under:
Total income computed
as per Annexure III - Rs.9,34,26,053.56
Less: Item No.55 - Rs. 35,000.00 F

Less: Item No.60 - Rs. 1,22,750.00
Rs.9 ,30,68,303 .56
Add: Item No.29 - Rs. 4,427.19
Add: Item No.27 - Rs. 1,15,640.00 G
Add: Item No.48 - Rs. 6,60,064.00
Add: Item No.52 - Rs. 48,35,000.00
Add: Item No.33 (Grape Garden)- Rs. 4,21,660.00
Total income - Rs.9,91,05,094.75 H
600 SUPREME COURT REPORTS [2017) 5 S.C.R.

A Thereafter, the Trial Court dealt with the expenditure incurred
between the check period which is specifically stated in Annexure-IV
(Ext.P-2330) which is set out hereunder: ,
<

EXPENDITURE INCURRED BETWEEN 1.7.1991 &
B 30.04.1996
ANNEXURE - IV (Ex.P .2330)

SI. De1ails ofExpenditure . Amotmtin Exhibits Witnesses
No. (Rs)
c I Amotmt paid towards interest in 50,93,921 P.1027 PW.182
respect of the loan of
Rs.1,50,00,000/- availed by M's.
Jaya Publications from Indian
Bank, Ab~uram, while
D closing the loan account on
25.06.1994 (Apart from the
principal amount of
Rs.1,50,00,000/-)
2 Repayment of Loan availed by 18,32,683 P.1260 PW.182
Mis. Sasi Enterprises from
E Indian Bank, Abiran:puram
Rs.11,44,977.00(P) Rs.
6,87,706.00ffi Rs.18,32,683.00
3. Payment of interest on loan of 23,774 P.1212 PW.182
Rs.28,00,000/- availed by J Farm
Houses from Indian Bank
Abirampuram
F
~- Paymentoflnterestonloanof 11,887.00 P.1173 PW.182
Rs. 7,00,<XXJ/- availed by Ms. J s
Housing Developmeli from Indian
Bank. Abirnrmuram
5. Payment of interest on loan of 11,887 P.1163 PW.182
G Rs.5,00,000/- availed by Mis. Jay
Real Estate, from Indian Bank,
Ab" m
6. Payment of interest on loan of 11,81,425.16 P.1233 PW.182
Rs. 75,00,<XXJ/- availed by Mis.
Ani''"""" Printers (p) Lld.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 601
[PINAKI CHANDRA GHOSE, J.]

-·· A
7 Payment of interest on loan of 3,84,400.00 P.1356 PW.182
Rs.17 ,86, 000/- availed by Mis. ..
Mahasubha Lakshmi Kalyana ..
Mandapam, from Indian Bank,
Abiramouram
8 Payment of interest on loan of 17,52,069.00 P.1330 PW.182
B
Rs.83,00,000/- availed by Mis. Lex
Property Development (P) Ltd,
from Indian Bank Abirarmuram
9 Amount paid to corporation of 13,840.00 P.65 PW.20
Madras towards sanction of
building plan in respect of Mis
Jaya Publications for change ofroof c
at MF-9, Guindy Industrial Estate,
Guindv(oaid on 14.2.94)
10 Amount paid to Corporation of 14,560.00 P.64 PW.20
Madras towards sanction of
building · plan in respect of Mis.
Anjaneya Printers (P) Ltd., at D
No.21, Padrnanabha Street, T.
,
Nagar, Chennai-17 (paid on
14.2.94)
11 Amount paid to Corporation of 1,45,320.00 P.51 PW.19
Madras towards building plan in PW.20
respect of Mis. Lex Property E
Development (P) Ltd., No .149, and
150, TIK Road, Chennai- 18 (Paid
on 20.12.95)
12 Amount paid to Corporation of 12,700.00 P.58 PW.20
Madras for building plan at No.36,
Poes Garden for additional F
construction (oaid on ll.12.91)
13 Amount paid to Corporation of 70,140.00 P.54 PW.19
Madras for building plan at No.5, PW.20
Murugesan Street, T. Nagar,
Chennai (Paid on 7.11.95)
14 Amount paid to Corporation of 1,350.00 P-63 PW.20· G
Madras for building plan (Mis.
Jaya Publications) at No.19,
Pattammal Street, proposed
additions and regularization of the
existinl! buildine (Paid on 3.3.93)
H
602 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 15 Amount paid to Corporation of 99,295.00 P-55, 56 PW.19
Madras towards sanction of
building plan in respect of Mis.
Jaya Publications at Plot No.S-7,
Ganapathy Colony, Guindy
Industrial Estate. oaidon 19.3.92
B 16 Amount paid to Corporation of 26,735.00 P.48 to 50 PW.19
Madras for building plan at & 59 PW.20
226,735.00 P.48 to 50 & 59 PW.19
PW.20 Spl.C.C.208/2004 296
No.36, Poes Garden, Additional
Block, (paid on 22.11.91,
7.12.92, 10.2.93 and 19.2.93)
c Rs. 2850.00.
550.00
2,250.00
21,085.00
26.735.00
17 Amount paid to Corporation of 10,925.00 P-60 PW.20
D Madras for building plan at
No.36, Poes Garden, for additions
of Securitv room (Paid on 19.2.93)
18. Amount paid to Corporation of 29,850.00 P-61 PW.20
Madras for building plan at
No.48,Imer Ring Road,
Ekkatuthangal, Guindy (i.e.,M/s.
E Sastri Nuts and Plates
Manufacturing (P) Ltd., (Paid on
26.11.93) Mis. Anjaneya Printers
!Pl Ltd ..
19 Amount paid to Corporation of 1,785.00 P-62 PW.20
Madras towards building plan
F sanction in respect of the
proposed alrerations to the existing
building at Door No.212, 213 St.
Mary's Road, Myfapore, Chennai
- 4 of Selvi J. Jayalalitha (paid on
5.2.92)
120 Amount paid to MMDA for 4,76,525.00 P-66 PW.19
G buildingplan Approval at Plot PW.20
No.6, Thiru - vi - Ka Industrial
Estate, Guindv, (oaid on 20.2.96)
121 Amount paid towards demolition 18,570.00 Ni76 PW.117
cost of the old building at Door
No.213, St. Mary's Road, PW.20
Mandaveli. Chennai - 28.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 603
[PINAKI CHANDRA GHOSE, J.]

22 Interest paid towards loan account 4,41,569.00 PW.211 A
No.787 dt.7.10.95 of RBF Nidhi
Ltd., upto the end of Check peiiod
for the loan of Rs.35 lakh5 taken by
Tmt. J. Elavarasi.
23 Amount paid to Five Star 1,01,315.70 P-823 to PW.154
Departmmtal Stores from SB 832 PW.201 B
23218 of Canara Bank, Mylapore
ofTmt. N. Sasikala
24 LIC premium payment made by 13,960.50 PW.201
Tmt. N. Sasikala from SB 23218 of
Canara Bank Mvlannre 126.3.92)
25 Payment made towards DD 600.00 PW.201
commission from SB 23218 of c
Canara Bank, Mylapore for
purchasing DD for Rs.9,35,000/- on
13.7.95
126 Amount paid to Salam Stores on 9,617.00 PW.201
3.11.92 from SB Ne. 23832 of PW.120
Selvi J. J ayalalitha of Camra D
Bank, Mvlaoore
27 AmOLUJt paid to Five Stru' 75,198.12 P-823 to PW.154
Depa1tm:ntal Stores from C.A- 856,
2196 of Canara Bank, Mylapore of P.1519 PW.201
Tm!. N. Sasikala durinl! 1992-95
28 Arriount paid to Alagu Security 9,950.00 P.1519 PW.201
E
Services from CA 2196 of Camra P.1533
Bank, Mylapore of Tnt. N.
Sasikala on 13.2.95, 22.12.95,
10.1.96 and 17.4.96
129 Expenditure incurred towards 4,074.JO P.1519 PW.201
purchase of books from American P.1527
Book House, Higginbothams and P.1537 F
India Book House by Tmt. N.
Sasikala from her CA 2196 of
Canara Bank, Mylapore Account on
3.2.94 and21.2.94
30 Amount paid to Latham India from 9,065.00 P.1519 PW.201.
CA 2196 of Canara Bank, P.1538 G
Mylapore of Tmt. N. Sasikala on
22.7.95
31 Amount paid to V.G.Pan:erdoss 13,450.00 P.1519 PW.201
from CA 2196 of Canara Bank, P.1539
Mylapore of Tmt. N. Sasikala on
6.11.95
H
604 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 32 Amount paid to (Raj asekaran & 1,26,500.00 P.1519 PW.201.
Co.) Auditor from CA 2196 of P.1540
Canara Bank, Mylapore of Tmt. N. to
Sasikala on 28.1.93, 28.3.95, P.1543
3.11.95
33 Amount paid to Keerthi from CA 6,633.00 P-1519 PW.201
B 2196 of Canara Bank ofMylapore P.1544
ofTrrt. N. Sasikala on 11.12.92
34 Amount paid to Khuzeema 7,165.00 P.1519,
Manuwala from CA 2196 of 1545
Canara Bank Mylapore ofTmt. N.
Sasikalaon 14.12.92
35 Amount paid to UC of India on 27,497.20 P-1519 PW.201
c 31.3.93 and 30.3.94 from CA 2196
of Canara Bank, Mylapore of Tmt. '

N. Sasikala (13748.60 x 2)
towards oolicy No.7 50405742
~6 LIC premium paid for March '95 13,748.60 Ex.P.15 Doc.1013
in Policy No.750405742 ofTmt._ 46 Letterof
D N. Sasikala UC, Trichy
Dt.23.4.92
~7 Amount paid to United India 1,02,039.00 P.1519 PW.201
Insurance on 31.3.93, 13.4.93, P.1548
4.8.93, 18.3.94, 24.3.95and17.4.96 to 1553
from CA 2196 of Canara Bank of
E Mvlaoore ofTmt N. Sasikala
~8 Amount paid towards L.F. charges 410.00 P-1519 PW.201
am DD commission from CA 2196
of Canara Bank, Mylapore of Tmt
N. Sasikala cin 1.12.92, 6.9.93,
14.10.93, 1.10.94, 7.10.94 and
31.12.94.
F 39 Amount debited towards interest 3,170.00 P-1519 PW.201
for T.O.D. from CA2196 of
Canara Bank, Mylapore of Tmt. N.
Sasikala on 10.3 .92, 6.9.93,
14.10.<l3, 1.10.94, 7.10.94 and
31.12.94
G 40 Amount paid to Abbas from CA 23,800.00 P-1382 PW.201
2018 of Canara Bank, Mylapore of P-1383
Selvi J. Javalalitha on 2.9 .95
41 Amount paid to Balus Colour Lab 54,660:00 P-1382 PW.178
from CA 2018 of Canara Bank, P-1009 PW.201
Mylapore ofSelvi J. Jayalalitm on
H 28.9.95
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 605
[PINAKI CHANDRA GROSE, J.]

A
142 Amount paid to BPL Ga!leiy from 1,28,530.00 P-1382 PW.201
CA 2018 of Canara Bank P-1384
Mylapore of Selvi J. Jayalalitha
on 19.9.95
43 Amount paid to Purnendupal from 1,00,000.00 P-1382 PW.201
CA 2018 of Canara Bank, P-1385
B
Mylapore of Selvi J. Jaya!alitha on
20.9.95
44 Amount paid to Chandrasekar from 25,000.00 P-1382 PW.201
CA 2018 of Camra Bank, .
Mylapore ofSelvi J. Jayalalitha on
12.3.96 c
45 Amount paid to Tmt N. Sasika!a 1,50,000.00 PW.198
on behalf of Tr. M Jayararmn
towards his share for obtaining the
dealership in SPIC Jyothi.
46 Amount paid to K Damxiarasarny 18,700.00 P-1382 PW.201
Naidu, from CA 2018 of Camra P-1386 D
Bank, Mylapore of SeIvi J.
Jayala!itha
47 Amount paid to Dr. Giri's Museum 57,250.00 P-1382 PW.186
from CA 2018 of Canara Bank, P-1387
Mylapore of Selvi J. Jayalalitha on PW.201
20.9.95 E
148 Amount paid to HCL Limited from 1,000.00 P-1387 PW.201
CA 2018 of Canara Bank, P-1382
Mylapore of Selvi J. Jayalalitha on PW.167
7.9.95
149 Amount paid to J. Haridoss from 5,100.00 P-1382 PW.201
CA 2018 of Canara Bank, P-1388 F
Mylapore of Selvi. J. Jayalalitha on
13.7.93
50 Amount paid to Tvl. J. K Brothern 1,09,800.00 P-1382 PW.201
from CA 2018 ofCanara Bank, P-1389
Mylapore of Selvi J. Jayalalitha on
11.1.96 an:! 5.3.96 (Rs.27 ,000 + G
82,800)
51 Amount paid to Tr.KK.Venugopal 5,95,000.00 P-1382 PW.201
from CA 2018 of Camra Bank, P-1390
Mylapore of Selvi J. Jayalalitha on to 1394
11.8.93, 18.8.93, 14.10.93,
5.11.93, 20.12.93 and 11.4.94
H
606 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 52 Amount paid to Tr. K.V. 20,000.00 P-1382 PW.201
Viswanathan, from CA 2018 of P-1395
Canara Bank Mylapore of Selvi J.
Javalalitha on 21.8.93
53 Amount paid to Tvl. Kapoors from 1,30, 779.40 P-1382 PW.118
CA 2018 of Canara Bank Mylapore P-1396 PW.201
B of Selvi J. Jayalalitha on 30.9 .95 P-678
54 Amount paid to Tvl. Kapoors by 12,721.00 P-1519 PW.118
cheque on 15.7.95 {Cheque P-1554 PW.201
No.082199 of Canara Bank) P-678
55 Amount paid by cash to Tvl. 44,264.00 P-678 PW.118
Kaooors on 4.5.95 and 7.6.95
c 56 Amount paid to Tr. Kishore from 25,000.00 P-1382 PW.146
CA 2018 of Canara Bank Mylapore P-784 PW.201
of Selvi J. J avalalitha on 10.10.95
57 Amount paid to tmt. latha 75,000.00 P-1382 PW.201
Krishnnamoorthy from CA 2018 P-1397
of Canara Bank, Mylapore of Selvi
D J. Javalalithaon4.9.95
58 Amount paid to MMWSS Board 37,046.00 P-1382 PW.146
from CA 2018 of Canara Bank P-1398 PW.201
Mylapore of Selvi J. Jayalalitha to 1411
12.12.91 to 6.12.95
59 Amount paid to Tr. G. Mohan from 20,000.00 P-1382 PW.148
CA 2018 of Canara Bank PW.201
E Mylapore of Selvi J. Jayalalitha
on 29.4.95
60 Amount paid to Madurai Kamaraj 5,00,000.00 P-1382 PW.108
University from CA 2018 of P-1412 PW.201
Canara Bank Mylapore of Selvi J.
Jayalalithaon 21.7.93
F 61 Amount paid to New Imia 9,517.00 P-1382 PW.201
Assurance from CA 2018 of Canara P-1413
Bank Mylapore of Se Ivi J.
Javalalitha on 1.8.92
~2 Amount paid to Corporation of 1,858.00 P-1519 PW.201
Madras from CA 2196 of Canara
Bank Mylapore of Tmt. N. Sasikala
G
on 22.2.93, 24.2.93, 15.10.93 and
14.2.94
~3 Amount paid to Tvl. Moulis 11,00,000.00 P-1382 PW.183
Advertisers from CA 2018 of P-1284 PW.201
Canara Bank, Mylapore of Selvi J.
Javalalitha on 18.9.95
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 607
[PINA.Kl CHANDRA GHOSE, J.]

A
64 Amount paid to Tr. KA- 10,000.00 P-1382 PW.201
Panchapakesan from CA 2018 of P-1414
Canara Bank Mylapore of Selvi J.
Javalalitha on 3.11.95
65 Amount paid to Tr. KPrem Olllnd 1,78,279:80 P-1382 PW.201
from CA 2018 of Canara Bank P-1415
Mylapore of Selvi J. Jaya!alitha on B
12.4.93
66 Amount paid to Tvl Rajasekaran & 2,36,120.00 P-1382 PW.201
Co. from CA 2018 of Canara Bank P-1416
Mylapon: of Selvi J. Jayalalitha on P-1417
9.3.93, 20.1.95, 9.3.95 and 3.11.95
'67 Amount paid to Tr. Ramamurthy 12,075.00 P-1382 PW.201 c
from CA 2018 of C.anara Bank P-1418
Mylapore of Selvi J. Jayalalitha on
21.5.92
'68 Amount paid to Tr. Ra~opal 12,075.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1419
Mylapore of Selvi J. Jayalalitha D
on 27.5.92
ki9 Amount paid to Tr. Ramson's from 6,447.00 P-1382 PW.201
CA 2018 of Canara Bank P-1420
Mylapore of Selvi J. Jayalalitha on
5.8.95
170 Amount paid to Ramnad District 5,940.00 P-1382 PW.201 E
Consmner Formn from CA 2018 of
Canara Bank Mylapore of Selvi J.
Javalalitha on 6.6.92 ITwo entries)
171 Amount paid to Tmt. Rangaillil1lll 46,000.00 P-1382 PW.201
from CA 2018 of Canara Bank P-818,
Mylapore ofSelvi J. Jayalalitha on 819 PW.152 F
1.2.92, 29.4.92, 26.9.92, 3.4.93, M0.637
8.10.93, 30.12.94 and 20.5.95. PW.126
(RsJOOo+ 12ooo+7ooo+300
o+4000+700o+7000)
72 Amount paid to Tr. Rangasamy 35,000.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1421
Mylapore ofSelvi J. Jayalalitha on G
15.11.95
73 Amolmt paid to A-P.Telecom from 8,915.00 P-1382 PW.201
CA 2018 of Canara Bank, P-1422
Mylapore of Selvi J. Jayala!itha on
27.01.1996
H
608 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 74 Amollllt paid to Tvl.Rock 2,77,666.00 P-1382 PW201
Advertising from CA 2018 of P-1423
Canara Bank Mylapore of Selvi J. PW.188
Jayalalitha on 20.9.95 (mo entries) M.0.159:
75 Amollllt paid to R.0.Corporation of 2,19,566.80 P-1382 PW.201
Madras from CA 2018 of Camra P-1424
B
Bank Mylapore of Selvi J. to 1432
Jayalalitha between 4.9.91 to
27.6.95
76 Amollllt paid to Salam Stores from 12,73,642.00 P-680 PW.201
~-
>-·CA 2018 of Canara Bank Mylapore P-1382 PW.120
ofSelvi J. Jayalalithafrom9.7.91 to
c 6.12.95
ToP-
1452
rn Amollllt paid to Romaga Foam 75,352.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1453
Mylapore of Selvi J. Jayalalitha
from9.7.91to6.12.95
D r?8 Amollllt paid to C. Sango from CA 10,258.56 P-1382 PW.201
2018 of Canara Bank Mylapore of P~l454
Selvi J. Javalalitln on 19.4.94
79 Amollllt paid to SBKC Carrier from 42,400.00 P-1382 PW,201
CA 2018 of Canara Bank P-1455
Mylapore of Selvi J. Jayalalitha
E on 6.1.95 and 1.12.95
80 Amollllt paid to ·SE, MEDC from 58,463.00 P-1382 PW.201
CA 2018 of Canara Bank Mylapore P-1456
Selvi J. Jayalalitha between to 1462
10.7.91 and6.ll.95
81 Amollllt paid to Tr. V.Selvaraj 13,000.00 P-1382 PW.152
F from CA 2018 of Canara Bank P-820 PW.201
Mylapore ofSelvi J. Jayalalitha on P-821 M0.637
29. 7.95 and 2.12.95 Page
223
82 Amollllt paid to SMCS Ud., from 8,017.25 P-1382 PW.201
CA 2018 of Canara Bank, P-1463
G Mylapore of Selvi J. Jayalalitha
on 29.11.95
83 AmOllllt paid to Tr. D. Swames\Wra 1,00,000.00 P-1382 PW.201
Rao from CA2018 of Canara Bank P-1464
Mylapore ofSelvi J. Jayalalitha on
26.05.95
H

''
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 609
[PINAKI CHANDRA GHOSE, J.]

A
84 Amount paid to Tr. Ram Jethrnalani 2,00,000.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1465
Mylapore ofSelvi J. Jayalalitha on P-1466
19.7.95 and9.9.95
85 Amount paid to Venkateswara Cine 14,000.00 Ex.Pl382,
fromC.A-2018on14.10.1995 P.783
86 Amount paid to Adyar Gate Hotel 1,75,24625 Ex.P.1382, B
from C.A- 2018 on 19.09.95 P.1467
87 Amount paid to Agarwal Sweets 12,000.00 P-1382 PW.201
from CA 2018 ofCamra Bank .

Mylapore of Selvi J. J ayalalitha
on 23.5.92
88 Amount paid to Vijaya Lakshmi 12,320.00 P-1382 PW.201 c
Sweets from CA 2018 of Canara P-1468
IlankMylapore ofSelvi J.
Javalalithaon 29.5.92
89 Amount paid to Annapoorna 19,600.00 P-1382 PW.201
Cafeteria from CA 2018 of Canara P-1469
Bank Mylapore ofSelvi J. D
Javalalitha on 21.5.97
90 Amount paid to Egmore Bhavan 19,300.00 P-1382 PW.201
from CA 2018 ofCamra Bank
Mylapore ofSelvi J. Jayalalitha on
15.5.92
91 Amount paid to Arasan Sweets 16,225.00 P-1382 PW.201
fromCA2018ofCamra Bank P-1470 E
Mylapore ofSelvi J. Jayalalitha
on 21.5.92
92 Amount paid to VasanthaBhavan 11,160.00 P-1382 PW.201
from CA 2018 of Camra Bank P-1471
Mylapore ofSelvi J. Jayalalitha on
27.5.92 F
~3 Amount paid to Archana Sweets 75,675.00 P-1382 PW.201
from CA 2018 ofCamra Bank P-079
Mylapore ofSelvi J. Jayalalitha on PW.119
21.5.92
~4 Amount paid to Arya Bhavan 77,580.00 P-1382 PW.201
Sweets from CA 2018 of Canara .G
Bank Mylapore ofSelvi J.
J avalalitha on 22. 5.92
95 Amount paid to Welcome Hotel 22,000.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1473
Mylapore ofSelvi J. Jayalalithaon X-18 PW.112
9.5.92
H
610 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 96 Amount paid to Ashok Bhavan 21,250.00 P-1382 PW.201
from CA 2018 of Canara Bank
Mylapore of Selvi J. Jayalalitha on
3.6.92
!l7 Amount paid to Bombay Milk Bar 7,500.00 P-1382 PW.201
from CA 2018 of Canara Bank
Mylapore of Selvi J. Jayalalitha
B
25.5.92
!)8 Amount paid to Bombay Sweet 15,000.00 P-1382 PW.201
Stall from CA 20 18 of Canara Bank
Mvlaoore on 25.9.92
99 Amount paid to Central Ca re from 48,645.00 P-1382 PW.201
CA 2018 of Canara Bank P-1474
c Mylapore of Selvi J. Jayalalitha
on 30.5.92
100 Amount paid to Coffee House from 17450.33 P-1382 PW.201
CA 2018 of Canara Bank Mylapore P-1475
ofSelvi J. Javalalitha on27.5.92
IOI Amount paid to Devanathan 18,042.00 P-1382 PW.201
Sweets, from CA 2018 of Canara
D
Bank Mylapore of Selvi J.
Javalalitha on 23.S. 97
102 Amount paid to Ganapathy Vilas 12,996.00 P-1382 PW.201
from CA 2018 of Canara Bank
Mylapore ofSelvi J. Jayalalitha on
26.5.92
E 103 Amount paid to Hotel Akash from 18,422.00 P-1382 PW.201
CA 2018 of Canara Bank
Mylapore of Selvi J. Jayalalitha
on 3.6.92
104 Amount paid to Jothi Ananda 8,840.00 P-1382 PW.201
Bhavan on 4.6.92 from CA 2018
F of Canara Bank Mylapore of Selvi
J. J avalalitha
105 Amount paid to Lakshmi Vilas 1,880.00 P-1382 PW.201
from CA 2018 of Canara Bank
Mylapore of Selvi J. Jayalalitha on
4.6.92
106 Amount paid to Master Bakery 9,091.50 P-1382 PW.201
G from CA 2018 of Canara Bank 1476
Mylapore of Selvi J. Jayalalitha on
27.5.92
107 Amount paid to Sri. Jayaram 10,224.00 P-1382 PW.201
Sweets from CA 2018 of Canara P-1477
Bank My lap ore of Selvi J.
H Javalalitha on 1.6.92
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 611
[PINAKI CHANDRA GHOSE, J.]
-
108 Amount paid to Mayil Mark 39,000.00 P-1382 PW.201 A
Mittai Kadai from CA 2018 of P-1478
Canara Bank Mylapore of Selvi J.
J avalalitha on 1.6. 92
109 Amount paid to Nandini from CA 21,000.00 P-1382 PW.201
2018 of Canara Bank Mylapore of X-15 to
Selvi J. Jayalalitha on 15.5.1992 17 PW.111 B
llO Amount paid to New Rama Care 74,342.25 P-1382
from CA 2018 of Canara Bank
Mylapore ofSelvi J. Jayalalitha on
26.5.92
ll l Amount paid to New Agarwal from 14,000.00 P-1382
CA 2018 Canara Bank Mylapore of
Selvi J. Javalalitha on 26.5.92
c
112 Amount paid to New Bombay 15,150.00 P-1382
Sweets from CA 2018 of Canara P-1479
Bank Mylapore of Selvi J.
Javalalitha on 21.5.92
ll3 Amount paid to Ramalakshmi 16,637 .40 P-1382
Sweets from CA 2018 of Canara D
Bank Mylapore of Selvi J.
Javalalitha on 3.6.92
ll4 Amount paid to Ro land Bakery 13,302.90 P-1382
from CA 2018 of Canara Bank
Mylapore of Selvi J. Jayalalitha on
18.6.92 E
ll5 Amount paid to Salem Care from 13,520.00 P-1382
CA 2018 of Canara Bank Mylapore P-1480
of Selvi J. Jayalalitha on 21.5.92
ll6 Amount paid to AGK Travels from 15,814.00 . P-1382 PW.201
CA 2018 · of Canara Bank .
P-1370
Mylapore of Selvi J .Jayalalitha •,
PW.199
on 28.9.95 F
117 Amount paid to Anchor Cabs from 19,211.00 P-1382 PW.201
CA . 2018 of Canara Bank . P-1286
Mylapore of Selvi J. Jayalalitha PW.185
on 28.9.95
ll8 Amount paid to Annamalai Bus 47,790.30 P-1382 PW .201
from CA 2018 of Canara Bank P-1481 G
Mylapore of Selvi J. Jayalalitha on P-1482
27.7.93 and 12.3.94
ll9 Amount paid to Govind Cabs from 15,903.00 P-1382 PW.201
CA 2018 of Canara Bank P-1483
Mylapore of Selvi J. Jayalalitha
on 29.9.95
H
612 SUPREME COURT REPORTS [2017) 5 S.C.R.

A 120 Amount paid to Vincent Travels 27,502.00 P-i382 PW.201
from CA 2018 of Canara Bank
Mylapore of Selvi J. Jayalalitha on
28.9.95
121 Amount paid as interest towards 11,861.00 P-1382 PW.201
T.0.D. between 27.1.92 and
B 3.11.95 from CA 2018 of Canara
Bank Mylapore of Selvi J.
Javalalitha
122 Expenditure incurred by way of 5,0ll.00 P-1382 PW.201
DD Commission from CA 2018 of
Canara Bank Mylapore of Selvi J.
Jayalalitha on 25.1.93, 27.9.94,
c 2.5.95, 1.9.95, 22,8.95 and 17.10.95
123 Expenditure incurred by way of 575.00 P-1382 PW.ZOI
folio charges from CA 2018 of
Canara Bank Myla pore of Selvi J.
J avalalitha on different dates
124 Amount paid to CM's Relief Fund 1,00.008.00 P-1382 PW.201
D from CA 2018 of Canara Bank P-1484
Mylapore of Selvi J. Jayalalitha
on 5.10.93
125 Amount paid to Kanagabisheka 1,08,000.00 P-1382 PW.201
Sarnith from CA 2018 of Canara P-1485
Bank Mylapore of Selvi J.
Javalalitha on 26.3 .93
E 126 Amount paid to Sacred Heart l ,00,000.00 P-1382 PW.201
Higher Secondary School from CA
2018 of Canara Bank Mylapore of
Selvi J. Javalalitha on 8.9.92
127 Amount paid to Rama Anchaneya ·1,00.008.00 P-1382 PW.201
Trust from CA 2018 of Canara X-12,
F Bank Mylapore of Selvi J. 13, 14 PWllO
Javalalithaon 12.5.94
128 Amount paid toTarnilaga lnipagam 27,000.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1486
Mylapore of Selvi J. Jayalalitha on
1.6.92
129 Amount paid to TNG. Music 1,00,000.00 P-1382 PW.201
G Academy from CA 2018 of Canara
Bank Mylapore of Selvi J. PW.109
Jayalalitha on 21.12.91
130 Amount paid to Presidern of 1,00,000.00 P-1382 PW .201
Thevar Peravai from CA 2018 of P-1487
Canara Bank Mylapore of Selvi J.
H J avalalitha on 3. I. 94
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS.. 613
[PINAKI CHANDRA GHOSE, J.)

131 Amount paid to R.V. Tower from 50,000.00 P-1382 PW.201 A
CA 2018 of Canara Bank Mylapore P-1488
ofSelvi J. Jayalalithaon 17.3.92
132 Amount paid to Warla Tmst from 1,00,000.00 P-1382 PW.201
CA 2018 of Canara Bank P-1489
Mylapore of Selvi J. Jayalalitha
on 14.9.93 B
133 Amount paid to Tamil Nadu Films 49,500.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1490
Mylapore of Selvi J. Jayalalitha on
20.9.95 49,500.00P - 1382 P-1490
PW.201 134 Amount paid to A-K.
Yijaya Shankar from CA 2018 of
Canara Bank Mylapore of Selvi J. c
Jayalalitha on 17.9.93, 5.4.95,
22.7.95, 20.8.94 & 26.10.95
134 Amount paid to A-K. Vijaya 80,000.00 P-1382 PW.201
Shankar from CA 2018 of Canara P-1491
Bank Mylapore of Selvi J. To
Jayalalitha on 17.9.93, 5.4.95, 1494 D
22. 7.95, 20.8.94 and 26.10.95
135 Amount paid to Sun Shine from CA
2018 of Canara Bank Mylaporc of .
76,450.00 P-1382
P-1496
PW.201

Selvi J. Javalalitha on 9.10.95
.
136 Amount paid to Tr. Saminathan 94,000.00 P-1382 PW.201
from CA 2018 of Canara Bank P-1496 E
Mylapore of Selvi J. Jayalalitha
on 15.9.95 and 10.10.95
137 Amount paid to Tan1il Na du l ,08,000.00 P-1382
Govemrrent Fund from CA 2018
of Canara Bank Mylapore of Selvi
J. J avalalitha on 11.1.92
Amount paid to United India 1,32, 796.00 P-1382
F
138
Insurance from CA 2018 of Canara P-I497
Bank Mylapore of Selvi J. to I500
Jayalalitha on 9.1.92, 28.3.92,
31.3.93, 29.7.93, 18.3.94, 16.3.95
and 24.3.95
139 Amount paid to VI G Tech from 91,I57.64 P-1382 PW.20I G
CA 2018 of Canara Bank Mylapore P-1018 PW.180
of Selvi J. Javalalitha on 10.1.96
140 Amount paid to Chinna Thambi 7,500.00 P-1381 PW.201
from CA 2018 of Canara Bank P-1389
Mylapore of Selvi J. Jayalalitha on
29.5.92
H
614 SUPREME COURT REPORTS [2017) 5 S.C.R.

A 141 Amount paid to Vision Hire from 2,50,000.00 P-1381 PW.201
CA 2018 of Canara Bank Mylapore P-1501
of Selvi J. Javalalitha on 3.3.93
142 Amount debited from CA 2018 15,90,726.00 P-1382 PW.201
of Canara Bank Mylapore of Selvi P-1502
J. Jayalalitha towards Indian Bank
B Account Government transactions
on 28.8.95
143 Amount paid to Post Master T. 399.00 P-1382 PW.201
Nagar from CA 2196 of Camm P-1503
Bank Mylapore ofTmt. N. Sasikala
on 30.6.95
144 Amount paid to Madras Telephones 9,301.00 P-1519 PW.201
c .
from CA 2196 of Canara Bank P-1555
Mylapore of Tmt. N. Sasikala on
30.8.94 and 23.3.94
145 Amount paid to MMWSSB from 2,285.00 P-1519 PW .201
CA 2196 of Canara Bank Mylapore P-1556 to
of Tmt. N. Sasikala between 7.4.93 P-1565
D and 16.3.95.
146 Amount paid to Marine Waves 8,000.00 P-1519 PW.201
from CA 2196 of Canara Bank P-1568
Mylapore ofTmt N. Sasikala on
27.2.93
147 Amount paid to SE, MDC from CA 14,313.00 P-1519 PW.201
2196 of Canara Bank Mylapore of P-1569
E Tmt. N. Sasikala on 24.1.96
148 Amount paid to Corporation of 1,393.95 P-1510 PW.201
Madras of MS from SB 23218 of
Canara Bank Mylapore of Tmt. N.
Sasikala on 20.6.92
149 Amount paid to RO. Corporation 1,858.60 P-1510 PW.201
F from SB 23218 of Canara Bank
Mylapore of Tmt. N. Sasikala on
5.9.91
150 (i) Amount paid in cash to Mis. 5 ,88,978.00 P-1510 PW.201
Nathella Anjaneyalu Chetty and P-1570 PW.238
Sons, towards cost of Silver items P-1571
for Puja pwposes silver .
G Kavacham for Vinayaga Idol
situated in front of Poes Garden
residence for Gold Polishing and
blass plates on the main doors .of.
Poes Garden and towards the cost
of six gold necklaces during Sept
to Nov. 1995. Rs.1,52,000 ·
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 615
[PINAKI CHANDRA GHOSE, J.]

(ii) Amounts paid to Mis. Nathella P-2262 PW.23.8
A
Anjaneyalu Chetty and Sons by P-2263
creque No.93293 and 93294 of
Canara Bank Mylapore towards
cost of two pairs of Gold Ear
.
studs, studded with Diamonds
(Vide bill No.45598 and 45599 - B
Rs.4.36.978/-)
151 Amount paid to Tvl. N. Rajasekaran 10;000.00 P-1572
am Som from SB 24621 of P-1574
Canara Bank Mylapore of Tr. V N
Sudhakaran on 28.1.93
152 Amount paid to United India from 5,710.00 P-1572
SB 24621 of Canara Banlc, P-1575 c
Mvlanore ofV.N.Sudhakaran
153 Amount paid to S. Srinivasan from . 4,500.00 P-1576
CA 2220 of Canara aank Mylapore P-1590
ofTr. VN Sudhakaranon21.10.94
154 Amount paid to R. Loganathan 3,000.00 P-1576
from CA 2220 of Canara Bank P-1591 D
Mylapore of Tr. V N Sudhakaranon
28.2.94
155 Amount paid to United India from 32,087.00 P-1576
CA 2220 of Canara Bank P-1592
Mylapore ofTr. VN Sudhakaran to 1595
on 18.3.94, 24.3.95, 6.12.95 and
27.3.96 E
156 Amount paid to OM Enterprises 36,105.00 P-1576
from CA 2220 of Canara Bank
.
Mylapore of Tr. VN Sudhakaran on
13.3.96
157 Amount paid to Tr. P. Raghur from 2,500.00 P-1576 PW.201
CA 2220 of Canara Bank P-1596 PW.96. F
Mylapore of Tr. VN Sudhakaran on
13.8.94
158 Amount paid to SAI Bhas from CA 4,500.00 P-1576
222 0 of Canara Bank M ylapore of P-1597
Tr. VN Sudhakaranon21.10.94
159 Amount paid to Tr. Sampath from 34,960.00 P-1576
CA 2220 of Canara Bank Mylapore P-1598 G
of Tr. V N Sudhakaranon26.10.95
160 Amount paid to Madras Telephones 1,995.00 P-1576
from CA 2220 of Canara Bank P-1599
Mylapore of Tr. V N Sudhakaran to 1603
on 19.9.95, 7.11.95, 26.2.96 and
26.4.96 IRs.399 x 5l H
616 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
161 Amount debited towards DD 300.00 P-1576
Commission from CA 2220 of
Canara Bank Mylapore of Tr. VN
Sudhakaran on 16.7.93, 17.1.94,
19.l.94and 14.5.94
162 Interest paid towards TOD from 2,_103.00 P-1576
B CA 2220 of Canara Bank My la pore
of Tr. VN Sudhakaran on 31.12.94,
15.12.95 and 7.3.96 (813 + 930 +
360)
163 Amount paid to Tr. Krishna from 2,500.00 P-1576
CA 2220 of Canara Bank Mylapore P-1604
of Tr. VN Sudhakaran on 9.11.94
c 164 Amount paid to Post Master from 399.00 P-1576
CA 2220 of Canara Bank P-1605
Mylapore of Tr. VN Sudhakaran
on 30.6.96
165 Amount paid to upfront from CA 3,500.00 P-1576
2220 of Canara Bank Mylapore of P-1609
Tr. VN Sudhakaranon27.I0.95
D 166 Amount paid to Tr. Anilkumar 2,500.00 P-1618 PW.201
from CA 2219 of Canara Bank P-1619 PW.97
Mvlanore ofTmt. J. Elavarasi.
167 Amount paid to Tr. Narayana Rao 4,500.00 P-1618 PW.201
from CA 2219 of Canara Bank P-1620 PW.195
Mylapore of Tmt. J. Elavarasi.
E On 6.10.94
168 Amount paid to Tr. G. Prabhakar 2,500.00 P-1618 PW.201
Reddy from CA 2219 of Canara P-1621
Bank Mylapore of Tmt. J.
Elavarasi. On 12.8.94
169 Amount paid to Tr. P.V.Ravikumar 1,000.00 P-1618 PW.201
from CA 2219 of Canara Bank P-1622 PW.114
F Mylapore of Tmt. J. Elavarasi. On
28.9.94
170 Amount paid to Tr. Suresh Bhatia 2,00,000.00 P-1618 PW.201
from CA 2219 of Canara Bank P-1623
Mylapore of Tmt. J. Elavarasi. On
14.3.95
171 Amount paid to Tr. R. Vijayan from 2,000.00 P-1618 PW.201
G CA 2219 of Canara Bank
Mylapore of Tmt. J. Elavarasi.
On 27.4.95
172 Amount paid to Tr. A- K.Vijaya 20,000.00 P-1618 PW.201
Shankar from CA 2219 of Canara P-1624
Bank My.la pore of Tmt. J.
Elavarasi. On 5.4.95
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 617
[PINAKI CHANDRA GHOSE, J.]

173 Amount paid to Milan Jothi from 12,500.00 P-1618 PW.201 A
CA 2219 of Canara Bank Mylapore P-785 to PW.147
ofTmt. J. Elavarasi. On 21.3.94 787
174 Amount paid to United India 21,494.00 P-1618 PW.201
Insurance from CA 221 9 of Canara P-1625
Bank Mylapore ofTmt. J.
Elavarasi. On 18.3.94, 24.3.95 and
27.3.96 B
175 Amount paid to MMSWWB from 17,305.00 P-1618 PW.201
CA 2219 ofCanaraBank
Mylapore of Tmt. J. Elavarasi.
On 2.6.95
176 Amounts debited from CA 2219 1,203.00 P-1618 PW.201
of Canara Bank Mylapore of Tmt.
J. Elavarasi towards cheque book
c
and DD Commission etc., on
different dates
177 Amount paid to MMDA for 2,90,675.00 P-725 PW.128
allotment of a plot at Door P-718
No .E-83, Besant Nagar, by A-3 P-726
on 3.3.93 and development P-727
charges Rs.1500/- on3.3.93 and
D
scrutiny fee of Rs.475/- on
1.3.93.
Plot cost Rs. 2,88,75 0.00
Dev.Ch. Rs. 1,500.00
Scrutiny fee Rs 1Z~ QQ
R<.2 oo 675 00
178 Income Tax remitted by Selvi J.
E
25,445.00 PW.227
Jayalalitha for A-Y. 1987-88
Rs.2675.00 (11/92)
Rs.227770.00128.8.95)
179 Income Tax remitted by Selvi J. 5 ,63,482.00 PW.227
Jayalalitha for A-Y. 1988- 89
Rs.9282.00 (11/92)
Rs.554<00.00 (28.8.95)
F
180 Income Tax remitted by Selvi J. 8,18,161.00 PW.227
Jayalalitha for A-Y. 1989-90
Rs.9905.00(11/92)
Rs.808256.00128.8.95)
'
181 Income Tax remitted by Selvi J. 30,61,549.00 PW.227
Jayalalitha for A-Y. 1990-91
G
Rs.61549.00 ( 11/92)
Rs.500000.00 (20.11.95)
Rs.500000.00 (8.12.95)
Rs.500000.00(18.01.96)
Rs.500000.00 (25.02 .96)
Rs.500000.00 (19.03 .96)
Rs.500000.00124. 04 .96)
H
618 SUPREME COURT REPORTS . [2017] 5 S.C.R.

.

A 182 Income Tax remitted by Selv.i l- 25,78,065:tJO PW.227
Jaya!alitha for A-Y. 1991-92
Rs.378065.00(20.11.92)
Rs. I 000000.00( I ..I 0.94)
Rs. 500000. 00 (26.12.94)
Rs. 700000.00122.1.94)
183 Income Tax remitted by Selvi J. 3,92,488.00 PW .215
B Jayalalitha for A-Y. 1992-93 PW.227
Rs. 3891.45 (23 .11. 92) PW.228
Rs.3343.00 fll 2.93\
184 Income Tax remitted by Selvi J. 8,88,370.00 PW.215
Jayalalitha for A-Y. 1993-94 PW .227
Rs.523757.00( 15.12.92) PW.228
Rs.349171.00( 16.3.93)
c Rs.15442.00(13.3.96\
185 Income Tax remitted by Selvi J. 2,90,528.00 PW.215
Jayalalitha for A-Y. 1994- 95 PW.227
Rs.87158.00( 15.9.93) PW.228
Rs.87158.00 (I 5 .12 .93)
Rs.116212.00JI 5.3.94)
186 Income Tax remitted by Selvi J. . 2,90,528.00 PW.215
D Jayalalitha for A-Y. 1995-96
Rs.87158.00( 15.9.94) PW .227
Rs.87158.00( 15.12.94) PW.228
Rs.116212.00.115.3.95\
187 Income Tax remitted by Selvi J. 9,24,316.00 PW.215
Jayalalitha for A-Y. I 997-98 PW.227
Rs.87158.00( 13.9.95) PW.228
E
Rs.87158.00(8.12.95)
Rs. I 16212.00.fl4.3.96)
188 Wealth tax remitted by Selvi J. 34,381.00 PW .215
Jayalalitha for A-Y. I 987- 88 PW.227
during 11192 - PW.228
189 Wealth tax remitted by Selvi J. 89,619.00 PW.215
F Jayalalitha for A-Y. 1988- 89 PW.227
during 11/92 PW.228
190 Wealth tax remitted by Selvi J. 2,68,475.00 PW.215
Jayalalitha for A-Y. 1989-90 PW.227
during 11192 . .PW.228
191 Wealth tax remitted by Selvi J. 6,02,757 .00 PW.215
Jayalalitha for A-Y. 1990-91 PW.227
G during 11/92 PW.228
192 Wealth t.ax remitted by Selvi J. 7,18,542.00 PW.201
Jayalalitha for A-Y. 1991-92 on
23.11.92
193 Wealth tax remitted by Selvi J. 13,51,590.00 PW .201
Jayalalitha for A-Y .1992- 93 on
23.11.92
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 619
[PINAKI CHANDRA GHOSE, J.]

194 Income Tax remitted by Tmt. N. 2,23, 750.00 PW.215 A
'- Sasikala for A-Y. 1991-92 during PW.227
2193 PW.228
195 Income Tax remitted by Tmt. N. 3 ,00,550.00 · PW.215
Sasikala for A-Y. 1992-93 during PW.227
2/93 PW.228
196 Income Tax remitted by Tmt. N. 7,62,151.00 PW.215 B
Sasikala for A-Y. 1993-94 during PW.227
13.3.96 PW.228
197 Wealth Tax remitted by Tm. N. 14,240.00 PW.215
Sasikala for A-Y. 1991-92 during PW.227
2/93 PW.228
198 Wealth Tax remitted by Tmt. N. 1,17,955.00 PW.215 c
Sasikala for A-Y. 1992-93 during PW.227
2/93 PW.228
199 Expenditure by way of ODs and 63,355.00 P-936 PW.164
P.Os taken in favour of Tr. Syed
Saleem of Pet Basheerabad.
7045x4=28100.00 D
703Sx5 =35175.00
63J55.00
From the SB 20614 of CBI
Secunderabad of Selvi J.
Jayalalitha during the check period
200 Amount paid to Tr. Ravinder 1,90, 730.00 P-936 PW.164 E
Reddy through Andhra Bank,
Basheerabad Branch (SB 2803)
from SB 20614 of CBI
.
Secunderabad of Selvi ].
J ayalalitha during check period
1035x6 =60210
F
10010 lli I~= l~Q~2Q -·
12QZ~Q
201 Amount ·paid to J.R. Rao on 76,337.00 P-936 PW.164
1.2.95 from SB 20614 of CBI
Secunderabad of Selvi ].
Javalalitha
202 Amount paid to Thirumala 3,835.00 P-936 PW.164 G
Fertilizers from SB i0614 of CBI
Secunderabad of · Selvi ].
Javalalitha on 11.1. 94
203 Tax deducted at source m 3,332.00 P-936 PW.164
respect of MIDR 6619 on
26.3.92 I
H
620 SUPREME COURT REPORTS [2017] 5 S.C.R.

A ~04 Amount paid towards BPO 301.00 P-1111 PW.182
Commission from CA 1068 of
Indian Bank, Abirampuram of Tr.
VN Sudhakaran on 21.12 .94
1205 Amount paid tO\v.lrdS LC. 125.00 P-1111 PW.182
Charges and Folio Charges from
B CA 1068 of Indian Bank,
Abirampuram of Tr. VN
Sudhakaran on 16.4.94, 13.5.94,
15.3.95 28.3.95 and 31.3.95
1206 Amount paid to Temporary OD . 388.00 P-1111 PW.182
as interest from CA I068 of Indian
Bank, Abiramouram on 31.12.94
c 207 Amount paid to Tr. Srinivasalu on 4,410.00 P-1111 PW.182
12.5.95 from CA 1068 of Indian .

Bank, Abiramptu·am of Tr. VN
Sudhakaran.
208 Amount paid to Tr. A- K. Vijaya 20,000.00 F-1109 PW.182
Shankar from CA 1171 of Indian
D Bank, Abirampuram of Tmt. J.
Elavarasi On 22.7.95
209 Amount paid to Tr. D. Srinivasan 1,40,000.00 P-1109 PW.182
from CA 1171 of Indian Bank,
Abirampuram of Trot. J.
Elavarasi On 7.2.96
210 Amount paid to Tr. Dasan from CA 1,052.00 P-1109 PW.182
E
1171 of Indian Bank,
Abirampuram of Tmt. J. Elavarasi
14.10.95
1211 . Amount paid to Tr. Ramadoss from 5,845.00 P-1109 PW.182
CA 1171 of Indian Bank,
Abirampuram ofTmt. J. Elavarasi
F on 14.10.95
1212 Amount paid to Tr. Ramson's from 9,963.00 P-1109 PW.182
CA 117 I of Indian Bank,
Abirampuram of Tmt. J. Elavarasi
on 26.10.95
213 Amount paid to Tr. Vedagiri from 20,000.00 P-1109 PW.182
G CA 1171 of Indian Bank,
Abirampuram of Trot. J. Elavarasi
on 3.11.95
214 Amount paid to Tr. Vcerasamy 3,500.00 P-1109 PW.182
from CA 1171 of Indian Bank,
Abirampuram ofTmt. J. Elavarasi
on 7.11.95
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 621
[PINAKI CHANDRA GHOSE, J.]

215 Amount paid to Tr. Durai Samy 92.025 .00 P-1109 PW.182 A
Nadar from CA 1171 of Indian
Bank, Abirampuram of Tmt. J.
Elavarasi on 8.11.95,
12.12.95, 7.2.96, 9.9.96 and
.
14.3.96 (Rs.13500 + 13150 +
27025 + 10800 + 275501
216 Amount paid to Tmt. Lakshmi from 5 91.60 P-1109 PW.182 B
CA 1171 of Indian Bank,
Abirampuram of Tmt. J.
Elavarasi on 4.12.95
217 Amount paid to Tr. D. Vi ma I 21,000.00 P-1109 PW.182
Kumar from CA 1171 of Indian
Bank, Abirampuram of Tmt. J.
Elavarasi on 29.3.96
218 Amount paid to Supdt. Engineer 1,434.00 P-1109 PW.182 c
from CA 1171 of Indian Bank,
Abirampuram of Tmt. J.
Elavarasi. On 24.1.96
219 Amount paid to telephone 1,197.00 P-1109 PW.182
departments from CA 1171 to
Indian Bank, Abirampuram of Tmt.
J. Elavarasi. On 29.12.95, 24.1.96 D
and 23.3.96 (Rs.399 x 3 )
220 Amount paid towards interest for 16,170.00 P-1109 PW.182
T.O.D from CA 1171 of Indian
Bank, A biram puram of Tmt. J.
Elavarasi. On 17.9.95 and
31.12.95 (Rs.6455 + 9715)
22 l Amount paid to DD Commission 6,865.00 P-1109 PW.182
and other charges from CA 1171 of E
Indian Bank, Abirampuram of Tmt.
J. Ela varasi. On 19.10.95, 7.2.96,
9.2.96, 14.2.96, 15.3.96 and 31.3.96
222 Amount paid to Tele 13,072 .50 P-1138 PW.182
Communication Department. From
SB 4119 of Indian Bank,
Abirampuram of J. Vivek slo. Tmt. F
J. Elavarasi. On 14.7.95
223 Amount paid to Tr. M. Natarajan, 40,96,565.00 P-1238 PW.182
Tamilarasi Press from CA 1053 P-1226
of India" Bn ;k, Abirampuram of
Mis. Anjaneya Printers (P) Ltd.,
towards the loan Ale JO Indian
Bank, Abirampuram in respect of
the loan availed by Tamilarasi G
Publication !Pl Ltd .. on 2 5 .6.94
224 Amount paid to Tamilarasi Private 12,03,435.00 P-1226 PW.182
Limited Account No.CA 372 of P-1239
Indian Bank, Abiramp uram from
CA 1053 of Indian Bank,
Abirampuram of Mis. Anjaneyo
Printers (P) Ltd., on 14.7.94 H
622 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
1225 Other item; of household expenditure of 16,15,500.00 PW.198
Selvi J. Jayalalitha at Poes Garden as per
the following particulars.
i. Salary for Tr. Jayararnan at
Rs.3000/- per month from 9/93 to
B 10'96 (37months)-Rs.1,ll,OOO/-
n. Salary for Tr. Vijayan from 6191 to
4196 at Rs.1500/- per month fur 59
months -Rs.88,500/-
iii. Salary for 6 drivers from 6191 To
4196 at Rs. l,500/- per month
c 16,15,500.00 PW.198 For 59 months
- Rs.5,3 I,000/-
iv. Salary for Flectrician for 6191 to
4196 at Rs.1,500/- per month fur 59
months. - Rs.88,500/-
v. Salary fur two sweepers from 6191
D io 4196 at Rs. 750/- per month for 59
months. - Rs. 88,5001-
vi. Salary for Cook Tr. Selvaraj at
Rs. 750/- per month for 59 months
from 6191 to 4196 -Rs. 44,250/-
vii. Salary for Tnt. Rajamma, cook at
Rs.5001- per month fur 59 months
E from 6191 to4/96-Rs. 29,5001-
viii. Salary for 7 Assistant Maids (Male
am Female servaits) at Rs.200/- per
moiith for 59 nmths from 6191 to
4196 - Rs. 82,600/-
ix. Salary for Dhoby at Rs.3000/- per
F month fur 59 months from 6191 to
4196 - Rs.I, 77,000/-
x. Milk expenditure 18 I1rs. Per day At
Rs. 7.50 per litre for 59 months From·
6191 to4196-Rs.2,38,950/-
xi. Telephone Bill for Phone
G No.4991414 for 59 months from
6191 to 4196 at Rs. I000/- per month
(Average bill amount) - Rs. 59,000/-
xii. Flowers purchased fur 59 mmths For
59 months at Rs.1,300/- per IIDnth
6191to4/96 -Rs. 76,700/-
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 623
[PINAKI CHANDRA GHOSE, J.]

226 Expenditure incurred in connection 6,45,04,222.00 P-1019 PW.181 A
with the marriage of foster son Tr. P-1371 PW.200
VN Sudhakaran with Tmt. to P- PW.192
Sathiyalakshmi on 7.9.95 1376 PW.196
P-1292 PW.238
A- Expenditure incurred · for PW.189 I
erection of marriage panda! over PW.228
and above the admitted I recorded B
payments (as estimated by P .W .D
authorities) Rs.5,21,23,532.00

b. Expenditure incurred towards
cost of food, mineral water and
thambulam (assessment based on
available materials) Rs.
c
1,14,96,125/-

c. 34 Nos. TITAN Watches
purchased on cash payment.
Rs. l ,34,565.00
D
d. Amount paid to Tr. Syed Bawker
towards stitching charges for
wedding dress of Tr. V N
Sudhakaran - Rs.1,26,000/-

e. Amount paid for purchase of 100
silver plates (paid by Tmt. N. E
Sasikala) Rs.4,00,000

f. · Postiil expenses for dispatch of
5 6,000 wedding invitations
Rs.2,24,000
~27 Kodanad Tea Estate in S.No.168 12,20,310.00 P-1964 PW.205
o fK othagiri Village P-1965
F
i. Expenditure incurred for
construction of bunglow structure
- Foundation Qnly- Rs. 7,00,000/-

ii Expenditure incurred towards
.
lavin• HDPE Pines Rs. 5.20.315/-
228 Amount paid by Tmt. N. Sasikala 10,82,420.00 P-1382 PW.190 .G
to Tr. V.N. Kanniyappan, P-1109
Proprietor, Lakshmi Marbles,
Choolaimedu, Chennai - 94
towards the cost of marbles and
· blaze titles supplied to Sengamala
Tbayar Memorial College for
Women at Mannar•udi. H
624 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 1229 Amount spent towards electricity 40,690.00 P-67 PW.21
power connection for 31-A Poes
Garden (new residence) for SC
Account Nos.203-43-209 SC
Connection charge Rs.1,400/-
security deposit Rs.l,000/-
Electricity consumption charges
B uoto 30.4.96- Rs.30.210/-
1230 Amount spent for securing 25,600.00 P-67 PW.21
electricity power connection 10
respect of SC No.208-43- 216 to
208-43-219 for 31-A Poes Garden
at the rateof Rs.6,400/- per service
connection
c 1231 Amount paid to Tr. Rajesekaran 30,000.00 P-1613 PW.201
from SB Ne. No.25389 of Canara P-1614
Bank Mylapore of Tmt. J.
Elavarasi. On 28.1.93
232 Amount paid to United India 9,369.00 P-1613 PW.201
Insurance Company from SB P-1615
No.25389 of Tmt. J. Elavarasi. On
D 31.3.93
1233 Amount paid to Tr. Subbarama 4,410.00 P-1613 PW.201
Reddy from SB Ne. No.25389 P-1616
Canara Bank Mylapore of Tmt. J.
Elavarasi. On 12.5.95
1234 Amount paid to Tr. Srinivasalu 4,590.00 P-1613 PW.201
E Reddy from S.B. Ne. No.25389 P-1617
Canara Bank Mylapore of Tmt. J.
Elavarasi. On 12.5.95
1235 Amount spent towards providing 7 ,50,000.00 P-1940 PW.201
extra amenities in Swaraj Mazda P203l PW.148
Vans (Three) TN -09/H-3541,
TN-09/ H- 3595 and TN-09/H-
F 3506 ofM/s. Anjaneya Printers (P)
Ltd., paid to. Tr. Mohan, Nikhil
entemrises. Chennai - 14
1236 Expenditure towards electricity 2,27,750.00 P-805 PW.149
consumption charges in respect of
SC No.211-11-179 dt 1.8.75 of
Jaya Publications at C-8, Thiru-vi-
G ka Industrial Estate, Chennai - 32
for the check Period
1237 Expenditure towards electricity 27,529.00 P-806 PW.149
consumption charges in respect of
S.C. No.211-11-180 dt. 1.8. 75 of
Namadhu MGR at C-8 Tr-vi- ka
Industrial Estate for the check
H oeriod
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 625
[PINAKI CHANDRA GHOSE, J.]

238 Expenditure towards electricity 2,69,102.00 P-798 PW.19 A
consumption charges in respect of
SC No2 l l-11-261 dt 17.3.90 at
MF-9, Guindy Industrial Estate,
Chennai - 32 in the name of
Mis. Java Publications.
239 Expenditure towards electricity 97,381.00 P-789 PW.149
consumption charges fur the B
I "·1·mises of Mis. Jaya Publications
··,JF-9, Industrial Estate Chennai-
32 fer the check period (including
deposit ofRs.12,000)
240 Expenditure towards electricity 1,594.00 P-804 PW.149
consumption charges including
deposits in respect of the premises
of Mis. Anjaneya Printers (P)
c
Ltd., at No.48, Jawaharlal Nehru
Road, ·chennai- 97
241 Expenditure towards electricity 1,08,138.00 P-807 PW.149
consumption chargesand deposits in
respect of SC No.211-11-273 of
Mis. Jaya Publications for the D
neriod from 9/92 to 12-93
242 Expenditure towards electricity 58,889 .00 P-808 PW.149
consumption chfirges and deposits
in respect of SC No.211-11-303
of Mis. Sasi Enterprises. at A-28,
Industrial Estate, Chennai - 32 for
the check oeriod
E
243 Expenditure towards electricity 7 ,38,433.00 P-800 PW.149
consumption charges of Mis. To 803
Anjaneya Printers (P) Ltd., in the
name of the following service
connections viz.,
i. Mis. Sastri Manufucturers, SC
No.211-05-141 for the period 9/93
to 4196 - Rs. 1,33,766/-
F
I
ii. Mis. Sastri Manufucturers, SC
No.211-05-142 for the period 9193
to 2195 (disconnected) - Rs.
1,4471-

iii. Mis. Uni Offset Printers SC G
No.211-05-273 for the period 9193
to 4196-Rs. 1,82,1271-

iv. Mis. Amar Enterprises SC
No.211-05-275 for the period 9193
to 4196 - Rs. 4,21,0931- H
626 SUPREME COURT REPORTS [2017) 5 S.C.R.

A
~44 Amount paid to (over and above the 4,63,000.00 P-1903 PW.30
document value concerned in P-1924 PW.201
document No.282/94 dt. 27.6.94 of P-1925
SRO North Madras) M/s. Fiesta P-1935
~;;
Properties (P) Ltd., by Mis. Jaya P-1903
Publications towards the cost of P-1933
B acquisition of flat at Door No.9899 ToP-
of Luz Church Road, Chennai- 4
1935
Total
11,56,56,833.41
1245 V ij ayasekar Services 44,341.35
246 Thevar Automobiles 9,73,452.00
c 247 K urnaran Silks 4,84,712.00
248 James Fredrich 30,00,000.00
Grand Total 12,00,59,338. 71

It appears that the aforementioned expenditures are classifiable
D as follows:
(a) Amounts paid towards interest in respect of the loan.
(b) Amounts paid to Corporation of Madras towards sanction
ofbuilding plan.
E (c) Amounts paid to Corporation, MMWSSB. ·
(d) Amounts paid for the purchase of provisions.
(e) Amounts towards LIC premium.
(t) Amounts paid towards DD Commission.
F (g) · Amounts paid to telecom and Electricity Department.
(h) Income Tax and Wealth Tax.
(i) Household Expenses.
(j) Marriage Expenses.
G (k) Other outgoings.
23. The Trial Court after analyzing oral and documentary evidence
came to the conclusion that the accused have not disputed the loan
transactions and as a result whereof it held that the prosecution has
proved Item Nos.l to 8 of Annexure-IV. ln respect of Item Nos.9 to 21,
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS.. 627
[PINAKI CHANDRA GHOSE, J.]

the Trial Court after duly considering the evidence, both oral and A
doc~entary, held that the accused did not dispute the statutory
permission obtained by them for constructing new buildings and addition
of the building as noted inExts.65, 64, 51, 54, 63, 56,48,49, 50, 59, 60,
61, 62, 66 and 76, respectively and therefore, it appeared that thereceipts
for such payments and the proceedings maintained by the concerned B
municipal authority had been established by the prosecution. Similarly,
the Trial Court held that payments made with respect to item Nos.23 to
35, 37 to 44, 46, 48 to 54 & 56 to 176 had been proved by the prosecution.
The corresponding documents have already been accepted before the
Court and hence such expenditure has been proved by the prosecution.
With regard to Item Nos.178 to 198, such expenditures were never C
disputed on behalf of the accused before the Court. After analyzing the
evidence of the prosecution witnesses and their depositions, it held that
item Nos.229 & 230 have also been proved by the prosecution.
24. The Trial Coun has duly considered the objections raised on
behalf of the accused and rejected the same. Similarly, the Trial Court D
has also dealt with other expenditures such as household expenses (Item
No.225 in the Chart) and the objections raised on such account on the
ground of overlapping entries and it came to the conclusion that the
argument of the learned counsel raising the objections cannot be accepted.
After analyzing the oral and documentary evidence placed on record
and the judgments cited before it, the Trial Court came to the following E
conclusion:
"Prosecution has proved beyond reasonable doubt that as against
the income of Rs.9,91,05,094.75 and expenditure of
Rs.8,49,06,833.00 during the check period, Al acquired and
possessed in her name and in the names of A2 to A4 and in the F
names of the business enterprises acquired in their names
immovable properties and pecuniary resources of the value of
Rs.53,60,49,954.00 which she could not satisfactorily account.
Hence, acting u/Sec. 248 (2) of 896 Spl.C. C.20812004 Cr.P.C.,
A 1 is hereby convicted for the offence punishable u/Sec. 13 ( 1) · G
(e) R/w. Sec. 13 (2) of 1988 Act.
Prosecution has proved beyond reasonable doubt that, Al to A4
were parties to criminal conspiracy with the object of acquiring
and possessing pecuniary resources and assets to the extent of
Rs.53,60,49,954.00 beyond the known source of income of Al.
H
628 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Hence, Al,A2, A3 andA4 are hereby convicted for the offence
punishable u/Sec. 120-B of l.P.C. R/w. Sec. 13 (1) (e) R/w.
Sec. 13 (2) of 1988 Act.
Prosecution has proved beyond reasonable doubt that A2 to A4 abetted
the commission of the above offence by intentionally aiding Al in the
B acquisition and possession of pecuniary resources and properties
disproportionate to her known source of income as above. Hence, A2,
A3 and A4 are hereby convicted for the offence punishable u/Sec. l 09
of I.P.C. R/w. Sec. 13 (1) (e) R/w. Sec. 13 (2) of 1988 Act."
25. The Trial Court after hearing the learned counsel appearing
c for the accused and the learned Public Prosecutor on sentence, awarded
the following sentence against the accused:
"For the offence u/Sec. 13 (I) (e) R/w. Sec. 13 (2) of the 1988
Act, Al Selvi. J. Jayalalitha, D/o. Late. Jayaram, is hereby
sentenced to undergo simple 908 Sp/. C. C.20812004
D imprisonment for a period of four years and a fine of Rs.I 00
crores. In default to pay the fine amount, she shall undergo further
imprisonment for one year.
For the offence punishable u/Sec. 120-B I.P.C., R/w. Sec. 13
(2) of 1988Act,A1 is sentenced to undergo simple imprisonment
E for six months and to pay fine of Rs. I lakh. In default to pay the
fine, she shall undergo further imprisonment for one month. For
the offence punishable u/Secs. 109 ofl.P.C., R/w. Sec. 13 (2) of
1988 Act, A2 Tmt. Sasikala Natarajan, A3 Tr. V.N. Sudhakaran
· and A4 Tmt. J. Eavarasi are sentenced to undergo simple
imprisonment for a period of four years each and to pay fine of
F Rs. I 0 crores each. In default to pay the fine amount,A2, A3 and
A4 shall each undergo further imprisonment for one year.
For the offence punishable u/Sec. 120-B of I.P.C. R/w. Sec. 13
(2) of 1988 Act, A2, A3 and A4 each are sentenced to undergo
simple imprisonment for a period of six months and to pay fine
G of Rs.10,000/- each. In default to pay the fine amount, A2, A3
andA4 shall each undergo further imprisonment for one month.
Substantive sentences of imprisonment shall nm concurrently.
Period of custody already undergone by the accused shall be
given set off u/Sec. 428 of Cr.P.C.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS.. 629
[PINAKI CHANDRA GHOSE, J.]

It is further ordered that, necessary direction shall be issued to A
the concerned banks to remit the proceeds of the Fixed Deposits
and the cash balance standing to the credit of the respective
accused in their bank account and the proceeds thereof shall be
appropriated and adjusted towards the fine amounts.
If after adjustment, still the fine falls short, the gold and diamond B
ornaments seized and produced before the Court (after setting
apart 7040 grams of gold with proportionate diamond jewellery),
as observed in the body of the judgment shall be sold to RBI or
SBI or by public auction to make deficit of fine amount good.
The rest of the gold and diamond jewellery shall be confiscated
to the Government. C
All the immovable properties registered in the names of Lex
Property Developments Pvt. Ltd., Meadow Agro Farms Pvt.
Ltd., Ramaraj Agro Mills Pvt. Ltd., Signora Business Enterprises
(P) Ltd., Riverway Agro Products (P) Ltd., and lndo Doha
Chemicals and Phramaceuticals Ltd., which are under attachment D
pursuant to G.O. Nos. M.S. 120 and 1183, shall be confiscated
to the State Government.
Out of the fine amount recovered as above, a sum ofRs.5 crores
shall be made over to the State of Karnataka towards
reimbursement of the cost of trial conducted in the State of E
Karnataka.
Furnish a free copy of the full judgment to the accused forthwith."
26. Being aggrieved, appeals were filed by the accused before
the High Court of Karnataka at Bangalore challenging the order passed
by the Court of 36'h Addi. City Civil & Sessions Judge at Bangalore. F
The High Court on its analysis came to the conclusion that the value of
assets at the end of the check period in respect ofaccused Nos. I, 2, 3 &
4 together along with the firms/companies involved was Rs.66,44,73,537/-
and accepted the value of the assets as indicated by the prosecution.
The High Court, thereafter applying the principles laid down in G
Krishnanand Agnihotri Vs. The State ofMadhya Pradesh, AIR 1977
SC 769 = (1977) 1SCC816, on a calculation of total assets, income &
expenditure of accused Nos.1 to 4, their firms and companies, arrived at
the percentage of disproportionate assets as under:

H
630 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
PARTICUIARS AMOUNT TOTAL
(IN RUPEE<;) AMOUNT
(IN RUPEES)
Assets as per DVAC 66,44,73 ,573

i) Cost of construl'tion:
B AsperDVAC 27, 79 ,88 ,945
Less: As per records and 5,10,54,060
finding
TotaHA) . 22,69,34,885
ii) Marriage Expcmes:
AsperDVAC 6,45,04,222
Less: As per finding of this 28,68,000
c Court
Total(B) 6,16.36,222
(A+B) 28.85.71.107
Less: (A+B) 28,85,71,107
TOTAL ASSETS 37,59,02,466

D

Income of Accused Nos.I to 4, firms and companies:

SI. Particulars Amount
No. (In Rupees)
E
I. Loan as income 18, 17,46,000

2. Income from grape Garden 46,71,600

3. Gifts I ,50,00,000

F 4. Sasi Enterprises 25,00,000

5. Jaya Publications and Namadhu MGR 4,00,00,000

6. Super Duper TV Pvt. Ltd. J ,00,00,000

7. Rental Income 3,22,000
G
8. Income assessed by DVAC 9,34,26,054

TOTAL INCOME 34, 76,65,654

H
.STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 631
[PINAKI CHANDRA GHOSE, J.]

DISPROPORTIONATE ASSETS: A
Total Assets - Total Income
Rs.37,59,02,466 - Rs.34,76,65,654 = Rs.2,82,36,812
Percentage = Disproportionate assets x 100
Income
B
Rs.2,82,36,812 x 100
Rs.34,76,65,654
= 8.12%
27. The High Court, following the principles laid down in
Krishnanand Agnihotri (supra), held that when there is disproportionate c
asset to the extent of 10% or below, the accused are entitled to acquittal
and accordingly the High Court passed the following order acquitting
the accused:
"(A) CriminalAppealNos.835/2014, 836/2014, 837/2014 and 838/
2014 are allowed. D
[i] The Judgment of Conviction and Sentence passed in
Spl.C.C.No.208 of2004, dated 27.9.2014, on the file of the 36th
Additional City Civil & Sessions Judge (Sp!. Court for Trial of
Criminal Cases against Kum.Jayalalitha & Ors.), Bengaluru, is
hereby set-aside. Appellants-Accused Nos. I to 4 are acquitted E
of all the charges levelled against them.
[ii] The Bail bonds of Al toA4 are discharged.
(B) The Appeals in Criminal Appeal Nos.17/2015, 18/2015, 19/
2015, 20/2015, 2112015 and22/2015 are allowed in part.
[i] Order of the Trial Court relating to confiscation of the F
properties both movable and immovable, is hereby set aside."
28. Assailing the judgment and order dated 11.05.2015, passed by
the High Court of Kamataka at Bengaluru, appeals, by special leave,
have been filed before this Court by the State of Karnataka and Mr. K.
Anbazhagan. Although the State of Tamil Nadu was arrayed as the sole G
respondent in the appeals before the High Court, these appeals have
been filed by the State of Kamataka, in view of the decisions of this
Court in K. Anbazhagan Vs. State ofKarnataka and Ors., reported in
(2015) 6 sec 86 and (2015) 6 sec 158, wherein it was held that it is
only the State of Kamataka (being the Transferee State) which is the H
632 SUPREME COURT REPORTS [2017] 5 S.C.R.

A sole Prosecuting Agency and was competent to appoint the Public
Prosecutor.
29. We have given a patient hearing to all the parties, including the
intervenor, in the matter. We have been taken through various documents
and the evidence of the parties.
B 30. Mr. Dushyant Dave and Mr. B.V. Acharya, learned senior
counsel appearing in support of the appeals first contended that the High
Court has calculated the disproportionate assets by adopting an incorrect
method with wrong particulars and our attention was drawn to Page 997
of the SLP Paper Book, where in the table consisting of assets and
C expenditure, the High Court has reduced the values therein but has inflated
the income and thus inaccurately assessed the disproportionate assets
to be Rs.2,82,36, 812/-. It is pointed out before us that there are
concurrent findings of the two Courts in respect of the fact that the
accused did own disproportionate assets during the check period and
the difference between the two Courts is only with regard to the quantum.
D While the Trial Court held that it is Rs.53,60,49,954/-, the High Court
held it as Rs.2,83,36,812/-. It is also submitted that in calculating the
disproportionate assets, value of assets, expenditure and income of all
the accused has been taken jointly along with that of firms and companies
(34 in number). Both the Courts, High Court as well as Trial Court, have
E recorded concurrent findings and have taken all the assets, income and
expenditure of all the accused together. It is further pointed out that the
sole source of inflow is of Al, although assets were standing in the
names of other accused or the firms/companies owned by them. It is
further submitted, as appears from the records, that both the Courts did
not accept the claim to consider the case of Al andA2 toA4 separately.·
F Hence, it is submitted that now they cannot claim such a course to be
adopted at this stage before this Court.
31. It is also submitted that both the Courts have rejected the
claim ofNamadhu MGR scheme which according to the accused worked
out to more than Rs.14 crores during the check period and that the
G finding of the Courts that all properties purchased by the 6 companies
actually belonged to accused has not been challenged by anybody and
therefore it stands.
32. Mr. B. V. Acharya, learned senior counsel appearing on behalf
of the State ofKarnataka contended that ifthe final figures arrived by
the High Court (appearing at Pages 997-998 ofits judgment) are accepted
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 633
[PINAKI CHANDRA GHOSE, J.]

and apparent errors therein including calculation and arithmetical errors A
as also error apparent on the face of the record are corrected, the
disproportionate assets will be more than Rs.35 crores and this alone is
sufficient to sustain the conviction, according to him. Mr. Acharya has
placed before us a Chart which is as follows:
S. No. ERROR COORECflONS
B

I. CALCULATION The method of calculating DA is wrong. If all the
ERROR findings of the high court is accepted in toto then the
!l!I!Qunt QfQ.A. is &.143823215 i.~. 41.3'1'.'q ~not
&; 2 82J!i 3!! BIZ i e 8 12% [ll! held b)': the l:!igb Court
-(The previous two charts have details of the same) c
2. ARITHMETIC While totalling loans as incoire at (Pg.939 Vol IV), the
ERROR High Court l:Bs connritted an arithmetic error to the
tune of 13.50 Crores. If this arithmetic error is alone
mrres;tl:d tbi:n tb~ Oispmpotli!lnall: ~I:! !:Qlllll IQ
Rs.16,32,36,812/-i.e. 76.7% D
This is fully covered in Pg 1028-1030-SLPVol. IV
.

3. ADMISION OF Under Expenditure:
ACCUSED Cost of Construction : The accused have achnitted that
the c'Ost of construction incurred is Rs.8,60,59,261 -Pg
2350 Vol IX Ho'Mlver the High Court values the same E
at Rs.5, 10,55,060 - Pg 979 Vol IV, 'Which is
Rs.3,50,05,210 lesser than ire admitted atrount.
Under income:
Business income of Jaya Publication: The accused
l:Bve admitted that the income of Jaya Publication was
Rs.1,15,94,849/- (As per written submission of A-2 - F
Extrac1ed in Pg 1034 SLP Vol IV). The High Cotrt
calculated this at Rs.4 Crores - Pg 946-960 Vol IV.
'Which is Rs.2,84,05,151/- more than the achnitted
amount.

4. GIFTS AS Gifts as incoire is subject matter of SLP Nos.1163-1167 G
INCOME of2012-Pg 1032-1033 Present SLP Vol IV. Therefore
although Trial Court has held that gifts received c'311llot
be held to be a lawful source of income-Pg 1283-1296
Vol V, the High Court has added 1.5 Crores as income
mder this head, much is liable to be reduced.

H
634 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Therefore ifthe above corrections are carried out, the disproportionate
assets will be :
l.On the basis of finding of High Court· Rs.14,38,93,645
2.0n the basis of finding of High Court, correction of the other
mistakes in arithmetic, admissions of accused and disallowing
B gifts as income:
1. 14,38,93,645 Omission of Expenses -Corrected

2. 13,50,00,000 Totalling Error- Corrected

c 3. 3,50,05,210 Admission Reg Valuation of Construction

4. 2,84,05,151 Admission Reg Business income of Jaya
Publication

5. 1,50,00,000 Gift - which is illegal
D
Dimrouortionate Asset- 35.73.04.006

Income will have to be :. 16,92,60,503
Disproportionate Asset (D.A.) 35,73,04,006/-
% of D.A. = 35,73,04,006 x 100 = 211.09%
E 16,92,60,503
Hence, he submitted that this process alone is sufficient to sustain
the conviction.
33. Mr. Acharya further contended that the findings of the High
Court regarding the value of assets are patently erroneous and
F unsustainable. He submitted that the High Court has accepted the value
given by DVAC except for a single head i.e., value of additional
constructions. The High Court has accepted the amount of expenditure
·'·except for 1 item i.e. marriage expenditure and the High Court has added
7 items towards the income which are patently erroneous. Mr. Acharya
G drew our attention to Annexure-III (64 items - Annexure-III, Pages
1224-1233 ofVol.V) and submitted that the income includes loan, interest,
rental, agricultural income and fixed deposits. According to the
prosecution, the said amountis Rs.9,34,26,054/- (which would appear at
Pages 1224-1233 ofVol.V). According to the Trial Court, the income
would be Rs.9,91,05,094.75/- (appearing at Page 1396 of Vol. VI).
H However, the High Court has shown such income as Rs.34,76,65,654/-
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 635
[PINAKI CHANDRA GHOSE, J.]

(appearing at Pages 997-998 of Vol. IV). It is submitted that the High A
Court considered additional income under 7 heads and has increased the
income to Rs.34,76,65,654/-.
34. The High Court has shown the value of income from loan as
Rs.24,17 ,31,274/-which contains error of totalling and the sum total of
these 10 items ought to be Rs.I 0,67,31,274/-. Therefore, there is a totalling B
error of Rs.13,50,00,000/-. He further contended that these loans as
income cannot be taken into consideration as has been taken by the
High Court. Since the prosecution has already considered such loans as
income which appears atAnnexure-III at Page 1228 Vol. V (Items 1-8)
and expenditure atAnnexure-IV (Page 1397 of Vol.VI, Items 1-8). He
drew our attention to the High Court judgment regarding 10 loans, which C
would appear at Page 938-939, Vol. IV of the SLP Paper Book, which is
asunder:
I. Ex.PI027 OMTI.rlndian Bank, Rs.1,50,00,000.00
Jaya Publications
2. Ex.Pl IOI Agricultural Rs.3, 75,00,000.00 D
MD. Loan, Indian
Bank, Guna
Bhushani. On
request ofGuna
Bhushan~ they
changed the loan
liability to A2, A3 E
and A4 since they
became the share
holders.
3. Ex.Pl 114 Indian Bank-Al Rs.90,00,000.00
4. Ex.P1162 Indian Bank J. Real Rs25,00,000.00
Estate
5. Ex.Pl 172 Indian Bank Rs.12,46,000.00
F
JS.Housing
6. Ex.Pl21 l Indian Bank Rs.50,00,000.00

7. Ex.Pl260
J. Farm House -
Indian Bank- Sasikala -
,
Rs25,00,000.00
8. Ex.PJ330 Indian Bank- Rs.1,57,00,000.00
V.N.Sudhakaran G
9. Ex.PJ354 Ramarai APm Mill Ltd Rs.I.65.00.000.00
10. Ex.P1357 Indian Bank- Rs.17 ,85,274.00
Mahalakshmi
Kalvanamandaoa
Total Rs.24.17.31.274.00

H
636 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 35. Mr. Acharya pointed out that the High Court has wrongly
taken into account the above-mentioned 10 Joan amounts, being the Joan
from Indian Bank. Regarding the loan ofRs.l,50,00,000/- by OMTL-
Jaya Publication, which is shown as item No. l in Annexure-IV Ext.-P
2330, Page 1397 of Vol.VI, (being expenditure list), he submitted that
B this amount cannot be taken into account by the High Court. He also
drew our attention to the deposition made by PW-182 and PW-160
wherefrom it appears that the said loan was repaid. The Trial Court has
dealt with such loan as it is specifically stated that the said loan was
closed on June 25, 1994. Mr. Acharya therefore submitted that the High
Court taking this amount again, would amount to a double entry.
c 36. Regarding MD Loan of Rs.3,75,00,000/- which is shown as
Item No.8 in Annexure III Exh.P-2329, Page 1225 of Vol. V (income
list), it is submitted by Mr. Acharya that this Joan has been discussed by
the Trial Court at Page 1237-1239 of Vol. V while dealing with income
and the Trial Court has accepted the case of the prosecution. The accused
D at no point of time have disputed about any Joan not being taken into
consideration by the prosecution. Mr. Acharya therefore submitted that
the High Court should not have taken this amount into consideration as
taking this amount again, would amount to double entry.
37. Mr. Acharya further submitted that the Loan of Rs.90,00,000/-
E which has been taken after the check period is only a credit voucher
shown in Exh.P-1114, marked by PW-182, who has deposed that this
Joan was taken in August, 1996 i.e. after the check period. He therefore
submitted that this loan could not have been considered by the High
Court at all.
F 38. Regarding the Loan ofRs.25,00,000/- which is shown as Item
No.4 in Annexure-III Exh.P-2329, Page 1224 of Vol. V (Income list)
and Item No.5 of Annexure-IV, Exh.P-2330, Page 1397 of Vol. VI
(Expenditure list), it is submitted by Mr. Acharya that this amount has
been deposed to by PW-182 andmarked as Exh.P-1161to1163 through
him. He submitted that although the Bank had sanctioned Rs.25 lakhs, it
G had released only a sum ofRs.5 lakhs. The principal amount and interest
has not been paid back by the firm. The Trial Court has discussed this
Joan at Page 1234 of Vol. V while dealing with income and at Page 1417
of Vol.VI while dealing with expenditure. Mr. Acharya submitted that
this income has been duly considered and the High Court could not have
H taken the amount ofRs.25 lakhs under this head.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 637
[PINAKI CHANDRA GHOSE, J .]

39. Regarding the loan ofRs.12,46,000/- J.S. Housing which is A
shown as item No.3 in Annexure-III Ext.-P 2329, Page 1224 of Vol. V,
(Income list) and Item N0.4 in Annexure-IV Exh.P-2330 Page 1397 of
Vol. VI (Expenditure list), it is submitted by the learned counsel that this
loan has been deposed to by PW-182 and marked as Exh.P-1171 to
1173 through him. He submitted that although the Bank had sanctioned B
Rs.12.46 lakhs, it had released only a sum of Rs. 7 lakhs and the principal
amount and interest has not been paid back by the firm. The Trial Court
has discussed this loan at Page 1234 of Vol. V while dealing with income
and at Page 1417 ofVol. VI while dealing with expenditure. Mr. Acharya,
therefore, submitted that this income has been duly considered and the
High Court could not have taken the amount of Rs.12.46 lakhs under C
this head.
40. Regarding the loan ofRs.50,00,000/- J. Farm House which is
shown as item No.2 in Annexure-Ill Ext.-P 2329, Page 1224 of Vol. V,
(Income list) and Item No.3 in Annexure-IV Exh.P-2330 Page 1397 of
Vol. VI (Expenditure list), it is submitted by the learned counsel that this D
loan has been deposed to by PW-182 and marked as Exh.P-1211-1212
through him. He submitted that although the Bank had sanctioned Rs.SO
lakhs, it had released only a sum of Rs.28 lakhs and the principal amount
and interest has not been paid back by the firm. The Trial Court has
discussed this loan at Page 1234 of Vol. V while dealing with income
and at Page 1416 of Vol.VI while dealing with expenditure. Therefore, E
Mr. Acharya submitted, this income has been duly considered and the
High Court could not have taken the amount of Rs.SO lakhs under this
head.
41. Regarding the loan of Rs.25,00,000/- by Sasikala which is
shoWn as item No. I in Annexure-lll Ext.-P 2329, Page 1224 of Vol. V, F
(Income list) and Item No.2 in Annexure-IV Exh.P-2330 Page 1397 of
Vol. VI (Expenditure list), it is submitted by the learned counsel that this
amount has been deposed to by PW-182 and marked as Exh.P-1260
through him. He submitted that the principal amount due under this
account was Rs.13,55,023 and the Trial Court has discussed this loan at G
Page 1234 of Vol. V while dealing with income and at Page 1416 of
Vol.VI while dealing with expenditure. Therefore, Mr. Acharya submitted
that this income has been duly considered and the High Court could not
have taken the amount of Rs.25 lakhs under this head.
42. Regarding the loan ofRs.l,57,00,000/- by Sudhakaran (A3) H
638 SUPREME COURT REPORTS [2017] 5 S.C.R.

A which is shown as item No.7 inAnnexure-III Ext-P 2329, Page 1224 of
Vol. V, (Income list) and Item No.8 in Annexure-IV Exh.P-2330 Page
1397 of Vol. VI (Expenditure list), it is submitted by Mr. Acharya that
this loan has been taken by Lex Property Development Ltd. and not by
Sudhakaran. It has been deposed to by PW-182 and marked as
B Exh.P-1330 through him. He submitted that the principal amount due
under this account was Rs.83,00,000 and the Trial Court's discussion on
this loan is at Page 1234 of Vol. V while dealing with income and at
Page 1418 of Vol.VI while dealing with expenditure. Therefore, Mr.
Acharya submitted, this income has been duly considered and the High
Court could not have taken a sum of Rs.1.57 lakhs under this head.
c 43. Regarding the loan of Rs.1,65,00,000/- by Rarnraj Agro Mills
Ltd. it is submitted by the learned counsel that this loan is not shown as
an item in Annexure-III Ext.-P 2329, Page 1224 of Vol. V, (Income list)
or as an item in Annexure-IV Exh.P-2330 Page 1397 of Vol. VI
(Expenditure list). It has been deposed to by PW-182 and marked as
D Exh.P-1349-1354 through him. Exh.1354 is a statement of account of
OCC-19 ofRarnraj Agro Mills Ltd. PW-235 at 145 ofVol. 11 has stated
of his knowledge about Rs.1.65 crores being sanctioned. However, there
is no evidence of disbursement of this loan amount. Mr. Acharya submitted
that the amount due to the Bank on this account was Rs.39,10,781/.,
hence, the High Court could not have taken a sum of Rs.1.65 crores
E under this head.
44. Regarding the loan of Rs.17,85,274/- by Mahalakshmi
Kalyanamandapa, which is shown as item No.6 in Annexure-III Ext.-P
2329, Page 1224 of Vol. V, (Income list) and Item No.7 in Annexure-IV
Exh.P-2330 Page 1397 of Vol. VI (Expenditure list), it is submitted by
F Mr. Acharya that this has been deposed to by PW-182 and marked as
Exh.P-1357 through him. He submitted that the amount due in this account
wasRs.19,81,802 and the Trial Court's discussion on this loan is at Page
1234 of Vol. Y while dealing with income and at Page 1417 of Vol.VI
while dealing with expenditure. Therefore, Mr. Acharya submitted that
G this income has been duly considered and the High Court could not have
taken a sum of Rs.17 .85 lakhs under this head.
45. Mr. Acharya thus submitted that the detailed discussion in the
preceding paragraphs will clearly disclose that that the High Court
considered these 10 items against the weight of the evidence on record
H and the entire amount of Rs.24,17,31,274/- which after deduction of
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 639
[PINAKI CHANDRA GHOSE, J.]

Rs.5,99,85,274/-comes to Rs.18,17,46,000/-is liable to be set aside. He A
further contended that the accused have nowhere in their written
statement under Section 313 Cr.P.C., their Memorandum of Appeal or
their written arguments before the Trial Court and the High Court, taken
any plea of any loan from nationalized banks being left out of consideration
while calculating the income and expenditure and then arrived at the B
value ofRs.9,34,26,054/-(Page 1224, Vo. V) andRs.11,56,56,833/-(Page
1397, Vol. VD, respectively. Therefore, he contended that 10 items valued
at Rs.24,17,31,274/- taken by the High Court at Page 939, has to be
totally excluded since the same amounts to nothing but double credit. If
this error is corrected, than the income has to be reduced by, according
to him, Rs.18,17,46,000/-. Therefore, from the finding of the total income C
ofRs.34,76,65,654/- of the High Court, an amount of Rs.18, 17,46,000/-
is liable to be deducted and the total income would be only
Rs.16,59,19,654/- and not Rs.34,76,65,654/~. He further contended that
from this amount, if we deduct the income on the basis of admission and
gift treating it as income, then the income will be Rs.16,59,19,654/- - D
Rs.2,84,05,151/- (admitted amount)+ Rs.1,50,00,000/- (gifts) =
Rs.12,25,14,503/-.
46. Mr. Acharya further contended that significantly the accused
are not pressing for remand of the case to the appellate Court (High
Court). Consequently, the, accused accept all the findings of the High
Court. Of course, this Court will have to correct the calculation mistakes E
or arithmetic errors and also errors apparent on the face of the record.
Reacting to the ingenious endeavour on the part of the respondents to
maintain their-acquittal by only assailing the errors committed by the
Trial Court, while abstaining from questioning any finding of the High
Court, the learned Public Prosecutor urged that the choice before the F
respondents was two-fold:-
i) To treat all assets together as one unit and sustain the same,
subject to this Court modifying the same by correcting
calculations/mathematical errors as also considering admissions
of accused and excluding illegal income as pointed.out by the G
appellants at Chart No.6 (pages 18 to 20) which results in the
figure of above Rs.35.00 crores as disproportionate assets; or
ii) to assail the findings of the High Court and request for a remand
of the case to the High Court to hear the appeals filed by them in
the presence of the State· of Karnataka, which is the sole
prosecuting agency. H
640 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Without following one of the above two options, accused cannot
claim confirmation of acquittal by merely pointing out few infirmities in
the order of the Trial Court and without proper analysis of the evidence
on record, he urged.
47. It is further the case of the prosecution that the Accused Nos. l
B to 4 have entered into a conspiracy and in furtherance of the same, the
Accused No.l (Al) who is a public servant had come into possession of
assets disproportionate to the known sources of income to the tune of
Rs.66.65 crores during the check period (1991-1996). It is further the
case of the appellants thatA2 toA4 have abetted Al in the commission
of the offence.
c
48. It is the case of the appellants that whenA2 toA4 had jointed
the household ofAl, they did not have any worthwhile property/asset in
their names. They did not have any independent source of income.
Properties were acquired in the names of newly formed or acquired
thirty two firms/companies and two existing firms, i.e., Jaya Publications
D and Sasi Enterprises in which Al and A2 were partners. Among these
entities, only few were registered as a company under the Companies
Act, 1956 and all others are firms. In the said films or companies, A2 or
A3 or A4 or all of them are partners or directors. It is not in dispute that
the said properties were acquired during the check period. It is further
E submitted that it is on record that six firms were registered on a single
day, i.e., on 25.01.1994, where partners were A2, A3 and A4 and ten
other firms were registered on another single day, i.e., on 06.02.1995,
where A2, A3 and A4 were the partners and further in Lex Proeprty
Development (P) Ltd., A3 and A4 were the directors, which would be
evident from the deposition of PW3 (D. Thangavalu in Vol.2, Pg. 11-
F 23). It was further pointed out that about 50 bank accounts were opened
in Indian Bank, Abiramapuram Branch and Canara Bank, Mylapore in
the names of accused and the firms/companies, which would be evident
from the deposition of PW-182 (A.R. Arunachalam in Vol.8-Pages 90-
182) and PW-201 (C.K.R.K. Vidyasagar in Vol.9-Pages 80-231). It is
G also submitted that the accused shared common auditors, architects and
accountants.
49. On the question of abetment and conspiracy, Mr. Acharya has
duly taken us through the Paragraph Nos. 88 to 99 of the judgment and
order of the Trial Court appearing at Page Nos. 1838-2028 in Vol. 7 & 8
H and submitted that there was no source of income of A2 to A4 and
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 641
[PINAKI CHANDRA GHOSE, J.]

further A2 to A4 were not related to Al. Moreover, A2 to A4 resided A
with Al.
50. It is submitted that the properties standing in the name of A3;
formation oflarge number of firms in the names ofA2 to A4; opening of
50 ba1* accounts and transfer of funds from one account to another and
cash credits into the banks shows that the origin of the resources is from · B
A 1. According to the prosecution, the other circumstances which disclose
the conspiracy and abetment would appear from the following facts:-
(i) General Power of Attorney was given by Al to A2;
(ii) Constitution of various firms;
(iii) Operations of firms from residence of A 1; C
(iv) Installation of A2 to A4 in the house of Al;
(v) Al had knowledge of capital investments into Sasi
Enterprises;
(vi) Flow of money from one account to another;
D
(vii) Calling of Sub-registrars to the residence of A 1 and
properties were registered.
51. All these acts would come within the purview of the conspiracy
and abetment between A2 to A4 with Al. Mr. Acharya submitted that
all the circumstances mentioned above establish the abetment and
conspiracy. In support of said contention, the following decisions were E
cited before us:-
1. Saju Vs. State of Kera/a - (2001) I SCC 378
2. State ofMaharashtra & Ors. Vs. Som Nat/I Thapa & Ors. - .
AIR 1996 SC 1744 = ( 1996) 4 sec 659
F
3. Kehar Singh & Ors. Vs. State (Delhi Administration) -
(1988) 3 sec 609
4. Ram Narayan Popli Vs. Central Bureau ofInvestigation -
c2003) 3 sec 641
5. Noor Mohammad Mohd. Yusuf Momin Vs. State of G
Maharaslztra - (1970) 1 SCC 696
6. M.G Agarwal Vs. State of Maharashtra - AIR 1963 SC
200 = (1963) 2 SCR 405
7. Firozuddin Basheeruddin & Ors. Vs. State of Kera/a -
c2001) 1sec596
H
642 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 52. He further submitted that to prove conspiracy it is not possible
to have direct evidence. The same has to be proved by drawing inferences
from the proved circumstances. It is fundamental that the ultimate decision
has to be by considering cumulative effect of all the circumstances taken
together. He also submitted that in the case of conspirators, each one
became an agent of the other and is bound by the actions of others. So
B
far as Al andA2 are considered, one is an agent of other in three ways-
(1) as partners of two firms,
(2) by virtue of power of attorney,
(3) capacity as conspirator.
c To support his contention, he submitted that:
• Al had given specific instruction to follow the directions given
by A2 (PW-198 -M. Jayaraman in Vol.9-Pg 28-58 @29).
• Huge unaccounted cash deposits are made to these two
accounts from cash originating from No.36, Poes Garden,
·D Chennai.
• It is A2 who has given direction as to which account the huge
cash deposits are to be made (PW-198 -M. Jayaraman in
Vol.9 - Pg 28-58).
• There are numerous inter account transfers showing that all
E accounts put together were treated as one account.
• Officials were used to locate and purchase lands at various
places like Thirunelveli, Uthukadu, Uthukottoai and other
places.
PW 47 - K. Muthian Vol.2 - Pg.237-245
F PW 71 - S. Radhakrishnan Vol.3-Pg 110-170
PW 159-Rajagopalan Vol.7 -Pg 19-124
• Acquisition of immovable properties both agricultural as well
as urban lands are as per registered sale deeds numbering
146, which have been produced. They were acquired in the
G name of individuals/ firms or companies. Agricultural lands
acquired were of about 3000 acres of fertile lands of which
about 900 acres formed a tea estate (Item No.166-Annexure
II, Pg 1588 Vol.VI). These properties were purchased at a
cost of about Rs.20 crores.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 643
[PINAKI CHANDRA GROSE, J.]

• In respect of most of the sales itisA2 who had given directions A
as to the names of which firm/individual the sale was to be
registered in (PW 159 - Rajagopalan in Vol 7 - Pg.19-124).
• The amounts were paid from amongst the various accounts
of the accused/firms/companies and cash.
• Most of the Sale transactions have taken place below the B
Guideline value.
PW 159 - Rajagopalan Vol.7 - Pg 19-124
PW 221 - R.Kesava Ramanujam Vol.IO Pgl62-249@ 172
• In many transactions, the vendor was not kept aware of the
purchaser and the registrations took place through the
c
registrars at the residence of A I. So also vendors were put
under duress to sell their properties. Instances of officials
also being put under duress were available. Evidence
disclosed that Al was aware of the transactions.
• There were also additional or new constructions made and D
old buildings were also renovated at huge costs.
53. Mr. Acharya submitted that the Trial Court has categorized
the assets-at Page 1543 in Vol. VI. He furnished us the chart as follows;-

CHART NO 10-A
For convenient discussion of the issues involved in the case, these assets are
E
categorized by the Trial Court under the following heads. [Pg 1543 Vol. VI]

Nature of Item Nos. Value (in Rs.) As Value (in Rs.) Value (in Rs.) As per
!assets Per Prosecution As Per Trial As Per High Actused in
Page 1543 - Vol Court Page 1837 Court Page their \.Vrittcn
VI Submission
& 1838 Vol 966-979 Vol
Page 2350 Vol
vu IV IX F
I htmNable I to 173, 175, 19, 77, 18164. 701- 20,07 ,80,246 6,24,09.120 16.19,03,3011-
properties Pg: 978 Vol
(consideration 292,297, IV
ro<t c{
301,
registration) Pgl590Vd VI Only 97
Sale Deeds
302(i), 305
considered
(Exdiding
Item
G
Nos.24,
31,
33,64,
66, 127,
145, 150,
159)

H
644 SUPREME COURT REPORTS [2017) 5 S.C.R.

A
n Cash paid 24. 31, 2,53,80,619.00 1.58,30,619 -Nil- NIL
over &aOO\e 33, 64, Pg: 978 Vol
consideration 66, 127, IV
145, ISO,
15!1
III New or 174, 176- 28,17,40,430.00 22 ,53 ,92,344 s. 10,54,060 8,60.59,261/-
additional 192, Pg :866-
constru::tim 30!, 302 889, 979 Vol
B builrl;rl!S Iii) IV
IV Gold ant 284-290. 5,53,02,334.75 2,51,59,144 As per NIL
Diannnd 295 prosecution
J"""llerv 979 Vol IV
v Sil""' mires 291 48,80,ffiO 20,00,000 Asper NIL
prorecution
979VollV
F.Ds ant share; 3,42,62,728.0 3,42,62,728 Asper 2.30.00,000/-
c VI 258-277,
298, 303, pro~tion
305 979VollV

vn Ca"1 ln!ance in 193-229, 97,47,751.32 97,47,751.32 Asper 97,47.75132/-
bankacromts 2%, 300. prosecution
JC\\ellery 304 979Vol IV

D VIII Vehicles 230-257, 1,29,94,033.0 1,29,94,033.0 Asper 81.35,1061-
299 prosecution
979Vol!V
IX Michinery 293, 294 2,24,11,000.0 2,24, 11,000.0 Asper 94,25,835/-
piw::cution
979Vol IV
x Foot\War 278 2,00,9(!2.45 Nil -Ni~ NIL
Pg%6Vcl IV
E XI Sarees 279-281 92,44,29000 Nil -Nil- NIL
Pg%7Vcl IV
XII Wrist Wdtches 21!2-283 15,90,350.00 IS,'XJ,350.00 /\>per NIL
prosecution
979Vol.IV
TOfAL 64A2,89,61 55.02"" 115 25,46.52 177 29,82,7 I,25t.32

F
GIARTlO-B
VALUE OF IMMOVABLE PROPERTY
PROSECUTION TRIAL COURT HIGHCOURT ASPER
ACCUSED
G 20,07 ,80,246/- 6,24,09,120/- 16,19,03,301/-
19,77 ,18164. 70/-
Page 1837 Vol VII Page 978 Vol IV Page 2350 Vol IX
Page 1543 Vol VI

H
.STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 645
[PINAKI CHANDRA GHOSE, J.]

Some Important Witnesses Who speak of purchase of property are: A

Vendm~ SW- R£<ri<traIS
~.W-40 Gangai Amaran >-Pg 1639 P.W.221 Purchaser's name
~About names of >-Vol VII Kesava Ramanujam nserted later- Pg<; 17-18
~hasers bring left of Chief.
blankl ~xh- P 105-110
P.W-56Rajaram(500 Pg 1643 - Vol VII P.W.159 About going to Poes B
~res) Thiru Rajagopalan Garden and effecting
various rel!istrations.
P.W~ Peter Graig Jooes
KK<xianadur Tea ~tate-
~OAcres)

54. He also drew our attention to the particulars of these sales,
c
which were furnished before us. The total sale price under these sale
deeds comes to Rs.19,77,18,164/- though according to the Trial Court
the same is Rs.20,07,80,246/-. The difference is marginal and it can be
taken that immoveable properties worth about Rs.20 (twenty) crores
have been acquired during the check period. He submitted that to prove D
these sales, prosecution has examined about 60 Vendors and about 20
Sub-registrars.
55. He further contended that though according to DVAC there
were 21 items, the Trial Court has taken only 18 out of them and the
High Court has taken only 17 there from. Hence he submitted that the E
High Court has miscalculated the area of construction of 17 items as
1668.39 Squares, i.e. 1,66,839 Sq.Ft. instead of 2174.69 Squares, i.e.,
2,17,469 sq. ft. which is nearly 506.3 Squares, i.e., 50,630 sq. ft. lesser
than the actual area as per the valuation reports. In support of such
contention, he filed a Chart, which is set out hereunder:
F
QIARTl~F
VALUATION OF ALL THE 21 PROPERTIES
THE FOLLOWING CHART DEALS WITH THE 21.PROPERTIES INCLUDING THE
SAMPLE 3 PROPERTIES.

SI. ITEM DESCRIPnON OF PROSE EXHIBIT TOfAL VALUATION
No NOS AS PROPERTY CUTION NO. C.'ONSTRU
ANNEXU WITNES CTIONIN G
RE-11 SES SQ MTS
P-2328
I. 192 Building, BoremJlls 87 519 171.00 708,1601-
with Electrical motors
& 5 separate power .
connectionc;. and
Pumps located at Sy
No.46646111&467/2
H
646 SUPREME COURT REPORTS [2017] 5 S.C.R.

A at Cherankulam
Village,VOC District
belonging to Mis
Riverway AgfO
Products Ltd
2. 186 New/Additional 98 641 289.84 24,83,759/-
Constru::tion in
residential. building at
B No.U66, Anna
Na gar, Chennai.
3. 187 New/Additional 98 642 203 10,92,828/-
Coostruction in
Building at Door
No.5, Murugesan
Street, T. Nagar,
c 4. 178
Crennai-17
New/Additional 98 643 2250.41 1,52,59,076/-
Coostruction in the
residential building at
D. No. 3/178C
Vettuvankeni,
Crennai
5. 189 New/Additional 98 644 271.8 20,38,959/-
D Coostruction in
residential Building at
No.I, Murphy St.,
Akkarai. Chennai
6. 179 New/Additional 98 645 1009.9 6,40,33,901/-
construction in the
building at the Grape
Garden Farm Hot5e,
E in tre limits of Jeedi
Meth and
Petpesherabad
Villages in A.P.
180 New/Additional 107 661 1911 5 ,40,52,298/-
7. construction in the
posh Bangalow at
Siruthavur in Cregai
F MGR Dist
8. 176 New/Additional 107 662 1369.09 1,2590.261/-
construction in Fam1
House Bungalows at
Payannur in Chengai
Anna District
9. 177 New/Additional 107 663 1986.12 2,13,63,457 /-
Construction building
G at Dooc No.48,
Jawaharlal Nehru
Road, Industrial
Estate, Guindy.
Ekkatuthangal,
Chennai (Mis.
Anjaneya Printers (Pl
Ltd .. Printers)
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 647
[PINAKI CHANDRA GHOSE, J.]

10. 185 New I Additional 116 666 344.87 20,43,000/- A
Co.rntruction in
residential buildingat
DoorNo.21
Padmanabha Street,
T. Nagar, Chennai- 17
II. 182 New I Additional 116 667 1143.63 29,59,000/-
construction in
building at 149, 150 B
ofTTK Road,
Chennai -18
12. 188 New I Additional 116 668 1985.24 53, 11,000/-
Construction m
residential building(4
Nos) in the campusat
No.11240,
Enjambakkam, in
c
New Mahabalipuram
Road .Al
New I Additional
construction in
building at Sea Shell
13. 183 Avenue No.2/l-B-3 116 669 1311.39 80,36,868/-
Apartment D
Sholinganallore
Saidaoet Taluk
14. 184 New I Additiooal 116 670 107.75 8,00,000/-
Construction in
Building at Door
No.19,Pattammal
Street, Mylapore,
Chennai
E
15. 181 New I Additiooal 116 671 3527.5 7,24,98,000/-
Construction in the
residential building at
D.No.36, Poes
Garden, Chennai-86.
16. 174 New I Additiooal 117 673 1333.83 80,75,000/-
Construction in F
building at 5 B & C
East Coast Road,
DoorNo.4/130 Raja
Nagar, Neelankarai,
Chenna i-41 (Ref. Doc.
No. 4752/930fSR.O.
Adyar) Evaluation
Reoort G
17. 191 New I Additiooal 117 674 274.69 (14,17,538)
Construction in 15,45,000/-
Buildings and the
change of roof for the
works she at MF-9,
Guindy Industrial
Estate, Chennai-32
H
648 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 18 190 New I Additiooal 117 677 883.55 39,34.000/-
Construction in
Building at
S.No.32/2-4, Plot
Nos.S-7, Ganapathy
Colony, Tr. Vi-Ka
Ind!. Estate, Guindy,
B Chennai-32
19 301 Cost ofrenovation 144 782 109.99 6,83,325/-
and additional
construction between
June 1992 and 1993,
of the building at Plot
- No.102, !TI Cross,
Road, Pon Nagar,
c Trichy, owned by
Tmt. N. Sasikala
. (covered by
Docmnent
No.2256/90 dt. 35-90
ofS.R.O.T. O.R.B.,
Trichvl
D 20 147 Cost of construction 153 822 2560.86 83,41,000/-
of compound wall,
twin house, staff
quarters for 8
numbers and MD
Bungalow in Rarnraj
MillsCamnus
21. 146 Cost of construction 205 1964 31.38 57,19,800/-
E of labour quarters (5) 86
in ground floor & (5) 1965
in first floor, I0 nos.
in Ground Floor and
I 0 nos in first floor,
construction of first
floor for Guest
House, over the
F existing ground floor
and construction of
platform in Rarnraj
Agro Mills Campm at
v ann•mn alai.
TOTAL 23,076.84 29,35,68,982/-

G 23076.84 sq mts - 2483.97 squares. The High court has however considered 17 items
instead of 21.Therefore the area of construction of 4 items i.e. item nos 146, 147, 192,
and 301 is hereto deducted and the total area of 17 items is equalent to 20,203 sq mts
which is= 2174.69 squares i.e 2,17,469 Sq ft.

The high court has miscalculated the area of construction of! 7 items as 1668.39 Squares
i.e 1,66,839 sq ft instead of2174.69 Squares i.e 2,17,469 Sq ft which is n:arly 506.3
Senta'""-" i.e 50 630 Sq ft lesser than the actual area as oer the valuation reoorts.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 649
[PINAKI CHANDRA GROSE, J.]

56. He further submitted that the valuation of the construct~ons A
has been made by qualified PWD engineers. Even the defence has
examined a retired engineer (DW-95). Detailed valuation reports have
been produced and all the engineers who have valued the buildings after
inspection have been examined. The contention of the defence that Trial
Court has rejected this evidence is not correct. In fact the Trial Court B
has accepted the evidence. But having regard to the fact that in valuing
the constructions, there are several imponderables and taking note of
the possibility of marginal error, the Trial Court has given a discount of
20% which in the circumstances, is reasonable. Having regard to the
superior quality of marble and granite used as described in the valuation
reports and having regard to the value of various special items, the ultimate C
finding of the Trial Court is justified, he urged.
57. He further submitted that even the accused have admitted
valuation of buildings at Rs.8,60,59,261/- excluding one building of
Anjaneya Printers. If the value of this construction of Rs.2, 13,63,457/-
is added to this sum, the total will be Rs.10,74,22,718/-. As can be seen D
from Chart 10 as reproduced above, under other items of assets IV to
XII, the Trial Court has totally excluded the value of Sarees and footwear.
Regarding Gold and Diamondjewellary also after detailed discussion at
Pages 1756 to 1785, Trial Court has reduced the value from
Rs.5,53,02,334/- to Rs.2,51,59,144/- and Silverwares from
Rs.48,80,800/- to R.s.20,80,000/-. Regarding other items such as Fixed E
Deposits and cash balance in bank account, there can be no dispute.
Therefore, the conclusion of the Trial Court regarding value of other
assets is fully justified as per the evidence on record, he contended.
58. So far expenditure is concerned, the High Court has accepted
the amount of expenditure fixed by DVAC in respect of all items except F
the marriage. The High Court has reduced the marriage expenditure
from Rs.6,45,04,222/- (as per prosecution) to Rs.28,68,000/-, i.e., a
reduction of Rs.6,16,36,222. According to the prosecution, the total
expenditure is Rs.11,56,56,833/-.
59. He submitted that the main dispute under caption expenditure G
is regarding marriage. In support of the prosecution case as many as 21
witnesses have been examined as detailed in the chart. Though according
to prosecution expenditure incurred for marriage is Rs.6,45,04,222/-, the
Trial Court on detailed consideration has fixed the same at Rs.3 Crores.
It is thus totally erroneous to contend that the Trial Court has rejected H
650 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the evidence of prosecution witnesses, he pleaded. In fact the Trial Court
on a consideration, not only of the prosecution evidence but also defence
evidence of23 witnesses, has rightly fixed the amount of expenditure to
the tune ofRs.3 Crores. It is even conceded that a total expenditure of
Rs.2 to 3 Crores has been spent for the marriage. According to him, the
Trial Court has rightly disbelieved the evidence ofDW's who claimed
B
that the party workers have collected funds and have spent for expenses
such as fai;:ade, decoration, food etc. It is unbelievable that a person of
the stature of Al, would allow her party workers to spend on the marriage
of her foster son. He elaborated that though A 1 has, in her reply to the
notice to the Income Tax Department, claimed that A2 has spent amounts
c under different heads, A2 has failed to account for the same.
60. Mr. Acharya submitted that according to the prosecution the
total income of the accused is Rs.9,34,26,054/- and according to the
Trial Court, the total income is Rs.9,91,05,094.75/-. However, according
to the High Court, the total income is Rs.34,76,65,654/-. In coming to
D this conclusion, the High Court added to the income seven items such
as:
S.No. Description Ammmt
I. Loans as incoire 18,17,46,000
2. Income from grape garden 46,71,600
3. Gifts 1,50,00,000
E 4. Sasi Entemrises 25,00.000
JayaPublications andNamadhu
5. 4,00,00,000
MGR
6. Super Duper TV Pvt.Lld. 1,00,00,000/-
7. Rental Income 3,22,0001-
F According to Mr. Acharya, there is no lawful source so far as the Gift is
concerned. He further submitted that the Trial Comt has rightly disallowed
the claim. The High Court has erroneously fixed it at Rs.4 crores based
on belatedly filed Income Tax returns, which even if accepted, amounts
to only Rs. l.15 Crores.
G 61. Therefore, he submitted that ifthe above is the correct position,
the conclusion of the Trial Court is fully justified. According to him, the
Trial Court has considered every contention raised by the accused and if
some of the contentions are not urged before the Trial Court, then the
respondent cannot complain before this Court about non-consideration
thereof.
H
.. -··.

STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 651
[PINAKl CHANDRA GHOSE, J.]

62. He further contended that ifthe contention of the appellants A
that in calculating Disproportionate Assets, the value of the Assets,
Expenditure and Income of all the Accused have to be taken jointly
along with that of firms and companies (34 in number), as done by both
the courts below, then the explanation offered in the individual chart of
Al and the combined chart given by A2 to A4 will be of no effect and B
the same do not deserve to be taken note of. The accused have deliberately
given their explanations separately as they cannot give any satisfactory
explanation ifthe assets are taken jointly.
63. In refutation, learned senior counsel appearing for Al submitted
that the Trial Court wrongly excluded from consideration the Income
Tax Assessment Orders in favour of the accused by relying upon the C
judgment of High Court of Patna in State ofBihar Vs. Latu Prasad &
Am:, (2008) Crl.L.J. 2433, which, according to him, is clearly inapplicable
since the order passed by the Patna High Court was in the nature of an
interlocutory order. He further stated that while dealing with the assets
of Al under the head "Additional Construction", the Trial Court by an D
arbitrary method deducted 20% from the overall cost of construction.
Similarly, in relation to marriage expenditure, the Trial Court e1Toneously
estimated the cost of construction of a thatched panda! and arbitrarily
came to the conclusion that the marriage expenditure was to the tune of
Rs.3 crores, for which no basis has been given, according to him. He
further contended that with regard to the possession of gold and jewellery, E
although the Trial Court accepted that Al had 7040 gms. in 1987-1988,
as reflected in the Wealth Tax Assessment order, it overlooked the other
Wealth Tax Assessment orders for the subsequent years whereby there
was an addition ofRs.2,51,59,144/- in the holdings ofAl, which is also
contrary to the evidence on record. He further submitted that the Trial F
Court and the prosecution have failed to take into account the incorrie
from Grape Garden, interest income, rental advance, rental income, wealth
tax refund, income from gifts, Partner's drawings of Al from Jaya
Publications and income from Namadhu MGR scheme, etc.
64. Learned senior counsel submitted that the Trial Court, contrary G
to the settled law, has required the public servant to offer an explanation
to the properties held by A2 to A4 and the companies, without any
foundational basis or any evidence to show that those properties in the
names of A2 toA4 or companies were acquired out of the resources of
Al or that there was any flow of fund from Al to A2 to A4. The Trial
H
652 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Court has sought to attribute criminal conspiracy between Al andA2 to
A4 on the sole ground that Al toA4were living in the same house under
a common roo£
65. He further contended that in a disproportionate assets case,
the prosecution has to discharge the initial burden to prove that the assets
B of the accused were disproportionate to the known sources of income.
The prosecution must establish beyond reasonable doubt, the value of
the assets possessed by the accused and it has a further burden to show
that the properties which were standing in the name of third parties, like
A2 to A4 and the companies, were being held benami for the public
servant. Once the prosecution discharges this initial burden beyond
C reasonable doubt, the onus then shifts to the accused to satisfactorily
account for the source of such income. He further contended that for
the accused, the standard of proof is one based on preponderance of
probabilities and it is sufficient for the accused to provide a plausible
explanation that is satisfactory to the Court. In support of his contention,
D the learned senior counsel relied upon the following decisions:
• V.D. Jhingan Vs. State of Uttar Pradesh - (1966) 3 SCR
736
• State of Maharashtra Vs. Wasudeo Ramchandra
Kaidalwar - (1981) 3 SCC 199
E
• Mr. Krishna Reddy Vs. State, Deputy Superintendent of
Police, Hyderabad - (1992) 4 SCC 45
• AmbaLalVs. Unionoflndia-(1961) 1 SCR933
• K. Veeraswami Vs. Union of India & Ors. -(1991) 3 SCC
F
655
• Prithipal Singh & Ors. Vs. State ofPunjab &Anr. -(2012)
1sec10
66. He further contended that in establishing the link between the
G alleged benamdar and the public servant, the standard of proof required
is direct evidence or circumstantial evidence of a clinching nature, which
has to be strictly discharged by adducing legal evidence of a definite
character. He further relied upon the decisions of this Court in Jaydayal
Poddar (deceased) through L.Rs. &Anr. Vs. Mst. Bibi Hazara, (1974)
1 SCC 3, Krishnanand Agnihotri (supra), Valliammal (D) by L.Rs.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 653
[PINAKI CHANDRA GHOSE, J.]

Vs. Subramaniam & Ors., (2004) 7 SCC 233, and Heirs ofVrajlal J. A
Ganatra Vs. Heirs of Parshottam S. Shah, (1996) 4 SCC 490.
67. The learned senior counsel, next dwelt upon the purport of
"income received from any lawful source" and drew our attention to
Section 13{l){e) of the 1988 Act, which reads as follows:
13. Criminal misconduct by a public servant-( 1) A public servant B
is said to commit the offence of criminal misconduct,-
xxx xxx xxx xxx
(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 C
which the public servant cannot satisfactorily account, of
pecuniary resources or property disproportionate to his known
sources of income.
Explanation.- For the purposes of this section, "known sources
of income" means income received from any lawful source and D
such receipt has been intimated in accordance with the provisions
of any law, rules or orders for the time being applicable to ·a
public servant."
68. He further contended that the term "income" which has been
used in Section 13(l)(e), would include all earnings, sources whereof E
are not prohibited by law and it is always open to the accused to prove
those other sources of income which have not been taken into account
or brought into evidence by the prosecution. The term "income", according
to him, would also include receipts in the form of "gifts" and "loans"
which have been disclosed to and accepted by the income tax authorities.
He further pointed out that the concept of'known sources of income' is F
not confined only to the source known to the prosecution but every other
source of income which the accused is able to establish during the
course of trial. In support of the said contention, he relied upon the
following decisions of this Court:
• C.S.D. Swami Vs. The State - (1960) I SCR 461 G
• P. Nallammal & Anr. Vs. State - (1999) 6 SCC 559
• Krishnanand Agni/10tri (supra)
• M. Krishna Reddy (supra)
H
654 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 69. According to the learned senior counsel, income tax/wealth
tax returns and assessment orders, being public documents, are admissible
in evidence. He further submitted that this Court has also accepted the
income tax orders while deciding the cases under the 1988 Act. This
Court has relied upon the following decisions:
B • Mohd. Mumtaz Vs. Nandini Satpatlzy (II) - (1987) 1 SCC
279
• State ofM.P. Vs. Molzanlal Soni - (2000) 6 SCC 338
• Ananda Bezbaruah Vs. UOI-(1994) Crl.L.J. 12, para 8-14
C • M. Krishna Reddy (supra)
• State ofA.P. Vs. J. Satyanarayana, JT 2000 (10) SC 430
• DSP, Cltennai Vs. K. lnbasagaran, (2006) 1 SCC 420
• Kedari Lal Vs. State ofMadhya Prades/1 & Ors., (2015) 14
·D SCC505
70. On the basis of above, the learned senior counsel submitted
that under the 1988 Act the burden on the accused is proved by
preponderance of probabilities as in a civil case and same is the degree
of proofrequired under the Income Tax Act also. Therefore, where the
E assessee had established the income and the extent of the expenditure
before the Income Tax authorities, the judicial decision thereunder would
be binding on the prosecution in a case under the 1988 Act. Hence, he
submitted that the judgment of the Trial Court on this question is wrong.
71. Having regard to the various evaluations relied upon by the
F prosecution, as he mentioned that in Jaw, the expert evidence is an
exception to the hearsay rnle under Section 46 of the Evidence Act. An
expert is not a witness to a fact. His evidence therefore must be based
on verifiable and reliable data and an expert witness has to give an
opinion with certainty. He relied on the judgment of this Court in State of
.G H.P. Vs. Jai Lal, (1999) 7 SCC 280 and other decisions. He further
submitted that the evidentiary value of prevaricating witnesses is to be
rejected. He relied upon the case of Suraj Mal Vs. State (1979) 4
sec 725.
72. Learned senior counsel further submitted that the Court cannot
set up a third case which is not the basis of prosecution case or that of
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 655
[PINAKI CHANDRA GHOSE, J.]

the accused. He further contended that without making a company an A
accused, its property cannot be forfeited. He further contended that
Al's income and expenditure have been accepted by the Income Tax
authorities for all the five years of the check period. In none of the
assessment years any income is assessed as from an unexplained source.
Same is the position as regards Jaya Publication and for A2 also, and
those orders have been exhibited in evidence. He further submitted that B
Al had no disproportionate assets but her likely savings were to the
extent of Rs.67,72,128.54. The prosecution has valued all the assets
belonging to Al to A4 and the 32 firms/companies, in a sum of
Rs.66,65,20,395/-. The value of the assets held by them before the check
period was assessed at Rs.2,01,83,957 /-.The assets acquired during the C
check period is Rs.64,42,89,616/-. The value of the assets acquired by
Al alone as per DVAC is Rs.24,29,40,490/-.
73. However, it is Al's case that the assets acquired (including
constrnction) by Al during check period amounted to Rs.6,52,34,410.00
for which she had satisfactorily explained out of her known sources of D
income. The major heads of assets and the errors committed by the
Trial Court were highlighted as hereunder:
Al acquired only one property during the entire check period. It is
vide Exhibit Pl for Rs.10,00,000/-shown as item 18 inAnnexure-II. She
made two constructions, a Farm House at Jeedimetla Village near E
Hyderabad and a construction at 31-A Poes Garden and renovated her
residential building at 36 Poes Garden.
74. Vis-a-vis new and additional constructions, Mr. L. Nageswara
Rao, learned senior counsel (as he then was) submitted that according
to the prosecution the total cost was Rs.13,65,31,90 II- and according to F
the accused as determined by the Income Tax authorities it is
Rs.3,62,47,700/-. Hence, he submitted that deduction of
Rs.10,02,84,201/- is required. He further pointed out that there are
fundamental defects in the prosecution evidence in relation to the
valuation of all the constrnction because measurement is not verifiable,
age of the building is not given, there is no basis for calculating the price G
of non-scheduled items. As per prosecution's calculation the cost under
the head new/additional construction in Grape Garden Farm House is
Rs.6,40,33,901/-while as per A I this cost is Rs.1,39,62,300/-. Therefore,
he submitted that an amount of Rs.5,00,71,601/- should be deducted.
H
656 SUPREME COURT REPORTS [2017) 5 S.C.R.

A 75. According to the learned senior counsel, the prosecution has
examined PW-98 M. Velayudam, PWD Engineer (Vol.4 Page 148-179)
and marked his Report Exh.P-645 (Vol.33 Page 86-112). He submitted
that the evidence of PW-98 should be rejected since there are three
major defects in his evidence. He further pointed out that his report is
B unreasoned and cannot be relied upon. The entire evaluation of electrical
appliances by Mr. Udaya Suriyan, Asstt. Electrical Engineer, amounting
to Rs.41,53,653/-(Exh.P-645) is inadmissible in evidence as this expert
has not been examined as a witness. He further submitted that the defence
evidence has not been taken into account by the Trial Court. He further
contended that the calculation of the prosecution under the head 'New/
C Additional Construction at residential buildings at 31-A and 36 Poes
Garden' is Rs.7,24,98,000/- (Trial Court Judgment - Page 1709 of
Vol.VU), whereas the valuation as per Al is Rs.2, 14,35,4000/-.
Accordingly, he submitted that an amount of Rs.5, 10,62,600/- is to be
deducted from the said amount.
D 76. He submitted that the prosecution has relied mainly on the
evidence ofPW-116 Jayapal, PWD Executive Engineer (appear at Vol.5
Page 41) and the report prepared by him i.e. Exh.P-671 (Vol. 35 Page
16-47) to arrive at an erroneous calculation of Rs.7,24,98,000/-.
According to the learned counsel, there are several infirmities in the
report Exh.P-671 as well as deposition of PW-116. He also raised dispute
E with regard to the valuation of electrical lay outs being Exh.P-2152
submitted by PW-220. He also relied on the evidence of DW-78 - R.
Raviraj, Executive Engineer (Vol.91 Page 212). He further contended
that the total expenditure incurred by Al towards construction was
accepted by the Income Tax authorities after deep and pervasive scrutiny.
f He also submitted that the total expenditure incurred by A 1 in the entire
three constructions amount to only as under:
Renovation of36 Poes Garden Rs. 76,74,900/-
Construction at 31-A Poes Garden Rs. l,35,l 0,500/-
Hyderabad Farm House addition Rs.1,39,62,300/-
G
Compound Wall for Hyderabad Rs. 11,00,000/-
Farm House

Total Rs.3,62,47, 700/-
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 657
[PINAKI CHANDRA GHOSE, J.]

whereas the prosecution has wantonly inflated the expenditure in a sum A
of Rs.13,65,31,901/-. Therefore, there has to be deduction of
Rs. I 0,02,84,201/- from the Annexure-II which denotes the value of the
assets during the check period.
77. He further submitted that the prosecution has shoW11 the DVAC
valuation of golden jewellery acquired by Al during the check period as B
Item286, 288, 289, 290 & 291 to Rs.5,14,19,462.25. The learned senior
counsel further pointed out that the Trial Court's valuation of gold jewellery
acquired by Al during the check period is Rs.2,51,59,144/-. With regard
to the gold jewellery possessed by Al, Mr. Rao submitted that the total
jewellery as on 31.3.1991 which was 21.280.300, was valued at
Rs. l ,50,56, 146/- and there is no addition to the jewellery in that year. C
The above figure was arrived at on the basis of increase in value of gold
and as per report of the registered valuer being Exh.P-860. Therefore, it
is indisputable and as per the prosecution document above-mentioned,
being Exh. P-2180, and also wealth tax assessment orders and evidence
of PW-227 and PW-213, it would be evident from Exh. P-1016, Vol.57, D
Page 186-187, the total gold jewellery owned and possessed by A2 as
on 31.3.1991 was 1,912.150 gms. Therefore, the total jewellery comes
to about 23,192.450 gms. It is further stated that Al in her capacity as·
General Secretary of the AIADMK Party, got 3,365.800 gms. of gold
Mementos which should be added to the total holding of Al and A2.
From Exh.P-704, Vol. 36, at 253-292, it would be evident that the total E
weight of the gold jewellery seized was 26,902.08 gms. which included
mementoes. Therefore, he submitted that there is insignificant difference
of343 .830 gms. According to him this difference might have arisen out
of faulty weighrnent. He further submitted that the valuation of the
jewellery filed in the return before the wealth tax authorities did not F
include mementoes.
78. He further pointed out that Al had succeeded in all the
proceedings before the Income Tax authorities and her case that the
gold jewellery was already possessed by her earlier to the check period
had been accepted by the authorities. Hence, he submitted that the total G
jewellery to the extent of 26,558.250 gms. has been accounted for and
what remains is only a balance of around 343.830 gms. which is meager
differencl:.
79. The learned senior counsel next pointed out that 416 Kgs. of
silver was seized from Al during the check period. The value of this H
658 SUPREME COURT REPORTS [2017] 5 S.C.R.

A silver has been taken as Rs.20,80,000/- at the rate ofRs.5,000/- per Kg
as described in Item No.291 of the DVAC Annexre-11 (Vol. I Page 112).
The Trial Court's finding is that 416 Kgs of silver is the illegal acquisition
ofAl during the check period and the value of this atthe rate ofRs.5,000/-
per kg, is assessed at Rs.20,80,000/-.
B 80. The High, Court has also accepted the said valuation. The
Trial Court, in· respect of costly watches, has duly accepted and allowed
the case of the prosecution while accepting the valuation report and oral
evidence of PW-129 and PW-130. According to the learned senior
counsel, PW-130 had been examined to value 91 watches. His report is
Exh.740. He had given the total value of91 watches at Rs.6,87,350/-.
c However, it would be evident from the testimony of these witnesses that
they are not experts as they have no special proficiency on valuation of
watches nor do they have experience in evaluating watches. He further
submitted that Al was not required to disclose personal effects as it is
exempted under Section 2(14) of the Income Tax Act. Hence, the amount
D ofRs.15,90,350/- is liable to be excluded from the computation of the
assets of Al. He also submitted that the entire amount with regard to
footwear and sarees has to be excluded from the assets of Al since the
Trial Court has disbelieved the version of the prosecution.
81. The learned senior counsel next turned to the expenditure.
E Annexure-III of DVAC shows that the valuation of expenditure
attributable to Al to A4 and the companies during the check period is
Rs.11,56,56,833/- and as per the prosecution the expenditme attributable
to Al is Rs.8,98,69,833/-. Al's case was that the expenditure incurred
by her during the check period was Rs.2,49,28,815/. As per the Trial
Court's judgment its value is Rs.8,49,06,833/- (Page 1542 Vol.VI) and
F the findings of the High Court which has been placed before us is at
Pages 889-831.
He drew the attention of this Court specifically to the following
particulars with regard to the Marriage ofTr. V.N. Sudhakaran:
• Prosecution's Valuation-Rs.6,45,04,222.00
G
• Al's case - Expenditure incurred by Al for the marriage -
Rs.28,68,000.00
• Value as per Trial Court Judgment - Rs.3,00,00,000
(Page1452-1542 Vol.VI).
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 659
[PINAKI CHANDRA GHOSE, J.]

• Value as per the High Court Judgment - Rs.28,68,000.00 A
(Pages 889-931)
The Prosecution value of Rs.6,45,04,222.00 was split up by the
prosecution itself in Item 226 of Annexure IV as follows:
a) Expenses towards erection of marriage panda!, over and above
admitted/recorded payments - Rs.5,21,23,532/- B
b) Expenditure towards cost of food, mineral water and tamboolam -
Rs.1,14,96,125/-
c) Cost of 34 titan watches
(disallowed by the Trial Court) - Rs.1,34,565/- c
d) Amount towards stitching wedding
dress for A3 Rs.1,26,000/-
e) Amount for purchase of I 00 silver
Plates (paid by N. Sasikala) - Rs.4,00,000/-
D
f) Postal expenses for dispatching
56000 wedding invitations: Rs.2,24,000/-
Total Rs.6,45,04,222/-
82. Qua Marriage Pandals, the prosecution relied upon the evidence
ofThangarajan who was examined as PW-181 who specifically stated E
that a huge panda! had been erected for the marriage and the cost of
panda! itself was Rs.5,21,23,532/-. It is submitted that the evidence of
PW-181 is unacceptable as it is merely hearsay, speculative, arbitrary
and based on no verifiable data to reach the said amount. Hence, it is
submitted by the learned counsel that his evidence ought to be rejected.
According to Al, she had spent a sum ofRs.28,68,000/-which is reflected F
in the orders of the Income Tax authorities. The Trial Court has fixed
this sum at Rs.3,00,00,000/- towards the expenditure for marriage.
According to learned senior counsel appearing for Al, the prosecution
has not discharged its burden in respect of the quantum of expenditure
for the marriage as well as the cost which was borne by Al. According G
to the learned counsel, the prosecution neither could establish the cost of
construction of marriage panda! nor it led any evidence to show that Al
incurred any expenditure. Hence, the amount ofRs.5.21 crores cannot
be said to have been established by the prosecution and hence the entire
amount is liable to be deducted. The prosecution has not proved the
H

•
660 SUPREME COURT REPORTS [2017] 5 S.C.R.

A entire
I
item 226 in Annexure-II. Hence, the entire amount of
Rs.6,45,04,222/- is liable to be excluded.
83. Learned counsel further pointed out that the Income Tax
Department had accepted the version of Al that she had incurred ortly
an expenditure of Rs.29 .81 lakhs, all by cheques except for a sum of
B Rs.3. l lakhs. According to him, at the most, Rs.29,66,552/- is to be added
in respect of the expenditure incurred by Al. According to him, the
findings of the Trial Court cannot be accepted to the tune ofRs.3 crores
towards the expenditure for marriage. On the contrary, the High Court
has rightly accepted the case of the accused.

c 84. The Trial Court and the High Court have calculated the
combined total income of Al to A4 and we find that no appeal has been
filed by Al to A4 in respect thereof. Therefore, we at this stage, make
it clear that we would adopt the same yardstick in respect of the combined
income ofAl toA4, in absence ofanypersuasive reason to the contrary.

D 85. In re, income from Grape Garden, it appears that that the
difference in estimated Grape Garden income between the prosecution
and Al is Rs.46, 71,660/-. The prosecution has cited the income from the
Grape Garden during the check period to the extent of Rs.5,78,340/-
instead ofRs.52,50,000/- as computed by Al. While the Trial Court has
concurred with the prosecution, the High Court has accepted the case
E ofAl and allowed an addition to the extent ofRs.46,71,660/- in respect
of the income of Al from Grape Garden. It is further submitted that the
agricultural income of Rs.52,50,000/- requires to be taken as income
available to Al during the check period. According to the learned senior
counsel, Al has fully proved the receipt of agricultural income and the
F High Court has also accepted this.
86. With regard to the interest income of Al, the prosecution has
allowed the same to the extent ofRs.58,90,925/- inst.ead of Rs. 77,40, 135/-
as claimed by Al on the basis of amounts declared and assessed in
Income Tax Returns/Assessment orders. The Trial Court has concurred
G with the prosecution and disallowed interest income ofA I amounting to
Rs.18,49,210/-.
87 .According to Al, the rental income was Rs.2,32,000/- per annum
from 1.7.1991 to 30.4.1996, atthe rate ofRs.4,000/- per month, in relation
to the property in St. Mary's Road, Chennai. It is also accepted that the
H Income Tax return could not be filed for the year 1.4.1992 to 31.3.1993.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 661
[PINAKI CHANDRA GHOSE, J.]

The claim ofAl is that the amount of gifts received by her on the occasion A
of her 44'h birthday was Rs.2,15,00,012/-(cash and drafts) and
Rs.77,52,059/-(foreign remittance) and this entire amount is to be allowed
as income. He has submitted that the prosecution has admitted the receipt
of the gift, it having been contemporaneously banked, but the amounts
were not taken into account as income or lawful resource available to
B
Al. The Trial Court has disallowed it in entirety. However, the High
Court accepted the case ofAl and reduced the amount ofRs.1,50,00,000/-
received from gift. It is submitted that the said income ought to have
been taken into consideration by the Trial Court.
88. Learned senior counsel further submitted that gift has been
recognized as valid source of income by this Court in its judicial C
pronouncements and he relied upon the case of M. Krishna Reddy
(supra) and Kedari Lal (supra). It is further pointed out that Al had
received an amount of Rs.6,28,569.00 from Sasi Enterprises in her
capacity as partner during the check period which was not repaid by Al
to Mis. Sasi Enterprises, thereby treating it as her drawings as a partner D
of the said firm.
89. It is further pointed out that Al had received a loan of
Rs.1,53,03,000.00 fromA2 and her proprietary firms. Jaya Publication
was started in the year 1988. At the relevant time, Al and A2 were the
only partners. It was carrying on business of printing and was running a E
daily newspaper called Namadhu MGR. This daily.newspaper used to
carry all the announcements of the General Secretary as also all the
AIADMK Party's news. Jaya Publication apart from its regular business
income had also received money through subscribers deposit schemes.
It is submitted that with a view to boost the circulation and the readership
of the newspaper, the subscribers scheme was started one year earlier F
to the check period. Under the scheme any person could make a deposit
ofRs.12,000/-, 15,000/- or 18,000/- and the subscribers would receive 4,
5, or 6 copies daily free of cost, according to the· deposit he made. The
deposit was refundable on 15 days notice of demand.
90. To establish the receipt under the said deposit scheme, A I G
produced Income Tax returns and independent evidence from subscribers
to probabilise and prove receipt of money. The money received u~der
the scheme from 1990 to 1996 was deposited in the bank account of
Namadhu MGR or in the account of Jaya Publication. It is submitted
that the Income Tax authorities accepted the said scheme of deposit. H
662 SUPREME COURT REPORTS [2017] 5 S.C.R.

A According to the learned senior counsel, there was a scrutiny of the
account of Jaya Publication and Namadhu MGR by an internal auditor
of the prosecution department and a report was filed. Yet the auditor
was not examined nor his report was marked in evidence. It is submitted
that an adverse inference ought to be drawn against the prosecution
evidence on account of suppression of the material evidence. It is
B
submitted that the Trial Court committed glaring errors while dealing
with the scheme deposit claim of Jaya Publication. The learned counsel
submitted that the accused had produced the order of the Income Tax
authorities relating to the scheme deposit covering the entire check period
of 5 years which was overlooked by the Trial Court. According to him,
c the drawing of Al from Jaya Publication in her capacity as partner of
Jaya Publication, to the extent ofRs.34,92,000/- is proper and lawful. It
is further submitted that Al received from Jaya Publication Rs.24, 75,000/
- and further amount spent by Jaya Publication on behalf of Al for
construction ofresidence at 36, Poes Garden, Chennai, at Rs.76,74,900/
D -. The evidence was placed before the Court, being Exh.D-226 and the
deposition of DW-88. Therefore, the total of the above two items in
aggregate comes to Rs.1,01,49 ,900/-. It is further submitted that the
loan from Can Fin Homes is about Rs.75,00,000/- which was availed as
loan from Can Fin Homes on 29.9.1992. The loan was also repaid by
Jaya Publication on behalf of A 1 on 27.3 .1995 and the same was not
E repaid by A I to Jaya Publication, thereby treating it as her drawings as
a partner of Jaya Publication. It is submitted that the entire amount of
Rs.13,89,19,475.00 is also the resource available to Al andA2 for offering
an explanation under the 1988 Act.
91. Referring to the attribution of assets ofA2 to A4, six companies
F and other firms to A I, the learned senior counsel contended that the
prosecution has included the properties acquired by the following
companies to the account of Al and the value of all the properties has
been included in the total assets.

DATE OF
S.No. NAME OF THE COMPANY
G INCORPORATION
I. Lex Prooertv Develooment Pvt. Ltd. 25.09.1990
2. Meadow Agro Mills Ltd. 11.10.1990
3. Ranrai Aoro Mills Ltd. 28.05.1986
4. Riverwav A!!l'o Pvt. Ltd. 22.10.1990
5. Indo Doha Chemicals and Pharmoceuticals Ltd. 02.01.1990
6. Si!!llora Business Entemrises Ltd 22.10.1990
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 663
[PINAKI CHANDRA GHOSE, J.]

The properties held by all the above companies have been computed in A
Annexure-II by the prosecution in a sum ofRs.4,70,24,439/-.
92. According to the learned senior counsel, the companies assets
required to oe excluded. He urged that Al was neither a shareholder
nor a director or associate of these six companies. Therefore, it is
submitted that there is no justification to attribute the properties of the B
companies to Al. For these reasons, he submitted that the property of
the company cannot be included in the holding of Al requiring her to
give an explanation. Hence, it is submitted that all the properties acquired
by and constructed by the said companies are liable to be excluded totally
from consideration and thus a total amount of Rs.4,70,24,439/- is liable
to be excluded. c
93. The learned senior counsel submitted that conspiracy, though
can be inferred from circumstances, in this case, the mere fact that Al
to A4 were residing in the house belonging to A1 cannot be a circumstance
to prove conspiracy. According to him, A1 and A2 were partners in two
partnership firms and such partnership connection cannot be an D
incriminating circumstance. According to him, A 1 to A4 have purchased
properties with their own efforts, with the money earned or mobilized by
them. Accordingly, it is submitted that the prosecution has not established
any circumstance from which an inference of conspiracy can be drawn.
There is no circumstance proved in this case by the prosecution from E
which a conclusion can be drawn that there was meeting of minds ofA 1
to A4 with a view to enable.Al to commit an offence under Section
13(1 )( e) of the 1988 Act. He further submitted that during the check
period, starting of a firm by a non-public servant could never be a
circumstance by itself to infer conspiracy. Hence, it is submitted that
there is no direct or indirect evidence in the form of proved circumstance F
to infer conspiracy. Hence, it is submitted that the judgment of the High
Court should be affirmed.
94. Mr. Shekhar Naphade, learned senior counsel appearing on
behalf of respondent Nos.2 to 4 submitted that the abstract ofAnnexures-
I to VII are assets relating to A2 to A4, firms & companies and he drew G
our attention to the said Annexures. According to him, the properties
acquired by A2 to A4, firms & companies prior to the check period as
per DVAC, would appear from the following chart:

H
664 SUPREME COURT REPORTS [2017] 5 S.C.R.

A ANNEXURE-1
PrqJerties acquired by Aa:mcil Ni.2, Jaya Publiratiom and Sitii Enterpisls prior to cited<
paiod areording to DVAC which i<; not disputed

'IMf.N. ~IKAlA

Desaipion ci the Reftrenre of Stands in the Valuecithe Annaure Ihm No
B Property ~Ii- NaIIEfi property Ni. in
Sale detrli ~ Anne.tore I
Land am fla N:>. 7,
RR Flats, 3'4 Attu
Stred, Santlmie, 17.04.1989
TniN.&sikala 3,13,530 I 6
cmmi4ofTnt.N Saledred
Sasikala
c
Land arrl :&iiding at
Abisrekap.iram
Vil~ Pmlaga',
Trichy in Pict N:>. l 02,
3rd Cro;s Rood, New
Ward, N:>.K, Block - 30.12-1988
Tni N Sasikah 5,85,420 I 15
D N:i.30, T.S.N:>.107, Sale D:ltxl
trtally m:asiring 3525
Sq Ft µirclnsOO fium
.MIRAS! of22A,
WtlliamRoal,
contoorrent Tridlv
am Balan;e as on 1-
E 7-19'Jl inCmiraBmk
Kellys Bran:h SB
38746 (\X'nal en 30.12-1988 Tni N Sasikah 13,601 I 24
30'12/1988intre
NnreofTni N.
Sasikala
am BaJan;e as on I-
F 7-19'Jl inCmiraBmk
Mflapcre SB 23218
07-01-1991 Tni N Sasikal: 1,40,198 1 27
(\X'nal en 23'511990
in tre Nure ofTnt. N.
Sasikala
62 i1em;ofJem:ls ;\<;per
clallred to be ofTni evalwtion
N &sikalaas reixrtof Tni N Sasikal 9,38,460 1 45
G
evalwtal ~M's. M's.VBC
VBCTrust Tm&

10IAL 19.9170
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 665
[PINAKI CHANDRA GHOSE, J.]

JAYA mBIJCATION A
~ription of the Rlfermcem Stands in the Value of the Annexure Item No
~rty Docummt- Name property No. in
Saledeuls of &. Annaure
. 1

Building at LOOr 18.06.1989 Mis Jaya 5,70,039 I B
7
No.19, PattanmaJ Sale reed Publications
Stred, ilimai Pict (Selvi J.
No.83, Jayalalitha
RSNo.4087 Extent and Tnt. N.
1897 Sq ft Sasikala)
purdlased frcm V.H
s~l:rammian
c
S/o.HVenkaiesublxm
, 15 Venkatramm.
Stred, Sriniw;a
Awnue, Chennai-28.
Lani and &ilding 08.12, 1990 Mis Jaya 5,28,039 I 17
Thim Vi KA Sale reed Publications
(Selvi
D
Itrllstrial Estate J.
G.tindy in Jayalalitha
S.No,55, 56 Block and Trrt. N.
No.VJ exlent Sasikala) .
5658 sq.ft fhai No.~ ,
8 Adyir
vi!lare
E
Cash balam:e a; (II Account Numlhu 5,51,826 I 26
1.7.91 CA No 1952 qienai MCR
Canara Bank , on23.10.89
. Mvlamre
Cash Balance as on 1- 07-01-19')1 Mis Jaya 7,83,861 I 28
7-1991 in Camra Publiciiions
Bank Mylap;re CA (Selvi J.
20:17 <µmed (II 26-9- Jayalalitha
F
90 on transfur from andTrrt. N.
Kellys Braoch in tre Sasikala)
Nlll1ll of Selvi J.
Jayalitha and
Trrt.N.Sasikala
Fixed Dqiooit FDR.di Mis Jaya 64,520 I '19 G
No,451/90 dmed 19.06.19')0 Publications
19,6,1990 \\ith (Selvi J.
Canll'a amk, Jayalalitha
Mylapore and Tnt. N.
Sasikala\

·1urAL 24.98185
H
666 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
SASI ENTERPRISES
Description of the Reference of Stands in the Value of the Annexure Item No in
Property Documett • Name property Rs. No. Annexure I
Sale deeds of

Shop No.14 Gro1md Mis. Sa;i
Floor at 602, Anna Enterprises -
B Salai Chennai - 6 07-05-1989 Partners Selvi
98,904 I
Sale deed Jayalaitha and 8
Tmt.N.
Sasikala
Undivided share of
Land only at
Door No. 14 Khadar
Mis. Sa;i
Navaz Khan road,
c Nw1gambakkam at
21-9-1989
Enterprises -
Partners Selvi
R.S.No.58/51 to the 2,10,919 l
extent of Sale deed Jayalaitha and
68/12000 1mdivided Tmt.N. 9
share in 11 Sasikala
groon<ls and 736 sq.ft
ofla:id
Land and building a: Mis. Sa;i
D T311iore S.No 1091 Enterprises -
extent of2400 sq.ft 19-04-1990 Partners Selvi
l,57,125 I 12
Sale deed Jayalaitha and
Tmt,N.
Sasikala
Vacant site at Blake
Mis. Sa;i
HD Road
T311iore Town 3rd Enterprises -
E 19-04-1990 Partners Selvi
division 6th 1,15,315 I 13
Sale deed Jayalaitha and
WardMmarNombu
chavadi et tent 5100 Tmt.N.
so.ft. in T,S.No.1091 Sasikala
Vacant site at Ward Mis. Sa;i
No.6in Manar Enterprises -
Nombu Cmvadi 19-04-1990 Partners Selvi
F extent 8970 sq. ft. in Sale deed Jayalaitha and 2,02,778 I 14
'r.s. No. 109 I Tmt.N.
Tani ore Town Sasikala
Dry Land to the Mis. Sa;i
extent of3 23 Acres Enterprises -
in S,No.402-2 of Partners Selvi
Sundarakottai 07-12-1990
Jayalaitha and 75,210 I 16
Village, Mannargudi Sale deed
Tmt.N.
G Taluk Taqjore distr. Sasikala

TSR 3 33 (Swaraj Mis. Sa;i
Mazda Van) Enterprises -
01-12-1989
Date of Partners Se! vi
2,99,845 I 22
Jayalaitha and
registratioo
Tmt.N.
H Sasikala

,
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 667
[PINAKI CHANDRA GROSE, J.]

Cash Balance as on A
01/7/1991 in
Canara Bank,
Mis. S15i
MylaporeCA2061
Enterprises-
Opened on 21/3/1991
Partners Selvi
in the name ofSasi 07-01-1991 2,29,578 I 33
Jayalaitha and
Enterprises in which
Tmt.N.
Both Selvi B
Sasikala
JJayalalitha and Trrt.
N Sas ikara are
oartners
Amount paid of
72/12000 on share
oflaid in 11 and
1736 sq.ft in h's c
at 14, gems court
Mis. S15i
Khadhar Navaz
Enterprises -
Con Road,
Partners Selvi
Nungambakkam paid 28-7-1993 50,000 I 50
Jayalaitha and
by Ch, dated23.4.90
Tmt.N.
of CB which was
Sasikala
registered as D
document No.641/93
ofS R Thousand
Lights, Dated
28/7/1993
TOTAL 14.39.674
GRAND TOTAL Rs 59.29.168
E
95. He further submitted that properties acquired by A2 to A4,
firms & companies prior to the check period were not taken into account
by DVAC and he filed a chart in respect thereof, which is hereunder:-

Al
F
ANNEXURE-1

PROPERTIES ACQUIRED BY ACCUSED N0.2 PIDOR TO CHECK
PEIDODNOTTAKENINTOACCOUNT BYDVAC

Exhibits and
Description of property Value Evidence relied by
G
Accused
As pa: Balance Sheet for the DW 88 (Vol No.92,
Assessment year 1991- 1992 ending Page 105-176) Ex-
4,35,622
m 31.3 .1991 the Cash Balance D-287 (Vol. No.
Available with Accused No.2 157. Page 1-5)
H
668 SUPREME COURT REPORTS [2017) 5 S.C.R.

A

The properties value of A2, Jaya Publication,
Sasi Enterprises in Annexure - i According
toDVACwas Rs. 59,29,168.00

B Cash balmce available on hand as on
1.7 .1991 and the alvances paid lying pending
adjustment as on 1.7.1991 As per Ex.P-2191
the anount available as on 31.3.1991 by A2
Rs. 4 ,35,622.60
is Rs.4,35,622/- which was not taken into
AccountbyDVAC
c
Hence the balance available on hand as on
1.7.1991 has to be treated as a Source/Income
available to A2 during check period and
considered in Annexure lll
Rs. 4,35,622.60
Hence the Assets value of A2 prior to check
D
period should be taken into Account as

Rs. 63,64,790.60

E
96. He further submitted that properties acquired by A2 to A4,
firms & companies at the end of the check period according to DVAC
would appear from the following Chart :
ANNEXURE-11 - PART -A
F Properties acquired by Accused No.2-4 & others at the end of
check period accordine to DV AC
Entitv Wise Summarv Amount Rs. At Pa!!.e reference

Mrs. N. Sasikala 435.62.372

G Java Publications 4.07.74.157

Sasi Enterorises 2.80.05.857

Green Fam House 1.7753.017

H Jav Farm House 1.42.84 079
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 669
[PINAKI CHANDRA GHOSE, J.]

A
JJ Leasim and Maintenance 1,838

Jay Real Fstate 44,37,036

JS Housin!! Develmrrent 41,35,497 B

Java Contractcrs and Builders 10,98,087

Kodanad Tea Estate 7,00,00,000
c
SakthiConstru::tions 1.02.490

Lakshmi Constructioos 1.02490

Goml Promcters 1,02,490
D
V. N. Sudha!!llfan - Individual 1, 19 ,89,961

J. Elavarasi 6,<»,07,252

J. Vivek - Son and daughter of -
10,20,823 E
Mrs. J. Elavarasi

Sen and daughter ofMrs. J.
38,421
Elavarasi

Mahasubha lakshmi Kalyana F
58,78,776
Mandamm

Java Finance P limited 1.700

Anianeva Printers Private limited 6.1691.574 G

Su""'" Omer TV Private limited 41?? 377

GRAND TOTAL 37.55.10.354

H
670 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Since compmies (Signcra hlsines.s enteiprise, Meadow Agro Fams, Ramraj
Al?IU Mills, Riverway Agro Mills, Lex Prqierty U:velq:iment, Tn:lo IX>ln
Phannaceutirals) are stpara1e legtl entities and they are not aa:used htl'ein
Hem: their propcrties are liable to be exclu.led Treir asscts acquired byth:m
are not attnbutable to any of the aa:used as there is no evidence that trese
assets were accpired with the finds povided bytre AccusOO.
B
ANNEXURE-11
l\"upel1ies acquir00by Acw.00 No.2 dming durl<.period acwnlingto DYAC

TMf. N. SASIKALA- Atcmed No.2

llemNoil
Descriptim of the R.r........ cf Yahecfthe
Slllndsin lheNaneof AnnaureNo. Annexurell
c Property
lall all R<t N>.7
DocumM (llqia1y Rs. .

RRflll; 3'4 Anlu
Sia:!, Sardum;
Ch:rmi4 cf 17-01-1989
Trrt. N. Sasika'1 3,13,530 11 7
TmtNSlsikiia (Ilx: Sllcdwl
nu 575/fla, <i
17.4.!~9 ri SRQ

D """·~·
Lani ant b.illilg at
~
Vila@', Pm Naga-,
Tri:hy (ii pb No. 102,
3rd Gw; Reed, New
WWll No.K, BloCk Tnt. NS..<il<abExP-
No.JO, T.S.Nu 107) to OJ.05-199J 782 (ill. 128. 129,.
15 (aoo IL~al
the cxtmt rt 3525 Yd. 39) ant 0087 - 5,85,420 II
Sile deed a;301)
E Sq.ft ITl\.'lllm(l9'Jl-92)
Tnt.N.&.ikalaW/u Pg 1- 5 cfYol. 157)
MNiar.jan
(Ib; Nu2256'90,
dt3.5.~ r{ ORB,
Thmj"'1ll) PW 14t &
DW88
l.anl ant Trrt. N. Sasikala Ex-
Btiiing v tr cxrrt rt P.Ql6, Pg 113 -124 of
F
= "!.ft in
&No.93,91 al1i 95 r{ 22-8-19')1
Yd. 33&Pl510
(SBA'c23218qmxl
6,78,000 ll 19
Mama!J!uli village Sak:dxrl (J1 23,(15.~)(l'g 235-

Haridranalli west 248, ml 61)
sired - PW 138 &
PWJ})
Lani and Building at Tnrt. N. Sasikala &-
~r No. 16 lp(llBabi P-1510, Pg 235-248
G (Ralhika Na!l'I) cNd.6I&Ex·P935,
Al]iaim Ganim Pg. 235 • 242 Yd. 55
Boo:aredld:y Gum EH'-1513&1514,Pg
Rood, Sccmdarlbal 25-J.19')2 253 -254 &255 ·256 cf 5,57,761 ll 22
Catoimn~ &No.49 Sllcdxrl \bl 61. - DDdnlhro
ard so l.anl Exlett firpa)mlft toJa'l"'i
22292 "I· !II. Siildng
area 2;ro "I.ft.PW -
H 163 - liRO - SrilMre
Rao
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 671
[PINAKI CHANDRA GHOSE, J.]

Ca;t of ocq.iisilioo Tr.V.N 33 A
of!him; ofM's. &diakloran an! (Value
Aili""Y" fliim~ Tut. N &;iloilaEx- ofMachireries
lhlOOatNi.481mr P41, Pg 107-112 cming
Ri"g~ ofVol. 14 &Ex- P- Rs20, 16,<XXY- to
El<kattulhang;il, 00 1519,Pg263-276 bedoletoo)
01~(1).1993
1-9-93 (Tcw.trl; ofVol. 61 (CA• 84,21,000 II
Salec:brl
1nl!sft." of!bares of 2196
Rs. tii,OS,<XXY-
B
111lfhireiycc>t of
Rs,20,16,<XX) furn
Tr. Nareffi Shroff-
PWlS
4.41 Aaesofdy 34
l.anlin PW- 31 Ratnavelu
Trrt. N. Sasil<ala
S.No.198'180F of '.IS-10-1993
Fx•P-83,Pg l(i()- 37,410 II
IW•32-&ru c
Velag<b.ran Salec:brl IW-JJ..Vtru-SRO
171of\Ol.21
Vi~·PW32to IW-47 -Mihiah
39
l.42a;re;of<iy 35
Llnlin PW-31-
SNJ.19&'180 F3, 28-1().1993 Trrt, N. Sasil<ala Ramivelu
198/1598of Fx- Jl.91, Pg 242 - 12,0(i() II PW-32•Bru
Vel111'PJ11111
Salec:brl
252ofVol.21 PW-39-Venu-SRO D
Vdlago-PW37& PW47 • Mdhaiah
PW39
36
l.42ocresofdiy PW•31-
Uniin Ratrnvelu
S.No.198'1ID'F 12 PW•32-Bru
198'161 A Tni N. Sasil<ala PW-39-Venu.S.RO E
28-10.1993
198'1(,()A 198'159 Fx-P-St, Pg 172- 12,0(i() IT PW47-1vfullniah
Salec:brl
D2, 198'158R2 179ofVol.21
198'157Blof
Velaklapram
Village- PW33 &
PW39
1.42 Acres ofcky
lanl in S.No. 37 F
198'180 HI, 179 A PW•31-
163Al62A, 161B, Ratrnvelu
Tnt. N. Sasil<ala
157 B2, 156.8, 155 28-10.1993 12,0(i() PW•32-Bru
Fx-Jl.92, Pg 1- 12 II
81of Salec:brl PW-39-Venu.S.RO
ofVol. 22
Vel~uram PW47 - Milhaiah
Villago - PW 31,
PW39&PW47-
~PW47
G
38
4.41 Acresof<iy PW-31-
l.anl in SNl.198 of Tni N. Sa>ikala Ratrnvelu
Velag;piram 28-10.1993
Fx• P-81,Pg 127• 37,385 II PW•32•Rtu
Salec:brl
Vdlage-PW31& 134ofVoL21 IW39-Veru-S.RO
PW39 PW-47-
Mtlraiah H
672 SUPREME COURT REPORTS [2017] 5 S.C.R.

A l,42Acresofdry 39
Lani in S,No.198 Tnt. N. Sasikala PW-31-
:ZS.10-1993 12,060 Ratnavelu
ofVela!WJ!lllll Ex-P-85,Pg 180- 11
Village• PW31, Sale deed PW• 32-13.U.t
186ofVol. 21
PW34&PW39 JW.39-VemS.RO
PW-47 -Muthaiah
40
1.42 Ams In S.No PW-31 •
B 198ofvcl~ :ZS.10-1993
Tnt. N. Sasikala
Ratnavelu
village- PW 39, Sale deed Ex- 1"93, Pg 13 - 12,00J 11
26ofVol. 22 PW-32-&b.t
PW 31 & PW 35 PW-39-Veru-S.RO
PW-47-Mtthaiah
41
4.41 AL-res of dry PW-31-
L<nd in S.N0.198 Tmt. N. Sasikala Ratnavelu
:ZS.10-1993
c ofVelaiwuram
Vtllage-PW31, Sale deed
Ex• P-86,Pg 187-
200ofVoL 21
37,381 II PW• 32'13ob.1
J'W.39-VemS.RO
PW34&PW39 PW-47-
Mtthaiah
42
4.41 AL'Ills of dry PW-31-
L<ndinS.N0.198 Tmt. N. Sasikala Ratnavelu
28-10-1993
ofVelag;yuram Ex-P-~. ~ 231- 37,385 11 PW•32-ll.Ut
D Sale deed
Village- PW 31, 241ofVoL21 JW.39-VemS.RO
PW38&PW39 PW-47·-
Mtthaiah
43
4.41 Acres of dry PW-31-
Land in SN0.198 Tmt. N. Sasikala Ratnavelu
28-10-1993
of Velagapuram Ex- P-87, Pg 201 - 37,385 11 PW• 32'.1300.1
Sale deed
Village - PW 31, W.lofVol.21 JW.39-Vem..S.RO
E PW35&PW39 ' PW-47-
Mttliaiah
44 ..
1.42 Aaes of dry PW-31-
Lani in S.No.198 Tmt. N. Sasikala Ratnavelu
28-10-1993
ofVelalWJl'lm Ex- P-94, Pg 27 - 12,060 II PW• 32 •ll<tu
Sale deed
Village- PW 31, 37ofVol. 22 JW.39-VemS.RO
F PW39&PW42
.
PW-47-
Mtthaiah
45
4.41 Acres of dry PW-31-
Land in SN0.198 Tmt. N. Sasikala Ratnavelu
28-10-1993
ofVelagiq:iuram Ex-P-88,Pg 210• 37,410 II PW•32•&b.t
Sale deed
Village - PW 31, 220ofVoL21 IW-39-VemS.RO
PW36&PW39 PW-47-
G Mtthaiah
46
. 4.4!k'IllS of dry PW-31-
I.aid in S.N0.198 Tmt. N. Sasikala Ratnavelu
28-10-1993
ofVelagap.uam
Sale deed Ex• P-89,Pg221- 37,410 n PW• 32'1300.1
Village - PW 37 & 230ofVol.21 JW.39-Venu-S.RO
PW39 PW-47-
H Mtthaiah
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 673
[PINAKI CHANDRA GHOSE, }.]

47 A
l.42A=fdylmfo PW-31-
SNilSl!cf TntNSEikla Ratnavdu
128-10.19'13
Velag;ipuram Ex- P-95, Pg 38- 12,0ffi II PW•32•Brou
Sale OOed
village-PW31 & 49ofVol. 22 IW39-VernrSRO
PW39 PW-47-
Mltham
48
PW-31- B
41 cents ofdry lax!
Tint N. Sasikala Ratnavdu
in SNo. 198 of 28-10-1993
Ex-P-82, Pg 135- 3,498 II PW•32•Brou
Velag;iJXlllllll Sale deed
village -PW31 159ofvol. 21 IW39-VernrSRO
PW-47-
Mlthaim
Tm. N. Sasikala
Ex - P'96, Pg. 50.
55 ofVol. 22- Sale
c
5.80 acres in
deooEx-P-1519,
S.No.39216, 38CY4,
Pg.263-276 of Vol
5, 39213,5,1,2,4, 95
10-11-1994 61-CA2196, Ex-
38li9, 380/12 in 1,95,800 ll 0.251 to257 DW-
Payyanoor Vdlage Sale deed P-1528, Pg. 287-
93
289 ofVol. 61-
-PW40&PW
DD challan &Ex-
159 Pl899, Pg. 49-50 D
ofVol.63-~e
""""
3.52 acres in Ux:. 2,86,520
Tint N. Sasikala
No.39111,2, 3, 5, - Ex-P-97, Pg. 56 -
6, 7;392/8 9,10,11 10-11-1994
61 II
in Pawanoor Sale deed 96
village - PW 40 & ofVol. 22 - Sale
0.251 to257 DW-
deed E
PW159 93
5.28 Acres in
S.No.384'1, 3,
Tmt. N. Sasikala
404'1, 97
10-11-1994 Ex - P-98, Pg. 62 -
38V3,4,5,6, 7,10,11 2,54,670 II 0.251 to257 DW-
Sale deed 67 of Vol. 22-Sale
inPayyamcr .
93
Village- PW 40 & deed
PW159 F
0.40 acres in
Tmt. N. Sasikala
S.No.383 in 98
10-11-1994 Ex - P-99, Pg 68 -
Payyanoor Village 1,94,012 II 0.251 to257DW-
Sale deed 71ofVol.22 -Sale
-PW40&PW 93
deed
159
0.40 acres in
Tat. N. Sasikala
S.No.383 in . 99
10-11-1994 Px-P.J:OO,Pg 72- ~
Payyamcr Village
Sale deed ofVoL 22- Sale
2,04,012 II f>251 to257 DW- G
-PW40&PW 93
159 deed
276acres in Trri. N. Sasikala 100
S.No.403/ I in Ex-P-101,Pg Tl- 0.251 to257DW-
10-11-1994
Payyanoor Vdlage 80 of Vol. 22- Sale 1,76,910 II 93
Sale deed
-PW40&PW deed
159
H
674 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 4 .23 Acres in
S.No.3 7912 and Tmt. N. Sasikala
379/3 of 10-11-1994 Ex•P-102,Pg 81- 101
Payyanoor Village Sale deed 1,91,248 II D-251 to257
85 of Vol. 22 - Sale
-PW40&PW deed DW-93
159
0.51 acres in S.No.
Tmt. N. Sasikala
381/9,392/1 and 102
10-11-1994 Ex- P-103, Pg. 86-
B 39212 in Payyanoor 2.14,810 II D-251 to257
Village- PW 40 Sale deed 91 of Vol. 22 - Sale
deed DW-93
&PW 159
Cost of Transfer of
6,14,000 shares of
M/s.Ramraj Agro at
Mis. Ramraj Agro
v endampalai at the
Mills. Ex-P-1519,
rate ofRs.3/- per
share from Gandhi 27-11-1994 Pg. 263-276 of 18,42,000 II 127
c and others
Vol.61-CA2196
DD Challan dt.
(6,18,000 shares
20.12.1994
minus 4000 shares)
PW501
Tmt. N. Sasikala Ex- 155
P-105, Pg.97.103-
Om sil<!h untivicbl
shares oflanl in 5 Sale deed, Ex-Pl519,
growcl; and l 1333sq.ff.
Pg 263-276 ofVol.
D .21-3-1995
61-CA2196 10,87,196 II
insro3334'1ai:i Sale deed
Payment dated
MybporoluzAvenue
21.03.1995 with
-PW 43 & PW 159
Rs. 750 lacs+
Rs.150 Lacs
Cost of acqusition of
Luz avenueprcperty
otherthan the
E consideration
covered by
document
Nos.241/95 to PW-43
252195 of denied of
No donuncnt and
S.RO.North Madras having 76,00,000 II 159
for the purpose of received by already argued
clearing the loan cash
that stood in the
F nanr ofproperties in
the lnlian Bark
Abiramapurnm - PW
43,PW44andPW
45
Tmt. N. Sasikalal'x-
P-1510,Pg 235-248 of
Vol.61-"(SBNc
G 23218 opened on
2.03 acres in
S.N0.385112385113 23.05.90)
19-7-1995 Ex.P-1518, Pg. 261-
385/14 in Payano or 3,44,195 II 170
Sale deed 262ofVol. 61-DD
Village- PW 41 &
paid; Ex-P-1631, Pg.
PW159
52-53ofVol. 62-
Cheque paid; Ex-P-
104, Pg. 92-96 of
H Vol.22
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 675
[PINAKI CHANDRA GHOSE, J.]

234 ans in SN>. Tnt. N. Sasikala
A
'385fl, 8, 9 386'la, I Ex-P-912-Sale <b!d
19-7-1995
b, Jc Jd,3862 in (Pg 142 - 147 of 3,91,655 II 171
Pay.mer Villag: - Saledeal Vol55)
PW4l&PW15'J
172
o.~ ocres in Tm. N. Sasikala (TOOilly
S.Ni.386'15, JSS'l, B
19-7-1995 Ex-P-91:>.Sale <b!d Rs.10,56,8&}'-iocl.
2,3,4,5,6 10
Sale deal (Pg 148 -153 ofVol. 3,21,030 n stanpdily&~
Pay.mer Villag: -
55) fre; Kr itmJ; 1";Q.
PW4l&PW15'J
172l
N:w'Adlitirnal Tnt. N. Sasikala
Gimm:tien in Ex-P-66/., ~ 31 -87
Fann lbH: ofVol. 34- \\liich is
Bmgilow.; a: Ewluaticn
Rtµlrt
1,25.~,261 II 176 c
i'a)Yillll" in Orngai
Arma~ - PW
107
cruh Balau: as en Tot. N Sasikala
30'4"1996ofca1071 irem Mlshroc:m
of IB .Rqrietrix - Ex-P-
Apiranpi11111 30-4-19<)6 1117, Pg 233 -240 771 n 195
D
Oimx\ en ofVol.58
1113/1994 - PW
182
Ol!h Balance as en M's. M!tal King
30-04-96 in CB !Die Rq>. N.Silil<ala
M)l~CA2277 30-4-1996 - Ex.P. 2001, Pg 2,~ II 201
Qxnoo in l(}.11-93 216-252 of Vol 63
-PW201 E
Ol!h Balan:e as en Tut. N. Sasikala -
30.0W6 in CB Ex-P-1519,Pg 263-
M)l~CA2196
qJtml en 1-12-92 -
.
30-4-1996 276 ofVol. 61 1,889 n 202

PW201
om &Jarre as en Tut N Saiklla- Ex-
3004% in CB P-1510, Pg 235-245 F
~SB23218 30-4-1996 ofVol.61 l,QJS II 204
Qimoo en 23-S.~
-PW201 .

ca!h Balance as en M'& M:tal ~
30-04-96 in CB SJ!e Prq:J.
Gtindy in C'A 1245 N.sasikala - Ex-0.
30-4-1996 281, P. 142-176 of 3,17232 II 205
Qxnooen 2-1.95 in
too rare of M!tal Vol.156 G
king-PW201
Ol!h Balance as en Tnt. N. Sasikala
30-0!-1996 in CB &.P-2Qll, Pg
M)I~ C'A 2133 30-4-1996 156'183 ofVol. 6t 561 II 212
Qi<ml en 3-2-92 -
.PW201
H
676 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Cash Balance as on Tmt. N. Sasikala
30-04-96 in CBI SB Ex-P-937, Pg 25S.
23792 sec'Undarbad 30-4-1996 256 of Vol. 155 2.34,000 ll 229
opened on 29-1-93 •
PW164
Tmt. N. Sasikal
Ex-P-228 & P-229,
Pg. 13 & 14, Vol. 25;
B TN - 01 - F - 9090 Ex-P-264. Pg. 85 of
Tata Searra car - 18-08-1992 Vol. 25 - Regi;traion 3,88,376 ll 241
PWS7&PW66 Ex-P-1510, Pg. 235 -
245 of Vol. 61- SB
Ne 23218 -Canara
bank
TN - 09 H 3559 Tmt. N. Sasikala
TATA Searra car - 26-03-1996 Ex-P-231, Pg. 18 5,11,118 ll 243
c PW57&PW69 of Vol. 25
Tmt. N. Sasikala
Ex-P-230, Pg. 16
of Vol. 25 & P-
232, Pg. 20 of Vol
Tn 09 H 3496
TATA Searra car - 25-03-1996 25 Ex-P-1519,
5,11,118 ll 244
Pg. 263-276 of Vol.
PW57&PW69
61 payment dt
D 04,04.96 ror
Rs.10,60,790/- for
Items 243 & 244
Mis. Metal King
TN 09 - E 9036 ( sole Prop.
N.Sasikala ExP-
Maruthi car)- 19-12.1994 2,22,485 II 253
236, Pg. 28 of Vol.
PW58&PW69
25 & P-286, Pg.
110 ofVol.25
E M/s. Metal King
sole Prop.
TN 09 B 6966 Bajaj N .Sasikala ExP-
Tempo Omni Bus - 19.04-1991 242, Pg. 40 of Vol. 2,03,979 II 254
PW59 &PW69 25 & P-288,
Pg .. 112 of Vol.
25.
Mis. Metal King
F sole Prop.
TN 09 B 6975
(Bajaj Tempo van) - N .Sasikala Ex-P-
19-04-1991 2,03,979 II 257
241, Pg. 38-39 of
PWS9&PW69
Vol. ·25 & P-287,
Pg. 111 of Vol. 25
62 ians of .hd• Asper Tmt. N. Sasikala
chirrW bbeoITmt N. evaluation Ex-P-1014, Pg. 181-
Sasikala as evaluated report ofM/s, 183 of Vol. 57 &
G by Mis. VBC Tru;t VBCTrust P .1015. Pg.184 -185.
9,38,460 u 285
on 31.3.1991 - PW on ofVol 57 (Befurethe
179 31-J.1991 check"""odl
34 items of Je\'\l>ls Tmt. N. Sasikala
purporting to be Ex-P-1016, Pg. 186-
Evaluation
Tmt. Sasikala as 188 ofVol.57
Report dated 17,54,868 II 287
evaluated by Mis. (Berore ire check
VBCTrust on 16-1- 16-1.1992 period)
H 1992-PW 179
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 677
[PINAKI CHANDRA GHOSE, J.]

~achinery subsequent!) MIS. Metal King sole A
Evaluation
11urchased for Mis. Metal King Prop. N.Sasikala 7,69,000 II 293
Report
ow 115 F.x-P-665
Cash Balance as on 30--04-199
in SB 38746 of CB Kelly1 jfmt. N. Sasikala Ex
kJpened on 30-12 88 in th< 30-4-1996 17.502 II 300
f-97 5 to P-977
~ameof
Tmt. N. Sasikala - PW 208
of renovation
B
Cost an<
pdclitional construction betweer
~une 1992 and 1993 of th1 Tmt. N. Sasikala
,ouilcling at Plot No. 102 I! Ex- P-781 & P-78;
~ross Road, Pon Nagar, TrichJ 31-3-1993 (No additiona 6,83,325 I! 301
kJwned by TmlN. Sasikah construction hence to
(Covered by doc'Ument NO be fully deleted)
~256/90/ dl 3/5/90 SR 0 I 0 F
lB TR!CHY)- PW 144
c
TOTAL 4,35,62,372

JAYA PUBLICATION
Value of
Item No. In
Dacription of the Reference of Stands in the Name he Annexu
Annexure
Property Document of roperty re No.
ls.
II D
Land ond Building at
Door No.19,
Pattammul Street,
Chenru>i Plot No.83,
R.S.No.4087, extent
1897 Sq .R Mis. Joya QB--06-1989 Ml& Jll)"J Publications
Publicatiolt5 Partners Sule deed Prior to check period
5,70,039 u 6
Selvi.J.Jayaulithaa &
N.Sasikofo (Doc E
No.1024/89, dt.18-6-
89 of SRO,
Mvlaoore
Land ll!ld building at
Thieu Vi-Kll
Industrial Eitate,
Oiindy, in S.No.55,
56, Block No.6, extent
5658 Sq. ft, ollal 08-12-1990 Ml& Jaya Publications
F
Nn.CS, Adyar Village Sale deed 5,28,039 ·U 17
Prior to check period
Mis. Jaya
Publications (Doc
No.4640/90 -
dt.8.12.1990 of SRO,
Ad~·
4664.60 sq.ft, MS 1o/<l Nfucin;
together with 26-9-1991 Sale Selvi JJayataitha ll!ld G
building in deal Tm!. N Sasil<ala) Ex-
. T,S.No.4345, P-1020 - CA 792
S.NoJ3/3pt, 32/4pt in Indian Bank- Ex-P.
St. Thorms mnunt 1023-Copy ofBPO 15,05,428 II 20
village Plot Nn, s - 7 for Rs. IOL Ex-P-
Block No, 6 Thiru vi 1903-CA JJ47-
ka lndLL•trial E&ate Oma-a Brnk Ex-P-
Guindy - PW 3 (to 1930 -Copy of DD
read""' S.No.101 fur R•.2.60 lacs H
..

678 SUPREME COURT REPORTS [2917] 5 S.C.R.

A Tansi (Foundary) Mis Jayd
Land and Building to Publications (Selvi
the extent of 55 J. Jayalalitha an!
groimds and 2143 Trrt. N. Sasikala)
sq.ft ie 12A61.1729'j.lt Ex-P-1028 - CA 792
ii Indian Bad<.-R•.1.50
SNJ.86,87,88,89,91,92,a 02--06'1992 Goreslwn
ni 9.l pat of ahndr Sale deed • Ex.P-1(116. cq,y <i 2,13,68,152 ll 23
lmnlet ofala}lr viTuile, BPO for Rs.28.3L
B Thiru.vika Jndru;riaJ Ex.P-1903-CA 2047
F.state Gmidy - -Canara Bank Ex-P-
PW 4, PW 3 and 1027 -Stat of
PW 126 (for OMTL -Ind Bank
seizure) andEx-P-6
Undivided share of Mis Jayd
land to the extent of Publications (Selvi
88<m'.JOO in 10 ~ J. Jayalalitha all
c ind 640 o;µt " OxJr
No. 9&'99 ( old No. 27--06-1994
ThtN. &RIW)Ex-P-
1903 - CA 'JD<fl -
2,26,130 ll 83
381 of Northern row Sale deed Canara Bank Ex-P-
of Luz O:mrch Rood, 1933 & 1934 •
Mylapore RS. No. Pay~It details and
1639/5-PW30 and Ex-P-79& 80
PW159
Mis Jaya
4564 sq.ft. of site and Publications (Selvi
D building in T.SNJ. 2 J. Jaydlalitha and
and T.SNo.18 Block Tmt N. Sasikala)
No. 22 \\bich is Ex- P-79 & P-80
called No) 15-11-1994
including Sta~ 34,20,160 ll 104
Parameswari Nagar , Sale deed
cbgs Ex-P-1926 &
Urur Village- PW 1927 - DD copy and
23, PW 159 & PW Ex-Pl020- CA-792
201 of JP with Indian
E bank
Mis Jaya
Publications
New additional
(Explained that the
construction in
valne of shed is
·Building at door No. Evaluation
Rs6,42,290/- and 8,00,000 ll 184
19 Pattanuntl St Report
hence balance of
Mylapore Cbennai •
Rsl,57,71CY- to be
PW 116
exclooed)
F Ex-P-670 - """"'"'
New I additional
Mis Jaya
Publications
construction in
Building at (Explained that the
S.No.32124 Plot No.
value of building
S-7 Ganapathy Evaluation constructed is
Report Rs32,94,834/- and 39,34,000 ll 190
colony Thiruvika
Jndostrial estate hence balance of
Rs6,39.166'- to be
G Guindy Cbennai 32 -
excluded) Ex-P-6n
PW117
-RPrV'lrt
Cash Balance as on Mis Jaya
30.04-96 in CB Publications (Selvi
Mylapore CA 2047 J. Jayalalitha and
20,79,885
Opened 26-09-90 30-4-1996 Tmt N. Sasikala) ll 203
(On transfer from Ex-P-1903-CA 2047
Kellys Branch) - PW Canara Bank
H 201
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 679
[PINAKI CHANDRA GHOSE, J.]

:ws Jaya ruuncanons A
(Sehi Uavaalitha an.1
rmt li. sasikala)fa-P-
Th' .-01.-0009 Ta:aE!ll!te
29--0i-1992 19()).(.A 2047 Canara 4,06,10( Il 234
:ar -P\V57 &PW 66 fxcp
Bank 226
(Inrcice) & P163
(Re~strafon) B
2\1'> Ja\"a Publicaions
(Sehi hz.'a!alitha an.1
IN-01 li.-9999 Swa:~
Tl!il. li. S~ka!a)- To be
..!azda Van-PW 60 and 21-ll-1991 3,85,52( 11 236
excluded Ex-P-245
PIV6§
(Invoice) & P.262
(RegiS!rationl
M's Ja)'a Public<lions
c
Th'-QI · Q-0099 Tata (Sehi JJayalalitha an.1
.•fobileran · PW57 and 21-11-1994 Tot. li. Sasikala) Ex-P- 2,81,16! JI 238
Pl\'66 19()J - C:A2047 Canara
Bank Ex-P224 (Invoice\

Ms Ja)4 Publicaions D
(Sehi Ilayaalitha an.1
29.-04.1993 Tnt. li. Saikala)- To be
TN.·04 E0099 t\duded
,\J3lltldta Armada Jeep-· fa:P-1903 • C:A 2047- 3)0)5( Il 239
PW¢1 \llld ?.V.-67 Cana:aBank F.x-P-
251 (fn1·oice) Ex-P-252 E
{Receipt) & P266
\Registration)

Hs Ja1~ Public<tions
(Sehi j Javalalitha an.1
Tnt. li. Sma)- Tobe F
ln\0702342-Baj~
;:;duded
~·an -Kbil'raj
16.02-1995 fx-P-1635 - CA 1952 - 52~!1 II 250
\utolll:)biles-PIV64&
G111a:a Bank Ex-P-
PW6S
256 (Invoice) fl-P-257
\Receipt) & P. 269
(Registration)
Ms Jaya Publicaions G
(Sehi IJ :ryaalidia an:!
!Th' 09 B6565 \)liercede! Tmt N. Sasikala) fx-P-
aenrnr lmponed) -As 04-05-1993 1903 - C:A 204i-C:anara 9,15,00C II 256
~\plained by PW 69 Bank P-1i9
(Registration) DW-88
fa-D-220 H
680 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
Hxed ~tin Mis Jaya
Canara Bank, Publications
Mylapore in the (Selvi J.
19-9-1<})4 Jayalalitha and 1,49,544 II 259
name of Jaya
Publications - Tmt. N. Sasikala)
PW201 Ex-P-1921-FDR
B coov

Fixed deposit in Mis Jaya
Canara Bank, Publications
Mysore Branch (Selvi J.
19-9-1994 Jayalalitha and 71,218 II 261
in the nan~ of
Jay.i Publications Tmt. N. Sasikala)
-PW201 Ex-P-1922 - FDR
c cmv
Ashok leyland
Panther Luxuy Mis Jaya
coach bearing Publications
registration No. (Selvi J.
1N-O'J F 2575 Jayalalitha and
pll"chased in tre Tmt. N. Sasikala)
D name of M's. Ex-P-1903 - CA
Jay.i Publication 184-1'1)5 2047 Canara 32,40,278 II 299
p linited Bank Ex-P255
(Chassis Rs. (Invoice) Ex-P-
699178 - cost of 258 (Registration)
Body Building Fx-P-1936 to 1938-
Rs2541000)- Payrnmt to Vendor
E PW 63, PW 65 Bharat Industries
andPW201
Cash balance as Namdm M:iR =
on 30.4.% CA Fx-P-163s.<::A
No 1952 Camra 1952-0!nara Bank 11
Bai<,!Vfy!~-
PW201 304-1996 5,10,%8 304
F
TOTAL 4.07.74.157
SASI ENIERPRISES

Item NI
DescriJXion ofthe Reference cf Stands in the Naur Valueofthe Arurxurc in
G Property Document of property Rs. No. Amcxurc
II

Srop No.14,
05-07-1989 M's. Sasi Entt'1'ptises
Grmn:rl Floor at
(Prier to the Partners Selvi
602, Arnn Salai, 98,904 II 8
creclq:erio.i) Jayalaitln and mr
Oiennai-6
Sale deed N Sasikala
H IParsn Manere)
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 681
[PINAKI CHANDRA GHOSE, J.]

A
M/s.Sasi
Enterprises (Doc
No.399/89 dt.5-7-89
of SRO,
Thousandlights)

Undivided share of
land only at Door B
No.14, Kather
Navaz Khan road,
Nungambakkam, in Ml& Sasi
Block No.12, EnteljlriseS
R.S.No.58/5 to the Partners
20-09- Jayalaitha
extent of 68/ 12000
1989 (Prior and Tmt.N.
undivided share in
ll Grounds 736 to the check Sasikala 2,10,919 n 9 c
period) Ex P-769
Sq.ft with a Shop
No. 9 Mis. Sasi Sale deed (sale
Enterprises deed)X-19-
Rental
(Doc No.526189
agreement
dt.21-9-89 of Jt.
S.R.11,
Thousandlights) • D
PW 113 for rent
(Mohsin Bii aouril

Land and Building in
19-04-1990
Tanjore, MS.Saii
(Prior to
Mahamoombu
the check ~-
Chavadi S.No.1091
exent of 2400 Sq.ft
period) Partners E
Selvi
Mis. Sasi
Sale deed Jayalaitha 1,57,125 n 12
Enterprises,
and Tmt.
Partners:
N.
J.Jayalalithaa, N.
Sasikala
Sasikala
(Doc No.455/90
dt.!9-4-90 of F
ORB,Thaniavur

Vacant site at
Blake H.D. Road,
Tanjore Town, 3rd Mis. Sasi
Division, 6th Ward, 19-04- Enterprises
Mahar Nombu 1990 - Partners
Chavadi to the (Prior to Selvi
G
extent of 5100 Sq the check Jayalaitha
1,15,315 n 13
Ft in T.S.No.1091 period) andTmt.
Mis. Sasi Sale deed N.
Enterprises (Doc Sasikala
No.456/90 dt.19-4-
90 of ORB,
Thaniavur H
682 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Vacant site at Blake -
HD. Road,Tanjore
To\Vll, Mahar
Nontm Chavadi, Mis. Sasi
extent 8970 Sq ft. in 19-04-1990 Enterprises -
(Prior ID the Partners Se! vi
T.S.No.1019 2,02,778 II 14
check peri ex!) Jayalaitha and
Mis. Sasi Sale deed Tmt. N.
B Enterprises, Sasikala
(Doc No.457/90 cit
19-04-1990 ofORB,
Thaniavur)
Dry land to the Mis. Sasi
extent of 3.23 Erterprises -
Acres in Partners Se! vi
c S.No.402/2
12-07·1990
Jayalaitha and
Sundarakottai Tmt. N. 75,210 II 16
Village, Tanjavur Sale deed Sasikala .
Mis. Sasi
Enterprises
.(Doc No.563/90
dt.12-7-90)
D Land aoo Building
at New Door No. Mis. Sasi
14, Kadhar Nawaz Enterprises -
Khan Road, Partners -Selvi 21
. Nungambakkam Jayalaitha and (Rs.50.000'
Block 12, 87/12000 Tmt. N. -raid on
undivided share of Sasikala 23.4.90 i.e.
19-2-1992
land in 11 ground Ex-P- 2,98,144 II prior to
E Sale deed
1736 sq. ft and 523 1940-CA - cha:k
sq.ft. buikling in 2061 of SE reriod) -
RS. No. 58 and with Canara Sre
New R.S.No. 58/5 bank Ex-P-
in Nung;imbakkarn 770 - Sale
Village - PW 137 - deed
Mr.Taiudeen
F Tansi (Enamellled
wires) Land and
Building at Thim
Vi Ka Industrial Mis. Sasi
Estate Guindy, 0.63 Enterprises -
acres of land and Partners Sel vi
495 sq.ft. in RC C Jayalaitha and
Roof 1155 sq .ft. in 10-07-1992 Tmt. N.
G ACC sheet roof in Sale deed 90,17,089 II 25
SasikalaEx-P-
SNo.89 of Alandur 1940 - CA -
village Ham! et of 2061 of SE
Adayar, ·mock No. with Canara
12, (Tansi bank
Enairalled Wires) -
PW 3 (refer to
H Pal!e 5)
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 683
[PINAKI CHANDRA GHOSE, J.]

Land and Building 22-01-1993 Mis. Sasi Elltetprises 49,02,105 II 26
A
to the exrett of I Sale deed · Partners Selvi
groind and 1475 Jayalaitha and Tmt
sq.ft. in RS.No. N. Sasikala Ex.-P-
3581 part in 1940 • CA -2061
Mylapore Villai;i: of SE with Canara
Door No. 18 East bank Ex-P-23 •
Abirmmptram 1111 Sale deed Ex-P- B
street • PW 4 1519 · CA -2196
(Refer to Page 2 • of NS with Canara
RrumchaJI!ranl Bank
72/12000slnre ofll M's. Sil;i FJieqiise; . 32
IJOlllils 1736 sq ft in Partners Selvi (Rs.50,000/-
Rs.No.5815 e 14, Jayalailln and Tnt N µrid on
Um; (hut. KaJh:r
28--7-1<})3
Sa.9kalaFx- P-1940 · 23.4.90 i.e. c
NruizKrnn rood, G\ ~llil of SE wi1h lffl572 11 piorto
Nmganbaldcam" Salechrl Carura hlnk fx.p. creckperi<Xl)
PW137 768 · Sale deed dt
30.6.93

4380 !lj.ft. llll!! with M's. Sil;i ~
520 !lj.ft. !Dure In Ex-P-46
D
S.No. 58817.A, 2 B in &-P- 1940 • G\ · 91
ThinNeOOda ~ 26-09-! 994 3J61 of SE m1h (Rs.52,205/-
Cd.my· PW 17 •
MrsSundari
Sale chrl Cana'.aBank 2,65,000 11 =
anrutttore
Shankar, PW 159 reteta:I)
(Raj¥pWm) &
PW161 IR>l'""'hl '· E
4lll sqft Jarl Wh$) 92
&j.tt. !rue In SNJ. (N:>e<.icirre
58817.A, 2 B in ill=!
ThinMrl<adi Naga- bypro;ecUim
aiony " =
annmt µrid to seller
26@.lg)<!
Sale chrl M's. Sasi etteiprises 3,10,000 11
so
R<:.3,10,000/-
Tot. Smdu:i tobe F
SIEnkar CJV<r and reteted)
alme docum:tt
.
"'1ue
Now'adlitimal M's. Sa5i ~ 174
cmtm:tim in (Amnmt to be (Irebalmce
&ikfilll a 5-A B, accepted is atDl11t
and c East OllSt R<:.40,35,981/-) cf G
Rood, Thor. Rs.40,39,019/-
Ev.ilrutim
N:>.41130 Raja 80,75,000 11 to beexduded)
Report
~. N!dairaai
Chmmi -41 ( Ref
Ill<: N:>. 475293
SRO Adayar) •
Alreadv ·-laired H
684 SUPREME COURT REPORTS [2017] 5 S.C.R.

A larlii s. Ni. 94cf Ms. SIB ~H:s -
Nmirni ~ Partners Selvi
v.i1h ID edflrt of ~aittmnlTrrtN
111976 sq. ft. of 1993 &sika!a &-P-133- 5,72,910 II 175
Jani (Plot No. 5 Ex.-P-1940 - CA -
a, b anic)-PW axil of SE mth
B 9:1(8.RO) OtromBank
N:w Aditianl Ms Sall aie!pise; 191
amm:tion in (Anuunt to be (Ire l:alana:
Rrilding rod tre accepted is anntnt
~of roof Rs.4,76,525/-) of
fur tre v.orks Evaluatim Rs.9,41,0JY-
14,17,538 II
c shed at MF 9
Gindy frr.lu;trial
Report to be
exdtrlal)
Btae ChlJroi -
32 - Alraldy
emlained
Ca;!i Balan:e as Ms. S.'lSi
U1 3Gm96 in Fntt'rjlllse&-
D CB, ~rpae Partners Selvi
CA2061 Qx=l Jll}filli!IR ani Trrt.
304-1996 4,59,976 fl 214
m 21/:Y91 - PW N.SE.ld1 Ex.-
3)1 P-19'() - CA -2061
of SE with Carom
Bart
E Gish Balan:e as Ms. Sall Erretpise; -
m 30'4196 in CA Partners Selvi
1044 of IB J3)"1laithl ani Trrt. N
Aliramp.nan 304-1996 S.'Eiklla Ex.-P-1255 - 1,02,4\U II 221
cpm;d Oil CA-I 044 of SE mth
15/12'93 in the - OtromBank
PW182
F
TSR.333 (Swmj) :tvfu Sall Frteipise;-
12-01-1~
Me.di Van Prutners Selvi
Befae clJrlc 2,99,845 fl 242
*** J211/ 1~9 peiiod
Ja}'<llalitbaa and
Trrt.N.S.'ISil<nla
Tn 01 W 1233 :tvfu Sall Frteipise;-
TmpoTm..eller Pmtners Selvi
G J~m!TrrtN
Saiiklla &It 1940 -
19-01-19)1 CA -2061 of SE 4,24,268 ll 245
mth Canam Bank
Fx-P-238 (Imuice)
Fx-P-265
IRe!!istration)
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 685
[PINAKI CHANDRA GHOSE, J.]

A
Ms Sa;iFJteiµi.""""
RutmsSelvi
Jayalaitlmnl 1lrt. N
Sa;il<ala
1N07H(ffi)(Taa Fx-P-194().Q\-2(X; l
21-12-19.» 3,15,537 II 246
9.l'ltj r:i
SE wth OrnraBmk B
Fx-P-233 llm.<irel
Ms Sa<i Ente1pises-
RutmsSelvi
Jay.llailln all Trrt N
TuOOE9207 26-12-19.» Sa<iklaFx-D2';U.Pg 5,25,132 Il 247
1561-Fx-P-237
(Mruhi Bmmar)
(111\Qice)-Fx-P-MJ c
lll..notdiorJ)

TTlrAL ,,.,,..!1;'7
GREEN FARMHOUSE

V:iucii1hc
ItmiN>ht
~iithl Rcfimreii Stand; in tlE Nore prqu1y Annew
Alne..i.re
D
~rty Ilol.immt of re Ni.
II
lli.

Tr. VNSullllkuan
16.75 rem; in &N>.lllf (Pa1m ii ChmHrm
aid old RS.Ni. Vlc4 Ib.se)Fx-P-43 to45
ffi-Ol-1994
r:i Srl~ -Sale~& 125 II 69 E
&lleclnl
Villaj:j' - PW 16 - POAFx-P-1189-
(~hARaja) CANiDS8<flnlim
Bmk

189'19.»ci 70
MsO=Farm
6.75 am en 8.3.19.» -
cashrroicn
fuse Fx-P-1189- 5iU200 r:i F
PW16-(~A 9-J.19.» II
Raja)
CAN>.1058 r:i
InlianBaik
Rs235000'-is tore
. Rs.33S<ro/- to
re
Sale<hrl exdudxl
a<hittal

16.50C61s in &Ni. Vlf
all old RS.NJ. l/lc4
Tr.VNSu:ll-d<rum
QJ-IB.19.»
r:i Srlingfmlkre
(Partm in Chm
125 Il 71 G
VJlhw - PW 16 - Saiereoo Famlhre)
(~ARaja)

H
686 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Actml COEidlratim
µlid to Tnt Gtyalri
dmdan Wlo KT.
Ms. Chm Fam
~22, lfue 72
Bizullm Fm.i 00-03-1'}.)4 Oi;hp;xtien of
Fx-P-!189 - CA Ni 8,65,400 II
Chmrni -17 By ID &techrl R5.3353XY-tobe
R<;, 530400'- arl by .!058 of ln!ian
Bai<. R..539400/- is exdtrlai
B cab · R<;, 3350'.XY- en to ooadrittal
&'.)l]g)I - : PW 16 •
(~ARl,ja)

16.75 ems in
RSNi.l/lf ddRS.Ni.
00-03-199'1 Ms. Chm Fam
lilol a SrliqJmlkre 125 II 73
c \filgo - PW 16 -
Salechrl rouse
~ja)

Adua am<hiticn
j'.EidtoKT
Ms. Chm Fam

D
Om.hv.dann
Bimllm
22,
Fml, 00.{13-11}.14
lfue Fx- . 74
Cl5h p:lltien of
Chlmll -17 by ID R5. Salechrl P-1189 - CA s;~,zoo II
R<;.335211'- to 00
2353XY- en S'319i arl N:il058 of ln!ian exduhl
allh Rs3~- en Bai<. R<;.232JV- is
10'4'1'»1 - PW 16 -
- to ooa<irittal
(~AR\ja)

E 34am ~\\ill126
cron:t Um; in SN> Ms. Chm Rnn
165/88 in Vat!Muiomi lfue Fx-P- 1189
- CA Ni.1058 of
Vdlage - PW 1:!I 166-94 Incian Bark. Fx-P- 1,21,<XXl II 80
(,Rij:gqul) & (Mm- &lechrl 'Xl6 to <.rn - Sde
chrl Fx..P-
Ms.Siam ' 11% to 11~ - Iirlc
F SdJranuiam & tramfu- cteilan
Olu-s-Ntooniml

Ms. Chm Fam
lfue Fx-
0.34 Ams ¥u\\illl
26 cron:t bas in P-1189-0\ Ni.1058
G of Incian Batk. Fx-
SN>.16578 ii
V~ Vdlog: - P-\0\to 'Ul- &te
166-94
PW:l:!l(Rajagqml) & 1,21,040 II 81
&techrl chrl Fx-P-1196
o,_.. Mm.Sbaiti
to 11~ - Baik
SdJnunriam &
'Ilmsfer Challat
Olu-s-Ntooniml
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 687
[PINAKI CHANDRA GHOSE, J.]

1 A
0.34 Acres t~ehr M'&°""'1Fann
mth 26 ca:aut trees Ho.re Fx-
in S.NJ.l 6Wain
VettuvaOOlli Vtlla!l'- P-Il89-CA 82
16-6-94
PWGJ (Rtjl~l"'Q No.I 058 cf Indian 1,21,0'IO II
Sale<Eed
&Owner Mrs.shanti Bank. Ex-P-<ni lo
Sibranmhm& 9!R-S3edm Fx- B
- --
Ohers-Nt P-
e<lllinoo 1196 lo II Ill - Bade
TrarnferQrahn

M'&GmiFann
Ho.re Fx- c
37 <;ens in S.N>.165'98 27-09-1994
in vtttuv.uJkmi P-Il89- CANa 1058 of 1,24,540 I 9l
Sale<Eed
Enjabakkam villag:: Indian Bark.Fx-P-
125-Sale<Eed

Mis. G-enFann 178 D
N:w'alditicml H°""' Balance pution
wmtru::tkn in the A<; IX"
Anrurtaocqiled = cf
Itsimtia Bui~ at Evaluatiw 1,52,S'J,076 II
R&l,02,47,286'- R•.50,11,790'-
UNo. Jn/8c - Fq:at
Vettuv.inl<mi Chernai
·1o re
excludid
E
Ck<ttBtlinreason Mis. °""1Fann
HCJ.llll
:no4'19% in CA I 058
30-4-1996 146 II 219
cf IB Abiraml]uam &-P-1189-CA
Qlmedon27/V94 Nol058cfln:ian
&ink.
.
WfAL l,71;53,017
F
JFARMHOUSE

Desc.dpioo litlr Rri!nnreof Vduelithe
Stit!ckin the Nani! of AmeureN>. ItemNoin
Prq><rty DlcwtEot puprlyRs. Anrextre
'
II
G
1.29 acres ub Mis. J. FannHru;e;
SNo 18/4a 1 cf_ Ex-P-73
25-2-1994
Enjantol<kam Village Ex-P-1Jl7 -CA 6,49, 710 II 68
Sale cEed
-PW25- llhanclari No.1054oflndiin
.P.B - to read chief &ink.

H
688 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
Ms. l Fam 1-hm; 2,86,441
9:!0011s inS.N>.2'1b, Ex-P-72 - POA E'x-
12-12-1m P-1JJ7-0\ 110
li in &iirgmlhr
II
Vil~ - IW 1A - &lledfil Nu I Q54 of Irrlian
IlliiwiaT.K Rri<: E'x
P-WI sale dwl
B O'J.121991

New OOiticrd Ms. J. Farm fures
oxsmticn m Ex-P-72 - PO\ E'x-
Bildirg a1 Sm s-en P-1207 - CA
As]J'I'
Nu IUi4 of Irrlian I&J (Value to
A\l'Dle NJ.2'1-B-3
c ~'lmnt
&allillirn Rri<:& P-'XJ.I &le 8Q36,868 11 beexdtlltlis
Rep:Jrt .R5.32,2ql'W-)
~~kre dwlO'J.121991
sad'¢ Taluik - A'i
Valte alrrittal is
eqiliml
.R5.48, 1(\6iU'-

D :r-e.v ndlitioml
M's. J. Farmlbl.l5fS
oct1SIJ.1£tirn in 188 (Valietu
Valte adnitted is
re;icEntial h.ul<irl! (4 beexcludtl is
As]J'I' .R5.29,82,392'-
Ns)inthoQllJJ'.ll'la Rs.23,28,008'-)
Blalwtirn 53,11,000 Il
NJ.112.:Xl Bjahld<an
Rep:Jrt
in New
E Mhbalip.rnmR:al-
A'ieqtiml

1UfAL 1,42,8Wi'9

JJ l.FA'llNGAN>M\INIENANffi

F Dsti¢cn fitre Rfam:eff
Sl:nlsintre \lite fith! ~ ltmJNJin
lliµrty fu-u:mt Anrian'll
Nm" ff (l1lllty Rs. Ni.

Q5h Bdaoce ai on
lY4% in 0\ J()j) Ms. J..by ~ aII
G
1B Al:iramlpnan 304-19% Mtintanance Ex-P- l,&J8
cp=l rn Zl-1-9:1 in 1136-0\Ni!Ui9of
fuenareof lnlianfulk 11 217

IUfAL 1,838

H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 689
[PINA.KI CHANDRA GHOSE, J.]

JAYRFAUSfAlE
A

ll5cripiooofl!E R!ft.-emH{ SruUlindE Vaie<idE A1re1:1re ItemNiin
lhprty Ihmet Nure <i ~R;. NJ. ARE<tell
Uni mi Bilcl~ to M..ey&aBtteEx-
ire extmt cf4800 8j.ft. l!-::9-&iedn!Ex.P-
Wth a b.ilclqi OOlh in 1100-0\Nl.IOSOof B
the gum mi first Jniai .Ellrk
fkxr in SNi52ffi cfT 19-07-tm
33,4l,<m I 84
N!!Jr Vill~ Wllch is &ilednl
00.V mm, as
MlUfj'Sa Mdali 9; -
PW 6 c
(!Vr.Q~

Nw aiiticrnl
187
roEltu:licn inR~ Asper l\1S. .ey&a.Btre
(\lllueto te
in dxr Ni 5 Evalurum \.lilue alnittal is 10,92,!QS I
e<du±di<;
~ SrMT Fep:rt R<;.5,47, 102/- D
&5,45,"W-)
Nlglr, Ol'l1lli 17

om lline as m Ms. JeyReal. Rtte lffl
lY4% 0\ 10:0 cflB Ex-P-1160-CA
30419J6 I 215
Abiranµamq:emlm N>JOjj oflnlian
27/li94 .Ellrk E

10I1\L 44,37,0l6

JSID.SINJIEVEUlM'Nr

F
1an1 ax1 ru1c1qi in ru
N>.40 an! 41 W:lh a b.ilt ip
l().894&iednl
a-ea of~ 8j.fi. l:x:th in !he
Guntanlfirst Acxrs (lmd Ms. J.S. ~
"'1ett 5 ~) of Thvekµrent Ex.P-
Sdinguallll' Vill'tl" in 1170 - CA N>.!Cfil
9,95,6/U n
G
SN:>.l/fo5 Wich is row cflrdanBld< &5
kro.vIJ as No I. Muphy
street, Akkui Vtllage - PW
·~
'•
-1.6 - Kam! Bltdu - to
real

H
690 SUPREME COURT REPORTS [2017] 5 S.C.R.

A One sixth undivided M'& J.S. Housing
share of laoo in five Development
21-J.1995Sale Ex-P·l 170 -
growxls and 1133 oi.ft. CANll®dhiiln 10,87,196 II 156
dew Bank
in S.No. 3334'!.uz Av
mue Myl:pore
M'&l.S. H(ll'iing 189
New/ additional Development (Value to
Value OOmitted is
B construction in
Evaloatioo Rs.13,31,185/- II
be
residential Building at 20,38,959 exchxlw
FqntSatedeed
No. I Muqhy Street i-;Rs.
Akkarai Chennai 7,07,774/
-)
M's. J S Housing
Balance as on
°""
3(l'()li96 in CA 1062 of 30-4-1996
Corporation
Ex-P-117().('A 13,672 II 218
c IB Abirannpuramin No.1062 oflndian
Bank
TOfAL 41,35,4!17
JAYA CONSTRUCTION (CONTRACTORS AND BUILDERS)
Desaipionofthe Vahr<ithe !tan No in
Referm.ce of Stands in the N"'"' Ann!xu
Prop<rty ~ Aml!xure
Document of re No.
Rs. II
D M'& Jaya
I/6th undividw !liare; of Contractoo; and
land in 5 gruurd; and Builders Ex-P-
21-3-1995Sale
1133 sq.ft. in 11 O- Sales dew 10,87,196 II 158
deed
S.No.3334'la of Luz Ex-P-1049.CA
Avenue No.1049of
Indian Bank
M's. Jaya
E contra;too; and
-
a.sh Balance as on
3Cl'4/96 in CA 1049 of IB Builders Ex-P-
30-4-1996 10,891 II 220
Abiramapuram C\Oened 1()49-CA
on27/1194 No.1049of
lndianBank
TOfAL 10,98,087

F KODANADTEAESTATE-PURCHASE
Kooamxl tea e;tate and OS-05-1995 Tml N.Sasikala, 7,60,00,000 II 166
tea fuctocy extent two Reconstitution Tmt J. Elavarasi,
acre; at klOOgiri, Nilgris deErl and.V.N.
district aa:iuired on an Sudhakaran Fx-
wuegislmll recon,titution P-520 & P-523
of padnetship deErl dt
5/6'1995 pa}lmlt
G
through six cheques dated
51511995 - PW 177
(Indian Bank -
Mr.
Sharunugasmdaranl)
TOTAL 7,60,00,000

H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 691
[PINAKI CHANDRA GHOSE, J.]

SAKIHI ~SIRUCIIO'S A
fi>saiption ofthe Rd'l'fUICe of S:ullintre Valueofthe Annexure ItonN>in
l'ropErty Dlcumtt Nureof PropertyRs. NI. Annexure
II
am Bilan:e as m Ms. ~ktlli
lY4'95 in CA 114) of Ccrntncticn; Fx-P-
30'4'19% l,02,4Xl 11 222 B
IB Alirarmp.Jram 2016-CAN>.1149
qJtlID 002313193 oflrxlianBmk
lfOL\L 1,0Z,4JO

MS~~CII<l\'
llinipilnoftte Rftmred' ~ntlr~of \lhof~ An:au llanNJn c
ProJety Ib:unmt Jl1llBfy Rs. reNl AlmaRII
Ms. lakshrri
cash Rilance as oo
ccmm:ticrn Ex- P-
30'4'95 in CA 11-0 cf
304-1996 1980-CA 1,02,490 II 224
IB Abiranµu:am
NJ.1149 of.lnlian
Qleml 00 '2313/95 D
Bank
TOfAL 1Sl2,4'»
illPALPRQ'\10fm8
!Rscription ofthe Rd'ertm!d' ~intteNnreof Vaued'the Amwre ltanNlin
Property Ihmeit irqufy'Rs. Nl Ammirell
Ms. G:µil E
caffi Balan:e as oo Pn:m:ms Fx-P-
3<Y4'95 in CA 1146 304-1996 1974 -
CA 1,02,490 II 223
qitlID oo'l313f)5 No.1146 of Icxlian
Bank
TOfAL 1,01,4'»
F
GRANDIOfAL 23JB$,410
lRV.N~-Ai.mwdNJ.3

~oft!E Rmmred' ~intlrl'WE Vaueoftlr Amrure ItemNiin
Pnprty Dxmet of pqmyRs. Ni. AlmnR
II
II acres 83 cents in G
S.NJ.34S'38.1'\, 2
5B, SF, 5d, 5( 5c, 02-00-1994 T1:VN.
344'1, 2.402/4, 401/1, ~leooro Sulillka'an
2,33,770 II ro
35511, in Simthavocr
Viii~
H
692 SUPREME COURT REPORTS [2017] 5 S.C.R.

A IO acre; 86 cents in
S.No,392/1,
02-08-1994
.
391,392,300,381/3,393,400/3, Tr. VNSudhakaran 2, 11,325 ll 62
Sale deed
398,406,39) ,400,406 in
Siruthavoor Village
B
7 Ams 44 cents in
S.No.339/la,

341/l ,34213a,2a, 02-05-1994
Tr. VN.Sudhakaran 1,45,891 ll 65
Jll,282,338/la,3, 342/JJ,4a, Sale deed
23513,4,2, 234/l,2 in
c Siruthm-ur Village

Armun! Paid over and above
the cost in OOcunenl No.43'94
02--05-1994
d:ted 5!W4, S R Nath Tr. VN.Sudhakaran 4,85,000 ll 66
Sale deed
Mutras to the seller Tr.
D Gopinath

. 330 Acres in S.No.403'3, 24-5-1994
Tr. VNSudhakaran 93,475 II 79
401!2 in Siruthavur Vil~ Sale deed

Qie sixth mvidid share of
lan1 in 5 lJOlllrl and 1133 21-3-1995
E Tr. VN.Sudhakaran 10,87,196 II 153
sq.ft. in S.No.3334/a of Luz Sale deed
Avenue

Flqln1inre townd<; acxjlisticn
of InIDrux> Chenica!s and
P!Dnm:rutica!s ltd at
F
Oillilore (I) Tr. Ayyadurai
prormtor of Jnlo.Dffio
~calsRs35,45,QOOI- Tr. VNSudhakaran 86,91,000 ll 173

(2)To intem:e capital Muket
shares 24,05,000'-
G
(3) to Ind Balik-22,41,000'-

Cash Balan:e a5 on 304-96 in
cA 1068 of IB Abirarrapuram 304-1996 Tr. VN.Sudhakaran 1,32,221 II 197
opened on 30-3-1994
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 693
[PINAKI CHANDRA GROSE, J.]
•
A .
Cash Balance as on 30-
04-96 in Cb, Mylapore
30-4-1996 Tr. VN.Sudhakaran 47,453 I! 206
CA 2220 Opened on 7-
4-1993 in the name of
Cash Balance as on 30-
04-96 in CB Mylapore B
30-4-1996 Tr. VN.Sudhakaran 61,430 II 208
SB 24621 opened on 25-
2-92
TN 09 E 9027 (Ashok
19-12-1994 Tr. VN.Sudhakaran 5,05,009 II 248
Leyand Cargo vehicle)
JN OJ 09 f3744 (Tarx 29-05-1995 Tr. VN.Sudhakaran 2,96,191 II 249
Jeep)
TOTAL 1,19,89,961
c

1Mf. J. ElAvARAS1 -Aa:used No.4

Description of the Refa-ence of Stand. in the Value of AmExtre ltemNoin
Property Document Name of .he~ No. Annexurell D
&
Anmn Paid to 1NHB
towads allctrrett of pld 00-02-1992
Tnt..J. Elavara;i 2,35,813 II 24.
N>. L<56 (old No. 524 N) Saled<>Xi
Arna Nag«, Chwmi -40
lad :nl 8Jiklif@ to 1"'
edtnt<i4802sqft. ~ E
mth a buildng mth 31-12-1993
Tnt. J. Elavara;i 9,ro,sai II 50
1'UJfd and first floor in Saled<>Xi
S.NJ.94, Pld N>. 7 of
N>llmkarai Villa!!!'
IO Aerts ard 41 cats in
Tnt J. Elawra;i
RS.NJ.346118,
J16'1c,318?.aal, ~ F
~344'1A,
34712£,34211&,342/184,342'
185,
34S'l.346'lk,34\1'2B,351/18
3, 348'3a,
31-1-1994
2,33,710 u . 57
Saled<>Xi
348'3c,3!ll,345/I,345/la,
346/l l,34\1'~9/4c3,35()' G
2al,
3511282,344/1,346' ld,346' I
e,
34612,37912,34612a,35G2a2
,344'1B, 348'38, 348'26 .

H
694 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 11 aaesaoo28cents
S.No.42/2 in
02-0l-1994
Karungul4xdhman:l Trri. J. Elavarasi 2.'Il.026 II 61
Sale deed
S.No.383 to386an:l393 in
Sirulhavocr Village

10.78 Am:s in S.No.379.381,
B 382, 342, in Sriuthavoor
02-0l-1994
Trrt. J. Elavarasi 2,02,251 II 63
Sale deed
Village

Armunt paid low.l!lls the
co;t of ocq.iisition of 10.78
ocres over and above tre 08-02-1994
Tnt. J. Elavarasi
c document valuedoc No. Sale deed
4,65,00J II 64

42194 data:! &'2/1994 of
SRO North Mldras

meli><ttuxiWixldmscfln:!
ilfueg1mn:lsaoo 1133 sq.ft
21-3-1995
in S.No. 3334/ la in Tmt J. Elavarasi 10,87,196 II 154
D Sale deed
~~LuzAvenue
(<knnai 4)

New a!ditiooal
oonstructioo in the pc6h Evaluation
Trri. J. Elavarasi 5,40,52,298 II 180
Bang;tlow at Siruthavr in Repat
Cbmgai Mgr Dist
E
New Adlitirnal cmtructioo
in residential building at Evaluation
Tmt J. Elavarasi 24,83,759 II 186
No.1/66 Anna Nagar Repat
Cbennai

Cash Baine as oo
F
3G'4'1996inCa1171 of
304-1996 Tnt. J. Elavarasi 3,40,527 II 199
in:lianBank Abirama1>-=
qiered in 2&'3.'95

Cash Balance as oo 304-
96 In CB Mylapore in CA 304-1996 Tnt. J. Elavarasi 1,18,198 II 210
G 2219openedm 74-93
.
Cash Baine as oo 30/4/96
in CB~~reSB25389 304-1996 Tmt J. Elavarasi 894 n 211
qien:xl 0023/1193

1UfAL 6,1)\07,252
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 695
[PINAKI CHANDRA GHOSE, J.]

J. VIVEK MINOR- Son and daughter of Accused No.4 A
P. Vivd< (minor)
Represented by his mOOier
1.50 Acm; in 21-09-2014 and natw.il gruirdian Tnt. J.
S.No.392/12 in 44,210 II 56
Sale docd Elavarasi No. 7 East Beach
Sirthavur village
Roal, Neelaikarai, Chennai
41 B

J. Vivek(mnor) Repre;ented
3 acres 51 crots in
by his 11Dther and natural
S.No.43/2 in 15-09-2014
guardian Tnt. J. Elavara<;i 1,58.310 II 87
Karunkuzhipallam Sale doed
No.7 East beach Road,
village
Neelankarai, Chennai-41
c
J. Vivd< (minor)
4 Acres 52 cents in Repre;ented by his mither
S.No.46 in 15-09-2014 md natural guardian Tmt. J.
2,03,510 II 88
Karunkwhipallam Sale doe\! Elavarasi No.7 East beach
Village Roal, Neelankarai, Chennai
41
D
J. Vivek (minor)
4 Acres 15 cents in Repre;ented bY his molher
S.No.45 in 15-09-2014 and natiiral guardian Tmt. J.
1,86,356 II 89
Karunkwhipallam Sale deed Elavarasi No.7 East beach
V~lagc Road , Neelankara~ Chennai
41 E
J, Vivek (minor)
Repre;ented by his molher
4 Acres 15 cents in
15-09-2014 and natural gum!ian Tmt.-J.
Karunkwhipallam 1,86,226 II 90
Sale doed Elavarasi No. 7 East Beach
Village
Road, Neelankara~ Chennai
41 F
cam Balance as oo
3G'4196 in the SB J. Vivek (minor)
4110 of .IOOian Repre;ented by hi• molher
Bank 30-04-1996 and natural guardian Tmt. J.
Ahiramq>Jram 2,42,211 II 193
qiened 00 1219194
Elavarasi No.7 East G
in the ruure of
Bead! Road , Neelankarai,
M:>;ter J. Vivek,
Chennai41
flo. J. Elavarasi

irOfAL 111,20,823
H
696 SUPREME COURT REPORTS [2017] 5 S.C.R.

A SON AND DAUGH1ER OF J ElAVARASI

Arrrunt O;,pooitoo in the
Daire of Mister Vivek Bank Roconls 38,421 II 306
Selvi Snakila atxl &lvi
Krislmapriya soo am S01anl
B drughter of Tnt. J. dit@tffrf
Elavarasi during Q:toba- 1Mr.J.
l9'J3 in Indian Bank ( On Eavarasi
roceipts ofteminal benefits
of their futm Tr. v.
Jayanumn)
c
lOfAL 38,421

MAHASUBBULAKSHMI KALYANAMANDAPAM
. ~lionofthe Rdtnnreof ~d!inthe Value of the Ame>lre IrernNoin

D Property Docmmrt Nan1'of ~lb. No. n IAn'""""'
Maha
Cbst of acqWtion of Maha
Stbbulakshni
Stba Lalclmi Kal)'!Da 19-7-1'1)3 38,51,00J II 31
Kalyana
Mandaban\ Chennai l06
Mandapam
E 3197 Sq. ft I ts Ni. 115/P,
31-1().1994 Maha
117/P in Arurrbakkrun Stbbulakshni
Village
am 8,55,150 II 103
04-04-19')5 Kalyana
Sale eked Mandapam

3197 Sq. ft I ts Ni. 115/P, 31.10.1994 Maha
F
117/P in Arurrbakkrun am Stbbulakshni
8,55,150
II
Village 162
04-01-1995 Ka)am
Sale cked Murl!µnn
.

Maha
Cash balaoce as en Accoont
Slbbulakshni
G 30.4.1~ in CA Nil 689 qienedon 3,17,476 II 207
Kalyana
OmaraBank, Anna Ntgar l-l:Z..19'J3
Mandapam

lOfAL '!fl,78,776

GRANDlUfAL !!,7;},§J72
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 697
[PINAKI CHANDRA GROSE, J.]

M'SJAYAFINANCE PLID

Cash Balance as on 3~-
96 in CA 1179 of Indian
30-4-1996
M's. Jaya
1,760
"'
209
Bank Abirarmpuram opened Finance (P) Lld
onS/5/95 in
B
TOTAL .

GRANDTOTAl 4,(J(),24,439

ANNEXURE- II
Properties aapred by Anjaneya Printers (P) lid, it the end of checkperiod c
aca>nli~to DVAC

I/5th Share of I ground and
1086 Sq.fl. together with a
super structure in S.No.301, 17-1-19')1 M's. Anjaneya
3,19,230 II 51 D
4725/16 in 21, Padmmaban Sale deed Printers P lid
Streetm T Nagar New T S
No. 8025/1 Block:No. 107
I/5th Share of 1 ground and
1086 Sq.fl. together with a
superstIU:ture in S.No.30 I, 17-1-19')1 M's. Anjaneya E
3,19,230 II 52
4725/16 in 21, Padrranaban Sale deed Printers P lid
Streetm T Nagar New T S
No. 8025/1 Block:No. 107
I/5th Share of 1 ground and
1086 Sq.fl. together with a F
super structure in S.No.301, 17-1-1<})4 M's. Aljaneya
3,19,230 II 53
4725/16 in 21, Padrranaban Salecbrl PrintersP lid
Streetm T Nagar New T S
No.8025/1 Block No. 107
I/5th Share of 1 ground and G
1086 Sq.fl. together with a
super structure in SNo.301, 17-l-19\l4 M's. Anjareya
3,19,230 II 54
4725/16 in 21, Padimnaban Salecbrl PrintasP lid
Streetm T Nagar New T S
No.8025/1 Block No. 107
H
698 SUPREME COURT REPORTS [2017) 5 S.C.R.

A I/5th Share of l ground and
I 086 Sq.ft. together with a
super structure in SNo.301, 17-1-1994 Mis. Anjaneya
319,230 II 55
4725/16 in 21, Padmanaban Sale reed Printen; P Ltd
Streetm T Nagar New T S
No.8025/ l Block No. 107
B 4293 sq. ft. to~ther with a
building (2000 sq.ft. Ground
Floor 2600 sq.ft first floor ) 30-12-1994 Mis. Anjaneya
43,56,142 II 122
in S.No.6794 which is called Sale reed Printers P Ltd
No. 68, Habibullah Road,
T.Nagar Ms. 17
c 3472 sq.ft. together with
building 3000 sq .ft. ground
Floor 3700 sq.ft. first Floor 30-12-1994 Mis. Anjaneya
59,96,346 II 123
in Survey No,6794 which is Sale reed Printers P Ltd
called 69, Habibullah Road
T. Nagar Ms. 17
D I/6th undivided shares of
lam in 5 grounds and l!33 21-3-1995 M's. Anjaneya
10,87,196 II 157
sq.ft. in S.No.3334/la of Luz Salede61 Printers P Ltd
Awnue
New/additional construction
Building at door No.48 Asper
M's. Anjaneya
E Jawharlal Nehru Road, Evalmtion 2,13,63,457 II 177
PrintersP Ltd
lndustrical estate Guindy Report ••
Ekkatuthangal Chennai
new additional construction
in residential building at Evalmtion M's. Anjaneya
door no. 21 Padbanabha Report 20,43,000 ll 185
Printers
Street T Nagar Chennai. - 17
F
Cash Balance as on 30-04- M's. Anjaneya
96 in CB. Mylapore in CA 304-1996 10,75,336 II 213
Printers P Ltd
2250 Opened on 29-07-93
TN 09 H 3595 (Swaraj Mis. Anjaneya
26-03-1996 5,56,999 II 251
Maz.da Van) Printers P Ltd
G TN 09 H 3541 (Swaraj Mis. Anjaneya
26-03-1996 5,56,999 II 252
Maz.da Van) Printers P Ltd
TN 09 H 3586 (Swaraj M/s.Anjaneya
25-3-1996 5,56,999 II 255
Maz.da Van) Printers P Ltd
Asper
Machinery subsequently Mis. Anjaneya
Evaluation 2,16,42,000 II 294
purchased fur Mis. Printers P Ltd
Report ••
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 699
[PINAKI CHANDRA GHOSE, J.]

A
A developed plot
bearing No. 6 to an
extent of 1.12 acre; in
Industrial estate
Thirurmzhi in the name
of M's. Artjaneya
05-0S-1994 M's. Artjarey.i B
Printer p ltd on 8,60.950 II 297
Saleem! Printers p ltd
20/4/1994 at a coot of
Rs. 81900Y- and a
service charges of Rs.
40950 collected by
Sidco vide receipt l'b.
120128 dated
c
rrorAL ~16,91,574

.
SUPERDlP.ER 1VPRIVATEUMITFD
Value of Item Ni
Referenoo
Description d' tlE Stands in tlE tlE AmExure in
of
fuJperty Naur of irqJttty No. Anrexure D
Document
& II
Ol5h Bllaice as m 3Q 01-
96 in CA 1152 at IB M's.~ IlJper 5,46;!77 216
304-19% n
Abirarrepmnn Clp(ml 1VPvt.ltd
on25'J,95
Fixed dposit in IB, E
M's. Stp::r D.µ:r
Abirarmpuram in the 20-04-1995 5,00000 ll 260
1VPvt. Ltd
name of
Fixed dposit in IB,
M's. Stµ:r D.µ:r
Abirarmpuram in the 25-3-1995 5,00,000 ll 262
1VPvt.Ltd
name of
Fixed dposit in IB, F
M's. Stµ:r D.µ:r
Abirarrapuram in the 25-3-19')5 5,00,000 ll 263
1VPvt.Ltd
narreof
Fixed dposit in IB,
M's. Stµ:r D.µ:r
Abirarmpuram in the 25-3-1995 5,00,000 n 264
1VPvt.Ltd
narreof
A sred allotted By .G
Sl1XO in Eatrorics M's. &irer IlJper
15-04-1995 15,75,800 II 292
COOlJlex, Giirrly on 1VPvt.ltd
151411995 in fuvwr
JUTAL 41,22,377
GrandTolal 'ST,55, 10,354
H
-.J
::i::: 0 "I1 tI1 ~ (") tJ:1 > 0
0

Part B Dispated Items.in .4.naEDJre n rElatin& to its:,·alae as '':El.las-its ml'Dersbip.. l>l
"'
:E -
--

Items
sltmTnin Demiption of the Item in
Value
Acrordl~
A.,~J:XCRE ·ll
E'idence and
if:mlbits rdled upon
E ,-id enc£ and
Exhibits r<'lied
Tri!t.l
Court
Hilrb
co11.rt
- s·
(1>

~
"' >
(1>
3
"'
\0
toDYAC .
bvDYAC Yalueuper up•>D ~- Accused
findine;s
findings ct
-· p=s .-.J tl.l
~ ~
..\..llneiur~Il
sa
i\UJl'a.Uf"I!
defence :Xo.2.
. II 0
Exhibits JPW's E:tllibits D\Vs
~ El a :::o
('D ('tl C/".I tr.I
6 Land and Buildi to!" a: Door .... - 0 ""
Ko.19, Pmm.mal Street, ~Ci?~-
"' - c.. ""
m
Cbenn:ii Plot Xo.S'.l, A..=q.1i:-ed. prior • ii' :E (")
:E r:t. 0 0
R.S.1\oA('Si, ex!ent 1~9 7 Sl:.o'\TI in .4nnextre- to check e:Jg El c
s~ .J"t ·~r~. Jaya. Publicaiofu 5JQ,039 I, period ·11er~ce.
& 0 ~ ~
-SC.i.1.J_J~yaalirhaa It~-6 ,,no:e amount oo· > g
Partn<rs
& ~'.SasiJ:ala
'.Doc l''o~ to b• excluded OQN-
:;;· 0- o·
g;
102H9, dtJ ~ -6-89 of SRO. (1> p 0~
:\Iy?apore P;J>S :;ti
g- .-1'>- l>l >--3
7
Land and FhrK>. 7 R.R.:=Jar;
E,.:.P23'.::7
A:::qcii:ed prior Ci? =n g. en
3 + .4n.-U Stte<t, Santl1011e,
Sbr•\lJ in .~exure.
I,
to check § 3
c.. "'
l>l
;::i.
Chennai-4 <f Tmt.>.Sa'1k-.la 3,13,530
Iten: .:
period H~.ce, (1>
:: °" CD
~-
::n
(Doc ru;.. ;.;s·s~, d: : ..,._J....lf.S9 '-'ho:I!- ~\mt
' (") c..
(Vol l'o 7S, Pa;!e 65- o er
of SR:), :\f,'ap<Y.e· co be extludoo
7;.l 3 '<
"' ~
s S1op N'>.:4 C-Totmo Floor a ~ ::r
-· N
Aoq·.1i:ed pri ot E!. 3 0
6):, A.mia -S:~:ll. Chenn:i-6
Sl:o"'ll in .~ex.ure- to ch<ck
(1>
...oo
0
::s ~
-
(Parsn :.rauero) :\hSasi
:CllW-pli Sel

(Doc N'>.39i'39 dt.5- '-89 of
98,904 I,
!urn -8
period H<r.e<,
t'ho:e arnoµnt "'<~
l>l
-·
::::;.· 0.

s::
Ul

~
(")
~KO, lhous3Ildlights)
to be exdudoo Z" -g_
(1>
.ri
Items ~-alue E~idmceand faideuce and Exhibits
Trial Court
lllgb court en
shon·nin Description of the item in Accordin: Exhibits rdiedupon Yalueaspe- relied upon by Accused
findings
finding$
~
~
Annerure Annemre II toDYAC byDYAC defence Xo.2.
-II Exhibits IPW's Exhibits D\rs
9 L'ndhided share ofland only at ~

~~
Door No.14, Katha: NavazKhan
Road. Nu11gambakkam, in Block Acquired prior to
NoJ2, RS.No.58•5 to the extent Sho"'u in .Annexure - check p<riod.

~~
pf6!V!20GO undhided sha-ein 11 2, 10,919 I, Hence, \\hcle

~
Growids i}6Sq.ft "ith a Shop llem-9 amount to be
:Ko.9-:l.Is.Sasi Enterprises exduded ('"}
(Doc No.526 ·s~ dt.21-9-89 <1f
$: ~
Jt. SRJL Thous.ndlighIS) Z en
12 Land and Building in Tanjore, ti tI1
:\iahanoombu Chavadi
Sho"n in Annexure -
Acquired prfor to ~$
S.J\o.f09l ei<tent of2-100 Sq.ft check period. a~
L :I: ......
:l.h. Sasi Enterprises, Partners: 1,57J25 Hence, "'hole
J.Jayalali thaa, XSasikala
Item-12
amcuntto b~ ?;l ~
(Doc J\o.45 5·90 dt19-4-90 of exduded
>
•tI1 r:-'
ORB, Thanj an1r) ~>
'-' r:-'

~
13 Vacaa site at Blakt HD.
Road, TanjoreTo"n, 3rd Dhision,
.-kqtircd priJtV
6th Wa-d, :'.\!altar :Kombu Chm'3di Sho"n in .-\nn"-\-ure -
checkpetiod. Hence, Pl'
to the <Xt<tt of5 l(tt) Sq ft in 1)5,315 L
tthole amount to be
T.S.No.1091 '.lh Sasi Enterprises
(Doc J\o.-!56 90 dt.19--1-90 of
rt=-13
excluded 2en
· ORB, Thattjanl!

:I: Q 'Tl tI1 ti ('"} Ill > -..J
0
-.J
::i::: 0 "I1 tr1 tl (j tti ;l> 0
N

Items Yalue Evidence a.nd Evidence and Exhibits Trial IDgb cou 1·t
sbml"nin Desc1iption of the item in ;\ccording Exhibits rEfieiupou Valueaspe.· relied upon -by •.\.:ccusied Court findings
..\nnenire Annex:urell toDYAC byDYAC dEfence ~o.2. findings
-II Exhibits PW's Exhibits D'\V's
14 '\•acant si~ atBl:abo H.D_ IZl

I
Road, Tanjore To""ll. ~-fah.21'
Acqufred prior to
Nombu Cha\'adi, e:<tet~ 3970 Sho1.i.n in •.:\nn~ure -
c:hei:kpaiod. Hence
Sq.ft. in T.S.No.!019 2,02, 778 ~ .._,hot e amount co be
~:!·s_ Sasi Enterprises, !tem-1-4
excluded
. lDotNo..157'90dt19-Q.!-1990
ofORB Thanja..i.tr)
0
(j
15 Land and building a . 0
A.bishekapuram Village, Pon
c:
~~agar, Trichy ~in plot
_-\..,_-quired prior to
~
1\'.o.102, 3rd Cross Road. ·l'C'\v Shc't'l.n in _.;r1ne"u-e-
~
~kpericd. Hence
\V:ard Xo.K,. Block :!'-v.30, TS.Xo. 5,85,420 1,
..-..holeo amount to be
1C7}t:o the ~mt o-f 3525 Sq.it ltom-15
T1nr_~.,..Sasikal.a \\'° o_ :\Ll"'\~:narajan
iexcluded 0
tDoc. Xo.22.56-90, dt.35 .90 of ~
IZl
ORB, n•:?Jtja'l-ur)
16 Dry land to the ex.rem- of3.23
...\cqttired prier to
Acres in S XoAG2·1 Suudarakortai S11'n\n in •.\ru1ex.tre: -
checkp<tivd. Hence
'\lllage~ TatlJa-..i.tr 75,2W ~
\'•,:holeam.Junt tc be
~:[ s. Sasi Er1.1::tt:prises. Itern-16
eo:cluded
(Doc 1\-o.563 90 dt.l 2- 7-90)
~
IC Land 20.d building arThiru 'i-Ka N
Industrial Es.tare, Guindy, in
S.>.-oJ\55. 56, Block:\c.6, extent
5658 Sq.ft, Shed :-:o.C-S,Ad<·ar 5,2S.!J39
5110.,. . n in -~mex:ure -
~
...\cquired prier to
c~k period. Henc~
-
0
- .J
~

v.
whet e amount to be
\ill age - ~f's_ J.ayaPublications Item -17 IZl
excluded
(:D.:ic X0.46·H} 90 dt.3.12. f990. of h
~KO, _,.\d yar
?o
Items E'\-idenceand Exhibits E,·idenc.e Jtnd Exhibits relied Trial Court Hl11h (/)
Description of ,.n.lue
upon by A.ccused :"o~ court
~
0

sbow11 in rell«i upon by D\ AC '\.·alne iJS pEi· d&eic-e findins;s
tbeite:n in •.:\..cC"ordioz
~
Annexur~ findings
_-\.nnexure l l toDYAC Exhibits P\'·''s Exhibits DW's
. Il
31 E.'<~P-40 D"'-90 (Vol 0
(Vol Xo.92,pg. "Tl

~~
No.14_,_pg. 188-195 :fr
Co5t of&:quisticn \.talue to be considered Ex-b-379 (,_.ol
105-106) pag• 190) Para 77.l & Pa~
of )..faha Suba PW-IO is Rs.10,00,.000; No' :16~. pg, 21
D\V-88 (\'cl 77 .1, Pg.166:2 Xo.978
.Lakshmi Kalyana 38,51.-000 (\.~01 No. 2. • and· hence - 24)

~~
1'o.92 Pg. -1665 ofVo-1
;\fan dab am, pg. 54-59) Rs.28;51,000--is to be Exhibit not
105-176 of.'\,.ct_'\ 11. ?-.'o_I'\,-

;:;::c: ~
C11~u11ai l -06 excluded. considered
~ Page.. 175)

D\Vnot

~~
cOOsidered
33 Since 1he cost of Ex.D-236,
machinery purclia=I Ex.D-237 & t::i tTl
~~
Cost of a.:quiStion
by .4.nj anre·ya Primers ExD-238, Pg.
of shares by~-! s.
Pvt Ltd is s.ho't'\n :as 12 i, 122 & 123
-~i aneya Printers Kot a:cqited Cl :-
Rs.:D,16,0011- has of ··voL !SJ
~P) Limited at Ko.
been included in item Ex-D-1: 76 Page DW-89
Page !'\o. 1820 ::t '-
4S ln:ti.er Ring ~!Ol:dat<d
"\-.,.ol (\\")1 Xo.91,
to IS~:?- 0 ?'.;
.g; :>
P\V-!5 294- of .:UU1exurC 11 in· 117 ParaS4-.3- to
Read, l}l.09.1993 - ~e 177 -
Ekkam.1than~al., on fa- P-4~
(\'ol "!\o ..:=: \-"o-1 .).""o.l page 113, ~·c_l56 and
lS!)~g page
Para S4..5 of Page-
r
1-9-93 (To\'r-.ntls
S-4,21,000
Vol. 14 of
p;:;;ge 77-S3.) the" :;aid amount has IO Ex-P-1519
1S5
\.,.clXo.\.11 l\.-o.979
of"\.,.ol :- >
~r
at page be excluded ha~ and (bank

~
0

tratl5~ of shares Pg 107-112} D\'l. 88 (Page "N"o.IV
79 only Rs.64,05.000-- statement), Pg,
'Ko. 12 7 of
cfR.s. 64,G5,000·- at page 108
(shares purchased by :63-276 cf Vo-1 !'a .92)
machine:rv CC5t. of
A-1) is: to be \"ol 61 _(C.-\
Rs. 20,16,000·-
coruidcred Hence the ?>.'o.2196 • CB) Ra
from Tr.Xan.~-sh 0
~.-aluc of Rs:. Ex-P-20SS
Shroff
10,16,000-- is. to be {\"al ~o.6..;, B;
ex duded page265J

::t C) "Tl tTl t::i (j to > -..)
0
w
-l
::c:: Cl "T1 trl t::l (") a; ~ '.i;:

ltElllS E•idence and :Exhibits Trial High
De>criptiou of Yalue faidmce and Exhibits
Slo"·n in relied upon by Accused ::'\o.2. Court court
the item in According relied upon by DYAC
Aooemre- Yalueasper defence findings findinS:s
Aooemrell toDVAC rn
Il Exhibits P\rs Exhibits DW's

64 .~onntpaid
to\:.ads the ccsc
of acquisition of
ICPS acr.s over
Ex.P-139 PW-51
(Vol. l"o. (Vol. No. 3,
Cash payment o fRs.
4,65,000'-is d.,Ued
Para ji.41
Pg. 1667
-1669 of
I
(")

3
and abow the 4,65,001)
Vol. \1L
and liable to be
do...--ument v2h1e
21, pg:
233'240)
pg. 1-17 21
poge 12) <:<duded. TC Accepts
c:i
dee no. 42'94
dated 8 2 1994 of
our case
~
0
SROXonh
:\ladras
.
c:i
rn

66 ,\mount Pllid o;-er P\Y-46
and above the (Vo!.l"o. 2, Para f7 ~.
Ex.P-124 Since it i;. ;.aid as cash
cost in document pg 228 -236) Pg. 1667-
(Yo! pavment
l"c .43 94 dated A.dmits in
!' 1669 of\'oL ~

.;,ss,ooo Xo. 22, The i;hole amolUlt of N
51·94,SRV
pg. 165-
cress the
RsA,S5,000-is rob•
\1[
....
0
-l
Nonh :\!adras to consideration TC ..\ccepts ~

1'1) excluded_ Vl
the seller sho"n in our case
tzl
Tr. Gopinath Doe<\ h
is correct" ?o
c:n
Itaus faidmre and Exhibits ~vldence and Exhibits relied Trial Court High ~
shown in
Description of
the item in
Value
_.\.ccording
teliEd upon by DY AC Yalue as per defmce upon by Accusld Ko.?. findin2'.s court ~
~
Annenu·e finding
:\nnea1rell toDVAC E:l:bibits P\\'s .Exhibits D\V's
- II s

~~
. . .

Acru.al fa.P-30, 31
Though our
con!ideration paid and 32 -
~~
case-is
ro PoA
-~>
accepted no
Tr. Jagadosh Ex.P-H- 2,35~"!00 deduction tvas.
70. A.Raja S o. Alagu Sale (C;ish payme:rn of given tot~
(")
Raja, 22, Bazulm 5, 70.200 agreenienr
Rs.3,35,000·-dcnied) tune of [; :<
Road (\"d.Xo.!4) In the income tax Rs.3,35,l}QI}- z c:n
0 tTl
~$
Chenuai-17 by DD Ex.CL returns ofthe v1'!ldcrs ref page
R.5..2;35,200'- 211d PW-16 1837 of Vol
Pg.78 '?9, in Ex-C2 itself Page
by cash Vol SI, (\'ol Ko. \TI: Page Q :-
sho"~ that the sale Ko.9i8
RsJ,35,1)1)(}'- on 2,Pg. 1'o. f6:'4 of ::i: '-
Ex.C2, Pg. cons:ider:nion \Va5
Yo! :'.\o. \1! of\"ol 0~
g:; >
S.3.!994 for 34-92) 3[
80 -SI, Vol. only Rs2352:00·-. His :'.\o.IV
purcha..<e of6.75 pageS6 • t""'
81. income tax rm.mis
cents covered in
belie; bis or:il
:- t""'
~
>
Doc

~
ttidence ofrecoipt of
Ko.IS9·book.+ of
cash. Hence the ,-aJue
199~ dated
of R.s.3,35. 000 - is to
9:3.!994 -0fSRO R<>
Adyar (om1ed by be excluded.
Greenf2rm ~
c:n
Hense)

::i: Q 'Tl tTl t::J (") til > -J
0
Ul
-J
:::i:: CJ 'Tl l:Il ti () to > 0
0\

~-- ---------------r----------·------·---·-· ·-·--· - - - --£,id€nce and Exb-ibits r~lled --Trial - - -Hi~
Items
shmTn in
Description or
Value :E"idence and :E:diibits up on by Accused l\o.2. Court court
the itE111 in According relied upon by DVAC Value as per defence findings findings
.Anne.uire Anne>:ure II toDVAC
. II :Exhibits P\Y's hbibits DW's
Actual
en
c
com;derarion paid "tl

~
72 toTmt. Gayathri
Chandran Wo Deduction
5,30,400 \Yas given t1J
K.T. Ex.P-44 - l:Il
(Cash payment 11f themneof
Chandara<·adanam Sale PW-16 Rs.3,35,000- Page ()
, 22, Bazullah a.greanent (\..ol 1\o. Rs.3,35,(i(J().
denied). l'o elidence to l\'o.97S 0
Road Cheiltlai -17 S,65,4iJO t\'ol l\o.14, 2,Pg.S4 - 92) sho'"- cash payment
ref page 1837
of\'ol VII;
cf\~oL c
BvDD
R.5.5304CO - and
pagel24-
128, gpge
arpage
So Hence thl! value of Paee
XcJV
~
R.£.3,35,GOO;- is to be

~
by cash Rs. 126) l\o.16S4 of
excluded. Vol. :\'o.v1!
3 350CHJ - on
8 n 994 (O.,ned 0
by Green Farm
House}
~
en
•.\.cmal Ex.P-45 - 2,35,20-0 Thcug.h ctn·
consideration paid Sak (Cash pa,ment of case is
to LT agteanent RsJ,35,000 - accepted no
"'"
Chandra<-adan:m t\'ol ;\o.l+, denied\ 1\o evidence to kie-ducricn "4S
22, Ba."1.tlla11 page12g. P\\•. !6 shC\\. .:a91 pa~~ment. gi\·en to the
Page
!Road, Chennai -1: 133, gpage (\'cl :--•o Hence the value cf tune of
:\'o.9:3
'N
b:;DDR;.
23:200'- on
S 3 9~ and cash
Rs.335000 - on
5,-::e,.::oo 129) 2,P§". $--l. -
9cJ ar page
36
Rs-3, 35,000·-is IC be
excluded.
~.3,35,GiJ!:<:-
rdpage 1S3:
of Vol \11;
Page l\o 165-'
of\"d
C\c.l\' -
0
-J
~

V1

10.: 199.; of\·ct ).+o en
nr ()
(Q-,, ned b:• Green
Farm Heusel ~
Items \~alue E•idence and Exllibits E•ideoce and Exhibits relied Trial Court Hi&h rJ1
Description cf
shown in
the item Jn
Accord in relied upon by DYAC \~alue- as t>er defence upon by .A.cc-used-:'\o •.2. findioss court
~
~
Anne:irure g findings
•.\nnemreil E"hibits P"\\''s Exhibits D\Y"s
-ll toDVAC
Page no. 1659- ~
EJt.pc17 (VoL N<>. 13,
pg 2>5-2J6) i.e. Sale
, 1660. Vol.No. :r::
VI! says ~>
deed
Rs.191}000'-
shO\YS
as PW161 zZ
"C :;ti

91&92 Ex.P-46 consideration and ~ideni;:e is
~~
~~
Rs.20800'' as sump probable ( eycn
-!380 sq.ft. land rvo1 }..c_ 14. though it is
cha-g6. Registration
''ith 510 sq.ft. pagc 134
charges Rs.1.995'- and contrary to the :J:
~~
house In SNo. -137)
Rs.37,"00 - ''ntten
5 SSi2.A, 2B in Ex-P-17 torupo-undi ng fees
Point P\\'-1.7 document). 0 til
Thiruvcnkadu
Xaga- colony-
etccss amount
Ko.91
RS-2,65,00
0_1_ Poirit
-
(Vol No.13)
Rs 190000
stamp
(\rol Xo2,
pagc93-
95)
totalling
Rs.2,49,995l-.
Henct
to

Rs-265000·-
In Statcmoit
undct
CrPC,
313
-~
Page
Xo.97S
of Vol
s: ~
o~
paid to seller sh\>..,n by m,._o._c is :J: ......
Ko.9:; -Rs. P\v161 d<ni<d No.I\'
Tmt Smdari
Shankar over and
3,10.000--
dury
Rs20,SOO'-
(R.amesh)
\'\l'.Ong_ TI1erefon:
Rs..15,005 . - is to be pa;.-ment of @ 2<
til :i>
excluded. The- mtitt aiy cash ovo- • t""'
abo,·e-docummt and
,·alue registration
cash paJ"Illiettt
Rs-3, 10,000· in Item
of f and above the
sale
~>
~t""'

(Sasi Emetprises) charges
Rs_1g9y_
No.92 also to be conSderation
~
excluded as thereisnc 1 ·
C'--idcnce. Hence die
The relevant >
p~e of Pl=>
sum of beth itan ~o. L··.s
~
311$-\l."ef
91 & 91 i.e-. 313 ofCrPC is
Rs.3,25,005'- is to bie rJ1
enclosed.
exclud<d.

0 > -..}
:J: 0 'Tl til ("')
°' 0
-..}
-..J
:I: a "Tl t'Il 0 Cl t:tl > 0
00

ltEms Descr:iptioo of Yalue Evidence and Yalueas pEl" dEfmce Evidence and Exhibits relied Triill Cou1·t High
shown in the item in :\ccording Exhibits relied upon by _.\.ccusecl :"oio.2. findina:s court
A.nnexu.re _>\nnexure n toDYAC- unon by D\7 _..\C findinp
-II :Exhibits PW's :Exhibits DW's
Value of shares as per r.n

~
DetCnoeis as. bd..O\Y"":-
T'Otal '--aiuc o-f Shares-
Rs.IS,42,000
Less:~ \lalue of 3,60,0)0
Vol shares ,gRs-3--- per share
X0.61 cuned and. relat:E.g to .4..-2
to A-4 -Rs.1C-.so.ooo·-
Cl
page
0
Co-st ofTransfe-
of 6,14,000
290 £~-
P-1529-
B.alan:e = Rs.7,62.000-
·1.:vhich needs. to be
c
shares of = exdudoi Paymmts c:i
~h:R.amr31 pa~~It made throu$h bank
-~" at
"\.-oidam.palai at
of
Rs3.CO
statdnO'lt cf -~-2 to ..\-4
arc Ex-P-1 :'29 (\'ol. :"c. ~
1he rate ofR.s.3·- La<s 61, pg 290-291)- = Para 77.5,
PQ".1670-
Poge
Xo.919
0
117
p~ share from
Gandln and
IS..+2,000
d:i<ed
10.12.94
pa~m~nt of Rs.3.60 Lacs,
Ex-P. :2.i5 payment by 16?1 of°\.'ol. of Vol. c:i
r.n
byChj •.\.-i - pag~ ):c .. 27 of'.\JI. \'I! Kc_f\ •
od1ers (6,.1 S,000
sh2r~ No.8213 Xo.76 (\ 01 'Xo. 76, pg.
0

rri.nus +001) P\\- 52 1- 365) - Shar~ transfer
shares} fa-P- cenificate- Rs.360000 -
Q..-Irs. :.:+:. payment in \--ol. ~o.62 a
>.Sasika1a; Page page 36- Ex-P161S, Ex-
~-0, 330 P.1111 - Pa•'ll'..ent bv ..\3
of -Ex-P2245 pag~ 156 of 'N
"\·ct.
"Ko. '5
\:oL 76 - (\·ot :"\c. 58, pg.
221-222'1 &E." P.1113 -
Cheque paid by-~· ";\'ot.
-
0
- ...)
~

V>
:cs. ">· 2::5 - ~:::s1 r.n
r~pe.....-c:h-·ely. the
H<n<»
Yalue of Rs. 7,62..000'- is to
(j
be exclndEd. ?v

I
Itens Desc1·iption of Value E'l;denc.e and \"alueas pB" dEfence :Evidence and Exhibits. reU-ed Trial Court IDgh
findings court U'.l
sb.OlYD in the item in .\.ccording Exhibits relied upon by Accused Xo.2.
A ..nnexnre Annexure II toDVAC unon bv DV AC findings ~
- II Exhibits
fa-P-105
P\V's
J.6d1 share ofLuz Clrun:h in
Exhibits DW's ;J
O>st of
a::qusi1ion cf Luz
.'\l·erue
"'110
(Sale de«!)
the name
:\frL">.S:asikaa,
of
JS
~
pccperty aber ttl211 (Vol. Housing and ~
the amida-aicu '.No21, Devclopll<!it; Aq:aneya ';a ?;
°""''«I
dromatt
b:~· .page97-
136)
I\inta-s
Private Ltd, Jaya
Excess amounr
paid by cash as zZ
NJs21195
252.'95
tu
of
and fa-P- PW-43
111 tofa- Vol:No.2
C0!1Cr'.,.ctois and
Builders, \ .N.Suihag2ra1:1
1
pleaded by
i:rosa...-i.tticn
~~
...... :i>
Pas!el'o.978
SR.O:Ncrth P121 Pg. 204- & oot accepted
cf\·01. (')~
159
:\Jadras iir the
76,00,000
(chall,m,) 21.:f,cros:s J.Elavarassi r~·dy. byrhe Tri;il 1'\o.1 \~ ::i:: >
!'l!P= ofdeaing (Vol Oii The a:1tir~ CC\.ut.. > :<:
the loon tha srocd 00.12, 29.1.2003) amount of Rs.76,00.l')O • Para 77.S, Pg. z U'.l
in me =• of ~137- =e:! to be 1673 -1680 of t:J til
pcop<rtios in the
india1
149) given in ca.41 is. to be
a duded.
\"-0!. '.11
~$
.Bodi: 0 !-
.>ibiranapuran ::i:: '-<
(\JrsS.Sasik:ala) ?;; ~
-E-:-P-105
A-2 purdia.""'1 item in
>
•til t"""
SSo34 to 48 sJlC\,11 in !-
~r-
>
..>.nnexure JI durin<! the died:

~
p<llcd fer fu3,"9,683 · as
per D\".~. Tiie my sane Para"' .64,
168 168 .;Q,197 items &e s.,id by ..\.-2 ro PJ.16-i9 of
). [eadc'\Y _.l.gro Fanc Bi 'l·xe \'ol .\'lI - Ro
l.inited foc Rs.2, 91\DtXJJ. arrl I:\)C'$J1Ct
~ san~ are sb~n~u
again as Item Ne. 168 and
noticiethat
iien.1£ 2re
2
U'.l
169 oL',mexure-H. reoearecL

::i:: 0 'Tl til t:J (') t:c > -..J
0
'°
:::i:: Cl >Tj tTl t:l ("J to > -
--l
0

nans Descripdon of '"alue E,·idence_and Exhibits , .. ;due as per defmce £.,·tdence and "Exhibits relied Trial Court High
sbown in the- 1ten1 ln .\cco.i: dtng: reiecl upon b~- DYAC upon by Accused :Xo.2. flndln~s court
.Unexure ..\nnenire I I toDYAC findings .
-II :Exhibits I .PW's Ex.hibitS D''·'"s
TI1ese items. 168 and [J'l
169 :are required to bC
ddctod from
~

169 169 40,197
•.l.fmcxme.,.IL Only d1c
Y21.ue of the items
S.No.34 ro 48 are to be
retained and item No..
i
("J
0
l~S &·169 amounting
to Rs.S0,3-94- - is-to be c
ddcted
.4.nnexure ll.
from Cl
173 E~o.1clirure
tO\-'\;ards
86 •.91.000 P\V-8-1 (Vol No.
4. pg. "32-t!. at
~
0
page 38) Furth«
acquisition of
Indo-Doha cross ~ill go to Cl
[J'l
Otcmicals and sho;.v no cash
\-•alue as per deft:n.Se P.ara94- 9-LS,
Pbanrui:ceutic2ls paymm.tof Pg. 1927-
is Rs.Sl.91,000- -
Ltd at Cuddalore Rs.:",00,0C>O- Ref Re-
~ice. che.disputed 1935 of\.'"cl.
(I) Ti· .. A.y~.·adurai -exam
•·alue of VlIL
promoter of Judo Page41,
Rs-5,,00,000·- 't\hich
Doha VoL
has bieen allt;!gc.dro he ~a e,·2luation
~o.I\" 'N
-
Pbannaccuticals Pg 1930 of
paid in cash is to- be 0
~..35,45.000·-
ex duded. \.:'"cl. -:-..·o. \ 1U - -l
l2) To interface Page ~

C(o.9"9 Vl
capital ~!arkrt
[J'l
shares 2A-,05,DOO of ':"L
~o.t\·
(;
(3)rn [ndBank -
27,41,(;(;{). - ~

•
High C/l
llems Description of Value 'EYideoce and.Exhibits ValueaspEI' demce 'E\idenceand 'El:hibits Tt·ial Court
shown in the item in .\.ccordiog rElied upon hr DVAC relied upon by Acrusei findings court ~
Aonemre Aonemrell toD\"AC Xo.2. findings tri
~
-II 'Exhibits PW's 'Exhibits DW's
174 Para 78 .1, Pg.

~~
1683- 168 <>f
Vol. ViI Trial
Court agree:;
"ith the ~~
;:; ~
l\ew·additlonal contention of
corurructicn in PW-I17 the accused ihat
Building at 5- A,
81})5,000
(VoLl\o 5,
Exl).306
(Pg. 122-168 ·g
the proS<cution $: :<
B, and CEast IPg.86, cro;,;
Without prejudice'. has net prowd z C/l
(..>,mount 10 be 163, the C05t of Cl !:Tl
~~
Coast fa.P-073 108-109, DW-95 Pagel\o.
accepted is VoL 157) construction vet
l\eelankarai (\'cl l\o. recalled (Vol. Ko. 866 to 889
Rs.40,39,(H9•-) and '.\'.OT ~anted 10~'0
Chennai -41 35,page 116) ..
92.Pq_ of\"ol. Cl !-
hence balance cf CO:.XSIDERED
reduction in the ::i:: .....
~~
(Ref!J.Jc. l\o. 70-1711 SeeDW-75 203-211) o\·erall cost. Ko.IV
Rs.40,35,981 ·. isto BY THE
Hence the
4752 93 SRO
.~ayar)
(Vol. Ko.
be excluded. TRIAL
prosecution
.m ~
91. COl"RT eridence ro\\ards !- >
(Sa>i Pgs. 181) ~ t""'
-cost oi :::j
Enterprises) construction is.
li2bTe to be $:
rejected in its Pl>

~
entirety. See
page 17 55-56 in
\'ol. Xo.\11

~ -..J
::i:: Cl 'Tl !:Tl Cl (j ;J>
::i:: Cl "I'l tTl t:1 (') to > -
-:J
N

......
Description of ,
V 1
a ud~
I
Evidence and Exhibits
relied llllOll bv D\" ..\.C
Ya Jue n.s-perJEvidence and Exhibits relied
defence upon by -~-cused ~o.2.
Trial C.out·t findings
High co-uri
findings
shO'\l'D iD
•.\.nn~re
theitemin .~ccor ws. I · P\V's ow·s
-""-nnexur e- n to D'"AC .£.xbibits .Exhibits
-II
Ex:.P-96 to Para 78.2, pg. 1689-1696 lZl
Ex.P-103
(\,"cl. .2::- The property '\-\as
ExD-2:'1
(Pg. 3 to 9,
~
\V-S3 ~'\~ol
1 cf'\:o.l. '\TIT_ Trial Court

agrees. ''ith the
.,,c
~
""o-. 92., pg. 2.3- contention of i:he ac:a.1s~d
Ke'"" .-\dditional P;!.50 - 55: purchased ''ith ,.oL-156)
35) D\Y-93 l~'ollthattheprosecution has-not
Construction in 56- 61~C2- building and nc to Ex.D-Z57
i?\o. 92 P2. 212- pr0 ,·ei..1 the cost of
176
Farm.House 67: 6S- ?l:P\Y-10', lnev-;:c~nmuction (Pg.19to2D. ~in ~ Page"~-o, tTl
construcri en yl':t pnnted
Ba11galcws at 71:- 76; ;7_ "\."cL .;, Pg. has been carried Vol-156) Ex- \y_ 95 \"cl. S66 to SS9 (')
20°0.reducrio11 in the-
1,25, 90,161
ll 7-1~3, at -out during check cf"\-oL 0
Payyanur in
Che:ngat •.l.nna
SO,
Sl-85 & 86- page 2::1; period. Hence
, ~~~~~; ~~;~ ·o.9~-Peye 2~4
c•·.erall cost.Hence the
:..-o.rv c
~
prosec:uaon e:'-1dence
Dist ~l) ithe '"hole amount Vol :Ko_l56) XHIBITS L" toi.'\·ards. cost of
cf:Rs_ 1,2.S, 90-,261 '\OT

~
(~-frs.X.Sasikala} Ex..P-662
- 1695 OF construcnon i:s li:abl<!- co
G
-,~c-1. :\c . .;;,..;.. is to be C"tduded CO:KSIDER -oL '\O.Yll bie ;;-q .:cted in its 0:1ti1··et:y.
Pg:·. ED
0
~
3J-S7)
E."\..D-.239· t:C Para ?S.3, Pg. 1696-1 :'1)1 cf
?\-c.i.·- additional \"ot. \.·rr IPaee Kc.S61 lZl
Ex.D-243 (Pg
constntction Since: the to SS9 of
12-4-132; 133- Trial Court agree:;; the:
Bmlding at dcOi" prvpeny is not \·'ol
l 7"7 13..;;i35-137: co.ntenti~•n cf the- a.:ctts~
No.4S Ja·~'-harlal C\.'l..ned by Xol'i:
Ex.P-l563
I 1....1. \,_ 1,.._v-..c.
13S-1~1). that the prcsecuti on has net:

I
'Kehru Read, (\--01.1'0 3.; _..\nj cnie-.._:a_ Printers l,."l, DW-S9 pnJYed the cost cf
Induml:al Esl'.2re-
pg ss-10-n P\\·-101, and a~1t ts l)~>nc:'d ·
1s.:.1
-
(\-1}-L '!'c. 92 , t:Ctlst:rUCUCJl yet granted
Guindy :,t3,6J,..;.~7Jand Ex-P- .:.1 \'.:il_ 4, Pg. by Shastry Xu.ts IE."\.-D-.2'7".'. P2:
Pg. _21} 0 -~ redw:tic11 in the 'N
Ekk2tU.tha..~g:al
d1ennai.
•.Sh.as.try Xuts
')..!Ot,·: i\-.:il. 21'"'?-25.:n Plates. Hence the·
Xe. 1-t., P:?-
107 -1 !.21
'"-ho-ie =mlcunt cf

fu.2) 3.63. ""' -
11 S-129 :g
page t 25,
,-01106-
· ,-
203-211! o;.·et".all i.:ost. Hence the
prcse..::ution e·ndence
tC".'\"'al·ds cost of
-
0
- :J
~

Vl
Placs1 is. liable t0
(Rrnun) t:l)nsm1cticn is liable tc b~ lZl
be exdud<d.
P1..'-""l. aci."t t'or rrjeaed in tt.s ernir~y (J
ro;,t paid ?:i
tans bideoceand Exhibits High en
Description of \·alue E'·idence and Exhibits Trial Court findings court
Yalue as per relied upon br .-kcosed
5b.o"'D in
Aune:nire
the item· in .~ccordine: -relied upon b~- DYAC
ddmce :'\0~2. nndinas ~
-II
Annexuren toDYAC
Exhibits P\V"s Exhibits D'\'s @
Para 78.+, Pg. 1701-1705
ofVoL \'IL Trial Court ~
agrees 'filth the

~~
Ex.P-643
P'.'ew;additiorui Without contention of the
(Vol.No. 33,
~0t1SttUctionin the prejudice:
DW-95
aCcused that the
pg. 2S-63)
!Residential PW-98 (Aniouilt to be p~cs.e_cuti on has not Page
REFERRED (VvL };.,_ -!, (Vol. No. 91,
proved t!ie cost of 1\o,866
~~
!Building at DSo. accepted.is Ex.D-306
BlT:"OT Pg_223 ~ 230)
178 J-1 Sc - 1,52,59,076 Pg. Rs.l,Oc,47,286 ') (Pg. 122-168, consU\tction ~;et granted ro 889 of
-~>
CO::"'SIDE D\Y-76
l''ctnn:ank<ni 148-179)"' and hence Vol. 15 7_) 20~-o reduction m the \·01.
RED (Vol Xo.91, Pg.
P,cnnai pagc 151 balaocc of ovtrall cost Hence the Ko.rv (")
.GreenF2m1
House)
Pl!'.1701 OF
YOL
Rs.50, d,7901- to
be excluded
191-20-})
pr.osecution e\iden....""e
to,\ads al St of
g: ~
:"O.VII construction is liable to Z en
t::l t!l
be-rrjo:ted in hs entiret)·-
s; ~
Para '8.6, Pg. 1707-1709" a~
of Vol. VIL Tri21 Court
::i: ._
agree-s the- cotJiention of ~~
Xew additional
P\Y-!07
(\'ol
(.~o\Ult to be
accepted is
the accused d1at the
prosecution has net
.t!l F:
c011structicn in 1'0.4,pg. DW-95\VoL
proved the cost of Pagei\o_ ~>
Ex.P-66! R..' L.25,06,305---) Ex.D-306 ~t""'
the posh :ti'-253) !'ll. 92, p~ 223-

~
(Vol. and henc~ balam.::~ (Pg.-121- consau....'"t.ion Yet granted 366 to SS\
lSO Bangalo··'-· at 5,40,52,c9S P\V-220
ofR~ 168, T•:cL
230)DW-S3
20(;-il reduction in the cf\'o1
:'\o. 34, pg.1.- (\-oL Xo_ 92,
Slruth21 ur· in (Vo!
Ko IV
3-D) -4J5«·l5,.9'93·-is to 157) OYeraH cost. Hence the
Chengai ~!gr N>.lD,pg_ Pg. 2:\-351
e'i'idence
be excluded prosei:uticn
Dist 132, 16i) at ro·.-..a,dsccsc of Ro
page 133 ccnstrucnou is liable to be
r<Ja."ted l!1 U:5 ennrery ~
en
P\\·11F e\1da1ce: iS;
Ll!lfclial>le

::i: a 'Tl t!l t::l (") to > -
---.)

~
:::i:: a "'1 til tl (j ti:l > -"""
-J

Items E\"idence and Exhibits Yalueasper EvidenCE and Exhibits relied High court
Description of Value Trial Courtrinding•
.i.own1n relied upon ~- DY AC defence unon bv A.c.cused .Xo.2~ £ind!ngs
tfleff.emiu According
Aunexure Exhibits PW's Exhibits DW's
Anne>.-urell toDVAC
- II .

Cfl
Para 78 9, Pg. 1710- c

~
1722. \"ol Vil Trial
cow1: agrees '\"\ith the:
New additicnal Without pr<judlce conterttion ofche
construction in fa.D-306 DW-95
20cuso:i chatthe Page til
Building 2t sea PW,116 (Pg. 122-168"' (Vcl No.92,
Ex'P~69 (AmoU!l! to be pr1Jserutionhas not (j
'1131 a'.'<t110 (Vol page Pg. No.S66
(Vol ai.."Cepted is proved th~· cost of 0
183 Xo-2'1-B-3 80,36,868 N'-5,pg 157, Vol. .1~J-230J to 889 of
apartment
No. >l, pg. 3-1-85)
RsAS,10,670·-} 15-7} mV-79
conmucrion ya: granted Vol. c
Sholinganallore
lSl-2.JO)
p~39
" and hence bal 211ce
:'\OT (Pg. 222<:3 7,
2~{ireducrion in the-
over.all cost. He-nee the
No .. I\' Cl
ofRs.32,:6, !93 - \-oL 91)
Sadapet Tahik CQ"\"SIDERED

~
to beexcluded pro sectttion a.;dence
(JF2tmHouse) towards co!t. of
construction is liable-to be
rejected in its entirety.
0
Cl
Cfl
Para os, IO. Pg. P23-
1727 of Vol VIL Trial
:N'ew additicn:!l C4.'.IITT a.gr~ '\'\.ith che
Withcut prejudice of the
c0115l'.1Uc:tion in contention
P\\'-116 Ex.D-226
Btildlng at deer ace.used chat the Page :N'o.
ExP-670 (\"cl. (•.\tno-unt toJ bre ~g, !SS - DW-SS
:'\o. 19 proset..l.ltion has not 86~ ~
(\"cl No. 5, Pg. accepted is 186, {Pg. 105-1 7 6, N
pro\·!!d the cost of t0: 889 cf
lS4 !':mammal St.
).fyl::pore.
Chennai
8,00,0CO 1\-o_ 35,, pg.
1-15}
34-85} at

page .fO
Rs.6,-i.2,290"--,i and
hmce ba! auce of
Rs.l,,57,flO -to
\-01.114)

page lS6 "'
,-cl?\o.92)at
page 109
construdlon yet granted
2lf0 reduction in the
o\:erali cost, H~nce the
Vol
:"O !\" -
0
-J
~

Vl
(la.ya he excluded
Publicarioul prosecution ~ndet:a.:e Cfl
"CO'\"Z"ds cost- of (j
construction 1s. liable to
be r~ ectcd in its entirety. ~
Items E'\-iClence and E..Utibits Yalue-asper Evidence nnd Exldbits relied mi:.h
Description or ''11.lue
reliied unon Jn· DY_..\.C defence u"l'U'>.n by ..\.crused 1\:o;2.
Tt"in.1 Court findings
court
r.n
~
!ih.O\\·n In •.\.ccording
the item In findings
..\nne:µ1re tom~Ac Exhibits P,\~s .Exhibits DW's
Annei"'Urell '-l
-II
1S5 I I Para 78.11, I'g. P2 7- tr1
1729 of vol. \'II. 0>Tj
Trial Court agrees
1\-e,v additional mV-79 ·with the .contention cf

~~
'W"ithout Ex.D-2 7 7 "(PH:.
construction in 118-129 arpage (Pg:_ 222- the accused that
preju~.Ce; the: proso:t.nicn has
residmt\21 23 7,
r2s.
~~
(..\mount spent Page
building ar dcor PW-116 Vol. 156) Vol. J'o_ 91, not proved the cost of
Ex.P-666 for caustntcticn con:structi on Xo.866
(Vo>L 1'o. \:'C"t"
Ko.
"'
~~
(Vol. Xo. tQ be accepted is '\''alue ofpropert:i-·
21 Padmanabh2 20,43,000 5, -Pg. 34- .including 1311.d page.!:+) granted- 2-0~0 rcdt~tion to 3S9 of
3~, !>S 113- Rs.I 9,05,8681-)
in the OY'er3.!l cost. \'Ci.

~
Str«t, SS\ at v.alueis DW-88
T'N"3gar,
139)
page 36
and hence (Pg. 105- Hence <h• ~o.J\·
balanc.e of Rs.350201s·-
Cltennai - 1 7 176, \,·oL1'o. pro~a.uion ~:idcncc
()
Rs.i,37,132-'-to :-OOT of

~~
(.4.Jtjaneya 92 atp~c toi.vards cost
be excluded CO'.\'SIDERED construction is.- liable
Print•«) 127)
to be reje:ctei in its
entirety. t:i tr1
186 I I
I I I I I ~~

.
2*.S3,759 1· Para 7S,1.:'., Pg. 17:9--
1 ?30 of ''ol VIL Cl :--
Trial Court agrees ::r: . . .
the contmtion of the 0 2<
mai: r.n >
r~ ~
DW-76 accused dl<
nsttuctton tn PW-.9S
j\-atue to he (\ "ol. ~o prose:ctttion has not Page
.trl t""
<kuti21
ldingar Ex.P·641
(\··ot No.
":cnsidere<f i::;
fu_ l 3,SS,361--. _ E."'i.D-306
91. 20..;.,
pg. 191-204
pro\·cd the CO$t of
coilstrucricn vet granted
:-- t""
~
>
.1 66 ..:Una (\"cl.');c.
4, P~. 148-
~ence the sum of 1.·Pg_ 12~-I-6S, at page 193- 2(i-0 ,..; reduction -in the
~o.S-615 ......
1 ?9 arpage
!Rs- !IJ,98,39S·-is
ro SS9 vf >-l
agar Cheru"3i [.).\pg. 3-17)
PS, 149 &
,-01. 157) 195) DW-95
(\~cl >;c.
.:::rv~l
the
C'05t. Hence
pro s:e.:t.tt1 on
\·01 ::r:
an~o.14~
r.~exl.U"ell;. (DgE
ISO_\
o be exdud«i
92, pg. :13 tJ e'l:idence to;...-ards
:-.:'o.1'' >
.&:S<f"\"ol. ::"o.l 230) cc st of ?.<>
COilS-tfUCti .....,n is
liable tc be'. nc>jected 1n 0
its entirety. :--..·~ ~
l.lnder ~ 13'
r.n
quesn01~
CrPC.

::r: Cl "Tl tr1 t:i () OJ > -
-..J
Vl
:::i:: Cl 'Tl m t:i (j to > -
-J

°'
Items Description of ,.alu~ E\-ideu~e .and Exhibits . I.,·idmce and :Exhibit~ relied High
shOll'"D in -~ccordin r0iedupoo byDY.-'.C 'alueasper upon by .-k-cused.:\o.2. Trial Court findings court
the item in
_.\.nnexure _.:\..nn exure Il to DYA.C - defence findin2s
- JI Exhibits PW's Exh iblts DW's
Para 78.13, Pg. 1730
187 en
- 1731 of \·oi. "\~II.
Trial Court a..,crees
c:
"'O
-.....1th the- contenti~n of
Nev.· additi on al
coosuuction
in Building in E"\.P-042
PW-9S
(VoL No.
\\ithout
prejudice:
t ..:s.mount to be
Ex.D-306 DW-90'
(\"ol .Xo 9.Z
the accused that
the prosecution has:
net prvYed the cost o-f
Page m
~
acc~di~ (Pg. 122-16$, Pg. 223 - :10) ~o.866
dcorl"o. S r--ol .;, l'g- 148- ccnSTn.1ction yet (j
10,92,S.!8 Rs.5~4-7,10:2·-) DW-76 to 889 of
).Jurugesai ~c.33, pg. grant~ .20J:l 'l rcdttction 0
\."oL 157) (Pg.191-~04, Vol.
Str~ T !'\agar, 18-27) 179; atpage-
andhence-
balance of :XOT \'oi ::-:o_ 9!, at
in the o..,_·erall co st. Jl'..-o.f\~ c:
1s:: & 1:'3) Rs5,+5, 726-'- tc
~
Chennai 17 He-nee the
CO:XSIDERED pagel9! &192\ proseattion e"'.idmce
(.IRe.ciE:lae:) be <%duded

~
towards c.o;:;t af
constn1cti1Ju is: lial:::le
to be :rej ectcd iu it 5
.entirety_ 0
188
P2ra ?S. l .+, Pg. l ?31
~
en
DW-95 - 1732 of \:ct. "".,/IL
"K~\V additional cv-cl. Kc .91, Tri al Court agrees
Vi--ithout
ccn:::truction in Pg.223-:3G) ·•1.:ith the- c1.1ntenticn cf
prejm.iice: DW-92 the accused that
1·esidential (.~ncutu to b~ Ex.D-306
building (-+ ]\¢s) PW-116 (Yo!. ~o 92, che prosecution has P2§"~
Ex-P-66S accepto.i is (Fig. 122-l 6S,
in rhe- campus at ('Vol. No, Pg.~03-:11, a nm: prcp.;ed t:he cost 1'."o.866
(\-ol.~c fu. 29,S2392-) cf ccn;:;truction vet to SS9 of
?'0.1-2.;-0 53, 11-WO 5,pg.3~- page ~
and hence \'cU-57>
3-L Pg. 2l:allai .?:1:it' ~ red.ucticn
-
::D3 & .:o..;) Yo!. N
En.jabakkam in 85 at pag<!
1'\~\"
1:'1-lSCJ 3 7}
:xor D\\-- '9 in the o-verall cost. ):o_I\-
0
bal-a11c~ of CO:XSIDERED
:\Jahabalipuram Rs1:<,28,6DS·-trJ
(\"cl ~0- 91, Hence thC' .::l
road Pg ..222-.23 :, at prv-secution l!'ddeKC' Vl
beexdudl!d to'l.·,-ards cost of
(;,Farm Hause} Page 2 2S .:.\: en
c\}nsrructicn _is liabl~
229\
to be rejected tn its
h
entirety. ~
Items £,id.wee and E'\:hlbits J:elied High
Description of \'"alue E'idience and Exhibits
shmTD in
the-itEm in Accordini reied upon by D\.-•.\.C
,-alueasper upon by ..\.crused ::"\o.2. Trial Court findings court r:n
~
..\nnexure A.nnaurell defence findings
to DVAC Exhibits DW's
. JI Exhibits P\Y's ;....i
189 .
tT1
Ke'\'\i additional \Vithout Para 7S_l5, Pg. 173.2
c-onstruaion in
resid1!ntial
prejudice:
(.-ount to he
D\Y-95
· 1733 of Vol. VII.
Tri al Court agrees
~
(\~ot. Xo_ 92,
Building ar No. I acceyted is-.
Pg.::!23-230)
·with the- contention of ~

~~
:-.!urphy Street, Rs.13.31.lSY·) DW,76 the accused that
Akkar2i Chc:nnai P\'"·98 and hence Ex.D-306 the prosecution has Page
Ex-P-644 (pg. 191· }:o_S66
(J.S_ Housing (\·-oL Ko. bcl:an~c of (Po. 1:2-168,\'of. net proved the cost
20-t, \.~cl. :--:-o.
~~
(Vcl Ko. 157)
De'l•elopmert) 20,38,959 4. Pg.14S- Rs3 ,07, 77.+:- to 91, at page
of ccnstrucrion \,·et to SS9 of
33. pg. 6~-
179, at page be excluded XOT granted 10°-¢ re:iuctfcn Vol.
-~>
85) 197)D\V-92
15~·153) jcO?\-SIDERED (Pg. 203-211, in the o..--~all cost No.IV
':-ot.Kv. 92.ar
H-ence the
pros.ea.Irion ~i.da:1ce
(")
::i::
~~
p-age
tO\'\'afdS .cost of
21)4 & 208)
consnu.:tion is: liabl~
to be rejected in its. t::J tT1
~~
!Mltirer.,·.
190
Para 1s.1q, Pg 1733-
?\e-..'\.· :?.ddition.il 1735 of \·oL \"II
0 :-
Trial Court a~ees
::i:: '--
~~
construction in
Buildins=:at 'Yithout '-Vith the ccnrentiCn of
S.).:c.J.124 Plot
1'.<:i. S-7 P\Y-117
pre,udicc:
(Amount tc be:
Ex.. D<~26
the accused that
th• prcs.ecution has Page .tT1 >
r
Ganapathy
Ex-P-677
('VoL~i>.
(\"ol. Ko.5. accepted is
(P~ lS"S-186, D"\'-" -SS (Vol.
\.·ot 11-t, ai: page >O. 9.2 Page
not p-ro·~·ed the cost of Xo.86c :- >
~r
Colonv 39,.34,000 p~. 86-117. Rs.3.2, 94, 33...:. -) c"nsttucrion ·-·e:t to SSS of

~
3-S, pg. 2.7i- 1S6J Xo.105-170
Thirtlvika .rpage94, andhffice granted 2-0° e r~ucdon "\,~oJl.
320)
lf.!3 & 1(; . q
XOT at Page 109)
in the overall C05t. X:o.1'. ~
fndustrial Estate balance of
Rs.6.:19.166 • to
~CO:'\SIDERED Hence the
Guindy d1en1.ai
..
be el<cludod pro!iecUtio.}n e':id.~nce
32
(Jaya tC'\Y2rds cost of
Pl>
Publicaticn) -.:.o.nstrncri~n is liable 0
to be r~ecte-d in it5 :;o
entirety. r:n

::i:: 0 'T] tT1 t::J (") t:o > -
-.J
- .J
:::i:: 0 'Tl til ti (') IJ:i > -
-..J
00

Items EYidmce and L~ibits H111h
Description ,.alue Elidmceand Exhibits rdied upon by Accused Trial Court findio"'s court
shm,..n in relied upon by D'\*.AC ,·atueasper defmce
of the lten1 In Accordln_i ~o.2 • flndines
..\.nnexure A.nDexure n to DYAC
-n .Exhibits PW's Exhibits ~·s
Pata 78.li. Pg. 1735
-'t"IL1736Trialof C-ourt
Ve!. en

191
Ne1.,..
.4.dditicnal
con_o;;trUction in
Building 3ud
the change of
roof.for thie
\Yorks shed at
~!F 9 Guindy
1..;.11,.538
Ex-P-674
(VoL:>o
35,
pg:. 172-
PW-U7(Voi.
Xo.:', pg. 86-
117, at page
102, 109&
\Vith9ut pr~udic~:

is Rs..+. 76,525---) 3lld
hence balance of
Rs..9,41,013·-ro-
E~.D-2:72
(Vol. !56,
(_.\rncunt to be ao:eptM Pg. 103,
111:, at

:"OT
DW-88
(Pg. 105-1 76,
'"oL :.:-o. 92, at
page 108)
page lOS.) D'V-75 (\7 ol.
Ko9L Pl>- ISO,
agrees
contention
\'\.itb

constructian
granted
rafuction in
the
of the
accus·ed that the
pi-e-secution has not
proYed the cost of
yet
20~«t
the
Page
Ko.866
to SS9 of
'\-..ol.
I
(')
g
No.n.·
~
lndmmat 110) be ex.duded co::-.-sm 191, arpagc 183 o,·eraU <:Ost.
225)
Estate Chemai I:RED & IS4; Hence the
-32

~~
pro.st:1.."Ution C'\-idcncc
(Sasi tO'\'\'al'ds cost of
EntctpriSC's) construction is
liable to be r~ected
in its entlret.-..·_
(Acquired en
prior to check
Sic"nin period. Hence
TSR333
..\nnexurc - '-\.hole amount
..:...i2 5.,,<U";:j ~!azda 1,99,845 !, of
'-~an
Itcm-~1 Rs .. ~.99,8~5 -
is to be-
excluded)
P'\'-59 ("«ol. 'N

tT:K-01-09-f-
Xo. 3, pg. 5"'!-

(Daoes not
Since no am01.mt '\'\"'2S
61. at page 5Sl paid toi.Yards purchase
vf,,-ehicle th~ "hole
ParaS3-S3.1~. Pg.
180'-
Page
Xo.979
-
~
0
-..J
VI
249 3 i..\...f) 2:,96,191 admit p.aymcu.f1
amount of Rs. !Slo of\'ol YI! cf\"ol en
(Tra~J~} P\Y-69 (\:ot.
Ko. J,pg. 100'-
107, atpagc
2,96,191 · - ii tcr be
ex duded.
?\~ 2pplicarion of mind No.I'/
n
;:o
102)
Dem .E\idence and Exhibits High en
Description of Value Evidence and Ex!li>its Trial Coun
relied upcm by AccUSEd
~
sbo..-nln C-OW"t
the item in Ac¢ording reiled upon by DVAC Value as per delinre findiDgs find!b<><
Annexure- '.'lio.2.
_.\nnexure n
II
to D\'AC
Exhibits P\\'s £xhibit• DWs ~
AsperEx.P-2SS tlio
Ytbire 'W.!S
~r®scd by AL~lI{
~

~~
oo. !9.4.1991 prior to
c!Je.ckperiod. Tue said
~-tliclt 'l'<!S om:hasod as
=md !landbvAttused
~~
PW-59
Ex.P-242 ):0. 1 on I 25: 1992 and
(Vol);o. 25, (VO! Xo. 3, !Para 83 · 83 .14, Pg. Pao:e
~~
Pg.57) fromAccu..<ed )fo.l, tho !8(1]cJSJ6ofVoL XoS79
TX 09 B ti\166 pg.40-42)
254 2,03,979 Ex.P-288 See P\\'-69 said .-ebide "as \·rr-dtsrussioo. ofVoL
~i&!King)
~Vo! ),ii_ 3, ?Jrchastd by i\Jt!al
(Vol :No.
Fg 100-107, King on 22JJ995..
25.pg. 115) at page 103) Hmc. ,-aiue a!!Sl!Jied by
& findings. Xol\'
$: ~
Z en
pro=ition·fur s..=nd t:I tTl
hanih-ehi~ l; mt
justifedand henrethe ~$
full ~-a.'ue of o~
1'£203,979'-is to be ::i: ._,
del•!td
@~
El<-P-279 DW-SS
.m >
._, r
(VoLXo.25. \\!ihrutprtjudia;: D-2.2iY-IT
Rerum
('id . >
~i:-
pg, 103) l,4mcunl oo b~ ac.rpctdis Xo .92, pagt

~
T:\'09l3 6565 fa-P-1903 P\V-69 Rs.6,76,000 - I and benc. (Pg. 79-97, at ~-03
Para83-S3J4,Pg Pago
(i\!mtdosBenz car (Vol. )io_ 6}_ (\ 'oL :'io, 3_ balance ammm of pagr 94 Vol IS07- !S16 of\'oL -:-;o.979
256 9,15,0ClJ pg_ 57 -WS, 105-176, at of\'ol_
lnloott<d) pg.IL11>-107, fu.2.39.ooo--c i• oobe :'io.11-1) pag;> HJS) \ 11 -disrussion
(Jaya Pub'lcatio!l) pages 7-l- arpa~ 102) - ~xdud<d '."OT &findings. :'iol\' Ro
'.'iOI
Rs.6---roOO& Ex·P-1903-Bank COX SIDE
~
C0."1;SID£
page. 75 Dr staretrent cf JP R£D R£D
RS.76000 en
ml!Yi

::i: 0 'Tl tTl t:I (") to > -
-i
\0
-:i
:I: Cl >Tj tTl Cl ('j tXl > N
0

r· . i[-eflls--
Description or \."alue
- £ykiel1Ce""inCf£ibibiis _t-,·Tdence·3.iicII: ihib-irS: --1- J.iiglt court
f'"mdiug1
Shown in n:!li.ed upon by D'\ ~A.C retied upon by •..\ccused Tiial Court
the iternill •..\.cc-ording ,~alue ns per defetce
..\..nnexure- .So.2. findings
•.\.nne:x.ure- I l to UVAC J:xhibits .P\Ys J.:x!Ibits P\Ys
Il

As p«Exl'-2-!L The 1JJ
PW-59
(\l"ol ~o.3,vehicle '\"aS purchased by c
E.'0-P-'.:-ll
pg.57-61~ at .4.1.~~U{. on 18.4.1991
page 58) prior to chcckpoiod.
Para 83- 33.1-t
Pg. 1807 - ""g;
('.'oL
Ko . 1:\ pg.
PW-69 Thi: said ··dllcl~ i.•as
pilrcha~ as second
1816of·v·ct
VU-
Page
Nc.979
s::tTl
1:' 09B :,03,979 f.
39-40)
Ex.-P-2S7
(Vol. 'Ko.3,
pg.. 100- hand by :-..-fetal King
"\.:ehicle not transferred
dis::.ussion
& finding-s..
of,·\}l
Xo :\- ('j
6975(B.i'll 107~ a.page
257 I ;\..~otNo.15,
IG3) as alleged by prosecution 0
Tcmpo,:an)
()..feral King)
pg .. 114)
hcnc~notjustified & fill
c
amount cf
Rs.]03,979,'- is to be
El
~chtdcct g;
'~mcle :\·aluation :-

I I I I
""0
L Rs.129,4-03.35
2. R'oYit':d bv _...\A."C\.tsed
-~s per the e.~hibit die I I
I
I I I
El
1JJ
Ft.--xed Deposit in amou1z1:; a

~aSLPg I
PW201 rene'l:;-al ofthc fi.~ed Page

::59
Cai a-a Bank.
l :>.fylapore in the
Ex-P-19-ll
1.,49,5-+4 Iva!. Ko_ 63, Page d.:pcsit pt aced prior to I 1791-1795-of :?'o.9 7 9
of"\-~cl.
t>s:- 120-
name of Jaya
Publications - 1.:1;
14:, Vol
!'o.9
the check p"1iod and
him..:e full amount cf I I 'l.'o!VIL
:"o .l\:'"
.P\Y 201 Rs.1,..+9_::..;.4 -is robe
e..""tdn:ied ~

Para Sl, Pg Page N
Ff..~ed doeposit tn -~s per the exhibit tlle 0
amot.mtis. a 1791-1795 of 1"--o.979 ,_.
Ca:1ara Ball:, -:i
Ex-.P-192~ rene'\Yal vi the :fi."'\.ed Yol. '-Tl cf•\·vt
':\f'..-svreBranch P\V 201
~

(Vol. .:-..-o. dcposi.tplacedp1-ior to :-..·c-1\.-
I in .the name cf 71,213 Page 1.+::_
VI
.:61 63, pg. 121- th~ check p eric d and
'bl :\.-ci.9 1JJ
Jai:a 123) hence full aincunt oJ f (J
puflicati ons - Rs..-;1,:1s -istcbe
P\\" 201 ~eluded
- ?:i
s
~emsl
wu 0
'Desc1iption of
t11ettem b1
I Yalue
•.\c-cordins;
I
Eddence and Exhibits relied upon b,..
D':~c. -- ,~alue as per deferlce
----:u-;dence. and·
£xhibi~ relied
upon by _-!ccused
Trial .Court.
Hllili
-cburl·
findings
CZl

~
l·~riure- ..\nnex.ure n to D'"'-.\.C I :Exhibits P\Ys :-;o.2. t1ndin2s
'-'l
Ex-P-1014 (Ve!.
E:ililbits P\"\$
m
Ko. 57.... pg.181- 0
-62 items of "r1
183),
JC\"-els PW-1 79 (Vol. :;o;:
E"·P-!{)15 {Vol.
claimed.to be No. 7, pg:,253- -~U:rtd prior ro. ~>
a.fTmt.. 1'". No: 57, pg. 184- Page "'O :::a
Sasikalaas 185},
272} check period, Hotti::e Paa 79~ Pg.
Xo.9"79 -z
~~
9.3S,460 P\V-227 ( '\~oL the '"'hole- amour1t of 1756-1755 of
e\:a1uace4 by Ex-P'2208 (Vol. cf'\toL
No. 11, pgAO- ~ ..9,lS,460·-tsto '"ol. VIL
1'-:aJ'\"
-~>
~!· s. '\.-'"BC No. 69. pg. 164-
56; at page 49 & be -excluded.
185 I Trust on .187)
31-3.1991 50) ('j
E;.."t-P-2209 f'\::-ol.
Xe. 69.,. pg. 1SS- s;: :<
189) z
t:i m
CZl
Ex-P-1016 (Ve!.

~~
.34 ite-ms of Xo. 57, pg_ ·1s6-
J~vd.s.
ISS) -~qt.ired prior to-
pupon::i tlg to Ex-P-22os -('\?'oL Page Q '.-
beofTmt.
P\\·--179 (\.~01 d1eck_p~-iod Haice Pa-a 79, Pg
Ko_979 ::r:: <_,
o~
Xo-"' 69, pg_ 1:6'4- l\o. 7, pg_ .253- die ""hole·:aniount of 1 ?56-l 7S5 of
287 I Sasikala as
17,54,368 of,~oL

e\'aluai:ed by
187). 272) R:.17,5-4,S6S.-is Vol. VIL
1'oT\:' CZl >
)..-I·s. "\:-aC
Ex.-P-2.2-09 (\-'ol. tc be excluded. S"1 t'""
No. -69, pg. 188- '.- >
Trnst on 1 6-
1-199"2

~f.achinery
189)

PW-11:'
(':ol. ~o. _5,
~!ac:hi.no:ic!S :are stated
to be as scrap (no
~t'""

->
>-J
::c:
Pag>::
""alu.e-fof" the ·saro~}. Pa-aS4, Pg
5-ubsequentl '.lo' E:'i.-P-665 ~\..,..ol. Pg. 18-33
1"."o.979 Pl>
~93 I purcha5'~ 7 ,69,000 Xo-34,pg. 111- (He menrioued Hence the '":hole 1 SltS-lS?.3 cf
cf\7ol. 0
tOr ~! s 11 ~) it as Sc:r.ap a.."llOlUlt Of \.,..ol. "\.~II
Nc_I"\.' :::a
CZl
).,.fetal King \.~alue)"alsc 21P{ Rs.-::-,69,000-is.to be
26 cf\.-oL 5, excluded.

::c: Q "r1 m tl ('j to > -...)
N
-.)
::i:: Cl 'T1 tTl 0 (j to > N
N

Items -E\1dence and ·Exhibits
E'idence and Exhibits
Trial ffieh
shml-·n ln Description Value ''"alueas pEI" rdied upou by .~cused court
o( the. itEDJ in Accor dins: relied uoon bv DVAC ~--.·.,
Court
_..\nnexure d<fence finding
-~nnexllte .II to DVA.C Emibits PWs findlnes
-Il E':dlibits PWs s
\,'"aluc of maclllnery E,•c°"236 to D- D\Y-89 en
as per defense is Rs. 23 S (Pg .. l2l·; (Pg.1 ?7-

294
~fachino:y
sub~quently
Ex-P-(164
(VoL Ko. 34;
pg. WS-1 1 0}
Ex-P-2088
PW-115
94,15$83 5_.-

po~ion of
machinerv as S. Ko~
22-3 & s:xo~24 of
.Anne-c.ure
.,,
and
D"\·~ .~C has s.hO\\n a
the.

IV
122 & 123, Vol
no. 153)
Ex-0-276
(Pg. 117, YoL page 178)
Ko. 156) E•- D\\'-SS
D-277
187,
':-ol. 1'"'."o.
9::, at
Para 84 -
S~.7. Pg.

(Pg. (Pg. 105- Vol.VII.
1816-
1813 of
Page
i
tTl
("')
(Part of
item
pttr.ch~ed fbr
),f::.s. _-.\rtjaneya
2. 16,,,J.2.000 (Vol. X<>.6~.
page265}- ·
(YoL
~o. 5~ pg.
totaling Rs.
53,co,ooo·-. Heni.::.e
I 1S-i29, Vol. 176, Ex-D-235
:-.:o. 156 at page , ...oL No. (Page 120,
No.979
of·\·ot 8
)"o.33)
Printers :rel.atieS to
IS·l3 ~ the defcn.<e
ac~ountabl.e
is 128) 91-, at
page 12')
VoL 153
'\l"Oflgiy
1'o.J\'
~
choques ""
~
explain t'".Jr·a sum of :rd'~rred to
to 3 parties RS. 94,25,$35.- here
oiilv. Hence the by the TC) 0
~
<li ff<nm:e of
Rs.1,22,16,165 is. to
be e.•duded en
~oklevland EX-P-253
IParu:h« Lt~'<ury (\.~cl.No.25,
coach bearing pg. 61-63)
jregistration Xo Ex-P-~.54
ITX-09F 2515 (Yo!. No. 25, (Amount to be D\V-SS
Ex..D-2.26
tptrc!iased in the pg. 64-65) PW-63 accepted is (Vol. Para 83.6, Page
(Pg. 185-186, Xo.92, Pg. 1811-
~

inamc of).-! s Ex-P-255 ~-cl. Ko.3, Rs.32,39,l)S-) and Xc.9"9 N

Z99
'"''"Publication
IPiimited
(Cha..'Sis Rs.
32,40,378
(\·ot .Xo.15,
pg 66-67)
pg.
74-"S)
henc~ balanc~ of
Rs. t, 100 - is to be
excluded
'\'oL No I 1-l. at
pag~ 1S6 - under
fixed assets)
page Xos. 1812 of
105-1 76, at \"oL \'IL
page 109)
of\'oL
~o.I'\- -
0
- .)
~

Vl
699178* cost en
of Bod,· (J
~rildi~g
R.;_25-HOOO) ?:i
- - - - - - - - - - - ---·- -
~ -- - - - - - . - - - -- - - - · - - . - - - ----- ------ - ------
In ems E\idence and High en
Sbo'\l·n Desciiption of Value
..\ccorcling
i:,·idenceand Exhibits
relied uoon bv DVAC
Value as pa·
Exhibits
relied n11on by
Tl"ial Court
court
findings
~
'""']
in the item in defence findings
to DVAC .Exhibits PWs _.\ccused :'\-o.2 . tT1
Annex Annexurell
ure-- II . lfxbibits PWs 0
'Tl
'Para 78.13, Pg.

zZ~
1736-173& of\-ol
e.·11. Trial Court
"ti
agrees "'th the
Cost ofrenovarion
~~
Pun:hased ",\i 1h contenrion of the
and additional accused that
~
building prior ro
const:ructi on he >-<

between Junt 1992
the cheek penod.
Ko ne\Y
prosecution has net g>
and 1993 ofthe PW-144 pro,·ed rhe cost of > ;<:
building at Plot 1'o.
Ex.P- 781
(Yo!.
construction construction :~et
Page Z en
(\'cL Ko.39, Purchased prior granted '21} 0 -o tl tT1

301
102
III Cross Road, P<>n 6,83,325'
pg.1~6-127}
?\o.6, pg
14 7-152)
ro d1eck period eductivn :in rhe
0,·erall cost
:'\'c.866
to 839 of
~$
and Ex-P-732 _>.tne.cire ~ Item a~
:\agar, Tri chy recalled .rience the Vol. Xe.
(Vol. Xe. 39, l\'o.15, YoL NJ. I ::i: '-
~ ?<
""ned.by Tmt. :'\". see Pg. 152 'WOS:e.:unon I\'
pg. 12S-129} !J>oge 421.
.m f::
Sasikala (Covered ofVoL 6. eYidence t°\J\"i ...ards
Hence builcfuig C'OSt of
by document ?'o. ~>
,-alue of Rs. . :: on Stl.1.l cti OU ts ~r
225690 dt. 35 90

~
6,33)25-- is to be ,iable robe reiected
SRO IO RB 'n its ei:1tirei:v. Tri21
· e':cluded.
TRI CHY) Court put; at >
Rs,39).+,0C(I - at Pl'
tpage 1·30 \"oL 0
l:t\o_·, 1! ~
en
TOTAL 13,11,02,559

::i: a 'Tl tT1 tl (') tp > --l
N
w
724 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 98. Mr. Naphade submitted that there are 306 items, which would
appear in Annexure II, out of which 175 items relate to properties of
Accused Nos. 1 to 4, Jaya Publications and Sasi Enterprises. Out of the
32 entities which have been referred in the charge sheet filed by the
prosecution, 17 of them are alleged to have properties, 4 of the said 17
companies and/or firms have only cash balances and 2 entities, which
B
are not included in the 32 entities are (i) Mahasubbulakshmi Kalyana
Mandabam and (ii) Jaya Finance. Out of 32 entities, 15 are not shown
to have any assets in Annexure II. A2 is concerned with the properties
shown in respect of herself, Jaya Publications, Sasi Enterprises as also
Anjaneya Printers Private Limited, Green Farm House, J Farm House,
C Jay Real Estate, Jaya Contractors and Builders, J .S. Housing
Development, J.J. Leasing and Maintenance, Lakshmi Constructions,
Gopal Promoters, Sakthi Constructions, Kodanad Tea Estate and Jaya
Finance Private Limited. A3 is concerned with the properties shown in
respect of himself as also Super Duper TV (P) Limited. A4 is concerned
D with the properties shown in respect of herself, J.Vivek Minor Son,
Daughter and Son of A4 and also Mahasubbulakshmi Kalyana
Mandabam.
The total I 0 items, which has been stated by the prosecution in
Annexure II is liable for exclusion since purchase have been made prior
to check period. Hence a sum of Rs.28,57,279/- needs to be excluded
E from Annexure II.
99. Mr. Naphade further submitted with regard to Item No.31-
Cost of acquisition ofMahasubhalakshmi Kalyana Mandapam, Chennai
amounting to Rs.38,51,000/- that it is a partnership firm of which the
original partners were one Selvaraj and his family members, who did
F appear before the Court as PWlO and he deposed that for the purpose
of construction, the said firm borrowed Rs.19 Lakhs from Central Bank
of India and such loan was duly repaid from the income of the said
Mandapam. A3 approached him in the year 1993 and it was agreed that
the original partners will retire and A3, A4 and one Sreethaladevi would
G be inducted as partners. He has stated that A3 paid a sum of
Rs.38,51,000/- by Demand Drafts. He relied upon a letter of the bank
dated 12.11.1996, which was marked as Exh. P-40 before the Court.
100. It is further submitted that the letter does not indicate that
any amount is paid by A3, A4 or the said Sreethaladevi. The prosecution
H has clearly attempted to manipulate the evidence to show that A3, A4
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 725
[PINAKI CHANDRA GHOSE, J.]

and Sreethaladevi paid a sum ofRs.38,51,000/-. In the absence of any A
evidence of any payment of Rs.38,51,000/- the case of the prosecution
must be discarded. However, defence led evidence through DW88 and
has proved the partnership deed (Exh.D-3 79) showing the original partners
retiring and A3, A4 and Sreethaladevi being inducted as partners. It
would be evident from the said deed that an amount of Rs. I 0 Lakhs only B
has been paid to the outgoing partners. It is submitted that the Trial
Court added the whole amount ofRs.38,51,000/-as assets of the accused.
Although A3 admits only a sum of Rs. I 0 Lakhs under this item, the
balance of Rs.28,51,000/- is liable to be excluded.
101. He further pointed out tl~at the shares by Mis. Anjaneya
Printers (P) Limited at No. 48 Inner Ring Road, Ekkattuthangal, on C
01.09 .1993 were acquired after making payment of Rs.64,05 ,000/-against
all the shares and the machinery at Rs.20, 16,000/- from Tr. Naresh Shroff
and thereby totalling Rs.84,21,000/-. The version of the prosecution,
according to Mr. Naphade proceeds on the assumption that the accused
have not only acquired shares of Shastri Nuts but also the assets of D
Shastri Nuts and on that premise prosecution has valued the machineries
at Rs.20,16,000/-. The evidence of PW15 clearly shows thatA2 acquired
shares of Shastri Nuts from PW! 5 and his family members. Mr. Naphade
stated that the MOU dated 01.09.1993 would show only the value of the
shares, i.e., Rs.64,05,000/- has been paid and further the accused have
not purchased the assets of Shastri Nuts. According to Mr. Naphade, E
the amount ofRs.20, 16,000/- is liable to be excluded.
102. Mr. Naphade further pointed out that Item No.64 of
Annexure-Il is a disputed item. According to him, the cash payment
shown in respect of this item towards acquisition of I 0.78 acres of land
in Siruthavur Village, over and above the value shown in the sale deed F
dated 19.1.1994 Exh.D-139, and alleged cash payment was not accepted
by the Trial Court which would appear at Pages 167-169 in para 77.4
Vol.7. The Trial Court at Pages 167-169 accepted the defence case in
respect thereof. He further submitted that the cash payment shown in
respect of the amount paid over and above the cost in document No.43/ G
94 dated 5'h February, 1994 to the seller also should be deleted since the
Trial Court accepted the case of the defence.
With respect to the disputed items being Sri. Nos.70, 72 and 74
shown in Annexure-Il, it is submitted that although the Trial Court
accepted the contention raised by the defence, but it did not give full H
726 SUPREME COURT REPORTS [2017] 5 S.C.R.

A benefit in respect of all the three items but granted relief only in respect
ofltem No.72 in the sum of Rs.3 ,35 ,000/- being cash payment as alleged.
However, Mr. Naphade submitted that in respect of Item Nos.70 and
74, a further sum of Rs.6,70,000/- is also liable to be excluded.
l 03. He further pointed out that the disputed items being Sri.
B Nos.91 and 92 to Annexure-Il, concerning Rs.2,65,000/- and
Rs.3,10,000/-, a sum of Rs.3,25,005/- has to be excluded. Similarly, in
respect of the disputed item No.127 of Annexure-ll relating to the cost
of transfer of 6, 14,000 shares of Mis. Ramraj Agro at Vendampalai at
the rate ofRs.3/-per share from Gandhi and others toA2, A3 andA4, it
is submitted that A2, A3 and A4 did not have shares valued at
C Rs.18,42,000/- as alleged by DVAC. The Trial Court mechanically
accepted the case of the prosecution without considering the case of the
defence. Hence, he submitted that an amount of Rs.7,62,000/- is to be
reduced from the alleged assets of A2 to A4.
104. As regards the disputed item at Sri. No.159 of Annexure-ll,
D relating to cost of acquisition of Luz Avenue property, it is submitted by
Mr. Naphade that as alleged by the prosecution, payment of
Rs.76,00,000/- had been made by way of cash over and above the sale
consideration recited in the document. According to the defence, no
amount was paid except the consideration amount recited in the. sale
E deed. He further pointed out that the Trial Court disbelieved the case of
the prosecution in respect of the disputed items at Sri. Nos. 168 & 169
to Annexure-Il. It is submitted that A2 had purchased items at Sri.
Nos.34 to 48 of Annexure-II during the check period for Rs.3,49,683/-
as per DVAC and the very same items were sold by A2 to Meadow
Agro Pvt. Ltd. for Rs.2,90,000/- and the same are shown again as Items
F Nos.168 & 169 of Annexure-TT. Therefore, these should be deleted due
to duplication.
105. As regards disputed Item being Sri. No.173 of Annexure-II,
relating to expenditure towards acquisition of Indo - Doha Chemicals
and Pharmaceuticals Ltd. at Cuddalore, it is the case of the prosecution
G that a sum ofRs.5 lakhs has been paid as cash over and above the sum
of Rs.30,45,000/- as consideration for the purchase of shares and the
prosecution has produced Exh. P-510 (Page 25 Vol.31 ), which is an
agreement by which A3 purchased shares from Mr. Ayyathurai (PW-
84), M. Khader Mohammed and K. Samudra Pandian. Qua this, it is
H submitted that the agreement does not specify the sale consideration.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 727
[PINAKI CHANDRA GHOSE, J.]

PW-84 in its deposition had stated that A3 paid Rs.30,45,000/- by way of A
five cheques and a further amount of Rs.5 lakhs was being paid to him
·in cash and the Trial Court wrongly accepted the case of the prosecution,
acting on the evidence of PW-84.
106. With regard to the disputed Item being Sri. No.174 of
Annexure-II, relating to New/Additional Construction in the building at B
5-AB and C East Coast Road, Door No.4/130, Raja Nagar, Neelankarai,
Chennai, it is submitted that DVAC had valued this asset at Rs.80,75,000/-
which was accepted by the Trial Court. However, it is stated that during
the check period the said construction was not undertaken and further
the said valuation is unscientific and unacceptable. Mr. Naphade submitted C
that the valuation of marbles and granites as testified by the prosecution
witness were inflated. According to him, DW-95 had evaluated this
property for a sum ofRs.40,35,981/- (Exh.D-306, Page 122 at Page 163
ofVol.157). According to him, the Trial Court failed to give any credit to
the evaluation, but allowed an overall reduction of20% on the value of
total construction and hence, he submitted that the balance sum should D
be excluded. He further submitted that with regard to the disputed Item
being Sri. No.176 ofAnnexure-II, relating to New/Additional Construction
in Farm House Bungalows at Payyanur in Chengai Anna District, a sum
of Rs.1,25,90,261/- had been invested, as alleged by the DVAC, by A2
in the farm house bungalow by way of additional constructions. According
to the learned senior counsel, no amount was invested for additional E
construction, as it is the definite case of the accused that no improvement
or additional construction was made after purchase. However, the
prosecution relied upon the oral evidence of PW-40, PW-I 07 and PW-
220 and Exh.P-96 to Exh.P-103 which are sale deeds and Exh.P-662 Is
a valuation report of PW-I 07. He further submitted that in support of F
the above contention, the defence relied on Exh.D-251 to Exh.D-257
and according to them, the said building was existing even prior to the
sale. According to him, no positive evidence has been adduced by the
prosecution to prove the additional construction during the check period
or its value. The Trial Court still accepted 80% of the alleged value of
the said construction which should have been omitted. G
107. Similarly, with respect of the New/Additional construction of
Building at Door No.48, Jawaharlal Nehru Road, Industrial Estate, Guindy
Ekkatuthangal, Chennai, (Shastry Nuts Plates) being item at Sri. No.177
of Annexure-Il, at Rs.2,13,63,457/-, Mr. Naphade submitted that the
DVAC and the Trial Court have assumed that the said additional H
728 SUPREME COURT REPORTS [2017] 5 S.C.R.

A construction was undertaken by Anjaneya Printers Pvt. Ltd. where A2
and A3 are directors. According to the defence, this construction is not
undertaken by Anjaneya Printers Pvt. Ltd. and it belongs to Sastri Nuts
Plates Manufacturers Pvt. Ltd. and Anjaneya Printers Pvt. Ltd. is only
a tenant. It is further submitted that except the evidence of PW-15 and
Exh.P-41, there is no other evidence which would indicate that any of
B
the accused had purchased the assets of the Sastri Nuts Plates. According
to him, though the Trial Court agreed with the contention of the accused
that the prosecution has not proved the cost of construction, it yet granted
20% reduction in the overall cost. Hence, such overall cost should be
excluded in its entirety.
c 108. Regarding the disputed item being Sri. No.178 of Annexure-
Il, relating to New/Additional Construction in the Residential Building at
D.No.3/I/8C - Vettuvankeni, Chennai, it is submitted that the DVAC
and the Trial Court found that this new additional constrnction was valued
at Rs.1,52,59,076/-. He submitted that no evidence is available to show
D that the said construction was made during the check period. It is further
submitted that aside the evidence of PW-98, no other evidence was
placed before the Court to show that the construction was made during
the check period. ~ccordingly, the said amount is liable to be excluded
entirely as well.

E 109. About disputed item being Sri. No.180 ofAnnexure-Il, relating
to >:ew Additional Construction in the Posh Bungalow at Siruthavur
Village in Changai MGR District, which attributes a sum of
Rs.5,40,52,298/- to A4 as the cost of construction during the check
period and is based on the report which was exhibited as Exh.P-661,
produced by PW-107 who claims to be the valuer, Mr. Naphade submitted
F that since his evidence was not put to A4 in Section 313 Cr:P.C.
examination, therefore, this valuation cannot be accepted. Hence, the
said cost of construction should have been rejected by the Trial Court.
110. With regard to the disputed item being Sri. No.183 of
Annexure-II, relating to New Additional Construction in Building at Sea
G Shell Avenue, No.2/l-B-3 Apartment Sholinganallore Saidapet Taluk, it
is submitted that DVAC found that this new construction was put up at
the cost ofRs.80,36,868/- and the Trial Court examined the valuer PW-
116 and marked the valuation report as Exh.P-669. According to Mr.
Naphade, the said valuation report cannot be accepted as according to
H him, the values of special items were inflated.
STATE OF KARNATAKA v. SELVI J. JAYA~ALITHA & ORS. 729
[PINAKI CHANDRA GHOSE, J.]

111. With regard to the disputed item being Sri. No.184 of A
Annexure-ll, relating to New Additional Construction in Building at Door
No.19, Pattammal St. Mylapore, Chennai- Jaya Publication, it is submitted
that the prosecution witness PW-116 stated that the value for this
construction was estimated at Rs.8,00,000/-. However, the same was
not accepted as its value as per the balance sheet of Jaya Publications B
for the year ended 31.03.1996 is shown as Rs.6,42,290/-. Hence, the
balance amount is liable to be excluded.
112. With regard to the disputed item being Sri. No.185 of
Annexure-II, relating to New Additional Construction in the residential
building at Door No.21, Padmanabha Street, T. Nagar, Chennai, it is
submitted that the said construction was undertaken by M/s. Anjaneya C
Printers Pvt. Ltd., according to the prosecution, to the tune of
Rs.20,43,000/- and the prosecution relied upon the evidence of PW-116
and the report prepared being Exh.P-666 and according to Mr. Naphade,
there is no positive evidence to prove that the construction was undertaken
during the check period. According to Mr. Naphade, only an amount of D
Rs.19,05,568/- was proved by DW-88 in respect of such cost and
therefore, the balance amount is liable to be excluded.
113. With regard to the disputed item being Sri. No.186 of
Annexure-ll, relating to New Additional Construction in residential
building at No.l/66, Anna Nagar, Chennai, at the cost of Rs.24,83,759/- E
, it is submitted that the prosecution relied on Exh.P-641 being the report
of valuation proved by PW-98 (Pages 148 to 179, Vol.IV). According to
Mr. Naphade, the said evidence cannot be considered at all as the same
has not been put to A4 - the owner of the property in her examination
under Section 313 Cr.P.C. He further submitted that the evidence of
PW-98 cannot be exhibited since he being a Civil Engineer, is not F
competent to give valuation of electrical items.
114. With regard to the disputed item being SrI.-No.187 of
Annexure-ll, relating to New Additional Construction in building in Door
No.5, Murugesan Street, T. Nagar, Chennai-17, at the cost of
Rs. I 0,92,828/-, it is submitted that PW-98 had deposed in respect of the G
said construction. However, Mr. Naphade submitted that the cost of
said construction as per DW-95 would work out to Rs.5,47, 103/-. Hence,
he submitted that the balance should be discarded.
115. With regard to disputed item being Sri. No.188 of Annexure-
ll, relating to New Additional Construction in residential building (4 Nos.) H
730 SUPREME COURT REPORTS [2017] 5 S.C.R.

A in the campus at No.11240, Enjambakkam in New Mahalipuram Road,
at the cost ofRs.53, 11,000/-, it is submitted that the DVAC alleged and
the Trial Court found that the said new additional construction had been
put up but it has not been proved that the said construction was made
during the check period as no evidence was adduced in this regard. The
defence also examined DW-95 to show that value of special items were
B
inflated and according to him the cost of construction would work out to
Rs.29,82,392/-. Hence, the balance of Rs.5,45,725/- is liable to be
excluded.
116. With regard to disputed items, being at Sri. Nos.189, 190,
191, 242, 249, 254, 256, 257, 259, 261, 285, 287, 293, 294 & 301, Mr.
C Naphade submitted that although the Valuation Reports and the amounts,
marked and exhibited before the Court, have been accepted by the Trial
Court, according to him those values are inflated and most of the amounts
should be much less than the amounts taken into account by the Trial
Court. Hence, he submitted that the Trial Court did not correctly assess
D the evidence and the documents placed before it and according to him
the inflated part of the amounts should have been discarded.
117. Mr. Naphade further contended that the income shown in
assessment year 1992-1993 by A2 during the check period, including the
foreign remittance, has not been taken into account by the prosecution
E and the Trial Court ought to have included this in the income of A2. He
further contended that the income from agricultural operation and by
way of gift for A2 for the assessment year 1992-1993 has not been
included in the income of A2 and the Income Tax authorities having
accepted the same, the DVAC and the Trial Court have erroneously
omitted to include such income in the income of A2. The income of A2
F shown in the assessment year I 993-1994 to the tune of Rs. I 0,00,000/-
has not been accepted by the DVAC and the Trial Court. Similarly,
DVAC and the Trial Court did not give due credit for the income shown
in the assessment year 1994-1995 of A2 which was to the tune of
Rs.24,99,005/-. It is further contended that the two loans ofRs.15,00,000/
G - and Rs.45,00,000/- availed by A2 for herself and for her proprieta1y
concern Metal King, on I 0.1.1996 from Housing and Real Estate
Development Pvt. Ltd., Chennai and on 6.1.1996 & 5 .3 .1996, from
Housing, Real Estate and Development Pvt. Ltd, Chennai, respectively,
were not given due credit by the DVAC and the Trial Court. He therefore
submitted that these loan amounts should have been included in the income
H ofA2.

,
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 731
[PINAKI CHANDRA GHOSE, J.]

118. Further the learned senior counsel pleaded that the Trial Court A
failed to consider an amount of Rs.22,00,0001- which A2 had received
as an advance from Bharani Beach Resorts Pvt. Ltd., paid by cheque
by the said company. According to Mr. Naphade that amount should
have been included in the income of A2. However, these documents
with many others though seized during the investigation and filed in the
B
Court were not exhibited and were kept as unmarked documents.
119. A2 further received an advance of Rs.52,00,0001- from Mis.
Riverway Agro Products (P) Ltd. on 18.2.1995 which was reflected in
the balance-sheet of the said company for the year ending on 31.3 .1996
(Exh.D-192) and it is submitted that a notice was issued to Mis. Riverway
by the Income Tax authorities and an order was passed on 30 .3 .2000 in C
which it is stated that Mis. Riverway got share application money from
different persons who have necessary resources to make such
contribution. But the Trial Court disallowed this amount on the ground
that the said transaction was hit by Section 269-SS of the Income Tax
Act. Hence, he submitted that credit should have been granted by the D
Trial Court in respect of the said amount.
120. He further submitted that the advance received by A2 from
Mis. Meadow Agro Farms (P) Ltd., by way of cheque, being a loan
from the said company but the Trial Court did not accept the said amount
on the ground that it was hit by Section 269-SS of the Income Tax Act. E
He further pointed out that as a partner of different films (9 Nos), A2
received a smn ofRs.2,20,00,0001-, Rs.25 lakhs from each establishments
excepting Vigneshwara Builders in which case it was Rs.20 lakhs,
aggregating to Rs.2,20,00,0001-. These payments are reflected in the
bank accounts ofbothA2 and also the respective establishments. Without
any justification, those amounts were not accepted by the Trial Court as F
income of A2.
121. As per Exh. P-910 and P-911, A2 had sold her properties
during the check period to Mis. Meadow Agro Farms and an amount of
Rs.2,90,0001- was received by her as sale consideration. The Trial Court
did not give any credit to the said amount as the income of A2. It is G
further submitted that the cash in hand withA2 being Rs.4,35,6221-was
also not taken into account by the Trial Court.
It is further submitted by the learned counsel that Sasi Enterprises
availed a loan from Housing Real Estate and Development (P) Ltd. to
the tune ofRs. l 0 lakhs on 20.2.1996. The Trial Court without considering H
732 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the bank statement and the payments made by cheque, failed to accept
the said loan transaction on the ground that the accused have not produced
any acceptable evidence in proof ofavailing the loan from the said Housing
Real Estate and Development (P) Ltd. company. Sasi Enterprises further
availed a loan on 18.10.1995 to the tune of Rs.2 lakhs from Mis. Lex
B Properties Pvt. Ltd. which was borne out by the Exh.P-1255, Bank
Statement of Sasi Enterprises. This amount has not been taken into
account by the DVAC and the Trial Court.
122. Sasi Enterprises had received a contribution of Rs.75 lakhs
on 29.9.1992 from Al which she had availed from CANFIN Homes
Ltd. as loan against FD of Rs. I crore. Therefore, Sasi Enterprises had
C an income ofRs.75 lakhs as capital contribution by Al during the check
period which has been ignored and overlooked by DVAC and the Trial
Court without any justification. The learned counsel submitted that this
amount is also to be included as income of the firm during the check
period. Mr. Naphade further submitted that the Trial Court without
D approving the transaction in question, held the circumstance to infer
conspiracy. He further pointed out that during 1992-1993, M.
Ramachandran, Nagammal and Subramanian owed amounts to Sasi
Enterprises to the tune ofRs.16,91,000/-which duly came to the coffers
ofSasi Enterprises during 1992-1993, but this amount was not accepted
by the Trial Court. Thus, the said amount has to be added in the income
E of said firm, according to Mr. Naphade.

123. It is further submitted that Sasi Enterprises had rental income
during the assessment years 1992-1993 to 1996-1997. These rental
incomes have been disclosed to the Income Tax authorities in their returns
which were duly accepted by them. Thus Sasi Enterprises had rental
F income to the tune of Rs.16,47,800/- during the check period of five
years which was ignored by the Trial Court. It is also submitted that
Sasi Enterprises had agricultural income also during the said assessment
years, to the tune of Rs.9,72,550/- which was also not taken into
consideration by the Trial Court on the ground that no proof was produced
G by Sasi Enterprises. During the assessment year 1994-1995,.Sasi
Enterprises sold some capital assets for Rs. I 0,20,000/- which was
rejected by the Trial Court. Similarly, the income of Sasi Enterprises
from business operation to the tune ofRs.2,39,701/- was not accepted
by the Trial Court. The sale of building materials to the tune of Rs.6
lakhs was also not accepted by the Trial Court as the income of Sasi
H Enterprises. It is also stated that during the assessment year 1995-1996,
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 733
[PINAKI CHANDRA GHOSE, J.]

Sasi Enterprises had received an advance of Rs.23,80,0001- towards A
sale of its property at Neelankarai which was not accepted by the Tiial
Court.
124. Mr. Naphade further asserted that Mis. Jaya Publications
had made profits during the assessment year 1992-1993 to 1996-1997,
to the tune ofRs. l, 15,94,8491- as is borne out by the income tax returns B
accepted by the Income Tax authorities. According to him, the said
amount should have been added in the income of J aya Publications, but
the Trial Court rejected the same mainly on the ground that the supporting
documents relied upon were Income Tax proceedings.
125. He underlined that Jaya Publications used to publish a c
newspaper by name 'Namadhu MGR' and a separate account was
maintained for running of the said newspaper. To boost the subscription
of 'Namadhu MGR', deposits were received from the subscribers. In
this scheme, a total amount of Rs.14,10,35,0001- was received by Jaya
Publications from 1. 7 .1991 to 30.4.1996 during the check period.
According to Mr. Naphade, the said amount should have been added to D
the income of Jaya Publications as the same was accepted by the Income
Tax authorities after detailed scrutiny. But DVAC and the Trial Court
did not give any credit to the said income.
126. Qua Mis. J. Farm House, in which A2, A3 and A4 were
partners, it is submitted that it had availed a loan of Rs.25 lakhs from Ml E
s. Housing Real Estate and Development (P) Ltd. during the financial
year i995-1996 which was acknowledged by the said company. This
amount was available as income of the said company during the check
period. No credit thereto has been given by the Trial Court. Mr. Naphade
submitted that this amount should have been included as income of the F
company. Similarly, Mis. Green Farm House in which A2, A3 and A4
were partners, availed a loan of Rs.25 lakhs on 20.10.1995 from Mis.
Housing Real Estate and Development (P) Ltd., during the financial
year 1995-1996. It is submitted that this amount was available as income
of the said Mis. Green Farm House during the check period but no
credit has been given in respect of the same and the Trial Court completely G
ignored this fact. Thus, this amount must be included in the income of
the company, according to Mr. Naphade.
127. It is submitted that prior to the incorporation of Mis. Super
Duper TV Pvt. Ltd., the business was conducted in the name of Mis.
Super Duper TV by A3 as the Proprietor and subsequently it was H
734 SUPREME COURT REPORTS [2017] 5 S.C.R.

A registered as a company and the business of the proprietary concern
continued even after its formation. It held a current account in Indian
Bank, Abhirampuram Branch. During investigation, a zerox copy of
statement of the said account for the period 12.8.1994 to 23.8.1995 was
seized but the same was not marked as exhibit, because it did not bear
the signature as required under Bankers' Books Evidence Act, 1891.
B
Mr. Naphade submitted that the said proprietary concern had received
certain amounts from different companies which ought to have been
taken into consideration but the same has been discarded by the Trial
Court. He further contended that there are certain other amounts which
have not been taken into account by DVAC. According to him, out of
c the total income generated by A2 to A4, related firms and companies,
further amounts were transferred to partners which needs to be deducted
from the sums available to them. Hence, according to him, a sum of
Rs.4,30,14,469/- should have been excluded by the Trial Court in order
to avoid double entry. He further contended that the disputed items
should have been deleted from Annexure-IV related to A2 to A4, their
D
firms and companies.
128. Mr. Naphade submitted that according to DVAC an
expenditure ofRs.50,93,921/-was incurred by Jaya Publications towards
the interest payable to Indian Bank in respect of loan obtained from the
said bank. According to him this item cannot be taken as an additional
E item in the Expenditure Column inAnnexure-IV. According to him the
prosecution is trying to mislead the Court as on the one hand, it does not
show that the net profit of Jaya Publications is derived after debiting the
interest amount and on the other, it is showing the payment of interest as
an item of expenditure, thereby subjecting the accused to double jeopardy.
F 129. Similarly, he tried to explain the expenditure ofRs.11,81,425.16
which was incurred by Anjaneya Printers towards the interest payable
to Indian Bank in respect of loan obtained from the said bank. The
defence case is that the said amount of Rs.11,81,425.16 cannot be taken
as additional item in the Expenditure Column. According to him, the
G prosecution has failed to establish the payment of interest. The
documentary evidence produced by the prosecution does not indicate
that the said amount was paid to the bank during the check period. The
defence submitted that during 1993-1994 to 1995-1996, the total interest
paid in the aforesaid three years, aggregated to Rs.24,25,685/- and the
net profit for the said period came to Rs.53,50,215/-. According to him,
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 735
[PINAKI CHANDRA GHOSE, J.]

the Trial Court has totally ignored the defence evidence and came to its A
conclusions. He has urged that the Trial Court wrongly did not give any
weight to the evidence produced by the defence and has failed to give
credit in favour of the accused. He further contended that the Trial
Court is totally wrong and has come to conclusion disregarding the
evidence produced before the Court on behalf of accused Nos.2 to 4,
B
130. In the backdrop of the vast canvas of factual and statistical
plenitude, expedient it would be, before embarking on the invigilation of
the evidence adduced oral and documentary and the scrutiny of the
appreciation thereof by the Trial Court and the High Court, to recapitulate
the quintessential soul of the competing legal postulations based thereon
even to some extent at the cost ofrepetition. c
131. Mr. Dushyant Dave, learned senior counsel representing the
State ofKarnataka has emphatically urged that the impugned decision is
afflicted by a host of errors apparent on the face of record rendering it
unsustainable in law and on facts. According to him, the High Court had
totally misconceived the scope and nature of audit of the findings recorded D
by the Trial Court and in the process has totally misled itself to err on
fundamental principles, thus vitiating its findings to the core. Whereas
the approach of the Trial Court was noticeably exhaustive and dialectical
in its analysis of the evidence oral and documentary, the High Court in
reversing the conviction recorded by the Trial Court did not record any E
persuasive finding to justify the same, thus rendering its decision unworthy
of acceptance. The High Court reversed the conviction on a wholly
purported and superficial treatment of the materials on record and on an
apparent wrong interpretation of the law applicable. Mr. Dave was
severely critical of the High Court in what according to him was visibly
a laconical assessment o[Jhe evidence without any application to the F
various factual aspects brought out by different witnesses and the
documents adduced by the prosecution. He asserted that the view point
of the High Court throughout appeared to extend the benefit of the
decision in KrislmanandAgnihotri, (supra), to the respondents-accused.
The learned senior counsel urged that the High Court not only wrongly G
reduced the cost of constructions and the marriage expenses, it as well
wrongly totalled the income derived from loans and thereby on an
apparent erroneous application of the formula to work out the percentage
of disproportionate assets, accorded the benefit of Krishnanand
Agnihotri (supra) to the respondents and acquitted them of the charges.
H
736 SUPREME COURT REPORTS [2017) 5 S.C.R.

A Apart from the fact that the High Court having accepted Rs.66,44, 73,573/
- as the value of the assets as cited by the prosecution, it could not have
deducted the marriage expenses therefrom, as is conceptually
impermissible, he contended that had the uncalled for reduction in the
value of assets and the marriage expenses not been effected, the
percentage of disproportionate assets would have been in the vicinity of
B
approximately 76.75%. Mr. Dave was particularly scathing about the
purported analysis of the evidence pertaining to the valuation of the
income, assets and expenditure and contended that the findings arriv~d
at on the basis thereof being patently perverse are liable to be set aside.
As the materials on record did conspicuously demonstrate that the assets
cacquired by the respondents during the check period were grossly
disproportionate to their known source of income, it was their burden,
primarily though of A 1, being a public servant at the relevant point of
time, to satisfactorily account therefor, more particularly in the face of
the charge under Section 13( l)( e) of the 1988 Act read with Section l 09
and 120B IPC. Mr. Dave argued that having regard to the evidence
D
available on records, it is hyaline clear that Al being a public servant at
the relevant time could not have disclosed the assets involved to be her
own and therefore did collaborate with A2, A3 and A4 and on the basis
of their conspiracy and abetment distributed the same amongst themselves
as well as the firms/companies of which they were partners or Directors
E as the case may be. As the "sources of income" contemplated in Section
l3(l)(e) of the 1988 Act denotes "lawful source of income" and as is
known to the prosecution, it was the obligation of the respondents-accused
in the facts of the case to satisfactorily account for the visibly
disproportionate assets at their disposal and they having miserably failed
to do so, the High Court fell in grave error in recording their acquittal, he
F
maintained. In doing so, the High Court while heavily relying mostly on
the delayed income tax returns and the orders passed therein was severely
flawed in its approach, and thereby also blatantly disregarded the law to
the contrary as proclaimed by this Court, he asserted. Mr. Dave urged
that not only the belated income tax returns, as the evidence divulged,
G were self-serving in nature qua the respondents and that too sans the
required probative value vis-a-vis the char.ges levelled, those were even
otherwise not binding on the Trial Court and.therefore the unreserved
reliance thereon by the High Court has rendered its adjudication incurably
faulty. He insisted that the High Court in evaluating the evidence on
record did totally misconstrue the letter and spirit of the 1988 Act as well
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 737
[PINAKI CHANDRA GHOSE, J.]

as the long standing precedential expositions with regard thereto, thus A
rendering its findings, irreversibly illegal and indefensible. According to
Mr. Dave, the conclusions recorded by the Trial Court, following a
painstaking and laborious appraisal of the materials on record are
unassailable in merit and content and therefore there was no justification
at all to overturn the same by resorting to a casual and purported review B
thereof by the High Court. The learned senior counsel has asserted that
having regard to the stringent predication of the law on corruption and
the proof of the charges against the respondents beyond all reasonable
doubt, their conviction as recorded by the Trial Court ought to be restored
in toto.
132. Mr. Acharya, Special Public Prosecutor for the State of C
Karnataka while conveying his general endorsement of the above
referred submissions, elaborated on the various factual aspects bearing
on the charge and the evidence adduced in respect thereof. He reiterated
that the High Court in quantifying the income had wrongly included
Rs.13.5 crores and reduced as well the value of the assets and the D
marriage expenses and on the basis of such wrong figures held against
the charge of disproportionate assets of the respondents by relying on
the decision in KrishnanandAgnihotri (supra). While strongly refuting
the imputation made in course of the arguments on behalf of the
respondents that the prosecution against them has been unfair, the learned
senior counsel inter alia referred to a show cause notice that was issued E
to Al to explain the disproportionate assets before launching the
prosecution. In discarding the income tax returns and the orders passed
thereon for the various assessment years during the check period to be
unworthy of any credence, the same having been belatedly filed much
after the charge-sheet with an obvious purpose, Mr. Acharya emphasized F
that evidence adduced authenticated unabated cash flow from 36, Poes
Garden, i.e. the residential Secretariat of Al to various accounts of the
other respondents as well as the firms and the companies of which they
were partners/Directors, culminating in the acquisition of huge properties
thereby. According to him, the accounts of A2, A3, A4 and of the firms/
companies involved were apparently false fronts to mask the flux of G
cash deposits and exchanges originating from A 1 and circulated inter se
in order to defeat the charge under Section 13( I)( e) of the l 988Act and
Sections I 09 and 120B IPC. While reiterating that the income tax returns
and the orders of the Income Tax Authorities thereon are not at all binding
on the Criminal Courts, he further asserted that as the State was not a H
738 SUPREME COURT REPORTS [2017] 5 S.C.R.

A party to the proceedings, these are neither relevant nor admissible nor of
any probative worth qua the defence offered on the basis thereof. Not
only the assessment and computation of the income has been grossly
wrong, the High Court did commit apparent errors in evaluating the assets
and quantifying the expenditure, he urged. According to Mr. Acharya
not only the purchases amongst others of the immovable properties by
B
the 146 sale deeds in the names of the firms created during the check
period were sham transactions on the face of the record and were
occasioned through two attorneys representing the owners thereof, the
deals have been undervalued and further even the rules for registrations
thereof have been flexed to the advantage of the respondents, obviously
c on the instructions of Al who was then in power. The learned senior
counsel argued that on an overall analysis of the evidence on record, the
deep rooted design of the respondents in distributing the otherwise
disproportionate assets of Al amongst themselves and the firms/
companies administered by them has been proved beyond all reasonable
doubt and the acquittal recorded by the High Court is patently unmerited
D
and if allowed to stand would result in travesty ofjustice and trivialization
of the avowed objectives of 1988 Act. He submitted that in the face of
the overwhelming evidence in support of the charge, the respondents,
by no means could have been extended the benefit of the decision in
Krishnanand Agnihotri (supra).
E 133. Dr. Subramaniam Swami, in supplementation has argued that
in the teeth of a new legal regime ushered in by the 1988 Act ordaining
an uncompromising stand point in re a charge of corruption more
particularly in public life, the High Court did grossly err in acquitting the
respondents by applying the decision in Krishnanand Agnihotri (supra).
F According to Dr. Swami not only this decision does not lay down an
uniform proposition oflaw regardless of the textual facts, even assuming
without admitting that the computation undertaken by the High Court in
evaluating the income, the assets and the expenditure to be correct, the
respondents could not have been exonerated of the serious charges
levelled against them in the overwhelming perspective of the statutory
G intolerance against pervasive and pernicious escalation of corruption in
public life destroying the vitals of the systemic soul of our democratic
polity.
134. Mr. Anbazaghan, the petitioner in SLP (Crl.) Nos.6294-6295
of 2015 impeaching as well the acquittal of the respondents has in his
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 739
[PINAKI CHANDRA GHOSE, J.]

written submissions insistently asserted in favour of his locus to maintain A
the challenge by profusely referring to the pronouncements of this Court
in K. Anbazhagan Vs. Superintendent of Police and others - (2004)
3 SCC 767 and K. Anbazhagan (supra). Apart from contending that
his standing having been unreservedly recognized by this Court and his
intervention inter alia in occasioning the transfer of the prosecution from B
the State of Tamil Nadu to that of Karnataka on valid reasons as noticed
therein, he has pleaded that he indeed had constructively contributed at
all stages of the trial to ensure a fair conduct thereof. That he had also
submitted detailed written arguments before the Trial Court has been
mentioned. He has expressed his grievance as well, on the non-
consideration of his written submissions by the High Court. While C
asserting his right to pursue his assailment of the decision of the Hiih
Court acquitting the respondents, he has chiefly focused on the error
committed by it in quantifying the amount ofloan as income in ascertaining
the percentage of disproportionate assets. According to him, in reiteration
of the contention of the State as well, the High Court had wrongly
0
incorporated an amount of Rs.13,50,00,000/- on that count, which if
omitted, the disproportionate assets on the basis of the formula applicable
would mount to 76. 7% thus disentitling the respondents to the benefit of
the decision in Krislina NandAgniliotri (1977) 1 SCC 816.
135. In persuasive refutation, learned senior counsel for Al
emphatically endorsed the impugned decision on all scores. The learned E
senior counsel at the first place questioned the locus of Mr. K.
Anbagazhan to offer any oral submission in addition to those advanced
by the other counsel for the State. He argued that not only Section
13(1Xe)of1988 Act insists on income from lawful source which envisages
one not prohibited by law, in absence of any special law, rules or orders, F
produced by the prosecution, requiring a public servant to intimate the
sources of such lawful income, the charge against his respondent has
remained unproved. He asserted that as no charge has been framed
against Al either under Section 7 or 11 or 13(l)(a) or 13(l)(b), no
presumption for the offence under Section 13(1 )(e) of l 988Act is available
under Section 20 thereof. Further, the initial burden being on the G
prosecution to call in evidence, in support of the charge of disproportionate
assets on the basis of the sources of income known to it, no burden in
this case did shift on Al on any point of time, as such prerequisites
remained uncomplied. The learned senior counsel dismissed the evidence
with regard to benami transactions stemming from the imputation that H
740 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the properties of A 1 have been allegedly purchased/held in the name of
A2, A3, A4 and the firms/companies involved, as no charge with regard
thereto had been framed. According to the learned senior counsel not
only the relevant income tax returns of his client had been filed before
the raid was conducted in her house on 07.12.1996, the orders passed
B by the Income Tax Authorities thereon after a full-fledged scrutiny of all
relevant aspects proffer a complete answer to the accusations made
against her. The learned senior counsel asserted that the income tax
records were relevant and admissible as public documents even without
reference to Section 43 of the Indian Evidence Act, 1892 (for short
hereinafter referred to as the "Evidence Act"). He urged that the income
C tax proceedings/orders passed, following detailed enquiries into the inputs
provided and successively tested in appeals before several tiers, thus
cannot be wished away as of no evidentiary value as commented by the
Trial Court. Additionally, the defence not only did refer to the income tax
records but also had produced the same at the trial by way of primary
evidence which by no means could have been overlooked by the Trial
0
Court. The learned senior counsel elaborated on various aspects of the
evidence pertaining to income, assets and expenditure to insist that the
appraisal thereof by the High Court and the findings based thereon are
incontrovertible. While repudiating the charge of abetment of conspiracy
as well the learnee senior counsel maintained that mere joint residence
E of Al to A4 could not be construed to be a decisive factor in support
thereof and in absence of any tangible evidence of diversion of reserves
of Al to the co-accused and the utilization thereof for the acquisition of
the properties involved, the High Court was justified in exonerating them
therefrom. According to him, having regard to the two inconsistent views
recorded by the two forums, this Court ought to examine the evidence
F
on record afresh to adjudicate the issues involved. In any case, the learned
senior counsel argued that the burden of Al; qua the charges was -only
by way of preponderance of probability which she adequately discharged
though not wa,rranted, the prosecution having failed to substantiate the
same. While endorsing the assessment undertaken by the High Court
G with regard to the valuation of the assets, the learned senior counsel
discarded amongst others the so called reports made by the expert team
to be sketchy, inchoate and unreliable being not either supported by reasons
or any contemporaneous record/document.
136. Mr. Naphade, representing A2 to A4, 'at the first instance,
H has denounced the decision of the Trial Court to be vitiated by non-
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 741
[PINAKI CHANDRA GHOSE, J.]

application of mind and non-consideration of vital pieces of evidence A
adduced by the defence. According to him, the verdict of conviction is
fraught with conjectures and surmises, not permissible in any view of
the matter, on the proved facts. While criticizing the approach of the
Trial Court to be prompted by disproportionate emphasis on extraneous
considerations, the learned senior counsel has maintained that the B
prosecution has utterly failed to prove the charge. Mr. Naphade has
asserted that in absence of any evidence to prove cash-flow from Al to
the co-accused or the firms and companies involved, the substratum of
the charge had been rendered non est. According to him, the Trial Court
had gone conspicuously wrong in ignoring the income tax records and in
overlooking the fact that even prior to the check period, A2 had been in C
business and had filed her income tax and wealth tax returns. That all
the six firms/companies were in existence before the check period and
had been in business, have been overlooked as well by the Trial Court in
assuming the culpability of the respondents de hors supporting materials,
has been emphasized. In any view of the matter, Mr. Naphade submitted D
that the prosecution has failed to discharge its burden that A1 by herself
and/or with the co-accused on her behalf had committed any corrupt
practice, and thus the High Court was perfectly justified in recording
their acquittal in absence of any tangible proof of abetment and conspiracy.
The learned senior counsel asserted that in any case A2, A3 and A4 not
being public servants at the relevant point of time, they cannot be called E
upon to explain the charge under Section 13(l)(e) of 1988 Act. He
dismissed as well the evidence of the prosecution with regard to the
income, assets and expenditure, with particular reference to the reports
of the 'experts in connection therewith, branding the same to be lacking
in inherent worth and credibility. That the Trial Court had grossly erred
in analyzing the evidence of the prosecution and leaving out cif F
consideration most of the materials adduced by the defence, in inferring
the complicity of the respondents in the charge, has been highlighted.
According to him, by no means, the banking transactions involving the
respondents and the concerned firms/companies could be attributed any
sin~ster or indictable attribute to assume a culpable design of the G
respondl'.nts, to return a finding of guilt against them. That mere joint
residence of the respondents and their business association by no means
could have been accepted as a decisive index of abetment and conspiracy
has been \}nderlined to deduce prejudice in the approach of the Trial
Court. Mr. Naphade took pains to demonstrate that the evidence on
H
742 SUPREME COURT REPORTS [2017) 5 S.C.R.

A record did authenticate that the prosecution had deliberately omitted to
add substantial amounts of income of the respondents and the Trial Court
disregarded the same as well in recording their conviction.
137. Apt it would be, as a multitude of propositions have been
exchanged, to notice at this juncture, the salient features of the anti
B corruption law involved the relevant decisions cited at the Bar pertaining
thereto and the legal precepts of binding impact applicable to the issues
seeking adjudication.
The Prevention of Corruption Act, 1947
138. The preamble of this statute manifests that it is a legislation
C with the objective of enhanced effective prevention of bribery and
corruption. As the Statement of Objects and Reasons of this enactment
demonstrates, it was impelled by the felt necessity for curbing bribery
and com1ption of public servants which noticeably had enormously
increased by the war conditions, lingering at that point of time. The· post
D war fall outs bearing on large amounts of government surplus stores
and related disbursement of large sums of government money, visibly
facilitated wide scope for corrupt practices, which necessitated
immediate and drastic initiatives to stamp out the said malady. As the
existing law proved to be inadequate to tackle the sprawling menace,
the legislation was enacted.
E
139. Apart from providing the definition of the expression "public
servant", as contained in Section 21 of the Indian Penal Code, by Section
3, the offence punishable under Section l 65A of the said Code was
construed to be a cognizable offence for the purposes of the then Code
of Criminal Procedure, 1898. Section 14 lodged the presumption where
F a public servant was found to accept or agreeable or attempting to accept/
obtain any gratification other than legal remuneration. In the eventualities,
as mentioned therein, Section 5 defined criminal misconduct by a public
servant. Noticeably, by Section 6 of Act 40 of 1964 i.e. the Anti
Corruption Law (Amendment) Act, 1964, amongst others, the following
G insertion by way of clause (e) was incorporated in Section 5:
"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 satisfactorily account, of pecuniary
resources or property disproportionate to his known sources of
income.".
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 743
[PINAKI CHANDRA GHOSE, J.]

140. Abare perusal of this extract would reveal that the criminal A
misconduct of the public servant, as envisaged therein, would ensue if
he/she or any person on his/her behalf was in possession or had, at any
point of time during the period of his/her office, been in possession of
pecuniary resources or property, disproportionate to his/her known
sources of income, which the public servant cannot satisfactorily account. B
Significantly, for such misconduct, the possession of the disproportionate
pecuniary resources or property, which the public servant is unable to
satisfactorily account, can be held either by him/her or any person on
his/her behalf is essential. This offence thus, enfolds in its sweep a
definitive involvement and role of persons other than the public servant,
either as a abetter or a co-conspirator in the actualisation of the crime. C
Consequently, thus such abettors or co-conspirators or partners in this
item of offence, if proved, cannot escape the legal consequences for
their participatory role. The other segments of Section 5, not being of
immediate relevance, are not being referred to.
14 l. Section 7A mandated application of the Code of Criminal D
Procedure, 1898 {then in force) to any proceeding in relation to any
offence punishable under Sections 161, 165, l 65A of the !PC or Section
5 of the Act subject to the modifications as enumerated therein.
The Prevention of Corruption Act. 1988
142. The 1947 Act was succeeded by a new version of anti E
corruption law in the form of the Prevention of Corruption, 1988, which
seeks to consolidate and amend the law relating to the prevention of
corruption and for matters connected therewith. The statute, as the
prefatory introduction thereof authenticates, retraced the evolution of
the law regarding the offence of bribery and corruption amongst public. F
servant, starting from the Indian Penal Code to the 1947 Act seeking to
respond to the exigencies of time, precipitated by the post World War-II
manifestations. Having felt that even the 1947 Act had proved to be
inadequate to deal with the offence of corruption effectively warranting
a result oriented legislation, the 1988 Act was ushered in amongst other
by widening their coverage and re-enforcing the provisions thereof. The G
Bill as a precursor of the 1988 Act was introduced in the Parliament
with these objectives.
143. The Statement of Objects and Reasons of this statute, while
reiterating the above mission, referred to the provisions in Chapter IX of
H
744 SUPREME COURT REPORTS [2017) 5 S.C.R.

A the Indian Penal Code, dealing with public servants and those who abet
the offences ~entioned therein, by way of criminal misconduct. The
provisions in the Criminal Law Amendment Ordinance, 1944 enabling
attachment of ill gotten wealth, obtained through corrupt means, was
also adverted to. The Bill was clearly contemplated to incorporate all
B these provisions with necessary modifications, so as to make those more
effective in combating corruption amongst public servants. With that
end in view, the ambit of "public servant" was sought to be expanded.
Additionally, the offences hitherto enumerated in Sections 161 to 165A
IPC were recommended to be incorporated in the legislation with
enhanced penalties. Finality of the order of the Trial Court upholding the
C grant of sanction for prosecution and provision for day to day trial of
cases were also integrated as few other unique features of the initiative.
144. In order to obviate avoidable references, certain provisions
of decisive relevance would only be dilated upon. Section 3 empowers
the Central or the State Government to appoint Special Judges, by
D notification in the official gazette, to try cases, as may be specified therein,
namely;
(a) any offence punishable under the Act; and
(b) any conspiracy to commit or any attempt to commit or any abetment
of the offences specified in clause (a).
E
145. Section 4 clarifies that the special Judge, so appointed, shall
try the offences specified in Section 3 of the Act and may also try any
offence other than those with which an accused may be charged at the
same trial under the Code of Criminal Procedure, 1973 (hereinafter
referred to as the 'Code' as well). Section 5 predicates that subject to
F the deviations, as contemplated in sub-sections (I) and (2) thereof, the
provisions of the Code would, so far as they are not inconsistent with the
Act, apply to the proceedings before a special Judge, whose court would
be that of Court of Session and the person conducting it would be deemed
to be a public prosecutor. Section ~(6) enjoins that a special Judge,
G while trying an offence punishable under the Act, would exercise all the
powers and functions, exercisable by a District Judge under the Criminal
Law Amendment Ordinance, 1944.
146. Chapter III dwells on "offences and penalties" and Section
13 thereunder sets out the contingencies under which a criminal
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 745
[PINAKI CHANDRA GROSE, J.]

misconduct is committed by a public servant. Clause l(e) of Section 13 A
being the gravamen of the charge herein is quoted hereunder:
"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 satisfactorily account, of pecuniary
resources or property disproportionate to his known sources of B
income.
Explanation:-For the purposes of this section, "known sources
of income" means income received from any lawful source and
such receipt has been intimated in accordance with the provisions
of any law, rules or orders for the time being applicable to a c
public servant."
147. A significant addition to this clause otherwise reproduced
from the 1947 Act is the explanation appended thereto which exposits
the expression "known sources of income" to be the income received
from any lawful source, the receipt whereof has been intimated in D
accordance with the provisions of any law, rules or orders for the time
being, applicable to a public servant.
148. Lawfulness or legitimacy of the known sources of income of
the public servant, to satisfactorily. account the pecuniary resources or
property, alleged to be disproportionate thereto, is, thus the indispensable E
legislative edict.
149. Section 22 of the Act also makes the provisions of the Code
of Criminal Procedure, 1973 applicable to a proceeding in relation to an
offence punishable thereunder, subject to certain modifications as
mentioned therein. Here as well, the applicability of Section 452 of the F
Code otherwise empowering a criminal court to order for disposal of the
property at the conclusion of the trial before it, has not been excluded.
While Section 27 recognises a special Judge under the Act to be a
Court of Session qua the powers of appeal and revision, conferred by
the Code of Criminal Procedure, 1973 available to the jurisdictional High
Court, Section 28 ordains that the provisions of the Act would be in G
addition to and not in derogation of any other law for the time being in
force and that nothing contained therein would exempt any public servant
from any proceeding which might be instituted against him/her. By
Section 29, amongst others, paragraph 4A of the Criminal Law
H
746 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Amendment Ordinance Act, 1944 has been substituted as hereunder:
"4A-An offence punishable under the Prevention of Corruption
Act, 1988".
Significantly, prior to the substitution, paragraph 4A of the afore-
mentioned ordinance read as follows: ·
B
"4A: An offence punishable under Section 5 of Prevention of
CorruptionAct, 1947"
150. Assuredly thus, the offence under Section 5 of the Prevention
of Corruption Act, 1947 (for short "1947 Act"), was included in the
C schedule of offences, appended to the Criminal Amendment Ordinance,
1944 since 18.12.1964 w.e.f. which Anti Corruption Laws (Amendment)
Act, 1964 was enforced.
151. As a consequence of the integration of the offences uner
Sections 161to165A contained in Chapter IX of the Indian Penal Code
0
dealing with the criminal misconduct of a public servant and the offence
of abetment thereof, by Section 31 of the statute, these provisions were
omitted from the IPC and were construed to have been repealed by a
Central Act.
152. The scheme of the Act 1988, thus ensure a stricter legislation
to combat and eradicate corruption in public life and takes within its
E
sweep, not only the public servants but also those who abet and conspire
with them in the commission of offences, enumerated therein. The
avowed objectives of the statute prompted by the compelling exigencies
of time and the revealing contemporary realities, thus demand of a
befitting curial approach to effectuate the same sans qua the nile of
F benefit of doubt on intangible and trivial omissions and deficiencies.
153. A plain perusal of the scheme of the Act presents several
noticeable special features thereof in accord with the legislative
intendment to achieve the objectives set therefor. Apart from the
overwhelming backdrop demanding the necessity to consolidate and
G reinforce the anti corruption law, the main mission being to achieve a
catharsis in public office, the statute besides expanding the notion of
"public servant" to effect maximum extension ofits sweep as envisaged,
has ordained the constitution of a court of Special Judge to try the offences
thereunder and also the charge of any conspiracy or attempt or abetment
in the commission thereof. Thus, an exclusive autonomous adjudicative
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 747
[PINAKI CHANDRA GHOSE, J.]

regime has been put in place. The provisions of the Code have been A
made applicable subject to the modifications contemplated and the special
Judge in particular, while trying an offence punishable under the Act has
been authorised to exercise all powers and functions invocable by a
District Judge under the Ordinance. Sections 7 to 12 of the Act
correspond to Section 161 to 165A of the Indian Penal Code, thereby
8
integrating the offences in the legislation to be tried by a special forum
as envisaged. Resultantly, Sections 161 to l 65A have been effaced froin
the Indian Penal Code forobvious reasons. Explanation to Section l 3(i)(e)
makes it limpid that the known sources of income of the public servant,
to satisfactorily account the pecuniary resources or the property
otherwise alleged to be disproportionate thereto, has to be from a lawful C
source and further that the receipt thereof had been intimated in
accordance with the provisions of any law, rule or orders for the time
being applicable to him/her, as the case may be. This prescription
indubitably emphasizes the lawfulness or legitimacy of the income to
enable the public servant to satisfactorily account for the pecuniary D
resources or property otherwise imputed to be disproportionate thereto.
Not only the Act entertains presumption against the public servant, in
the eventualities as comprehended in Section 20 of the Act, it is clarified
in Section 28 that nothing in the statute would exempt any public servant
from any proceeding which might apart from the Act, be instituted against
him or her. Section 29, amongst others to reiterate, has substituted in E
paragraph 4A of the Ordinance, an offence punishable under the 1988
Act, in lieu of the offence under Section 5 of the 1947 Act. The legislation
thus is a complete code by itself, vibrant with the purpose therefor and
animated with the spirit to effectuate the statutory goal. All these predicate
a purposive explication of the provisions thereof to further the salutary
F
legislative vision.
CONSPIRACY
154. While dwelling on the concept of conspiracy this Court in
Mo/rd. Husain u,,,ar Kochra Etc. Vs. K.S. Dalipsinghji and Another
Etc., (1969) 3 SCC 429 held that in conspiracy, agreement is the gist of G
the offence and a common design and common intention-in furtherance
of the common scheme is necessarv. Each conspirator plays his separate
part in one integrated and united effort to achieve the common purpose.
It was enounced that conspiracy may develop in successive stages and
new technigues may be invented and new means may be devised. and a
H
748 SUPREME COURT REPORTS [2017] 5 S.C.R.

A general conspiracy may be a sum up of separate conspiracies having a
similar general pumose. the essential elements being collaboration.
connivance. jointness in severaltv and coordination. (Emphasis supplied)
155. Noor Mohammad Mohd. Yusuf Momin (supra),
encountered a fact situation witnessing a clash between the neighbours
B on a very trivial incident of a cow blocking a passage. Murderous assaults
followed in which the appellant along with 4/5 associates were involved.
The appellant along with others were found guilty under Section 302/34
!PC. This Court held that participation is the gravamen of common
intention but Section 109, abetment can be attracted even ifthe abettor
is not present. Qua conspiracy, it was exposited that it postulates an
C agreement between two or more persons to do or cause to be done an
illegal act or an act which is not illegal by illegal means. It was elucidated,
that conspiracy is of wider amplitude than abetment though there is a
close association between the two. It was ruled that conspiracy can be
proved by circumstantial evidence and proof thereof is largely inferential
D founded of facts and this is because of the difficulty in securing direct
evidence of criminal conspiracy. It was explicated that once a reasonable
ground is shown to suggest that two or more persons have conspired.
then anything done by one of them in reference to their common intention
becomes relevant in proving the conspiracy and the offences committed
pursuant thereto. (Emphasis supplied)
E
156. InSaju Vs. State ofKera/a (supra), it was propounded that
to attract Section l 20B !PC, it is to be proved that all the accused had
the intention and they had agreed to commit the crime. It was assumed
that conspiracy is hatched in private and in secrecy. for which direct
evidence would not be readily available. It was ruled that it is not
F necessary that each member to a conspiracy must know all the details
of all the conspiracy. (Emphasis supplied)
157. This Court recalled its observations in Yash Pal Mittal Vs.
State ofPunjab, ( 1977) 4 SCC 540 that there may be so many devices
and techniques adopted to achieve the common goal of the conspiracy,
G and there may be division of performances in the chain of actions with
one object to achieve the real end. of which every collaborator need not
be aware but in which each one of them would be interested. There
must be a unity of object or purpose but there may be plurality of means,
sometimes even unknown to one another, amongst the conspirators. The
H . only relevant factor is that all means adopted and illegal acts done must
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 749
[PINAKI CHANDRA GHOSE, J.]

be to fulfill the object of the conspiracy. Even if some steps are resorted A
to by one or two of the conspirators without the knowledge of the others.
it will not affect the culpabilitv of those others when they are associated
with the object of the conspiracy.
It was noted that as an exception to the settled position oflaw, an
act or action of one of the accused cannot be used as evidence against B
another, Section l 0 of the Evidence Act provided otherwise. To attract
the applicabilitv of Section 10. the Court must have reasonable ground to
believe that two or more persons had conspired together for committing
an offence and then the evidence of action or statement made by one of
the accused could be used as evidence against the other. (Emphasis
supplied) c
158. In Ram Narayan Popli Vs. Central Bureau of
Investigation (supra), the executives of the Maruti Udyog Limited were
charged with criminal conspiracy to siphon off its funds in favour of A-
5 and were prosecuted under Sections 13(1) (c) and 13(2) of the 1988
Act along with Sections 1208, 420,409, 467 and 471 of the IPC. This D
Court reiterated that the essence of a Criminal conspiracy, is unlawful
combination and ordinarily the offence is complete when the combination
is framed and that the law making conspiracy a crime, is designed to
curb the immoderate power to do mischief which is gained by combination
of the means. It was held that the offence of criminal conspiracy has E
its foundation in an agreement to commit an offence. A conspiracy
consists not merely in the intention of two or more but in the agreement
of two or more to do an unlawful act by unlawful means.
The agreement which is the quintessence of criminal conspiracy
can be proved either by direct or by circumstantial evidence or by both F
and it is .a matter of common experience that direct evidence to prove
conspiracy is rarely available.
159. The following excerpt from Halsbury's Laws of England 4'h
· Edition Volume XI, page 54, para 58 was relied upon:-
"The conspiracy arises and the offence is committed as soon as G
the agreement is made: and the offence continues to be committed
so long as the combination persists that is. until the conspiratorial
agreement is terminated by completion of its performance or by
abandonment or frustration or however, it may be the actus reus
in a conspiracy is the agreement to execute the illegal conduct, H
750 SUPREME COURT REPORTS [2017] 5 S.C.R.

A not the execution of it. It is not enough that two or more persons
pursued the same unlawful object at the same time or at the
same place. It is necessary to show the meeting of minds to a
consensus to effect an unlawful purpose. It is not, however;
necessary that each conspirator should have been in
communication with each other."
B
160. Reference was made to Regina Vs. Murphy, (1837) 173
ER 502 where Coleridge J, was of the view that although common design
is the root of the charge, it is not necessary to prove that these two
parties had come together and actually agreed in terms to have the
common design and to pursue it by common means and so to carry it
C into execution, as in many cases of established conspiracy, there are no
ways of proving any such thing. If it is found that these two persons
pursued by their acts. the same object. often by the same means. one
performing one part of an act and the other another part of the same act
so as to complete it. with a view to attain the object which they are
D pursuing. you will be at liberty to draw the conclusion that they have
been engaged in a conspiracy to effect that object. (Emphasis supplied)
161. The overwhelming judicial opinion thus is that a conspiracy
can be proved by circumstantial evidence as mostly having regard to the
nature of the offending act, no direct evidence can be expected.
E 162. In Firozuddin Basheer11ddi11 & Ors. Vs. State of Kera/a,
(supra), it was ruled that loosened standards prevail in a conspiracy trial
regarding admissibility of evidence. Contrary to the usual rule. in
conspiracy prosecution. any declaration by one conspirator. made in
furtherance of a conspiracy and during its pendency. is admissible against
F each co conspirator. Despite the unreliability of hearsay evidence. it is
admissible in conspiracy prosecutions. It was observed that thus the
conspirators are liable on an agency theory for statements of co
conspirators just as they are for the overt acts and crimes committed in
their confederates. (Emphasis supplied)

G 163. In Mir Nagvi Askari Vs. Ce11tral Bureau ofInvestigation,
(2009) 15 sec 643, it was enounced that courts in deciding on the
existence or otherwise, of an offence of conspiracy must bear in mind
that it is hatched in secrecy and that it is difficult. if not impossible to
obtain direct evidence to establish the same. The manner and
circumstances in which the offences have been committed and the
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS.· 751
[PINAKI CHANDRA GHOSE, J.]

accused persons had taken part are relevant. To prove that the A
propounders had expressly agreed to conunit the illegal act or had caused
it to be done. may be proved by adducing circumstantial evidence and or
by necessary implications. (Emphasis supplied)
164. The following extract from Russels on Crimes 12•h Edition,
Volume I was quoted with approval:- B
"The gist of the offence of conspiracy then lies, not in doing the
act, or effecting the purpose for which the conspiracy is formed,
nor in attempting to do them, nor in inciting others to do them, but
in the forming of the scheme or agreement between the parties.
Agreement is essential. Mere knowledge, or even discussion, c
of the plan is not, per se, enough."
165. It recalled its conclusions in Kehar Singh & Ors. Vs. State
(Delhi Administration), (supra), that to establish the offence of criminal
conspiracy, it is not required that a single agreement should be entered
into by all the conspirators at one time. Each conspirator plays his o
separate part in one integrated and united effort to achieve the conunon
purpose. Each one is aware that he has a part to play in a general
conspiracy though he may not know all its secrets or means by which
the conunon purpose is to be accomplished. On the touchstone of the
above adumbrated legal postulations, the evidence on records would
have to be assayed to derive the deduction as logically permissible. E
(Emphasis supplied)
Approach of Court in PC Cases
166. Qua the required orientation of a Court vis-a-vis offences
under the Act, it has been inter alia emphatically observed in State of F
M.P. & Ors. Vs. Ram Singh, (2000) 5 SCC 88, that corruption in a
civilized society is a disease like cancer, which if not detected in time is
sure to affiict the polity of the country leading to disastrous consequences.
It was ruled that corruption is like a plague which is not only contagious
but if not controlled spreads like fire in a jungle. It was proclaimed that
corruption is opposed to democracy and social order, being not only anti G
people but aimed and targeted against them. It affects the economy and
destroys the cultural heritage and therefore, unless it is nipped in the bud
at the earliest, it is likely to cause turbulence, shaking the socio-economic-
political system in an otherwise healthy, wealthy, effective and vibrating
society.
H
752 SUPREME 'COURT REPORTS (2017) 5 S.C.R.

A 167. The history of the enactment of the 1947 Act was traced in
R.S. Nayak Vs. A.R. Antulay, (1984) 2 SCC 183 and a caveat was
sounded to the effect that whenever a question of construction arises
upon ambiguity or if two views are possible of a orovision of an anti
corruption law (then Act 1947). it would be the duty of the Court to
adopt that construction which would advance the object underlying the
B
statute. namely to make effective the provision for the prevention of
briberv and corruption and at any rate not to defeat it. It was underscored
that procedural delays and technicalities of law should not be permitted
to defeat the object sought to be achieved by the statute and the overall
public interest and the social object is to be borne in mind while interpreting
c the various provisions thereof and in deciding cases under the same.
(Emphasis supplied)
168. In Niranjan Hemchandra Sashitta/ & Anr. Vs. State of
Maharashtra, (2013) 4 SCC 642, this Court while dwelling on the same
theme, exposited as hereinbelow :
D "It can be stated without any fear of contradiction that corruption
is not to be judged by decree, for corruption mothers disorder,
destroys societal will to progress, accelerates undeserved
ambitions, kills the conscience, jettisons the glory of the
institutions, paralyses the economic health of a country, corrodes
the sense of civility and mars the marrows of governance. It is
E
worth noting that immoral acquisition of wealth destroys the
energy of the people believing in honesty, and history records
with agony how they have suffered. The only redeeming fact is
that collective sensibility respects such suffering as it is in
consonance with the constitutional morality."
F 169. A Constitution Bench of this Court in Subramanian Swamy
Vs. Director, Central Bureau of Investigation & Anr., (2014) 8 SCC
682, reiterated that corruption is an enemy of the natio~ and tracking
down corrupt public servants and punishing such persons is a necessary
mandate of the Act 1988,
G 170. On the touchstone of the above entrenched legal prescripts
the evidence on record woulQ have to be assayed to derive the deductions
as' logically permissible.
Probative worth of Income Tax Proceedings gila lawfulness of
the source of income
H 171. The respondent in Commissioner ofIncome Tax, U.P. Vs.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 753
[PINAKI CHANDRA GHOSE, J.]

Devi Prasad Vishwanath Prasad, (1969) ITR 194 was a firm dealing A
in handloom cloth and silk fabrics. In the proceeding for the assessment
year 194647, the income tax officer, amongst others, found a credit of
Rs.20000/- in its books of accounts as a deposit in the name of Mis.
Banshidhar Rawatmal of Ratangarh. After considering the evidence
procured by the assessee, the Income Tax Officer rejected the plea that B
the amount had been deposited by the above firm and concluded that it
was the assessee's income from undisclosed source. Eventually, the
statement of case was referred to the High Court with the following
question:
"Whether, on the facts and in the circumstances of the case,
there was any material to hold that the sum of Rs.20,000/- was C
income of the assessee from some other source and was not
income included in the assessed income on the rejection of the
books of account?"
The High Court, having answered in the affirmative in favour of
the assessee, the issue reached this Court. D
172. lt was exposited that there was nothing in law which
prevented the Income Tax Officer in an appropriate case from taxing
both the cash credit, the source and nature of which was not satisfactorily
explained, and the business income estimated by him under Section 13
of the Income Tax Act, 1922, after rejecting the books of accounts of E
the assessee as unreliable. It was propounded as well that where there
was unexplained cash credit, it was open to the Income Tax Officer to
hold that it is the income of the assessee and no further burden lies on
the Income Tax Officer to show that that income is from any particular
source and that it was for the assessee to prove that even if the cash F
credit represented income. it was an income from a source which had
already been taxed.
173. In Anantharam Veerasingliaiah & Co. Vs. C.J. T., Andlira
Pradesli, (1980) Suppl. SCC 13, the return filed by the petitioner -
assessee, who was anAbkari contractor, was not accepted by the l.T.O. G
as amongst others, excess expenditure over the disclosed available cash
was noticeable and further several deposits had been made in names of
others. The assessee's explanation that the excess expenditure was met
from the amounts deposited with him by other shopkeepers but were not
entered in his book, was not accepted and penalty proceedings were
taken out against him holding that the items of cash deficit and cash H
754 SUPREME COURT REPORTS (2017] 5 S.C.R.

A deposit represented concealed income resulting from suppressed yield
and low selling rates mentioned in the books. The Appellate Tribunal
however, allowed the appeal of the assessee and set aside the penalty
order. The High Court reversed the decision of the Appellate Tribunal
and the matter reached the Supreme Court.
B 174. It was held that as per Section 27l(l)(c) of the Income Tax
Act, l 96 l, penalty can be imposed in case where any person has
concealed the particulars of his income or has deliberately furnished
inaccurate particulars of such income. The related proceeding was quasi
criminal in nature and the burden lay on the revenue to establish that the
disputed amount represented income and that the assessee had
C consciously concealed the particulars of his income or had deliberately
furnished inaccurate particulars. The burden of proof in penalty
proceedings varied from that involved in assessment proceedings and a
finding in assessment proceedings that a particular receipt was income
cannot automatically be adopted as a finding to that effect in the penalty
D proceedings. In the penalty proceedings, the taxing authority was bound
to consider the matter afresh on the materials before it, to ascertain that
whether a particular amount is a revenue receipt. It was observed that
no doubt the fact that the assessment year contains a finding that the
disputed amount represents income constitutes good evidence in the
penalty proceedings. but the finding in the assessment proceedings cannot
E be regarded as conclusive for the purpose of penalty proceedings. Before
a penalty can be imposed, the entirety of the circumstances must be
taken into account and must lead to the conclusion that the disputed
amount represented income and that the assessee had consciously
concealed ·the particulars of his income or had deliberately furnished
F inaccurate particulars.
l 75. The decision is to convey that though the I. T. returns and the
orders passed in the I. T. Proceedings in the instant case recorded the
income of the accused concerned as disclosed in their returns, in view
of the charge levelled against them, such returns and the orders in the
G I.T. Proceedings would not by themselves establish that such income
had been from lawful source as contemplated in the explanation to Section
l 3( l (e) and that independent evidence would be required to account for
the same.
· l 76. Though considerable exchanges had been made in course of
H the arguments, centring around Section 43 of the Indian Evidence Act,
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. · · 755
[PINAKI CHANDRA GHOSE, J.]

1872, we are of the comprehension that those need not be expatiated in A
details. Suffice it to state that even assuming that the income tax returns,
the proceedings in connection therewith and the decisions rendered therein
are relevant and admissible in evidence as well, nothing as such, turris
thereon definitively as those do not furnish any guarantee or authentication
of the lawfulness of the source(s) of income, the pith of the charge B
levelled against the respondents. It is the plea of the defence that the
income tax returns and orders, while proved by the accused persons had
not been objected to by the prosecution and further it (prosecution) as
well had called in evidence the income tax returns/orders ancf thus, it
cannot object to the admissibility of the records produced by the defence.
To reiterate, even if such returns and orders are admissible, the probative C
value would depend on the nature of the information furnished, the findings
recorded in the orders and having a bearing on the charge levelled. In
any view of the matter, however, such returns and orders would not ipso
facto either conclusively prove or disprove the charge and can at best
be pieces of evidence which have to be evaluated along with the other
0
materials on record. Noticeably, none of the respondents has been
examined on oath in the case in hand. Further, the income tax returns
relied upon by the defence as well as the orders passed in the proceedings
pertaining thereto have been filed/passed after the charge-sheet had
been submitted. Significantly, there is a charge of conspiracy and
abetment against the accused persons. In the overall perspective therefore E
neither the income tax returns nor the orders passed in the proceedings
relatable thereto, either definitively attest the lawfulness of the sources
of income of the accused persons or are of any avail to them to
satisfactorily account the disproportionateness of their pecuniary
resources and properties as mandated by Section 13( 1)(e) of the Act.
F
177. A Constitution Bench of this Court in Iqbal Singh Marwah
& Anr. Vs. Meenakshi Marwah & Anr., (2005) 4 SCC 370, in this
context had ruled that there is neither any statutory provision nor any
legal principle that the findings recorded in one proceeding may be treated
as final or binding on the other as both the cases have to be decided on
the basis of the evidence adduced therein. G
178. In CIT Patiala Vs. Piara Singh, 1980 Supp. SCC 166,Jhe
respondent was apprehended while crossing the Indo Pakistan Border
and a sum ofRs.65,500/-was recovered. He revealed at the interrogation,
that he was taking the currency notes to Pakistan for purchase of gold
H
756 SUPREME COURT REPORTS [2017] 5 S.C.R.

A to smuggle it into India. The ctUTency notes were confiscated. In the
income tax assessment proceedings of the respondent, the I.T.O., held
that out of Rs.65,500/- an amount of Rs.60,500/- constituted income of
the assessee from undisclosed sources. The plea of the respondent was
that ifhe was regarded as engaged in the business of smuggling gold, he
was entitled to deduction under Section 10(1) of the Income Tax Act of
B
the entire amount at Rs.65,500/- as loss incurred in the business due to
the confiscation thereof. His claim was upheld. It was ruled that ifthe
activities of smuggling can be regarded as business. the currency notes
carried by the assessee was meant for acquiring gold in Pakistan to be
sold in India at a profit. The carrying of ctUTency note was thus an
c essential part of the business and the confiscation of cWTency notes
was a loss occasioned in pursuing the business and would be akin to an
eventuality, as ifthe cWTency notes had been stolen or dropped on the
way. while carrying on business.
(emphasis supplied)
D This rendition too proclaims against probative efficacy of an income
tax proceeding or order passed therein as a conclusive determinant of
lawfulness of the source of any income involved therein.
179. In State of Tamil Nadu by Inspector of Police Vigilance
and Anti-Corruption Vs. N. Suresh Rajan & Ors., (2014) 11 SCC
E 709, the allegation against the respondent, who was the Minister of Tamil
Nadu was acquisition of pecuniary resources and properties in his name
and in the names of his family members, and friends, disproportionate to
the known sources of income. Charge of abetment was also levelled
against the family members and friends. Charge sheet was submitted
F under Section 109 IPC read with Section 13(l)(e) and 13(2) of the
1988 Act. All of them were discharged by the High Court.
180. This Court ruled that the fact that the accused, other than
the two Ministers, had been assessed to income tax and had paid income
tax could not have been relied upon to discharge the accused persons in
G view of the allegation made by the prosecution that there was no separate
income to amass such huge property. It was underlined that the property
in the name of the income tax assessee itself cannot be a ground to hold
that it actually belongs to such an assessee and that if this proposition
was accepted, it would lead to disastrous consequences. This Court
reflected that in such an eventuality it will give opportunities to the corrupt
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 757
[PINAKI CHANDRA GROSE, J.]

public servant to amass property in the name of known person, pay A
income tax on their behalf and then be out from the mischief of faw.
(emphasis supplied)
181. In Commissioner of Income Tax, Gujarat Vs. S.C.
Kothari, (1972) 4 SCC 402, the respondent S.C. Kothari was a
registered firm and carrying on the business of commission agents and B
general merchants. During the assessment year 1958-59, the assessee
claimed to have incurred a loss ofRs.3,40,443/- in certain transactions
and pleaded that the above loss was allowable under Section 10(1) of
the Income Tax Act, I 922 as a deduction against its other business
income. The Income Tax Officer was of the view that the transactions c
in question were hit by the provisions of the Forward Contracts Regulation
Act, 1852 and the Rules and Regulations of the Saurashtra Oil and
Oilseeds Association Ltd. The losses were thus held to have been
incurred in illegal transactions and the Income Tax Officer, thus rejected
the contention of the assessee that even on the assumption that the
losses were incurred in illegal transactions. they would be allowed in the D
computation of the income. The appellate Assistant Commissioner
confirmed the order of the Income Tax Officer but the Tribunal held, in
further appeal, that the transactions in question were not illegal contracts
but were contracts which had been validly entered into under the Act
and the bye-laws etc. The Tribunal remanded the matter to the Appellate E
Assistant Commissioner for a report and on the receipt thereof, it
eventually held that such loss could not be set off against the other ·
income but was of the view that the asses see was entitled to a set off of
the loss against the profits in speculative transactions.
182. The High Court in the reference made, inter alia, held that F
even though the disputed contracts were not validly entered into in
accordance with the above mentioned Act, the loss ofRs.3.40.443 was
liable to be taken into account in computing the business income of the
assessee under Section 10 of the Act of 1922 and the assessee was
entitled to set off against the profits from other speculative transactions.
This Court in the above factual backdrop held that it is well settled that G
contracts which are prohibited by statute. the prohibition being either
express or implied. would be illegal and unenforceable if they are entered
into in contravention of the statute. If the business is illegal. neither the
profits earned or the losses incurred would be enforceable in law. But
that does not take the profits out of the taxing statute. Similarly the taint H
758 SUPREME COURT REPORTS [2017] S S.C.R.

A of illegality of the business cannot detract from the losses being taken
into account for computation of the amount which can be subjected to
tax as "profits" under Section 10(1) of the Act of 1922 and the Tax
Collector cannot be heard to say that he will bring the gross receipts to
tax. He can only tax profits of a trade or business and that cannot be
done without deducting the losses and the legitimate expenses of the
B
business. The view of the High Court that for the purpose of Section
10(1), the losses which have actually been incurred in carrying on a
particular illegal business must be deducted before the true figure relating
to profits can be computed or determined to be brought to tax, was
upheld.
c (emphasis supplied)
183. The import of this decision is that in the tax regime, the legality
or illegality of the transactions generating profit or loss is inconsequential
qua the issue whether the income is from a lawful source or not. The
scrutiny in an assessment proceeding is directed only to quantify the
D taxable income and the orders passed therein do not certify or
authenticate that the source(s) thereof to be lawful and are thus of no
significance vis-a-vis a charge under Section 13(l)(e) of the Act.
184. In Vishwanath Chaturvedi Vs. Union of India & Ors.,
(2007) 4 SCC 380, a writ petition was filed under Article 32 of the
E Constitution of India seeking an appropriate writ for directing Union of
India to take appropriate action to prosecute R2 to RS under the 1988
Act for having amassed assets disproportionate to the known sources of
income by misusing their power and authority. The respondents were
the then sitting Chief Minister of U.P. and his relatives. Having noticed
F that the basic issue was with regard to alleged investments and sources
of such investments, the respondents 2 to 5 were ordered by this Court
to file copies. of income tax and wealth· tax returns of the relevant
assessment years which was done. It was pointed out on behalf of the
petitioner that the net assets of the family though was Rs.9,22,72,000/-
, as per the calculation made by the official valuer, the then value of the
G net assets came to be Rs.24 crores. It was pleaded on behalf of the
respondents that income tax returns had already been filed and the
matters were pending before the authorities concerned and all the
payments were made by cheques, and thus the allegation levelled against
them were baseless. It was observed that the minuteness of the details
H furnished by the parties and the income tax returns and assessment
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 759
[PINA.Kl CHANDRA GHOSE, J.]

orders, sale deeds etc. were necessary to be carefully looked into and A
analysed only by an independent agency with the assistance of chartered
accountants and other accredited engineers and valuers of the property.
It was observed that the Income Tax Department was concerned only
with the source of income and whether the tax was paid or not and,
therefore, only an independent agency or CBI could, on court direction,
B
determine the question of disproportionate assets. The CBI was thus
directed to conduct a preliminary enquiry into the assets of all the
respondents and to take further action in the matter after scrutinizing as
to whether a case was made out or not.
This decision is to emphasize that submission of income tax returns
and the assessments orders passed thereon, would not constitute a full c
proof defence against a charge of acquisition of assets disproportionate
to the known lawful sources of income as contemplated under the PC
Act and that further scrutiny/analysis thereof is imperative to determine
as to whether the offence as contemplated by the PC act is made out or
not. D
Consistent approach of Courts in P.C. matters
185. In State ofM.P. Vs. Shambliu Dayal Nagar, (2006) 8 SCC
693, this court while responding to the plea for a lenient view qua a
charge of corruption expressed its concern against rampant venality by
public servant observed that the malady is corroding like cancerous E
lymph nodes, the vital veins of the body politics, social falenic of efficiency
in public service and demoralizing the honest officers. The need for
public servants to devote their sincere attention to the duties of the office
was emphasized.
186. ln Subramanian Swamy (supra), this Court was examining F
the challenge to the constitutional validity of Section 6A of the DSPE
Act, 1946 - qua a classification amongst public servants made by Section
6A for the purpose of inquiry/investigation into any offence under the
1988 Act. It was observed that the corruption is an enemy of the nation
and to track down the corrupt public servant and to punish them is the G
necessary mandate of the 1988 Act and as such the purposes of law
being either to eliminate public mischief or achieve public good, the
classification militates against the same and in a way advances public
mischief and protects the crime doer. It was held that the provision
thwarts independent unhampered, unbiased, efficient and fearless inquiry/
H
760 SUPREME COURT REPORTS [2017] 5 S.C.R.

A investigation to track down the corrupt public servants. Section 6A of
the DSPE Act and Section 26 (c) of the CBC Act struck down.
187. Jn Niranjan Hemchandra Sashittal (supra), this Court, apart
from elucidating the objective of the 1988 Act ruled that the gravity of
the offence thereunder is not to be judged on the measure of quantum of
B obribe, as corruption is not to be justified in degree. A serious concern
was expressed noticing the permeating presence of the malady in the
contemporary existence, so much so, that immoral acquisition of wealth
visibly has the potential to destroy the morale of the people believing in
honesty, destroying societal will to progress, aside corroding the sense
of civility and enervating the marrows of governance.
c
LIFTING OF CORPORATE VEIL OF THE COMPANY
188. In Aron Salomon (Pauper) Vs. A. Salomon and Company
Limited, 1897 AC 22, the House of Lords accentuated the distinctive
entity of a company qua its subscribers as elucidated hereunder:
D "The company is at law a different person altogether from the
subscribers to the memorandum; and, though it may be that
after incorporation, the business is precisely the same as it was
before, and the same persons are managers, and the same hands
receive the profits, the company is not in law the agent of the
E subscribers or trustee for them."
The caveat of Lord Halsbury L.C. in this context, as extracted
hereinbelow, however is revealing:
"I am simply here dealing with the provisions of the statute, and
it seems to me to be essential to the artificial creation that the
F law should recognise only that artificial existence - quite apart
from the motives or conduct of individual corporation. In saying
this, I do not at all mean to suggest that if it could be established
that this provision of the statute iOwhich 1 am adverting had not
been complied with, you could not go behind the certificate of
incorporation to show that a fraud had been committed upon the
G
officer entrusted with the duty of giving the certificate, and that
by some proceeding in the nature of scire facias you could not
prove the fact that the company had no real legal existence."
189. While elaborating on the same theme, this Court in Delhi
Development Authority Vs. Skipper Construction Co. (P) Ltd. & Anr.,
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 761
[PINAKI CHANDRA GROSE, J.]

(1996)4 SCC 622, noted that the above legal proposition was, however, A
subject to several exceptions amongst others, when the corporate
personality is blatantly used as a cloak for fraud or improper conduct, as
scripted by Gower - Modern Company Law - 4'h Edn. (1979) (page
137).
190. The following passage from Company Law by Pennington B
- 5t1t Edition 1985 at page 53 was also quoted with approval:
"The concept of 'piercing the veil' in the United States is much
more developed than in the UK. The motto, which was laid
down by Sanborn, J. and cited ·since then as the law, is that
'when the notion of legal entity is used to defeat public c
convenience. justify wrong. protect fraud, or defend crime, the
law will regard the corporation as an association of persons'.
The same can be seen in various European jurisdictions."
This Court also in that decision, referred to the following synopsis
on the subject as entered by the American Professor L. Maurice D
Wormser in his article "Piercing the veil of corporate entity" :
"When the conception of corporate entity is employed to defraud
creditors, to evade an existing obligation, to circumvent a statute,
to achieve or perpetuate monopoly, or to protect knavery or crime,
the courts will draw aside the web of entity, will regard the E
corporate company as an association oflive. up-and-doing. men
and women shareholders, and will do justice between real
persons.".
191. It was finally held that the concept of corporate entity was
evolved to encourage and promote trade and commerce __ and not to
F
commit illegalities or to defraud people and thus when the corporate
character is employed for the purpose of committing illegality or for
defrauding others, the Court ought to ignore the corporate character
and scan the reality behind the corporate veil so as to enable it to pass
appropriate orders to do justice between the parties.
G
192. In State ofRajasthan & Ors. Vs. Gotan Lime Stone Khanji
Udyog Private Limited & Anr., (2016) 4 SCC 469, it has propounded
that the principle of lifting the corporate veil was well recognized not
only to unravel tax evasion but also where protection of public interest
was of paramount importance and the corporate entity was only an
H
762 SUPREME COURT REPORTS [2017] 5 S.C.R.

A attempt to evade legal obligations and lifting of veil is necessary to
prevent a device to avoid any welfare legislation. It was acknowledged
that it was difficult to enumerate the classes of cases where lifting the
veil is permissible but it was stressed upon that the same must necessarily
depend on the relevant statutory or other provisions. the object sought to
be achieved, the impugned conduct, the involvement of the element of
B
the public interest. the effect on parties who may be affected etc. It was
recorded that the doctrine oflifting the veil could be invoked. ifthe public
interest so required or if there was violation of law by using the device
of a corporate entity. In the reported case, the corporate entity had
been used to conceal the real transaction of transfer of mining lease to a
c third party for consideration without the statutory consent by terming it
as two separate transactions. The real transaction was the sale of mining
lease which was legally impermissible. That the doctrine of lifting the
veil has to be applied to give effect to law which is sought to be
circumvented, is thus the judicial precept.
D 193. In Commissioner of Income Tax Vs. P. Moltanakala,
(2007) 6 sec 21, the issue involved related to additions made by the
Assessing Officer in respect of several foreign gifts stated to have been
received by the assessees from one common donor Sampat Kumar.
Though the gifts were claimed to have been received from persons with
two other names, in course of the inquiry, it was ascertained by the
E
Assessing Officer that those were all aliases of Sampat Kumar. The
concerned revenue authority, therefore did not accept the explanation
that the receipt was a gift from an NRI. Noticeably, the payments were
made by instruments issued by a foreign bank and credited into the
respective assessee's account by negotiation through a bank in India. In
F course of the inquiry, except the self-serving statement of Sampat Kumar,
no other material evidence as regard his financial status did surface.
The Assessing Officer, on an appreciation of the evidence collected,
concluded that he had given gifts to the assessees with the possibility of
· having received compensatory payments in lieu of the gifts made by
him. It was thus, concluded by the said authority that the gifts though
G apparent were not real and accordingly, treated those amounts credited
in the books of the assesses as their income.
194. This Court while scanning the facts involved referred to
Section 68 of the Income Tax Act, 1961. It also relied on the decision of
this Court in Sumati Dayal Vs. Commissioner of Income Tax,
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 763
[PINAKI CHANDRA GHOSE, J.]

Bangalore, (1995) Suppl. 2 SCC 453 to the effect that in all cases A
where a receipt is sought to be taxed as income, the burden lies on the
department to prove that it is within the taxing provision and that if the
receipt is in the nature of income, the burden of proving that itis not
taxable because it falls within the exemption provided by the Income
Tax Act lay upon the assessee. This Court in the textual facts upheld B
the finding of the Assessing Officer, and most importantly underlined
that though the money involved had come by way of bank cheques and
paid through the process of banking transaction, the same per se were
of no consequence. (emphasis supplied)
195. The decision highlights two aspects, firstly ifthe Assessing
Officer on the consideration of the materials sought for is not satisfied C
with the explanation provided by the assessee qua an income determined
by undisclosed sources, in terms of Section 68, such income can be
made subject to income tax and secondly even if such transaction is
evidenced by banking operations as well as contemporaneous records
pertaining thereto, the same ipso facto would not be determinative to D
hold that the transaction was that of a genuine acceptable gift. It was in
this context that the distinction between a transaction that is apparent
from one i.e. real has been highlighted in emphatic terms.
196. In Yash Pal Goel Vs. Commissioner of Income Tax
(Appeals), (2009) 310 ITR 75 (P&H) Smt. Kusumlata Thakral Vs. E
Commissioner ofIncome Tax (Appeals), (2010) 327 ITR 424 (P&H),
Commissioner of Income Tax Vs. Sandeep Goyal, (2014) 369 ITR
471 (P&H) and Income Tax Officer Vs. Mukesh Bltanubhai Shah,
(2009) 318 (AT) 394 (!TAT [Mum]), the common issue was with regard
to applicability of Section 68 of the Income Tax Act, 1961 vis-a-vis receipts
which were claimed by the assessees to be by way of gifts and thus F
exempted from income tax. In all these cases the assessees were asked
to provide explanation to bring the receipts within the purview of gifts
exempted from income tax and the AO on an indepth scrutiny thereof
had concluded that the transactions were only smoke screen/subterfuge
to avoid income tax. The decision in Sumati Dayal (supra), with G
reference to Section 68 of the Income Tax Act was relied upon. Further
the significant aspects of creditworthiness of donors and genuineness Of
the transactions were highlighted. The relationship between the donors
and the assessee was also examined so as to furnish an acceptable
reason or justification for such gift out of natural love and affection.
H
764 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 197. It was emphasized that to examine the genuineness of a gift,
the test of human probability was very appropriate. It was reiterated
that a gift cannot be accepted as such to be genuine merely because the
amount has come by way of cheque or draft through banking channels
unless the identity of the donor, his creditworthiness, relationship with
the donee and the occasion was proved. Unless the recipient proved
B
the genuineness of the transaction, the same could be very well treated
as an accommodation entry of the assessee's own money, which was
not disclosed for the purpose of taxation.
198. In all however, the process undertaken by the Income Tax
c-. authorities under Section 68 of the Act is only to determine as to whether
the receipt is an income from undisclosed sources or not and is unrelated
to the lawfulness of the sources or of the receipt. Thus even if a receipt
claimed as a gift is after the scrutiny of the Income Tax Authorities
construed to be income from undisclosed sources and is subjected to
income tax, it would not for the purposes of a charge under Section
D 13(1 )( e) of the Act be sufficient to hold that it was from a lawful source
in absence of any independent and satisfactory evidence to that effect.
199. In Sumati Dayal (supra), the subject matter of scrutiny was
receipts by the assessee claimed to be from her winnings in races and
the explanation in support thereof. This court held that it is no doubt true
E that in all cases where the receipt is sought to be taxed as income, the
burden lies on the Department to prove that it is within the relevant
provision and if a receipt is in the nature of income, the burden of proof
that it is not taxable but it falls within the exemption provided by the
Income Tax Act lies on the assessee. But in view of Section 68 of the
Act, where any sum is found credited in the books of the assessee for
F any previous year, the same may be charged as income tax as the income
of the assessee of the previous year, if the explanation offered by the
assessee about the nature and source thereof is in the opinion of the
Assessing Officer, not satisfactory. It was expounded that in such a
case there is, prima facie, evidence against the assessee viz., the receipt
G of money, and ifhe fails to rebut the said evidence, it can be used against
him by holding that it was a receipt of an income nature.
200. In the contextual facts it was observed that though there
was no dispute that the amounts were received by the appellant from
various race clubs on the basis of winning tickets presented by her, the
H question was whether the transaction could be accepted as real. The
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 765
[PINAKI CHANDRA GROSE, J.]

Court recalled. the laid down proposition that apparent must be considered A
as real until it is shown that there are reasons to believe that the apparent
is not the real and the Taxing Authorities are entitled to look in the attendant
circumstances to find out the reality and that the matter has to be
considered by applying the test of human probabilities. On an analysis of
the various attendant factors i.e. knowledge of the appellant about racing, B
wild and unbelievable claim of the appellant to have won several jackpots
in 3-4 races not merely at one place but at three different centres, absence
of drawings from the appellant's books on the race days or on the
immediately preceding days, absence of any debit either for expenses
and purchase of tickets or for losses etc., the Court upheld the analysis
the AO rejecting the appellant's claim of receipts of winning races as C
unreal. This Court thus upheld the approach of examining attendant
circumstances and applying the test of human probabilities to ascertain
as to whether the claim was genuine or not.
Gift, if Lawful Source of Income for a holder of Public Office:
201. This Court in R.S. Nayak Vs. A.R. Antulay & Anr., ( 1986) D
2 SCC 716, amongst others dealt with the distinctive features of Sections
161 and 165 ofthe Indian Penal Code. It enunciated that under the
former Section, a present is taken by a public servant as a motive or
reward for abuse of office but under the latter, the question of motive or
reward is wholly immaterial and acceptance of a valuable thing without E
consideration or with inadequate consideration from a person who has
or is likely to have any business to be transacted is forbidden because
though not taken as a motive or reward for showing any official favour,
it is likely to influence the public servant to show official favour to the
person giving such valuable thing. While observing that the ambit of
Section 165 is wider than that of Sections 161, 162 and 163 IPC and is F
intended to cover cases of corruption which do not come within the
sweep of the latter provisions, it was emphatically proclaimed that if
public servants are allowed to accept presents when they are prohibited
in law, they would easily circumvent the prohibition by accepting the
bribe in the shape of a present. It was underscored that the provisions G
under Sections 161 and 165 IPC as well as the Section 5 of the Act
1947 were intended to keep the public servant free from corruption and
thus ultimately to ensure purity in public life.
202. It is worthwhile to recall that with the advent of the Act
1988, Sections 161 to l 65A have been omitted from the Code as those H
766 SUPREME COURT REPORTS [2017) 5 S.C.R.

A have been essentially engrafted in the said Statute and thus the essence
and spirit thereof seemingly have a bearing on the constituents of Section
13 of the Act. This, in our comprehension, would comport to the Statement
of Objects & Reasons of the legislation, which envisaged widening of
the scope of the definition of the expression "public servant" and
incorporation of the offences under Sections 161 to l 65A in the Act. As
B
a corollary, while applyfog Section 13 thereof in the facts of the given
case, the attributes of the offences contained in erstwhile Sections 161
to 165A of the IPC cannot be totally disregarded.
Burden of proof and benefits of doubt
c 203. That the burden of proof a charge is on the prosecution subject
to the defence of insanity and any other statutory exception has been
authoritatively proclaimed in Woolmington Vs. The Director ofPublic
Prosecutions, (1935) AC 462, and testified by the following extract:
Throughout the web of the English Criminal Law one golden
D thread is always to be seen, that it is the duty of the prosecution
to prove the prisoner's guilt subject to what I have already said
as to the defence of insanity and subject also to any statutory
exception. If, at the end of and on the whole of the case, there
is a reasonable doubt, created by the evidence given by either
the prosecution or the prisoner, as to whether the prisoner killed
E the deceased with a malicious intention, the prosecution has not
made out the case and the prisoner is entitled to an acquittal. No
matter what the charge or where the trial, the principle that the
prosecution must prove the guilt of the prisoner is part of the
common law of England and no attempt to whittle it down can
F be entertained."
204. In Shivaji Sahabrao Bobade & Anr. Vs. State of
Maharashtra, (1973) 2 SCC 793, Hon'ble Krishna Iyer J., in his
inimitable expressional felicity cautioned against the dangers of
exaggerated affinity to the rule of benefit of doubt as hereunder:
G "The dangers of exaggerated devotion to the rule of benefit of
doubt at the expense of social defence and to the soothing
sentiment that all acquittals are always good regardless ofjustice
to the victim and the community, demand especial emphasis in
the contemporary context of escalating crime and escape. The
judicial instrument has a public accountability. The cherished
H
STATE OF KARNATAKA v. SELVl J. JAYALALlTHA & ORS. 767
[PlNAKl CHANDRA GHOSE, J.]

principles or golden thread of proof beyond reasonable doubt A
which runs thro' the web of our law should not be stretched
morbidly to embrace every hunch, hesitancy and degree of doubt.
The excessive solicitude reflected in the attitude that a thousand
guilty men may go but one innocent martyr shall not suffer is a
false dilemma. Only reasonable doubts belong to the accused. B
Otherwise any practical system of justice will then break do'Wn
and lose credibility with the community. The evil of acquitting a
guilty person light heartedly as a learned author (Glanville Williams
in 'Proof of Guilt') has sapiently observed, goes much beyond
the simple fact that just one guilty person has gone unpunished.
If unmerited acquittals become general. they tend to lead to a C
cynical disregard of the law, and this in turn leads to a public
demand for harsher legal presumptions against indicated 'persons'
and more severe punishment of those who are found guilty.".
(emphasis supplied)
205. In Collector ofCustoms, Madras & Ors. Vs. D. Bhoormall, D
(1974) 2 SCC 544, this Court had observed that in all human affairs,
absolute certainty is a myth and the law does not require the prosecution
to prove the impossible. It was highlighted that all that was required is
the establishment of such a degree of probability that a prudent man
may on this basis believe in the existence of the fact in issue. It was
exposited that legal proof is thus not necessarily perfect proof and is E
nothing more than a prndent man's estimate as to the probability of the
case.
206. That proof beyond reasonable doubt is only a guideline and
not a fetish and that a guilty man cannot get away with it because trnth
suffers from infirmity, when projected through human processes, was F
underscored by this Court in Inder Singh & Anr. Vs. State (Delhi
Administration), (1978) 4 SCC 161. It was remarked that if a case is
proved too perfectly, it is argued that it is artificial; if a case has some
flaws, inevitable because human beings are prone to err, it is argued that
it is, too imperfect and thus whether in the meticulous hypersensitivity to G
eliminate a rare innocent from being punished, many, guilty men must be
callously allowed to escape.
207. In the same vein, this Court inAshokDebbarma aliasAchak
Debbarma Vs. State o/Tripura, (2014) 4 SCC 747, expounded that in
our criminal justice system, for recording guilt of the accused, it is not H
768 SUPREME COURT REPORTS [2017] 5 S.C.R.

A necessary that the prosecution should prove the case with absolute or
mathematical certaintv but only beyond reasonable doubt and the criminal
courts, while examining whether any doubt is beyond reasonable doubt,
may carry in their mind, some "residual doubt" even though the courts
are convinced of the accused persons' guilt beyond reasonable doubt.
B
ISSUE - ESTOPPEL
208. This Court in Ravinder Singh Vs. State ofHaryana, (1975)
3 sec 742, while dwelling on the rule of issue/estoppel enunciated that
in order to invoke the rule of issue-estoppel not only the parties in the
c two proceedings must be the same but also the fact-in-issue proved or
not in the earlier proceeding must be identical with what is sought to be
re-agitated in the subsequent one.
209. This ruling was in the context of the plea that in the face of
the acquittal of the co-accused (appellant therein) in a separate trial,
D conviction against him (appellant) was unsustainable. This proposition
has been relied upon by the prosecution to reinforce its plea that in any
view of the matter, it not being a party to the tax assessment proceedings,
at any level, the decision passed therein would not be of binding bearing
at the trial by invoking the rule of issue estoppel.
E 210. A Constitution Bench of this Court in Iqbal Singh Marwah
& Anr. Vs. Meenakshi Marwah & Anr. (supra), in this context had
ruled that there is neither any statutory provision nor any legal principle
that the findings recorded in one proceeding may be treated as final or
binding in other as both the cases have to be decided on the basis of the
evidence adduced therein.
F
Interpretation of the expression "satisfactorily account" in the
context of the offence of misconduct under Section S(l)(e) of Act
of 1947 and Section 13 (l)(e) of Act 1988
211. This Court in C.S.D. Swami Vs. The State, (supra), was
G dealing with an appeal from a conviction under Sections 5(1)(a) and
5(l)(d) of Act 1947. In the textual facts this Court while examining the
purport of Section 5(3) of Act 1947 observed that the said provision did
not create a new offence but only laid down a rule of evidence, enabling
the Court to raise a presumption of guilt in certain circumstances - a
rule which was in complete departure from the established principles of
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 769
[PINAKI CHANDRA GHOSE, J.]

criminal jurisprudence that the burden always lay on the prosecution to A
prove all the ingredients of the offence charged and that the burden
never shifted on to the accused to disprove the charge framed against
him. In this premise, it was held that the test of plausible explanation
was inapplicable, as under this statute, the accused person was required
to satisfactorily account for the possession of the pecuniarv resources B
or propertv disproportionate to its own sources of income and that the
word "satisfactorily" used by the legislature deliberately did cast a burden
on the accused not only to offer a plausible explanation as to how he
came to acquire his large wealth but also to satisfy the Court that his
explanation was worthy of acceptance. This Court enunciated that
"known sources of income" must have reference to sources known to C
the prosecution on a thorough investigation of the case and it cannot be
the resources known to the accused. In further elaboration, it was
elucidated that the affairs of an accused person would be a matter within
his special knowledge in terms of the Section 106 of the Evidence Act
and that the source of income of a particular individual would depend D
upon his position in life, with particular reference to its occupation or
avocation in life and in case of government servant, the prosecution
would naturally infer that his known source of income would be the
salary earned by him during his active service. That however, it would
be open to the accused to prove the other sources of income which have
not been taken into account or brought into evidence by the prosecution E
was underlined.
(emphasis supplied)
212. In M. Narayanan Nambiar Vs. State of Kera/a, (1963)
Suppl. 2 SCR 724, also involving the offence under Section 5(l)(d) of
the Act 1947, this Court emphasised that this statute was passed to F
make more effective provisions for the prevention of bribery an,d
corruption as the general law with regard thereto as contained in Sections
161and165 IPC proved to be insufficient to eradicate or even control
the growing evil of these offences corroding the public service. This
Court held a view that the rebuttable presumption contemplated by the G
statute though contrary to the well known principles of criminal
jurisprudence had been comprehended as a socially useful measure
conceived in public interest and thus deserve to be liberally construed to
bring about the desired object. This Court added that when the legislature.
having referred to the aim of the legislation had used comprehensive
,. H
770 SUPREME COURT REPORTS [2017] 5 S.C.R.

A terminology in Section 5(1)(d), to achieve a puroose, it would be
appropriate not to limit the content by construction when in particular
the spirit of the statute is in accord with the words used therein.
(emphasis supplied)
213. The same view was reiterated, amongst others in State of
B Maharashtra Vs. Wasudeo Ramchandra Kaidalwar, (supra), dealing
in specific terms with Section 5( 1)( e) of 194 7 Act.
The evident dispensation of this pronouncement is that the spirit
of the enactment has to be acknowledged as a relevant factor to construe
an offence alleged to have been committed there under. While dilating
c on the expressions "the public servant cannot satisfactorily account"
and "known sources of income", which was construed to mean "sources
known to the prosecution", this Court held the view that the plea that
unless the prosecution disproves all possible sources of income, a public
servant charged for having disproportionate assets in his possession,
which he cannot satisfactorily account, cannot be convicted under Section
D 5( 1)( e) of the Act was erroneous. It was enunciated that the possible
sources of income beyond those known to the prosecution were matters
within the special knowledge of the public servant within the meaning of
Section 106 of the Evidence Act, 1872. It was, however, recognized that
the burden of the accused was not so onerous as that of the prosecution
E and could be discharged by proof of balance of probabilities. (emphasis
supplied)
214. In K. Ponnuswamy Vs. State of T.N., (2001) 6 SCC 674,
this Court referred to the definition of the word "proved" in Section 3 of
the Indian Evidence Act 1872 and also Section 114 thereof. While noting
F that in terms thereof, a fact is said to be proved when after considering
the matters before it, the Court either believes it to exist or considers its
existence so probable that a prudent man, under the circumstances of
the particular case, ought to act upon this supposition that it exists. It
reflected also on the permissible presumption envisaged under the statute,
with regard to the existence of any fact which a Court is likely to think to
G have happened, regard being had to the common course of natural events,
human conduct and public and private business in relation to the facts of
a particular case.
215. The significance of this decision is that while evaluating the
evidence on record, the attendant facts and circumstances need be taken
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 771
[PINAKI CHANDRA GHOSE, J .]

note of as well, to determine as to whether the materials available, having A
regard to the common course of natural events and human conduct do
logically prove the point in issue.
216. In the context of the sources of income of a public servant
which is the kernel of the offence of criminal misconduct engrafted in
Section 13(1 )(e) of the Act, this Court in State ofM.P. Vs. Awadh Kish ore B
Gupta & Ors., (2004) 1SCC691, elaborated on the attributes of income
as hereunder in para 6:
"The phrase "known sources of income" in Section 13(1)(e)
[old Section 5(1)(e)] has clearly the emphasis on the word
"income". It would be primary to observe that qua the public c
servant, the income would be what is attached to his office or
post, commonly known as remuneration or salary. · The term
"income" by itself, is elastic and has a wide connotation.
Whatever comes in or is received, is income. But, however, wide
the import and connotation of the term "income", it is incapable
of being understood as meaning receipt having no nexus to one's D
labour, or expertise, or property, or investment and having further
a source which may or may not yield a regular revenue. These
essential characteristics are vital in understanding the term
"income". Therefore, it can be said that, though "income" is
receipt in the hand of its recipient, eveiy receipt would not partake E
the character of income. Qua the public servant, whatever return
he gets from his service, will be the primarv item of his income.
Other incomes, which conceivably are income qua the public
servant. will be in the regular receipt from (a) his property, or Cb)
his investment. A receipt from windfall, or gains of graft, crime
or immoral secretions by persons prima facie would not be receipt F
from the "known sources of income" of a public servant."
(emphasis supplied)
217. It was emphasised that the word "satisfactorily" did levy a
burden on the accused not only to offer a plausible explanation as to
how he came by his large wealth but also to satisfy the Court that the G
explanation was worthy of acceptance. The noticeable feature of this
pronouncement thus is that the explanation offered by the accused to be
acceptable has to be one not only plausible in nature and content but also
worthy of acceptance.
I-I
772 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 218. InP. Nallammal & Anr. Vs. State, (supra), this Court while
elucidating that the 1988 Act does contemplate abetment of an offence
under Section 13, proclaimed that in terms of the explanation to Section
13(l)(e) of 1988 Act, the known sources of income of a public servant
for the purpose of satisfying the Court should be "lawful source" and
further the receipt ther_eof should have been intimated by him or her in
B
accordance with the provisions"of any law applicable to such public
servant at the relevant time. It was underscored that a public servant
cannot escape from the tentacles of Section 13( 1)(e) of the 1988 Act,
by showing other legally forbidden sources.
219. A Constitution Bench of this Court in K. Veeraswami Vs.
c Union of India & Ors., (1991) 3 SCC 655, again elaborating on an
offence under Section 5(l)(e) read with Section 5(2) of the Act 1947
reaffirmed the view that clause (e) of Section 5(1) created a statutory
offence which must be proved by the prosecution and when the onus is
discharged by it, the accused has to account satisfactorily for the dis-
D proportionality of the properties possessed by him. It was noted that the
Section did make available a statutory defence to the accused which he/
she was to prove and that the public servant was required to account for
the disparity of the assets qua the income. Though it was observed that
the legal burden of proof placed on the accused was not so onerous as
that of the prosecution, it was enunciated that it would not be enough to
E just throw some doubt on the prosecution version. Referring to the
expression "satisfactorily account'', it was ruled that due emphasis must
be accorded to the word "satisfactorily" which signified that the accused
has to satisfy the Court that his explanation was worthy of acceptance.
Though it was marked that the procedure was contrary to the well known
F principle of criminal jurisprudence that the burden of proof lay always
on the prosecution and did never shift to the accused, the competence of
the Parliament to shift such burden on certain aspects and particular in
matters especially in the knowledge of the accused. was acknowledged.
The plea of the appellant therein that the possession of assets
disproportionate to one's source of income is no offence, till the public
G servant was able to account for the excess thereof was not accepted. I!
was held that if one possesses assets beyond his legitimate means, it
goes without saying that the excess is out of ill-gotten gain observing
that assets are not drawn like Nitrogen from the air and that have to be
essentially acquired. for which means are necessary. It was stressed
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 773
[PINAKI CHANDRA GHOSE, J.]

upon that the public servant concerned was required to prove the source A
of income or the means by which he had acquired the assets. It was
propounded that once the prosecution proved that the public servant
possessed assets dis-proportionate to his known sources of income, the
offence of criminal conduct was attributed to him but it would be open to
him to satisfactorily account for such dis-proportionality.
B
220. In V. D. Jhingan Vs. State of Uttar Pradesh (supra), it was
expounded that when a statute places burden of proof on an accused
person, it is not that he is not required to establish his plea, but a decree
and character of proof which the accused was expected to furnish could
not be equated with those expected from the prosecution.
c
221. In N. Ramakrishnaiah (dead) through LRs. Vs. State of
Andhra Pradesh, (2008) 17 SCC 83, charge-sheet was submitted against
the petitioner (since dead) under Section 5(l)(e) and 5(2) of the Act
1947 on the allegation of acquiring disproportionate assets compared to
his known sources of income and he was convicted by the Trial· Court
In the appeal before the High Court, the dispute was restricted only to D
Item 26 of the assets (moveables) and agricultural income. It was pleaded
that the former was over estimated and deserved to be reduced and the
latter was under estimated and was to be enhanced. The High Court
rejected the plea. This Court noted that whereas the prosecution in
support of the agricultural income amongst others relied on the evidence E
of the Manda! Revenue Officer and the details furnished by the witness
in the documents proved by him, the accused placed reliance on a
document without disclosing as to who was the author thereof and on
what basis the entries mentioned therein had been made. Placing reliance
on the decision in State ofM.P. Vs. Awadh Kishore Gupta and others
(supra), dealing with "income" of a public servant" known sources" of F
income" and "satisfactorily account", this Court affirmed the conviction.
It reiterated that by using the word "satisfactorily". the legislature had
deliberately cast a burden on the accused not only to offer a plausible
explanation as to how he came by his large wealth, but also to satisfy the
Court that his explanation was worthy of acceptance. G
Scope of interference with an order of acguittal/conviction under
Article 136 of the Constitution of India
222. This Court in State of Uttar Pradesh Vs. Chet Ram &
Ors., (1989) 2 SCC 425, while reflecting on the scope of appeal against
H
774 SUPREME COURT REPORTS [2017] 5 S.C.R.

A acquittal recorded by the High Court thus reversing the verdict of
conviction rendered by the Trial Court propounded that though the power
(under Article 136) ought to be exercised with care and restraint in setting-
aside a judgement of acquittal, the Court would be failing in its duty
when the ends of justice warrant the same. In the textual facts, this
Court recorded that the conclusions of the High Court had been drawn
B
on assumption of surmises without any foundation in the evidence for
them. It was observed that the prosecution evidence wa·s of
unimpeachable nature and did not afford any scope of two views to be
taken with one of them being more plausible than the other. It was held
that as an abstract proposition of argument, though it may be stated that
c every case affords the potential for two views being taken, it has to be
realized that the alternative view must have some content of plausibility
in it and without the same, the said view cannot be countenanced in law
as a plausible alternative. In this context, it recalled the enunciation in
Arunachalam Vs. P.S.R. Sadhanantham & Anr., (1979) 2 SCC 297,
D that in dealing with an appeal against acquittal, the Court would keep in
mind that the presumption of innocence in favour of the accused is
reinforced by the judgment of acquittal. It, however,· noted as well the
caveat that in such an eventuality also, the Court would not abjure its
duty to prevent miscarriage of justice by hesitating to interfere where
interference is imperative. It was stated that where the acquittal is based
E on irrelevant ground, or where the High Court allows itself to be deflected
by red herrings drawn across the track, or by the evidence accepted by
the Trial Court but rejected by the High Court after perfunctozy
consideration or where the baneful approach of the High Court has
resulted in vital and crucial evidence being ignored or for any such
adequate reasons, the Court would feel obliged to step in to secure the
F
interest of justice. to appease the judicial conscience as it were.
(emphasis supplied)
223. That this Court ought to rarely interfere and only where there
is a grave error of law or serious miscarriage of justice or the judgment.
of the High Court appealed against is fraught with serious and substantial
G error oflaw and legal infirmities was highlighted in State ofMaharashtra
Vs. Narsinghrao Gangaram Pimple, (1984) 1 SCC 446. In the factual
scenario involved therein, this Court was of the view that abstinence
from interference with the order of acquittal would amount to failure in
duty.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 775
[PINAKI CHANDRA GHOSE, J.]

224. In State ofPunjab Vs. Karnail Singh, (2003) 11SCC271, A
where apart from underlining that there was no embargo on the Appellate
Court to review the evidence upon which an order of acquittal is based,
it was elaborated that if two views are possible on the same set of
evidence, interference with an acquittal would be justified when there
are compelling and substantial reasons for doing so. It was stated as B
well that if the impugned judgement of acquittal is unreasonable, it would
as well be a compelling reason to overturn the same.
(emphasis supplied)
225. It was propounded in Mritunjoy Biswa_s Vs. Pranab alias
Kuti Biswas & Anr., (2013) 12 SCC 796, that minor discrepancies are C
not to be given undue emphasis and.evidence is to be considered from
the point of view of trustworthiness. The test is whether the same inspires
confidence in the mind of the Court. If the evidence is incredible and
cannot be accepted by the test of prudence, then it may create a dent in
the prosecution version. Every omission cannot take place of a material
omission and therefore minor contradictions, inconsistencies or D
insignificant embellishments do not affect the core of the prosecution
case. The omission should create a serious doubt about the truthfulness
or creditworthiness of a witness. It was held that it is only serious
contradictions and omissions would materially affect the case of the
prosecution, but not every contradiction or omission is relevant. E
226. This Court in State ofU.P. Vs. Gokaran & Ors., 1984 Suppl.
sec 482, expounded that when incriminating evidence of a satisfactory
character is brushed aside mainly by relying upon a few circumstances
which do not detract from the value of such incriminating evidence, it
becomes the duty of the Court to interfere with the acquittal in order to p
redeem the course ofjustice. It was elaborated that if it is found that the
Court below had adopted a hyper technical approach to the entire
prosecution case and that the direct ocular evidence cannot be doubted,
interference would be warranted.
227. In Mst. Dalbir Kaur & Ors. Vs. State of Punjab, (1976) 4 G
SCC 158, this Court ruled that.the Supreme Court is not an ordinary
court of criminal appeal and does not interfere with pure questions of
fact. It is only in very special cases where it is satisfied that the High
Court has committed an error of law or procedure as a result of which
there has been a serious miscarriage of justice, that it would intervene.
H
776 SUPREME COURT REPORTS [2017] 5 S.C.R.

A It is generally not in the province of this Court to reappraise the evidence
and go into the question of credibility of the witnesses unless the
assessment of evidence by the High Court is vitiated by an error of law
or procedure, by the principles of natural justice, by errors of record or
misleading of evidence, non-consideration of glaring inconsistencies in
the evidence which demolish the prosecution case or where the
B
conclusions are manifestly perverse and unsupportable. In other words,
substantial and grave injustice ought to be visible, warranting a review
of the decision appealed against. Something substantial has to exist to
persuade the Court to go behind the findings of facts. It underlined that
Article 136 reserves to this Court, special discretionary power to interfere
c in suitable cases when for special reasons, it considers that interference
is called for in the larger interest of justice.
228. In Chandrappa ~ Ors. Vs. State. of Karnataka, (2007) 4
SCC 415, the High Court had reversed the order of acquittal made by
the Trial Court and had convicted the appellants. The scope of interference
D with an order of acquittal under Section 378 Cr.P.C. thus fell for scrutiny
of this Court. It was ruled that in an appeal against acquittal, the High
Court has full power to re appreciate, review and reconsider the evidence
at large, the material on which the order of acquittal is founded and to
arrive at its own conclusions on such evidence. Both questions of fact
and of law are open to determination by the High Court in an appeal
E against an order of acquittal. It, however, has to bear in mind that there
is a double presumption in favour of the accused once there is an order
of acquittal. Firstly, the presumption of innocence is available to him
under the fundamental principle of criminal jurisprudence that every
person should be presumed to be innocent unless he is proved to be
F guilty by a competent court of law and secondly the accused having
secured an acquittal, the presumption of his innocence is certainly not
weakened but reinforced, reaffirmed and strengthened by the Trial Court.
229. It quoted with approval the view of Lord Russel in Sheo
Swarup Vs. R. Emperor, AIR 1934 PC 227 (2), that there was no
G foundation of the opinion that the High Court has no power or jurisdiction
to reverse an order of acquittal except in cases in which the lower court
has "obstinately blundered" or has "through incompetence, stupidity or
perversity" reached such 'distorted conclusions as to produce a positive
miscarriage of justice or has in some other way so conducted or
misconducted itself as to produce a glaring miscarriage ofjustice or has
H been tricked by the defence so as to produce a similar result.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 777
[PINAKI CHANDRA GHOSE, J.]

230. It was reiterated that though the High Court has full power A
to review the evidence upon which the order of acquittal is founded, in
view of the presumption of innocence, reversal can be made only for
substantial and compelling reasons. The decision quoted the observations
in Shivaji Sahabrao Bobade (supra), sounding caution against the
dangers of exaggerated devotion to the rule of benefit of doubt at the B
expense of social defence and to the soothing sentiment that all acquittals
are always good regardless of the justice to the victim and the community.
The decision also adverted to the rendition in K. Gopal Reddy Vs. State
of Andhra Pradesh, (1979) 1 SCC 355, to the effect that if two
reasonably probable and evenly balanced views on the evidence are
possible, one must necessarily concede the existence of a reasonable C
doubt but remote and fanciful possibilities must be left out of account. It
was reiterated that in order to entitle an accused person to the benefit of
doubt arising from the possibilitv of duality of views. the possible view in
his favour. must be as reasonably probable as that against him.
(emphasis supplied) D
231. In Ramaiah @Rama Vs. State of Kanataka, (2014) 9
SCC 365, this Court, while dwelling on the same theme quoted its
observation in Harbans Singh & Anr. Vs. State of Punjab, AIR 1962
SC 439, to the effect that in the recent years, emphasis on "compelling
reasons" has often been avoided but nonetheless the emphasis on the E
requirement of close and careful examination of the reasons that had
impelled the lower courts to acquit the accused has been insisted upon.
While reiterating the essentiality of examination of the evidence with
particular care by the Court ofAppeal in deciding the assailment against
acquittal, it has however been underlined that once the Appellate Court
comes to the conclusion that the view taken by the lower court was F
clearly unreasonable. then that by itself would be a compelling reason
for interference. It was highlighted that it is a court's duty to convict a
guilty person when the guilt is established beyond reasonable doubt, no
less than it is its duty to acquit the accused when such guilt is not so
established. (emphasis supplied) G
Benami transactions:
232. This Court in Jaydayal Poddar (Deceased) through LRs.
(supra), enunciated that it is well settled that the burden of proving that
a particular sale is benami and the apparent purchaser is not the real
H
778 SUPREME COURT REPORTS [2017] 5 S.C.R.

A owner, always rests on the person asserting it to be so. The burden has
to be strictly discharged by adducing legal evidence of a definite character
which yvould either directly prove the fact of benami or establish
circumstances unerringly and reasonably raising an inference of that
fact. It was propounded that the essence ofa benami is the intention of
the party or parties concerned and not unoften, such intention is shrouded
B
in a thick veil which cannot be easily pierced through. However such
difficulties do not relieve the person asserting the transaction to be benami,
of any part of the serious onus that rests on him nor justify the acceptance
of mere conjectures or surmises, as a substitute fpr proof. It was
exposited that the reason is that a deed is a solemn document prepared
c and executed after considerable deliberation, and the person expressly
shown as the purchaser or transferee in the deed, starts with the initial
presumption in his favour that the apparent state of affairs is the real
state ofaffairs. It was held that though the question, whether a particular
sale is benami or not, is largely one of fact and for determining this
question, no absolute formula or acid test, uniformly applicable ·in all
D situatioi:is, can b•e laid down; yet in weighing the probabilities and for
gathering the relevant indicia, the courts are usually guided by the following
circumstances:
(l)The source from which the purchase money came;
E (2) The nature of possession of the property, after the purchase;
(3) Notice, ifany, for giving the transaction a benami colour;
(4) The position of the parties and the relationship, if any, between the
claimant and the alleged benamdar;
(5) The custody of the title-deeds after the sale and
F
(6) The conduct of the parties concerned in dealing with the property
after the sale.
233. That the above indicia are not exhaustive and their efficacy
varies according to the facts of each case was however underlined. The
G emphasis of the decision on benami purchase, therefore, is that there
has to be either some direct evidence or strong circumstantial evidence
to raise an inference that the property alleged to be benami had been
purchased with the funds/resources of someone other than the person in
whose name the property is shown in the document.
H
,
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 779
[PINAKI CHANDRA GHOSE, J.]

234. In the present case, there is also a charge of conspiracy and A
abetment and, therefore, the factors as above would have to be tested
on the anvil of the overall circumstances to ascertain as to whether a
reasonable inference therefrom can be drawn of a benami transaction
as alleged. This is more so as by the very nature of the offence of
conspiracy, the activities in connection therewith are expectedly hatched B
in secrecy.

PROBATIVE WORTH OF EXPERT EVIDENCE
235. In re the probative worth of experts evidence, a host of
decisions in Mahmood Vs. State of U.P., (1976) 1 SCC 542, Chatt C
Ram Vs. State of Haryana, (1980) 1 SCC 460, State of H.P. Vs. Jai
Lal & Ors., (1999) 7 SCC 280, Ramesh Chandra Agrawal Vs.
Regency Hospital Limited & Ors., (2009) 9 SCC 709, and Dayal
Singh & Ors. Vs. State of Uttaranchal, (2012) 8 SCC 263, have been
cited at the·Bar. As all these decisions postulate identical propositions, D
the gravamen of these authorities would only be referred to avoid
inessential prolixity. These renderings explicate that an expert is one
who has made a subject upon which he speaks or renders his opinion, a
matter of particular study, practice or observation and has a special
knowledge thereof. His knowledge must be within the recognized field
of expertise and he essentially has to be qualified in that discipline of E
study. It has been propounded that an expert is not a witness of fact and
its evidence is really of an advisory character and it is his duty to furnish
to the Judge/Court the necessary scientific criteria for testing the
accuracy of the conclusions so as to enable the Judge/Court to form his/
its independent judgment by the application of such criteria to the facts F
proved by the evidence. Referring to Section 45 of the Evidence Act
1892, which makes the opinion of an expert admissible, it has been
·underlined that not only an expert must possess necessary special skill
and experience in his discipline, his opinion must be backed by reason
and has to be examined and cross-examined to ascertain the probative
worth thereof. That it would be unsafe to convict the person charged on G
the basis of expert opinion without any independent corroboration has
also been indicated. It has been held that the evidentiary value of the
opinion of an expert depends on the facts upon which it is based and also
the validity of the process by which the conclusion has been reached.
H
780 SUPREME COURT REPORTS [2017] 5 S.C.R.

A The decisions underline that the Court is not to subjugate its own judgment
to that of the expert or delegate its authority to a third party but ought to
assess the evidence of the expert like any other evidence.

HEARSAY EVIDENCE CAN BE ·USED TO CORROBORATE
B SUBSTANTIVE EVIDENCE.
236. In Pawan Kumar Vs. State of Haryana, (2003) 11 SCC
241, this Court had observed that hearsay evidence could be used to
corroborate substantive evidence.
C Krishnanand Agnihotri (supra), In this case the petitioner was
convicted by the Trial Court as well as the High Court by acting on the
presumption contained in Section 5{3) of the Act, 1947 (prior to the
amendment of 1964, as it was) for the offence punishable under Section
5(2). The plea of the petitioner was that the charges levelled against
him under Section 5(1) had not been established and, therefore, the
D presumption was not available.
23 7. The facts revealed that the admitted income was
Rs.l,12,515.43 during the checkperiod29.l l.1949 to l.1.1962. Various
heads of income were in dispute and this Court examined the evidence
adduced by the parties under those heads and after disallowing/allowing
E different amounts, reached the figure ofRs. l,27,715.43/- as the income.
Vis-a-vis the expenditure also, the admitted figure was Rs.23,459.84
and the parties were at issue on various heads. Similarly, this Court
analysed the evidence adduced by the parties and after allowing/
disallowing, the expenditure of different items concluded that the total
F expenditure of the petitioner during the check period was Rs. 83,331.84.
Thus deducting the total expenditure from the total income so computed,
it transpired that an amount of Rs.44,383.59 was available with the
petitioner for his acquired assets.
The admitted assets was Rs.38-,572.46. Here again, under different heads
G by appreciating the evidence on record and by allowing/disallowing the
rival claims, this Court arrived at a figure of Rs.55,732.25 as the value of
the assets.
238. Comparing the income, after adjusting the expenditure that
was left with the petitioner i.e. Rs.44,383.59 with the value of the assets
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 781
[PINAKI CHANDRA GHOSE, J.]

i.e. 55,732.25, this Court held that though the value of the assets exceeded A
the amount of income, the excess was comparatively small and less
than 10% of the total income i.e. Rs.l,27,715.43 and was of the view
that the assets were not disproportionate to his known sources of income
so as to justify the raising of the presumption under Section 5(3). The
petitioner was acquitted.
B
239. The narration of the judgment clearly indicates that this
Court had assessed the evidence on record by itself on the items of
dispute pertaining to income, expenditure and assets and had recorded
its own independent findings. In most of the items, where this Court had
rejected the contention of the prosecution, it appears that it had not
adduced any evidence whatsoever. Further the judgment does not C
advance any proposition that in order to adjudge the disproportionateness
of the assets in comparison of the income of a public servant, the
margin of 10% is a permissible index of uniform application and
acknowledged as a determinant to decide as to whether a public servant
charged under Section 13(l)(e) of the 1988 Act can be held guilty ofa D
criminal misconduct contemplated by the statute judged on such
benchmark.
240. The evidence on record in the above backdrop, now has to
be tested in the context of the charge framed against the respondents.
The respondent Al has been charged with the offence of conspiracy as E
well as criminal misconduct under Section 13(l)(e) read with Section
13(2) of the PC Act andA2 toA4 in particular, of conspiracy and abetment
in the commission of the above offence under the Act.
There are basically four broad heads for scrutiny:
(l) Income F
(2) Expenditure
(3) Assets
(4) Conspiracy and abetment.
From the evidence led and the arguments advanced, "it appears that the G
income, expenditure and assets, all have been cumulatively taken account
of. Though it had been argued on behalf of A 1 that she had no connection
whatsoever with A2, A3 and A4 and, therefore the figures relating to
income, expenditure and assets would have to be separately considered,
H
782 SUPREME COURT REPORTS [2017] 5 S.C.R.

A it would transpire that while adverting to the charts submitted in the
((ourse of arguments, such segregation has not been insisted upon and is
even uncalled for, having regard to the charge of conspiracy and abetment,
for the purpose of the appraisal to follow.
INCOME
B 241. Under the head income, the prosecution has limited its tally
to 64 items, which the respondents do not dispute but they have added
seven further heads thereto. According to the prosecution, the income
of the 64 heads is Rs.9,34,26,053.56, which the Trial Court on a
consideration of the evidence has found to be Rs.9,91,05,094.75.
c 242. The High Court, however, accepted the respondents' claim
of income under seven additional heads and raised the income to
Rs.34,76,65,654. Noticeably, this income of Rs.34,76,65,654 is the
combined total income of all the respondents. In other words, the
respondents also rely on this collective income to disprove the charge.
D Nowhere, their plea is that the income of A 1 has to be separately noted,
as distinguished from the income of A2,A3 andA4. In view of the fact
thatthe respondents accept the income ofRs.9,34,26,053.56 as cited by
DVAC and there is no dispute with regard thereto, it is not necessary to
examine the evidence of the prosecution in support of its figures.
24~. As the income cited by the DVAC is not disputed and the
E
case of the respondents is based on the additional income under the
seven heads, as cited by them and accepted by the High Court, it would,
thus, be necessary to examine the evidence in respect of those additional
heads along with the findings of the Trial Court and the High Court.
Vis-a-vis the income, there appears to be three facets:
F
(i) the income as listed by the DVAC
(ii) The additional heads of income taken note by the High Court and
(iii) The heads of income introduced in evidence by the defence also
supplementing the earlier two heads.
G
The income, as mentioned by the DVAC, to reiterate is not disputed by
the defence. The respondents however seek to take advantage of the
additional heads taken note of by the High Court to boost the income
further.

H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 783
[PINAKI CHANDRA GHOSE, J.]

1. Income from Grape Garden: A
244. This item of income has been mentioned by the prosecution
at Item No.33 of Annexure III at page 1228 - Volume V and has been
calculated at Rs.5, 78,340/-.
The Trial Court on an assessment of the evidence has enhanced
the income to Rs. l 0,00,000 i.e. enhanced the figure cited by the DVAC B
by Rs.4,21,660.
The High Court, however, accepted the claim ofA 1 that the income
·was Rs.52,50,000 and thereby added Rs.46,71,660 to Rs.5,78,340, as
fixed by DVAC.
c
245. The argument on behalf of Al is that the extra amount of
Rs.46,71,660 has been conceded to in course of the arguments on behalf
of the State and further this amount has been established on the basis of
the income tax returns/orders passed thereon for the assessment years,
1995-96 to 1996-97.
D
As against this, the argument on behalf of the prosecution is that
the income tax returns and the orders passed thereon are not binding
and those by themselves do not prove the amount of income or the
lawful source thereof.
246. The relevant evidence of the prosecution on this component E
is traceable to PWl 65 - K.R. Latha - Horticulture Officer in the office
of the Assistant Director (Horticulture), Rangareddy District, A.P.
PWJ66 - P. Kondareddy, Assistant Director of Horticulture and PW
256 - Mr. R. Kadireshan, Dy. Superintendent of Police, Vigilance
Department &Anti Corruption, Chennai.
PW 165 has deposed that as per the direction of Assistant Director of F
Horticulture on 10.12.1996, she had visited the grape garden belonging
to Al along with the Horticulture Officer Sanjay Kumar in presence of
PW256. She inspected the horticulture crops and examined the varieties
of grapes raised as well as the plants and the area covered.
247. PW-166 corroborated the testimony of PW-165. She also G
visited the grape garden and had worked out the details regarding the
cost of raising the grapes and the gross and net income and submitted
his report (Ex. P-938). The Assistant Director of Horticulture claimed
to be competent to assess the basis of cost for raising various crops
including grapes and mentioned the total income of seeded variety for H
784 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the period 1991-96 to be Rs.3,82,420 and the reseeded variety from
1993-96 as Rs.2,18,960. He mentioned that he had assessed liberally in
arriving at the above conclusion. He claimed his expertise in the matter
of preparation of the assessment report pertaining to the cost of cultivation
and income of crops and stated to have adopted NABARD norms in
assessing the cost of cultivation and the yield. In cross-examination, he
B
however conceded that he had not enclosed the inspection report of PW
165 along with his report Ex. P-938 and also that his evaluations were
approximate and probable.
PW 256 stated that he on the request of PW 165 and Sanjay Kumar had
C estimated the value of the produce of the grape garden.
248. The Trial Court examined the plea on behalf of Al that Ex.
P-938 was not worthy of acceptance as it was not accompanied by any
final report and also in absence of any explanation of the prosecution for
such omission. It examined as well, the plea based on the income tax
returns of Al and the orders of the assessing officer accepting the same
D and that eventually on the basis of the said returns and the orders, the
income from the grape garden was found to be Rs. 52,50,000.
The evidence adduced by the defence may at this stage be briefly referred
to.

E 249. Vi de Exbs. D-61 to D-64, the orders passed by the concerned
income tax authorities/forums, eventually the claim of agricultural income
of Al on the basis of the particulars furnished in her returns for the
relevant assessment years i.e. 1991-92 to 1996-97 were accepted. As
the order of the CIT (Appeals)-!, Chennai dated 30.3.1999 (Exb. D-61)
would reveal, while upholding the claim of the agricultural income ofA 1
F to be Rs.10,50,000/- for the assessment year 1994.-95, the said authority
relied on the report dated 25.3.1999 of the assessing officer, as called
for and accepted the figure furnished by Al. The report incidentally
mentioned the age of the grape vines, as enquired from the Supervisor,
to be 2 to 2.5 years. Though the net agricultural income on the basis of
G the said report was assessed to be Rs.13,55,000/-, after applying the
cost inflation index and the additional land in cultivation, the authority
accepted the figure furnished by Al. Prior thereto, for the assessment
year 1993-94, the CIT (Appeals) had accepted the agricultural income
of Al at Rs.9,50,000 as furnished by her. The same approach was
adopted by the concerned authorities/forums for the assessment years
H 1995-96 and 1996-97 and same reasons had been cited.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 785
[PINAKI CHANDRA GHOSE, J.]

250. Al thus claimed agricultural income ofRs.52,50,000 during A
the check period, on the basis of the above returns/orders of the income
tax authorities/forums.
The Trial Court duly evaluated the evidence adduced by the
prosecution as well as by the defence in this regard in detail and
concluded that the two versions were irreconcilable. It did not accept B
the evidence adduced by the prosecution in absence of the notes of
inspection endorsing the report Ex. P-938. It also noticed the flaws in
the evidence of PWs 165, 166 and 256 which revealed that the inspection
of the grape garden had been made without reference to any revenue or
survey records and that there was no clear and definite evidence regarding
the specific extent of land used for the cultivation of grapes and other C
crups. It doubted the basis on which the yield had been determined and
the price calculated by the inspecting team and, therefore held that the
report was unreliable.
251. The evidence ofA 1 was also held to be vague and ambiguous
being not supported by acceptable evidence. It was of the view that the D
income tax returns and the orders passed thereon were of minimal
evidentiary value in determining the extent of cultivation, quantum of
produce, cost of cultivation and the price fetched by Al during the relevant
years. It held that though all these aspects were within the exclusive
knowledge of Al, she had failed to produce the best evidence available E
to her. The Trial Court was thus of the view that there was no worthwhile
evidence to accept the claim ofA 1. The above conclusion notwithstanding,
the Trial Court took note of the fact that A 1 had been holding 14\/i acres
of agricultural land and that she had been growing grapes thereon. It
referred to copies of the pahanis Exb. P225 l to P2258 in support of her
stand that grapes were being grown on the land involved. The Trial F
Court was of the view that her entire claim cannot be rejected for her
failure~to produce convincing documentary evidence. It took note of the
fact from the reports, that 10 acres of land were being used for cultivation
of grapes at the relevant time. Having regard to the likely cost of
cultivation and the fluctuating price prevalent during the check period, G
the Trial Court made a rough estimate of income from the grape garden
at Rs.20,000/- per acre per annum and on the basis thereof, quantified
the agricultural income for the check period of five years at Rs. l 0 lakhs
during the check period, thus enhancing the income from Rs.5, 78,340/-
cited by the prosecution.
H
786 SUPREME COURT REPORTS [2017] 5 S.C.R'..

A 252. The High Court, on the other hand, readily accepted the
income tax returns filed by the assessee and affirmed the claim of Al
of agricultural income ofRs.52,50,000/-. It was of the view that though
the income tax returns had been filed belatedly, the same per se could
a
not be a ground to reject the same as proof of the agricultural income
of Al from grape garden. Thereby, the High Court enhanced the
B
agricultural income of Al to Rs.52,50,000/- permitting an addition of
Rs.46,71,600/-.
253. Apart from the fact that the approach of the High Court on
this aspect appears to be summary in nature without reference to the
other evidence on record as had been exhaustively discussed and
c analysed by the Trial Court, in law the income tax returns/orders passed
. thereon qua the issue are not final and binding on a criminal court, and at
best only are relevant and always subject to its independent appraisal on
merits.
254. It has been urged on behalfof Rl/A1 that her claim of income
D ofRs.52,50,000/-under this head stands proved wholly on the basis of
the relevant income tax returns and the orders passed thereon. Oral
evidence of DW-64 and the documentary evidence by way of D-61 to
D-64 have been relied upon. As observed hereinabove, the High Court
had readily accepted this evidence and had thereby enhanced the income
E ofAl under this.,head to Rs.52,50,000/- by adding Rs.46,71,600/- to the
sum of Rs.5,78,340/- mentioned by the DVAC. In absence of any
independent evidence in support of this claim, having regard to the state
oflaw that income tax returns/orders are not automatically binding on a
criminal court, in our view, the effortless acceptance thereof by the
High Court is in disregard to this settled legal proposition. Thereby the
F High Court has accorded unassailable primacy to such income tax returns/
orders and have made those final and binding on the criminal court without
any appreciation of the probative potential thereof.
255. The High Court thus had proceeded not only in disregard of
the evidence as a whole but also being oblivious of the legal postulations
G enunciated by this Court that income tax returns/orders passed thereon
are not binding on criminal court and that the facts involved are to be
proved on the basis of independent evidence and that the income tax
returns/orders are only relevant and nothing further.

H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 787
[PINAKI CHANDRA GHOSE, J.]

LOANS: A
256. The second additional head of income involved by the
respondents constitutes loans in addition to the bank loans cited by DVAC
as taken note of by the High Court to add Rs.18, 17,46,000 to the income
of the respondents.
This item of income significantly is suggestive of the collective B
orientation of the respondents qua the charge as one corporate unit. The
tone and tenor of the contents of the applications for loan and the
composition of the firms/companies availing the benefit thereof, suggest
that the respondents were in collaboration with each other in the
transactions which demonstrate their combined involvement therein. c
25 7. Here, according to the prosecution, there are two aspects,
firstly there is a duplication as DVAC has included these loans in its
chart which have been considered by the Trial Court and secondly, even
otherwise, the High Court committed a mistake in adding up the loan
amounts of these additional 10 heads to arrive at a figure of D
Rs.24, 17,31,274 which on a correct calculation, ought to be
Rs. I 0,67 ,31,224/-.
258. Noticeably, these additional loan amounts have been availed
of by Al, Mis Sasi Enterprise and other firms like M/s Jaya Publications,
Mis Jay Real Estate, Mis J.S. Housing, Mis J. Farm House, Mis Ramraj E
Agro Mills Limited, Mis Mahalaxmi Kalyanmandpam (hereinafter for
sake of brevity 'Mis' as prefix to the names & the firms referred to
would be avoided).
Apt it would be to deal with these loans in seriatim.
Indian Bank - OMTL - Jaya Publications: F
Rs.1,50,00,000/-
259. This head corresponds to item No. 1 of Annexure IV
(Expenditure)- Exb. P-2330. This indicates that this loan account was
closed on 25.6.1994. An amount of Rs.50,93,921/- was paid by way of
interest on this loan which is evident from Exb. P-1027. This has been G
stated by PW 182. PW6 also confirms the repayment of the loan. Thus,
this head of income did not exist at the end of the check period i.e.
30.4.1996 and cannot be accounted for.

H
788 SUPREME COURT REPORTS [2017] 5 S.C.R.

A The Trial Court did take note of this aspect in its judgment while
dealing with these items of loan on the basis of the evidence adduced,
more particularly while dealing with the heads of expenditure.
In that view of the matter, the High Court was in error in including
this item of loan in the income of the respondents.
B Indian Bank - Agricultural Loan - Rs.3,75,00,000:
260. This c01Tesponds to item No. 8 of the Heads oflncome vide
Exb. P-2329 as cited by the DVAC. The oral evidence to this effect has
been adduced by PW 182 who has proved Exb. P-1101. The Trial Court
dealt with the evidence both oral and documentary in this regard and by
C referring to the letter Exb. P-1001, addressed to the bank by the applicant
for the loan thereof, had concluded that the liability to liquidate the loan
had been taken over by A2 to A4. The evidence on record, thus,
demonstrates that the Trial Court had taken note of this item ofloan and,
therefore the High Court ought not to have added this figure by way of
D duplication.
Indian Bank - Al - Rs.90,00,000/-
261. As would be apparent from the evidence of PW 182 who
proved Exb. P-1114, this loan was taken after the check period i.e. in
August 1996 and thus, the amount thereof could not have been taken
E into account by the High Court. This figure, therefore as a corollary has
to be excluded.
Indian Bank - Jay Real Estate - Rs.25,00,000/-
262. This c01Tesponds to item No. 4 of the list of income cited by
the DVAC and relatable to Exb. P-2329. PW 182 through Exb. P-1161
F
to P-1163 has proved this loan. Exb. P-1161 written by A3 on behalf
of Jay Real Estate is one seeking loan of Rs.29 lakhs providing the
necessary particulars in the annexure appended thereto. Exb. P-1162
discloses that medium term loan of Rs.25 lakhs was sanctioned by the
bank but as on 22.11.1995, an amount of Rs.5 lakhs had been disbursed,
G as is evident by Exb. P-1163.
The Trial Court has duly dealt with the evidence to this effect
while quantifying the income as well as in noting the expenditure by
way of interest against this loan.
The plea of the prosecution that in the above premise, the High
H Court was wrong in adding a sum of Rs.25 lakhs towards the income of
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 789
[PINAKI CHANDRA GHOSE, J.]

the respondents under this head, has to be accepted. A
Indian Bank - J.S. Housing - Rs.12,46,000/-:
263. This corresponds to item No. 3 of the heads of income cited
by the DVAC vide Exb. P-2329. This loan has been proved by PW 182
through Exb. P- 1171 to 1173.The Trial Court has referred to this evidence
while quantifying the income and the expenditure by way of interest on B
the loan amount as had been listed in Annexure IV (Expenditure) cited
by the DVAC.
264. The documents pertaining to this loan transaction authenticate
that though an amount of Rs.12,46,000/- had been sanctioned by the
bank, it had released only a sum of Rs. 7 lakhs and the principal amount C
and the interest had not been repaid by the fim1. Thus, per se the High
Court was not justified in adding a sum ofRs.12,46,000/- to the tally of
income of the respondents under this head.
Indian Bank - Jay Farm House - Rs. 50,00,000/-:
D
265. This corresponds to item No. 2 of the heads of income cited
by the DVAC and has been proved by PW 182 through Ex P-1211. The
records attest that though the full amount of Rs.50,00,000/- was
sanctioned, a sum of Rs.28 lakhs was only disbursed and the principal
amount with interest had not been repaid.
E
The Trial Court has considered the evidence, oral and documentary,
to this effect. The addition of a further amount of Rs.SO lakhs by the
High Court to the corpus of income of the respondents, therefore, is
clearly erroneous.
Indian Bank - Ms. Sasikala - Rs. 25,00,000/-:
F
266. This corresponds to item No. I of the items of income cited
by the DVAC and in fact had been availed by Sasi Enterprise, as has
been deposed by PW 182 through Ex. P-1260. The amount due and
outstanding to the bank, at the relevant point of time, was Rs.13,55,023/".
The Trial Court noted that the application for loan had been made o
by Ms. Sasikala as the Managing Partner of the firm and had examined
the relevant evidence including the statement of account pertaining to
the loan. This head of income thus had been taken note by the Trial
Court and, therefore the High Court was not justified to add a further
sum of Rs.25 lakhs thereunder.
H
790 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Indian Bank - Mr. Sudhakaran - Rs. 1,57,00,000/-:
267. This corr.esponds to item No. 7 of the heads of income cited
by the DVAC and has been proved by PW 182 through ExP-1330. The
Trial Court has examined the evidence relating to this loan applied for by
Mr. V.N. Sudhakaran on behalfof Lex Property Development (P) Limited
B for a loan of Rs.1,57,00,000/-. The oral and other documentary evidence
with regard to the sanction of loan and the statement of account has
been analysed as well. The Trial Court, thus, had taken note of this loan
while computing the income of the respondents. The principal amount,
due under this account at the relevant point of time, was Rs.83,00,000/-.
The addition of an amount of Rs.1,57 ,00,000/- by the High Court towards
c income in the above backdrop is indefensible.
Ramraj Agro Mills Limited - Rs.1,65,00,000/-:
268. This item is not included in the list of income furnished by the
DVAC. PW 182 has deposed about this loan through Exb. P-1349 to
D P-1354. The statement of account ofRamraj Agro Mills Limited is Exb.
P-1354. This has been corroborated as well by PW 235 who has stated
that an amount of Rs.1.65 crores had been sanctioned as loan. There
is, however,no evidence with regard to the disbursement of any amotmt
qua the loan sanctioned. In any case, the amount due to the bank at the
relevant point of time in this account was Rs.39,10,781/-. Therefore,
E addition of amount ofRs.1.65 crores, by no means, as done by the High
Court, can be said to be justified.
269. There is no discussion about this head ofloan by the Trial
Court presumably due to the absence of any evidence with regard to
disbursement of any amount in connection therewith. The High Court,
F however, has added an amount of Rs.1.65 crores without even referring
to the evidence to ascertain as to whether any amount out of the loan
sanctioned, in fact had been released in favour of the firm involved.
In any case, examination ofExb. P-1354, the statement of account
of Ramaraj Agro Mills Private Limited pertaining to this loan, discloses
G that, at the relevant time, the outstanding amount due to the bank was
Rs.39,10,781/-and thus, in any view of the matter, the High Court could
not have added Rs.1.65 crores against this item.
Indian Bank - Maha Subbalakshmi Kalyana Mandapam -
Rs.17,85,274/-:
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 791
[PINAKI CHANDRA GHOSE, J.]

270. This corresponds to item No. 6 of the heads of income cited A
by the DVAC and has been referred to by PW 182 who proved Ex P-
1357 in connection therewith. The amount due under this account at
the relevant time was Rs.19,81,802/-.
The Trial Court has considered the evidence, oral and documentary,
to this effect and thus had accounted for this component while quantifying B
the total income of the respondents. In this premise, the High Court was
not right in adding the entire sum of Rs.17,85,274/-, as if the same had
escaped the notice of DVAC or the Trial Court.
271. As the impugned judgment of the High Com·t would reveal, it
referred to generally the testimony of PW 182 and PW 259 and had c
observed that the respondents had borrowed loans from the banks as
well as from the private parties which however have not been taken into
consideration. While noting the loans availed by the respondents from .
different fim1s and companies, as named therein, the High Court did,
however limit itself only to the loans borrowed from the nationalised
banks, as referred to hereinabove, but wrongly totalled the amounts to D
inflate figure to Rs.24,17,31,274/- which in fact ought to have been
Rs. I 0,67,31,224/- on a correct arithmetic. The High Court, thereafter,
adjusting Rs.5,99,85,274/-, i.e. the income quantified by the DVAC added
Rs.18,17,46,000/- (Rs.24,17,31,274- Rs.5,99,85,274) to the income of
the respondents. E
272. In view of the above discussion, the High Court has not only
erred in including the entire amount of loan encompassed in ten items,
mentioned hereto before, but also premised its finding on income on an
inflated and patently incorrect figure ofRs.24, 17,31,274/-. This addition
of Rs.18, 17 ,46,000/- to the income of the respondents, as done by the F
High Court, is obviously erroneous and thus cannot be sustained.
To reiterate, even the High Court though had referred to private
loans, availed by the respondents from A3, J. fo1m House, Meadow
Agro Farms Limited, Sasi Enterprises, Bharani Beach Resort, Lex
Property Development Private Limited, it did not include the same in the G
total income of the respondents. The plea of the respondents that the
income from private sources had not been considered at all, is thus
untenable, more particularly in absence of any challenge by them against
the above exclusion by the High Court.

H
792 SUPREME COURT REPORTS [2017] 5 S.C.R.

A GIFTS:
273. The next additional item of income indicated by the High
Court is gifts offered to Al. The defence has introduced this item of
income against receipts on the birthday of A 1 on 24.2.1992, claimed to
have been celebrated on a grand scale as it was her first birth day as the
B Chief Minister of the State for the said term. Gifts byway of jewellery
and cash in particular have been claimed to have been received. Foreign
remittance also has been assimilated. The evidence adduced by the
defence includes testimony of members of Al AD MK party, of which
at the relevant time, Al was the General Secretary. The decipherable
pattern of the evidence adduced by the members of the AIADMK,
c who claimed to have contributed along with about 300/350 donors is that
their contributions were collected by the concerned office bearers of
the party and thereafter the amount was converted into demand draft in
the name of Al. It is, however, deducible from the evidence which is
almost stereotype in nature that no individual receipt had been issued
D to the contributors against their donations. Record of the collectors, as
office bearers of the party, has also not been produced. No account
has been maintained with regard to such collection. A copy of the draft
amount of Rs.2, 15,000/- has been proved. No record with regard to the
banking transactions resulting in the draft has also been proved. In other
words, the source of the fund of the draft has remained obscure.
E
274. According to the prosecution, the gifts, as claimed by the
respondents, do not constitute a lawful source of income under Section
11 (l)(e) of the Act and, therefore had not been included by the DVAC
in the list of known sources of income.
F 275. A I through her letter dated 6.9.1993 claimed receipt of gifts
ofjewellery, cash, demand draft, silver items, silk sarees, framed po1traits
etc. on the occasion of her birthday. There is also mention ofreceipt of
similar gifts qua the relevant assessment years 1990-91, 1991-92, etc.
In the concerned assessment order dated 21.3.1995, affidavits filed
relating to gifts for the assessment years 1990-91, 1991-92, 1992-93
G had also been considered. This assessment order would show that a
total of Rs.1,26,32,657/- was taken to be the income against receipt of
jewellery, silver articles and cash deposits in the bank.
276. Ex. P-2139 is the income tax return of A I for the Assessment
Year 1991-92 which had been filed on 23 .11.1992 and does not mention
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 793
[PINAKI CHANDRA GHOSE, J.]

any gift as income from other sources. However, the assessment order A
for the assessment year 1992-93 passed on 21.3.1995 Ex. P-2140
discloses that on 7. 12. 1992, the assessee's representative filed the
receipts and payments account Exp. 2140, profit and loss account and
balance sheet, as on 31.3.1992 with a request to treat the same to be
read with the total income statement. Thereunder, the head "Receipt
8
and Payment" for the period 1.4.1991 to 31.3.1992, a sum of
Rs.1,94,50,012/- has been mentioned to be "gifts received". The said
figure is also shown in the balance sheet as at 31.3.1992. To this, a
further amount of Rs.15,00,000/- also had been added as gifts receipt.
277. This order thus suggests that in the return of Al for the
financial year 1991-92, a sum of Rs.1,94,50,012/- against gifts had not c
been originally shown but had been sought to be introduced on 7.12.1992
as a supplementary income statement. Be that as it may, this exhibit i.e.
P-2140 also on the above reasoning, has taken note of this amount and
this receipt as gift has been subjected to tax by taking the same to be
income from undisclosed sources. D
278. The attempt on the part of the defence to prove the income
tax returns and the assessment orders, as above, is to show that receipts
by way of cash, demand draft, jewellery, silverware etc. had been a
normal feature on eve1y birthday ofAl in view of the respect and esteem
earned by her as a political personality and an adorable leader. E
279. Incidentally, the CBI, vis-a-vis the claim of receipt of Rs.1.5
crores as income from gifts had filed a charge sheet against Al
constituting the same to be an offence under Section 11 of the 1988
Act. The High Court, however, had quashed the proceedings on the
ground of delay in the investigation and the CBI has filed a Special F
Leave Petition before this Court, being SLP (Crl.) Nos. 1163-1168 of
2012 which is pending adjudication. This fact was not brought to the
notice of the High Comi, passing the impugned order herein. Noticeably
again, as the prosecution asserts, in view of the 'Explanation' to Section
13(l)(e) of the PC Act, any gift received by the public servant, to be a
lawful source of income should have been intimated to the authorities in G
accordance with law. Mentioning of such receipt in the income tax
return, per se, according to the prosecution, is not enough.
280. The Trial Court, while dealing with this aspect, took note of
the plea of the defence of making gift by way of cash and drafts amounting
H
794 SUPREME COURT REPORTS [2017] 5 S.C.R.

A to Rs.2,15,00,012/-and foreign remittance ofRs.77,52,591/-toAl, who
had disclosed the same in her income tax return for the assessment
year 1992-93 filed on 22.11.1992. That the income tax authorities had
treated this amount to be an income ofA 1 from undisclosed sources and
had levied tax, which was paid by her, was also noticed by the Trial
Court. The evidence of PW-259, the Investigating Officer in his cross-
B
examination that in Tamil Nadu, party workers and ordinary people
generally present such gifts on the birthdays of political leaders and
that from the witnesses examined, an amount of Rs.1,94,50,012/- had
been received through demand drafts as birthday gift for Al, was also
taken on record. Cash receipts by way of gift amounting to Rs.15 lakhs
c for the same event, as stated by PW-259, was also considered. Receipts
by way of gifts in the earlier years also did not miss the attention of the
Trial Court. It noted as well, the receipt of gift of the substantial amount
by way of foreign remittance in American dollars during 1992-93 from
the testimony of this witness.
D 281. The defence evidence and the income tax returns/orders
proved by the respondents, were also considered in details. The evidence
in particular of DW-64 S. Shanmugam, Chartered Accountant in this
regard also was analyzed. Noticeably, this witness was the auditor of
Al during the period 1996-2000 but claimed to have dealt with her
accounts for the assessment years 1991-92 to 1997-98. He generally
E reiterated the evidence with regard to the disclosure of the receipts by
way of gifts by Al on the occasion of her birthday on 24.2.1992
amounting to Rs.2,15,00,012/- and foreign remittance ofRs.77,52,591/-.
He however admitted that the income tax returns for the assessment
years 1991-92 to 1995-96 ofAl were filed by her previous tax consultant
F and not by him.
282. The Trial Court, on an analysis of the evidence of this witness,
however was of the opinion that he was not acquainted with the trne
facts of the case and was incompetent to speak about the gifts received
by Al or the income tax returns said to have been filed by her, as he
G was not her auditor at the relevant point of time. The Trial Court
examined as well the relevant returns and the orders passed by the
concerned income tax authorities and rightly noted that there was no
mention of the alleged presents/gifts in the return of A 1 for the
assessment year 1992-93 at the first instance. However the factum of
receipt of jewellery as gifts for the period of the wealth tax return of
H 1991 was taken note of. The letter dated 18.3.1994 of Al reiterating
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 795
[PINAKI CHANDRA GHOSE, J.]

that she had received cash/DD/jewellery/silverwares in various years A
as personal gifts on her birthdays and that she had disclosed the same in
her wealth tax returns and had paid the wealth tax, also was considered
by the Trial Court. It however, took note of the observation made in Ex.
P-2145 that the returns claiming birth day presents were not filed in the
respective assessment years but long after and that for the first four
B
years, i.e. assessment years 1987-88 to 1990-91, there was no mention
of cash presents and that it was limited to jewellery only.
283. That aggrieved by the finding of the Commissioner ofincome
Tax, PW-125 that the money and assets representing the presents and
gifts did constitute applicant's income from undisclosed source within
the meaning of Sections 69 and 69A of the income tax Act, Al had
c
preferred an appeal before the Tribunal and that the same was pending,
was recorded.
284. That the receipt of money or pecunia1y resources in order to
qualify as income within the meaning of Section 13( 1) ( e) of the Act, in
case ofa public servant should essentially be attached to his/her official D
post and that any windfall or gain of graft, crime or immoral secretions
prima facie would not be a receipt from the known sources of his/her
income as held by this Court in State ofM.P. Vs. Awadh Kislwre Gupta
(supra), was noted. The Trial Court was of the view that though the
receipt of birthday presents by themselves might not amount to windfall E
or immoral secretions, the receipt of huge amount of Rs.2 crores and
foreign remittance as presents and gifts, as the Chief Minister of a State,
was susceptible to serious doubts and suspicion about the nature of the
receipts. The fact that the practice of offering such gifts had been
discontinued after 1992 and the possibility of such offerings not being
made if A l was not in office, was pondered over. The Trial Court F
discarded the evidence of the party workers and rejected the Al's claim
of income from the gifts from a lawful source. The decision of this
Court in A.R. Antulay Vs. R.S. Nayak & Anr., ( 1988) 2 SCC 602, was
referred to emphasize upon the objectives of the 1947 Act to keep a
public servant free from corruption and to ensure purity in public life. G
The Trial Court, thus, rejected the alleged gifts, said to have been received
by Al to constitute a lawful source of income.
On a reading of the discussion of the Trial Court on this issue, by
no means, can it be repudiated to be one bereft of appreciation of the
evidence on record or reasons or application of mind. H
796 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 285. In contradistinction, the High Court quantified the amount of
gifts to be Rs.1.5 crores principally referring to the income tax returns
and the orders of the authorities passed thereon. It did notice that there
had been a delay in the submission of the income tax retmns but accepted
the plea of the defence acting on the orders of the income tax authorities.
It seems to have been convinced as well by the contention that there
B
was a practice of offering gifts to political leaders on their birthdays in
the State. Not only is the ultimate conclusion of the High Court, de hors
any independent assessment of the evidence to overturn the categorical
finding of the Trial Court to the contrary, no convincing or persuasive
reason is also forthcoming. This assumes significance also in view of
c the state of law that the findings of the income tax authorities/forums
are not binding on a criminal court to readily accept the legality or
lawfulness of the source ofincome as mentioned in the income tax returns
by an assessee without any semblance of inquisition into the inherent
merit of the materials on record relatable thereto. Not only this aspect
was totally missed by the High Court, no attempt seems to have been
D
made by it to appraise the evidence adduced by the parties in this regard,
to come to a self-contained and consummate determination.
286. Exb. P-2145 is the order dated 25.3.1996 of the CIT (appeals)
rejecting the explanation of Al with regard to the gifts said to have been
received by her by way of cash, demand draft, jewellery, silve1ware for
E the assessment years 1987-88 to 1992-93. The order, amongst others,
reveals that none of the income tax returns and wealth tax returns of
Al, was in time. Whereas those for the assessment years 1987-88 to
1991-92 were delayed by periods ranging between one year and five
years and above, that of 1992-93 wa> also belated. The explanation
F provided by A I in her letters to this effect wa' taken note of and was
not accepted by the Assessment Officer and th\; C'lT (Appeals) also
sustained this conclusion. Apart from other aspects, the appc:'.dte authority
also noticed the unexplained delay in the submission of the u~nm1e tax
as well as wealth tax returns. The observation of the Assessmc·nt r ,,,.,.icer
that the income tax returns did not disclose the presents/gifts re. ·ed
G by the assessee during the relevant time, was also noted. The appellatt:
authority was of the view, taking the clue from the decision of this Court
in The Commissioner of Expenditure Tax, Andhra Pradesh Vs.
P. V.G Raju, ( 1976) I SCC 241, that politics is a profession and thus the
collections in the form of presents/gifts cannot but were receipts from
H profession and, therefore were to be construed as professional income
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 797
[PINAKI CHANDRA GHOSE, J .]

under Section 28. As would be evident from the order, the income tax A
authorities did limit their scrntiny only to decide as to whether the receipts
by way of presents/gifts were to be treated as income or not for the
purposes oflncome Tax Act and not to verify the genuineness, authenticity
and lawfulness of the source thereof or of the transactions relating thereto
as required from the standpoint of a charge of criminal misconduct under
B
the 1988 Act.
287. Apart from the fact that the oral testimony of PWs 215 and
259 as to the practice of entertainment of gifts and donations qua the
political figures of the states on celebratory occasions is of no
consequence to ascribe any legitimacy to such receipts as a lawful source
of income under the 1988 Act, in view of the incorporation of Sections
c
161 to l 65A IPC in their letter and spirit in the 1988 Act, gifts as
claimed to have been made to Al were not only prohibited by law, having
regard to her office and the role attached thereto, but also constitute an
offence thereunder. By no means therefore, the gifts in any form, as
offered to Al during the relevant period, can be constrned, having regard D
to the rationale and rigour of the underlying objectives of this lagislation
be accepted as a lawful source of income. To reiterate, disclosure of
such gifts in the income tax returns of A 1 and the orders of the income
tax authorities on the basis thereof, do not validate the said receipts to
elevate the same to lawful income to repel the charge under Section
E
13( 1)( e) thereof. The reliance of the defence on the decisions of this
Court in M. Krishna Reddy (supra) and Kedari Lal (supra), in the
facts and circumstances of the case, is of no avail.
288. This Court while dilating on the permissibility of acceptance
of presents by public servants, proclaimed in R.S. Nayak (supra), that
ifthe same is allowed, it would facilitate circumvention of the prohibition F
of acceptance of bribe in the shape of present/gift. An analytical insight
into the ingredients of Sections 161 to l 65A of IPC, then on the statute
book as a part of the Code was undertaken to propound that the ambit
of Section 165 was wider than that of Sections 161,162 and 163 IPC and
was intended to cover cases of corruption. It was elaborated that the G
difference between the acceptance of bribe made punishable under
Section 161 and 165 IPC was that under the former section, the present
is taken as a motive or reward for abuse of office but under the latter,
the question of motive orreward is wholly immaterial and the acceptance
of a valuable thing without consideration or with inadequate consideration
H
798 SUPREME COURT REPORTS [2017] 5 S.C.R.

A from a person who has or is likely to have any business to be transacted,
is forbidden because though not taken as a motive or reward for showing
any official favour, it is likely to influence the public servant to show
official favour to a person giving such valuable thing. It was underlined
that Sections 161 and 165 IPC as well as Section 5 of the PC Act are
intended to keep the public servant free from corruption and thus
B
ultimately to ensure purity in public life.
289. Gifts to Al, a public servant in the context of Sections 161 to
165AIPC now integrated into the Act arc visibly illegal and forbidden by
law. The endeavour to strike a distinction between "legal" and "unlawfol"
as sought to be made to portray gifts to constitute a lawful source of
c income is thus wholly misconstrued.
290. With the advent of the 1988 Act, and inter alia. consequent
upon the expansion of the scope of definition of the "public servant"
and the integration of Section 161 to l 65A IPC in the said statute, the
claim of the defence to treat the gifts offered to A I on her birthday as
D lawful income, thus cannot receive judicial imprimatur.

INCOME OF SASI ENTERPRISES BY WAY OF RENTAL
INCOME, AGRICULTURAL INCOME AND REPAYMENT OF
E LOAN.
291. This partly conesponds to the rental income of this firm,
listed at item Nos. 59,60 and 61 in the Heads ofincome furnished by the
D VAC, amounting to Rs.6, 15 ,900/-. Whereas the Trial Court had rejected
the claim ofSasi Enterprises of having earned Rs.95,92,776/- as income
under the various heads i.e. profit from business, sale of scrap, agricultural
F
income, rental income, recovery of loan, advance receipt for sale of
property and had sustained the figure mentioned by the prosecution, the
High Court assessed the same to be Rs.25,00,000/-.
292. As the evidence on record would reveal, in support of their
claim, the respondents relied heavily on the income tax returns and the
G
orders passed thereon for the assessment years 1991-92 to 1996-97 and
the oral testimony of DW-88. Ex. D-262 to D-275 were pressed into
service. Qua the rental income of Sasi Enterprises, according to the
respondents, against a sum ofRs.12,68,800/-, the DVAC had accepted
only Rs.6,15,900/- as reflected against item Nos. 59, 61 and 62 of the
H schedule of income furnished by it.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 799
[PINAKJ CHANDRA GHOSE, J.]

293. DW-88 K. Soundravelan claimed to be a Chartered A
Accountant since 1992 had depo~ed to have handled the accounts of
Jaya Publications and Sasi Enterprises and also the personal accounts
of A2 and the firms concerning her. He is stated to have been involved
in the finalisation of accounts of the above assessees. He generally
identified the various exhibits like income tax returns, profit and loss
B
accounts, balance sheets and the orders of the income tax authorities in
connection therewith. He also stated with regard to the business in
which Sasi Enterprises was involved in the name of FAX Universal.
He referred to a lease agreement of one TSR Vasudevan with Sasi
Enterprises in the year 1990 for carrying out agricultural operations and
also a copy of the certificate issued by the Tehsildar ofVillupuram with c
regard to the leasehold lands. He identified as well the documents
produced by the firm indicating recovery of a part of the loan advanced
to one Nagammal and Subramaniam. Noticeably, his testimony was based
on the contents of the documents alone. He in the same vein, also refe1Ted
to the agricultural income as reflected in the relevant income tax returns.
D
He, however, admitted that Sasi Enterprises had not filed its return of
income for the assessment years 1994-95, 1995-96 and 1996-97 in time
for which notices had been issued under Section 148 of the Income Tax
Act. This assumes importance in view of the prosecution launched
against this firm for delayed submissions of the income tax returns.
294. The prosecution had examined PW-113 Mosin Bijapuri on E
this issue, who at the relevant time i.e. 1992-93, was the Managing
Director in H.B.M. Foundation Limited. He stated about taking on rent
by his company, a shop for which an advance of Rs.21,600/- was
made. He also stated about the payment of rent till 1997 i.e. till vacation
of the premises. He referred to a copy of the rent agreement with Sasi f
Enterprises but conceded that he did not know as to who had signed on
behalf of the firm.
295.The Trial Court evaluated the oral as well as the documentary
evidence in full. It analysed the contents of the documents individually
so as to examine the tenability or otherwise of the claim of income under G
various heads for each assessment year during the check period. It
recorded, amongst others, that in terms of Section 269 (SS) of the Income
Tax Act, no one was permitted to take or accept from any other person,
any amount of loan or deposit exceeding Rs.20,000/- except by way of
account payee cheque or an account payee bank draft. It examined this
H

•
800 SUPREME COURT REPORTS [2017] 5 S.C.R.

A aspect in the context of the definition of "known source of income"
applied in Section 13(l)(e) of the Act. Reference to Section 269-0
regarding repayment also through an account payee cheque or an account
pay bank draft was made. Though it had been argued on behalf of the
respondents that in view of the Direct Tax Laws (Amendment) Act of
1987, Section 27600, which provided for prosecution and penalty for
B
contravention of Section 26900, had been repealed, non-compliance of
Section 269SS, even assuming that such violation did not attract
prosecution under the Act, the same cannot be ignored in order to
determine the veracity and/or the acceptability of the transactions
involved. At least to this extent, the approach of the Trial Court and the
c application of Section 269SS merits acceptance.
296. The Trial Court was also of the view that vis-a-vis the plea
of recovery ofloan, the defence had mainly endeavoured to substantiate
the claim of income under the aforementioned head on the basis of the
profit and loss account, there being no other tangible proof either of
D grant of loan or the repayment thereof. That the defence had neither
examined the loanee nor had produced any material in support of the
transaction was recorded. It also discarded the profit and loss account
in support of the plea of the defence that an amount of Rs.16,91,000/-
had been recovered out of the loan advance to Nagammal and
Subramanium.
E
297. The Trial Court rejected the lease agreement between TSR
Vasudevan and Sasi Enterprises, an1ongst others, on the ground that the
claimant's lease was for a period of 11 months which was impennissible
under Section 107 of the Transfer of Property Act. Further there was
no acceptable evidence that the land had been cultivated to claim
F agricultural income. The letter of the Tehsildar, Vellupuram Ex. 259
certifying that A2 was a lessee of the land involved from 1980 to 1988
was also rejected in absence of any evidence that the lease, the original
term whereof had expired on 21.7.1992, had been extended thereafter.
Additionally, the certificate dated 25.10.2001 was de hors any proof of
G any local inquiry or scrutiny of the relevant lease deeds, rendering the
said document a suspect. According to the Trial Court, the income tax
returns, the profit and loss accounts and the balance sheets as well as
the orders of the income tax authorities did not prove the claim of income
as made by the defence in absence of independent and persuasive
evidence to that effect. The letter produced by the Housing Real Estate
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 801
[PINAKI CHANDRA GHOSE, J .]

and Development Private Limited cited as a tenant of the firm in support A
of the plea of having paid to it an amount of Rs. I 0 lakhs as rent, was
also rejected, the document being on a plain sheet of paper without any
date of issuance thereof. The discrepancy in the name of the fim1 was
also noticed to dismiss this claim as inauthentic. Ex. D-274 adduced by
the defence as an e/(cerpt from the confirmation of accounts, furnished
B
by Housing and Real Estate Development Pvt. Limited also did not find
the approval of the Trial Court, the same not having been proved by the
author thereof and in absence of the required particulars of the
transaction, pertinent thereto. The Trial Court as a whole thus rejected
the claim of Sasi Enterprises of the additional amount of income of
Rs.95,92,776/- during the check period. c
298. The High Court accepted wholly the documents produced
by the defence as enumerated hereinabove and acted on the contents
thereof. It is however noteworthy that the narration in relation thereto,
does not reveal any analytical approach to the fathom probative value
thereof on the touchstone of acceptability of the proof of the · facts D
proposed thereby. Neither the oral nor the documentary evidence has
been tested independent of the income tax returns, profit and loss accounts
and the balance sheets to determine the intrinsic worth thereof. At the
conclusion, however, against the claim ofRs.95,92,776/-, the High Court
assessed the income of Sasi Enterprises to be Rs.25,00,000/-. No
acceptable basis for this computation has also been disclosed. E

299. We have examined the oral and documentary evidence
referred to hereinabove to the extent wa1Tanted. Apart from the fact
that the contents of the income tax returns, the profit and loss account
and the balance sheet for the relevant assessment years, as well as the
determination made by the income tax authorities on the basis thereof, F
are not final and binding on the criminal court, the investigative approach
of the Trial Court visibly has been relatively exhaustive and searching
qua every piece of evidence adduced as expected. Though the orders
of the income tax authorities on the various aspects of the issue under
consideration, reveal examination of the materials considered to be G
relevant therefrom in the limited perspective of computation of taxable
income alone, we are left with the impression that High Court has not
made any endeavour to appraise the evidence available, independent of
documents/records pertaining to income tax assessments and the decision
of the tax authorities to arrive at its conclusions. The income tax returns
H
802 SUPREME COURT REPORTS [2017] 5 S.C.R.

A and the appendices thereto as well as the orders of the income tax
authorities, to reiterate are neither decisive nor binding on the criminal
court and the facts narrated therein, if fall for scrutiny in a criminal
proceeding, have to be essentially addressed by adducing evidence to
prove or disprove the same, as the case may be. Correspondingly, the
court would be legally obliged to undertake an incised scrutiny thereof
B
on its own to record its deduction therefrom.
300. The respondents having claimed the income of Rs.95,92, 776/-
as against Rs.6,15,900/-quantified by the DVAC, the onus was on them
to prove the same. Even judged by the bench mark of balance of
probabilities, in our view, the High Court in order to reverse th<>
c determination of the Trial Court, on the same set of evidence ought to
have applied itself to examine and assess the evidence in this perspective.
301. The High Court, in our view, having regard to its approach
has failed as an appellate forum and as a higher court of facts to appreciate
the evidence in the correct legal context. The finding of the High Court,
D on this issue, thus, cannot be sustained.
Rental Income of Al
302. Whereas the DVAC quoted Rs.40,01,127/-to be the income
under this head as listed against Item Nos. 53 & 54 of the Heads of
E Income, according to the defence, the same ought to have been
Rs.43,75,132/-. The Trial Courtconsidered the oral evidence of PW-102
Raghwan, who at the relevant time, was the Manager (Administration)
of the firm Plant Construction Private Limited which had taken on rent
from M/s Jaya Publications, vide lease deed Ex. P65 l, the building
mentioned therein and owned by M/s Jaya Publications on a monthly
F rent of Rs.1,05,000/-. This witness also proved the agreements whereby
the tenancy had been extended thereafter from time to time on
enhancement of rent.
303. This witness testified as well with regard to the tenancy of
another house also belonging to M/s Jaya Publications vide lease deed
G Ex. P655 initially at a monthly rent of Rs. I 0,0001-, which stood enhanced
thereafter on renewal of the tenancy/lease. According to this witness,
the rent was paid through cheques and in all for the period January, 1993
to April, 1996, an amount of Rs.43,75,132/- was paid to this effect to
M/s Jaya Publications.
H
STATE OF KARNATAKA v. SELVI J. JAYALALlTHA & ORS. 803
[PINAKI CHANDRA GHOSE, J.]

304. It has been urged on behalf of Al that she had received an A
amount of Rs.90000/- by way of monthly advance and Rs.2,32,000 by
way of rental income during the check period. Reliance has been placed
on Ex. P-936 (statement of Central Bank of India of Al), P-2334 and P-
2336 being her statements of account during the relevant period. The
evidence of DW-64 S-Shanmugam, who claimed to be her Chartered
B
Accountant, has also been referred to.
305. The learned Trial Court accepted this evidence and noted
that though the total rent paid did sum up to Rs.43,75,132/-, the prosecution
had taken this figure to be Rs.40,01, 127/-. lt however declined to interfere
on the ground that rental income was taxable under the Income Tax
Act. The High Court, on the other hand, without any discussion of the c
evidence added Rs.3,22,000/- to the rental income as the prosecution
had omitted to do so.
306. In our view, as the evidence adduced by the defence did
establish that Rs.43,75,132/-had been paid as rent for the two premises
in question, as identified under item nos. 53 & 54 in the list of income D
provided by the DVAC, the High Court was justified in adding
Rs.3,22,000/-.
Income of Jaya Publications and Namadhu MGR:
307. The appellant-State has also taken exception to the addition E
of an amount ofRs.4 crores by the High Court towards income of Jaya
Publications and Namadhu MGR in addition to the figure cited by the
DVAC.
308. Jaya Publications is the proprietorship fim1 of which, at the
relevant time, Al and A2 were partners. As per the deed of partnership,
F
it carried on business of all types of printing and publication of newspapers/
magazines/ periodicals etc. and such other business or businesses to be
mutually agreed upon between the partners. It, as per the records,
purchased a factory shed with the factory building and had installed a
printing press thereat and had commenced its business of printing and
publication ofnews letter of AIADMK party namely; "Namadhu MGR" G
for circulation amongst the public and various other agencies.
309. It is claimed by the defence that a non-interest paying deposit
scheme was started in the year 1990 to supply free copies of the
newsletter against deposits of Rs.12,000, Rs.15000, Rs.18000 annually
H
804 SUPREME COURT REPORTS [2017) 5 S.C.R.

A for which the subscribers could get 4, 5 or 6 copies of such newsletter
per day, correspondingly. The provision for refund of the deposit by
giving prior notice was made as well.
310. The defence examined DW-88 K. Soundravalan, a Chartered
Accountant who claim to have handled the accounts of Jaya Publications
B and Sasi Enterprises and was involved in the finalisation of accounts of
the said firms during the period 1992 to 1996. He referred to the
aforementioned scheme and also the rates of subscription. He stated
that Jaya Publications was an assessee of income tax from the year
1991. According to him, he had personally produced the books of account
of the assessee before the special auditors for the assessment year 1994-
c 95 which were certified to have been maintained properly. He identified
the income tax returns of the firm for the assessment years 1991-92 to
1993-94 i.e. Exbs. D-218, D-219, D-220, submitted on 6.11.1988. He
also identified the income tax returns of Jaya Publications for the
assessment years 1994-95 to 1996-97 i.e. Exbs. D-221 submitted on
D 17 .3 .1998 and D-222, D-223 submitted on 17 .3 .1999. He deposed that
along with the returns, statement of income tax, balance sheets, profit
and loss accounts were furnished for the respective years. He however
admitted that the balance sheets for the assessment years 1994-95, 1995-
96, 1996-97 were not available in the records produced in court by the
income tax department and that he did produce the attested copies of
E
the balance sheets and profit and loss accounts of the asses see for the
years ending 31.3.1994, 31.3.1995 and 31.3.1996 i.e. Exb. D-224, D-
225 and D-226 respectively. He also referred to the list of subscribers
to the deposit scheme for the year 1992-93 i.e. Exb. D-228 and also
mentioned about the scrutiny of the accounts for the years 1991 to 1996
F by the income tax authorities. He stated that the assessing officer did
not accept the claim of scheme deposit for the assessment year 1991-92
by his order dated 26.3 .2001. But the concerned C.l.T. (Appeals), in the
appeal filed by the assessee, accepted the claim of scheme deposit
subscription.

G Similarly, the CIT (Appeals) did uphold the claim of the assessee
for the assessment years 1992-93 and 1993-1994.
311. Qua the assessment years 1994-95 to 1996-97, according to
this witness, the assessing officer partially allowed the claim which was
upheld in the appeals by the CIT (Appeals). Eventually, the Income Tax
H Appellate Tribunal, B- Bench, by a common order, accepted the claim
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS.· 805
[PINAKI CHANDRA GHOSE, J.]

of the assessee regarding the deposit scheme except in respect of 41 A
depositors, who denied to have made such deposits. The witness did
disclose that the matter was remanded to the assessing officer with a
direction to afford an opportunity to the assessee to cross-examine these
41 depositors. The witness admitted that such enquiry was pending. He,
however, deposed that under the deposit scheme, Jaya Publications
B
collected an amount of Rs.14,23,89,000/- over the period of six years.
312. The witness disclosed that the main source of income of
Jaya Publications was sale of newspapers, advertisements and printing
on job work basis and that as per its profit and loss statement, the net
profit derived by it from the above sources, during the assessment years
1992-93 to 1996-97, was Rs. I, 15,94,848.60/-. He also mentioned about
c
agricultural operations being carried out by Jaya Publications in the name
ofSapthagiri Farms which yielded agricultural income.
313. The Trial Court, took into account the particulars of income
of Jaya Publications as claimed by the defence for the assessment years
1992-93 to 1996-97 sought to be proved through the oral evidence of D
DW 88 and various documents Exh. D-217 to D-235. The break up of
the income from various sources, as furnished by the firm, discloses that
its income through scheme deposit over the above period was
Rs.14,10,35,000/- and qua other sources including sales, job work,
advertisements, interest, agricultural income, rentals etc. Rs. I, I 5,94,848/-. E
The Trial Court was conscious of the fact that the defence in support
of its claim of the income aforementioned, had called in evidence the
testimony of 31 witnesses, who did speak about the deposits made by
them under the scheme, in addition to DW 88 and that further reliance
had been placed on the special audit report obtained by the income tax
authorities, Exb. P-217, orders of the commissioner of income Tax F
(Appeals) Exb. D-231 to D-234 as well as the balance sheets filed
along with the returns Exb. D-218 to D-222.
314. The Trial Court rightly noticed that the returns for the
assessment years 1991-92, 1992-93, 1993-94 had been filed much
belatedly on 6.11.1998 and that in these returns, thenature of the business G
of the firm was shown as "printing, publishing and dealing in properties".
It also noted that in the balance sheet, enclosed to the return of the year
1991-92, an amount ofRs.13,54,000/-was shown in the liability column.
The amounts of Rs.82,14,000/- and Rs.3,05,40,000/-, being scheme
deposit, were also shown in the liability column in the balance sheets H
806 SUPREME COURT REPORTS [2017] 5 S.C.R.

A enclosed with the returns for the assessment years 1992-93 and 1993-
94. The Trial Court noticed as well that the return for the assessment
year 1994-95 Exb. D-221 had been filed only on 17 .3 .1998 and that the
balance sheet attached thereto, showed scheme deposit of
Rs.51,31,50,00/- in the liability column. That the return for the assessment
year 1995-96 was also filed only on 17.3.1999 much belatedly, was
B
noticed as well. The Trial Court mentioned and rightly that this return as
well as the return for the assessment years 1996-97 i.e. Ex. D-222 and
D-223 did not mention about the scheme deposit. That the defence,
however, separately got marked the profit and loss accounts for the
years ending 31.3.1994, 31.3.1995 and 31.3 .1996 vi de Exb. D-224, D-
c 225 and D-226, was taken note of. The Trial Court, however, left out of
consideration these documents i.e. profit and loss accounts,
aforementioned firstly because those were only attested copies and
secondly, as those did not disclose in any manner, to have been filed with
the corresponding return before the income tax authorities or produed
before them at any point of time.
D
315. The evidence of the 31 witnesses with regard to the deposits
made by them of amounts va1ying from Rs.12000/- to Rs.18000/- is
more or less of the same model and owing allegiance to the AlADMK
party. Some of them also proved their application for becoming
subscribers but though they stated to have been issued receipts for the
E deposits made, none produced the same.
316. The Trial Court, in assessing the evidence on record traced
the proceedings before the income tax authorities on this count, beginning
from the assessment year 1991-92. It marked as to how the claim of
scheme deposit had been rejected by the assessing officer as the
F impounded books of accounts did not reflect the same, whereafter
following the re-assessment proceedings, the Commissioner of Income
Tax (Appeals) upheld the same. In this backdrop of the initial failure of
the assessee to produce the necessary documents before the assessing
officer supporting the scheme deposit and the unexplained delayed in
G submission of the income tax returns for the assessment years 1991-92
to 1993-94 only on 6.11.1998, the Trial Court held the view that the
defence had contrived the story of scheme deposit only in the year 1998
and in furtherance thereof, mentioned about it in the profit and loss account
statement enclosed to such returns. The Trial Court, however, did not
rest contended on that finding but scrutinised as well the applications of
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 807
[PINAKI CHANDRA GHOSE, J.]

the subscribers brought on record. It, however, noted the explanation of A
the assessee before the income tax authorities for non-production of
such application forms, counter-foils of receipts etc. on the ground that
those had gone missing and that a complaint with regard thereto had
been lodged. The Trial Court thus reflected on the cr~dibility of the
defence stand that such application forms had been obtained from the
B
income tax department. It, however, appears that DW-88 did refer to
the files containing the applications. In any view of the matter, these
applications under Exb. 0-230 had been produced at the trial by the
defence.
317. The Trial Court recorded that DW-88 had admitted that
there was no mention in Exb. 0-217, the report of the Chartered c
Accountant of Jaya Publications addressed to the income tax authorities,
that the books of accounts of the assessee had been produced before
the special auditors. Further, it had been noted in the report Exb. 0-217
that all payments through cash were not supported by any outside
document or evidence and that they were only supported by internally D
made vouchers with proper payees signatures. The Trial Court also
recorded that OW-88 had admitted that profit and loss accounts/balance
sheets of the assessee as on 31.3.1994, 31.3.1995, 31.3.1996 i.e. Exb.
D-224 to D-226 did not bear the date, seal and signatures of the income
tax authorities. Further Exb. 0-228, the claimed list of subscribers also
did not contain the seal and signatures of Jaya Publications. That the E
original subscription applications contained in Exb. 0-230( 1) to Exb.
230(17) had not been produced before the income tax authorities but
their xerox copies were only produced, was noted as well. The Trial
Court was categorical in bringing on record the fact that it was only
after the CIT (Appeals) had set-aside the assessment order i.e. 3.3.1988
rejecting the claim of scheme deposit of the assessee on 15.9.1998 that
Jaya Publications filed its returns for the assessment years 1991-92,
1992-93, 1993-94 on 6.11.1998 mentioning for the first time such deposits.
That in the course of the scrntiny thereafter, in response to the notice
issued by the assessing officer, Jaya Publications did not produce the
originals of the applications and the counter-foils of deposits but only G
copies, was taken note of.
318. The Trial Court also analysed the evidence of PW 20 l
C.K.R.K. Vidya Sagar, an officer of the Canara Bank, Mylapore Branch
disclosing the transactions of heavy amounts inter se the accounts of
H
808 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Jaya Publications, Namadhu MGR, Sasi Enterprises, Metal King
Company of which A2 was the proprietor and Vinod Video Vision to
indicate, according to it, circulation of unaccotmted and undisclosed funds
in the names of various firms and companies of which Al to A4 were
either directors or partners at the relevant point of time. Referring to
the amounts mentioned by PW-201 in the accounts of J aya Publications,
B
the Trial Court disbelieved the plea of credit of deposit of
Rs.14, 10,35,000/- as collection from subscription under the deposit
scheme as claimed by the defence.
319. The Trial Court on an overall assessment of the evidence
concluded that the story of scheme deposit had been introduced by the
c defence only after the charge-sheet had been filed on 4.10.1997 i.e.
through the income tax returns filed in the year 1998. That no evidence
had been produced before the Court to show that the scheme had been
floated in the year 1990, was recorded. While rejecting the claim of this
head ofincome by the defence, the Trial Court sought to draw sustenance
D from the fact that the assessee had not produced the primaiy documents
either before the special auditors or the assessing officers and also
rejected the applications Exb. D-230 si;;ries as manufactured. The
testimony of subscribers was dismissed also on the ground that they
were hardened party workers.

E 320. The High Court, though had traversed the above facts in
lesser detail, dealt with the oral and documentary evidence and noted
that thl' defence claim of scheme deposit of Rs.13,89, 19,475/-, as
accepted by the concerned CIT (Appeals), was SLtbjudice before the
High Court, Madras. The High Court reiterated as well that the income
tax returns for the relevant assessment years had been filed ve1y belatedly
F and that no plausible explanation. therefor was forthcoming. That neither
Al nor A2 had examined themselves, was noted. The High Court also
did take into account the fact that at one point of time, the assesee had
complained that the applications by the subscribers were missing and
that complaint to that effect had been lodged, but subsequently those
G applications said to have been presented before the income tax
department were marked in court. The High Court categorically held
that delayed and unexplained submission of income tax returns did give
rise to doubt of the genuineness thereof. This notwithstanding, the High
Court only in the face of the oral evidence of the 31 witnesses claiming
themselves to be the depositors/subscribers for the newsletter, returned
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 809
[PINAKI CHANDRA GHOSE, J.]

a finding that the whole claim of the assessee could not be rejected only A
on the ground of delay in filing of the income tax returns. Acting solely
on this consideration, the High Court, thus allowed addition of a sum of
Rs.4 crores as income of Jaya Publications.
321. Not only as refen-ed to hereinabove, in our view, the Trial
Court had been alive to the relevant materials bearing on this issue and B
had founded its conclusions on elaborate scrntiny thereof, its criticism
by the defence that it had left out of consideration amongst others, the
oral evidence of PWs 201, PW-230 and DW2 to DW67 and DW88 is
not acceptable. The grievance with regard to non production of the
report of the internal auditor of the DVAC about the affairs of Jaya
Publications and the accounts ofNamadhu MGR as adverted to by PW c
259 in his testimony, is also not of any conclusive relevance. Not only
the absence of the report does not prove the defence plea, significantly,
no endeavour was made on behalf of the respondents to summon the
said report. The contention that the omission on the part of the prosecution
to examine the internal auditor and to produce his report wa1rnnts adverse D
inference against the prosecution, does not commend for acceptance.
This is more so as the prosecution had not accepted the deposit under
the Namadhu MGR scheme to be a lawful source of income. The
respondents consequently in order to establish it to be one, ought to have
discharged their burden to satisfactorily prove the same and for that
matter, ought to have taken necessary steps, if such report was constrned E
to be vitally essential.
322.Vis-a-vis the balance sheet and the profit and loss account
for the relevant assessment years, rejected by the Trial Court, suffice it
to record that mere marking of documents without any objection from
the prosecution ipso facto, in law is not an authentication or proof of F
contents thereof and the plea to the contrary, thus cannot be sustained.
Further, reliance on the presumption based on clause (cl) of the
Explanation under Section 139(9) of the Income Tax Act, 1961, to
suggest that the balance sheet and the profit and loss accounts must
have been filed along with the con-esponding income tax returns and G
that the failure on the part of the income tax department to produce the
same, does not demolish the plea of the defence of submission of such
balance sheets and profit and loss accounts along with the returns, in our
estimate, is no answer to the inaction on the part of the respondents to
prove by better evidence that the balance sheets and the profit and· loss
H
810 SUPREME COURT REPORTS [2017] 5 S.C.R.

A accounts supposed to accompany the income tax returns mandatorily,
had infact been filed therewith, more particularly in view of the apparent
discrepancies in the balance sheet and the profit and loss account for
the assessment year 1994-95, proved at the trial.
323. The evidence of PW 201 on which great emphasis has been
B laid by the respondents, to start with, is contradictory on the date of
opening of the current account of Namadhu MGR. Though reference
has been made by this witness vis-a-vis current account No. 1952 of
Namadhu MGR about deposits made therein from 18.12.1991,
significantly it is apparent from his testimony that sizeable amounts have
been transferred therefrom to the accounts of Al, A2, A3 and A4, Jaya
c Publications, Sasi Enterprises, Anjaneya Printers Pvt. Ltd., Metal King,
Green Farmhouse, Meadow Agro Farms and Fax Universal (unit of
Sasi Enterprises) on various dates during the check period.
324. Having regard to the overall evidence with regard to the
scheme deposit and the free flow of funds from the account ofNamadhu
D MGR to the respondents and their firms, the concurrent conclusions of
the Trial Court and the High Court against this source of income, as
claimed by the defence, appear to be unexceptionable.
325. Significantly, though the High Court had rejected this source
of income also on scrutiny of the materials on record albeit less
E exhaustively compared to the Trial Court and noticing as well the
unexplained belated submission of the income tax returns of the relevant
years, the said finding has remained unchallenged by the respondents.
326. At the cost of repetition, having regard to the conspectus of
facts pertaining to this issue, the Trial Court was within its authority and
F being obliged in law, rightly scrutinised the evidence independently to
assay the genuineness or otherwise of the claim of scheme deposit made
by Jaya Publications. Considering the different phases of the process
undertaken by the income tax authorities, the failure of the assessee to
produce the primary documents in original before the auditors and the
G income tax authorities in support of such scheme deposit and more
particularly the inordinate delay in submission of income tax returns
much after the submission of the charge-sheet, along with the other
attendant circumstances considered by the Trial Court, we are of the
view that the High Court was not justified in allowing an additional sum
of Rs.4 crores as income of Jaya Publications on account of scheme
H deposit merely on the basis of the oral evidence of the 31 witnesses.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 811
[PINAKI CHANDRA GROSE, J.]

This is more so when it was otherwise convinced on the appreciation of A
the evidence on record that the income tax returns, in particular for the
relevant assessment years, incorporating the scheme deposit were
doubtful in view of the unexplained delay in submission thereof. In other
words, though the High Court itself was left unconvinced about the
acceptability of the claim of scheme deposit, due to largely delayed income
B
tax returns, it benignly did award an income of Rs.4 crores to the assessee
only on the basis of the oral testimony of3 l witnesses who, as noted by
the Trial Court, owed unstinted allegiance to AIADMK party with no
legally acceptable documentary evidence to corroborate the same. The
addition of this additional sum of Rs.4 crores as income of Jaya
Publications, having regard to the state of the evidence with regard thereto, c
cannot be upheld.
Income of Al by way of interest on bank deposit:
327. A further sum of Rs.18,49,210/- has been claimed on behalf
of Rl/ Al as her income by way of interest on bank deposits. Though
the prosecution against the relevant items of income has accepted a D
sum of Rs.58,90,925/-, according to the Rl/Al, it ought to have been
Rs. 77,40, 13 5/-. Thus the claim of the additional amount of Rs.18,49 ,210/-.
To endorse this claim, this respondent has again wholly relied on the
income tax returns/orders for the assessment years 1992-93 to 1996-97,
where various amounts were shown under the head "income from other E
sources".
328. The Trial Court bad dealt with these items elaborately. It
examined the evidence of PWs 164, 173, 201 and 202, officers of the
concerned banks with reference to the copies of the contemporaneous
statements of accounts and had accepted the figures available thereunder. F
It, however, declined to accept the profit and loss account statements
adduced on behalf of the said respondent in support of the enhanced
claim ofRs.77,40,135/- as her income by way of interest in absence of
any other reliable evidence to that effect. Even assuming that the
contention on behalf of this respondent that profit and loss accounts
were indeed part of the respective income tax returns and had, in any G
case, been separately tendered and marked in evidence at the trial, in
law the same per se was not an unassailable authentication of the
probative worth of the contents thereof, so much so to repudiate the
approach of the Trial Court to be incurably erroneous. Further the High
Court seems to have omitted to adjudicate this issue. H
812 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 329. To reiterate, as the scrntiny of the evidence on record in a
trial on a charge under the 1988 Act, coupled with the imputation of
conspiracy and abetment has to be essentially in the perspectives attuned
to the ingredients of the offences involved and not divorced therefrom,
unreserved reliance on the disclosures of income in the income tax
returns and the orders passed thereon by the income tax authorities
B
would be an approach not in accord with law. The omission on the part
of the prosecution to object either to the admissibility of the income tax
returns/orders or the mode of proof thereof, ipso facto would not endow
the contents thereof with probative efficacy. The reliance on the decision
of this Court in R. V.E. Venkatachala Gounder vs Arulmigu
c Viswesaraswami & V.P. Temple and another (2003) 8 SCC 752 on
this aspect is thus of no avail to the respondents.
330. This decision dwell on the nature of objections as to the
admissibility of documents e.g. an objection that it is by itself inadmissible
in evidence or as to the mode of proof thereof alleging the same to be
D irregular or insufficient. It is not an authority on the proposition that if
none of these objections is taken, the contents of the document so
introduced, would automatically have to be accepted as the unassailable
proof of the facts conveyed thereby.
Income of Super Duper T.V. Pvt. Ltd. - Rs.l,00,00,000/-.
E 331. Whereas the Trial Court has rejected this claim, the High
Court has allowed it. rhis head of income was not included by the
DVAC in its list and the defence plea has been that the same had been
wrongly and deliberately excluded. This amount is claimed to be the
legitimate income of A3 from his business initially carried on as the
F proprietor of Super Duper T. V. and later incorporated as Super Duper
T.V. Private Limited. The Trial Court did refer to the evidence of PW
259, the Investigating Officer, who deposed that the seized documents
included 22 fee receipt books maintained by the firm, each of 100 leaves
and that the counter-foils showed receipt of Rs.5000/- each. The
witness, however, denied that the sum otherwise totalled at
G Rs.I ,10,00,000/- was the income of Super Duper T. V. and that this amount
was not included as income of A3 as the same had been utilised in the
expenditure to rnn the company.
332. As referred to by the defence, the learned Trial Court did
take note of the testimony of witnesses DW 65 to DW 73 about the
H deposits made by them with the company during the check period. The
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 813
[PINAKI CHANDRA GHOSE, J.]

documents exhibited by DW 85, the Manager of the company to prove A
the receipt of Rs.1.10 crores was also considered. The Trial Court
recorded that this company was one of those floated by A2, A3 and A4
during the check period and that it had introduced a deposit scheme
whereunder the cable operators made cash deposit of Rs.5000/- or
multiples thereof and that in that process the company received deposit
B
of Rs.1,06, 10, 100/-. In addition thereto, the Trial Court noted as well
that the company did receive periodical lease rent of Rs.1500/- p.m.
from other equipments given on hire. The lease agreements to this
effect were also considered. The claim that the company had supplied
equipments to Tamil Nadu Tourism Development Corporation Limited
was recorded. The copies of the assessment orders exhibited were c
examined and the Trial Court concluded that there was no reason to
doubt the business transactions carried on by A2 and A3 in the name of
Super Duper T.V. Private Limited. It, however, recorded with reference
to the assessment orders relied on by the defence i.e. Ex. D-182, D-183
and D-184 that those were belatedly submitted after the charge sheet
D
was filed on 4.10.1997.
333. Vis-a-vis the claim of the defence that the amount of
Rs.1,06,10,100/- as business income was available with A2 and A3 in
addition to other incomes, the Trial Court noted, amongst others, that as
per the Cable Television Network Rules, 1994 enforced on and frorn
29 .4.1994, only refundable security deposits was permissible and that E
though receipt books and counter-foils of the payee-in- slips to show
that the amount of Rs.5000/- each collected from large number of
subscribers were credited to account No. 1152, there was nothing on
record to show how the investments were made for the purchase of
equipments claimed to have been supplied by the company to various F
subscribers and that in any case, this amount could not have been available
with the A3 as the stable corpus of income for purchase of immovable
properties, as claimed. Referring to the evidence of DW-85, PW-182
and PW 201 in details, the Trial Court recorded the huge cash inflow
and outflow to and from the account of the company. Noticeably, such
deposits and withdrawals had been, vis-a-vis several accounts involving G
Al to A4 and the firms and companies floated by them during the check
period of which they were partners/directors, as the case may be. All
these were noted by referring to the accounts and the individual
transactions. The Trial Court having regard to the enormity of bank
transactions inter se amongst the respondents and their films/companies H
814 SUPREME COURT REPORTS [2017] 5 S.C.R.

A declined to sustain the contention of A3 that they were possessed of
independent source of income and the same was available with him and
A2 for acquisition of properties in their names.
334. As against this, the High Court chiefly relied on the evidence
of DW-85, who introduced himself as the Manager/Administrator of the
B company during 1995-96 and the fee receipt books and the counter-
foils pertaining to the claimed deposit ofRs.5000/- per member as non-
refundable entrance fee.
335. Further, it accepted the investments/documents exhibited at
the trial with regard to payments received by the company amongst
c others from the Tamil Nadu Tourism Development Corporation Ltd.
and other public/public sectorundertakings in connection with the business
transactions entered into. It, in the passing also, noticed the assessment
of the returns of the company by the income tax authorities and assessed
the same to be Rs. l,00,00,000/-.

D 336. In our considered view, the High Court in appreciating the
evidence adduced missed the facets of the charges levelled against the
respondents and confined itself seemingly to the statements of the
claimed depositors and the deposit books and the counter-foils in
connection therewith. The Trial Court in contradistinction, not only did
analyse the oral and the documentary evidence adduced by the parties
E in proper details, it took pains to examine the trail of the income claimed
by the company and the feasible investments thereof. It also took note
of the huge inflow and outflow of cash to and from the accounts of the
firms/companies of which the respondents were partners/directors during
the check period so much so that the income claimed by A3 under this
F head ceased to retain its independent identity so as to be accepted as
the discernible earnings of the company for transacting its business
activities as a distinctly separate institution. The revelation regarding
the bank transactions are matters of record gleanable from the oral and
documentary evidence to this effect and, in our estimate, assume great
significance in the backdrop of the charge of conspiracy and abetment
G imputed against the respondents. The summary treatment of the
evidence on this issue by the High Court, in our comprehension, lacks
the desired approach and insight and,therefore, cannot be sustained. The
addition awarded by it of income of Rs. l ,00,00,000/- to Super Duper
T.V. Pvt. Limited, thus cannot be upheld.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 815
[PINAKI CHANDRA GHOSE, J.]

Refund of Wealth Tax to Al: A
33 7. Respondent No. l/A 1 has pleaded addition offurther amount
of Rs.1,35,6311- by way ofrefund of wealth tax as on 22.4.1993 and to
reinforce this claim, has placed reliance on Exh. P-2336 and P-1382
being her Statement of Affairs as on 31.3.1994 and the Statement of
Account of Canara Bank, Mylapore, Madras, for the period 1.4.1993 to B
30.4.1993 showing the receipt/deposit of the said sum. The testimony
of DW64 has also been pressed into service.
338. Having regard to the concept of wealth tax and the
comprehension of assets and net wealth attracting such levy, this refund,
though contemplated by the Wealth Tax Act, 1957, ipso facto does not c
certify the lawfulness of the wealth on which initially, a tax was charged
and later refunded. In absence of any other evidence to satisfactorily
prove the legitimate origin and status of the wealth relatable to the refund,
in our view, the same cannot be accepted to be an income from the
lawful source as envisaged in Section 13( 1)( e) of the Act. More over
there appears to be no discussion or analysis of this claim of income by D
the RllAl either by the Trial Court or by the High Court.
Income of Al from Mis Sasi Enterprises:
339. The next addition sought for is by way of income from Ml
s Sasi Enterprises. To bolster this claim, reliance has been placed on E
Ex. D-267, the balance sheet of Sasi Enterprises as on 31.3.1993
indicating payment ofregistration charges of Rs.2,86,5691- for 3 lA,
Poes Garden and Ex. P-2334, the statement of account of Al for the
assessment year 1996-97 showing receipt of an amount of Rs.3,42,'000I
- from Mis Fax Universal to her cunent account No.2018. It is in this
premise, Al asserted that under this head, she had an income of F
Rs.6,28,5691- from Sasi Enterprises, Mis Fax Universal being an unit of
the said firm. Incidentally and indubitably, at the relevant time, A 1 and
A2 were the partners of Sasi Enterprises and A2 was one of the
partners of Mis Fax Universal as well. The exchanges of the reserves
mentioned hereinabove are therefore for all practical purposes inter se G
Al and A2. The claim of the defence to accept the above amount to be
lawful income in the attendant facts and circumstances, lacks persuasion.
Loan by Al from A2:
340. Loan of an amount Rs.1,53,03,0001- from A2 and her
proprietary firms fotms the next sequence of income claimed on behalf H
816 SUPREME COURT REPORTS [2017] 5 S.C.R.

A ofAl. The oral testimony of PW-201, Manager, Canara Bank, Mylapore
Branch and Ex. P-2332, 2334, 2335, 2336, statement of account of A I
forthe assessment year 1996-97, P-1382, P-1117 have been referred
to for demonstrating the receipts/deposits of various amounts from A2,
Fresh Mushroom Limited and Vinod Video Vision.
B 341. Admittedly, A2 was the sole proprietor of both, Fresh
Mushroom and Vinod Video Vision at the relevant time and thus the
deposits, though speciously are evidenced by bank transactions are visibly,
inter se, Al and A2 and her firms. These receipts essentially have to be
tested in the backdrop of the charge of conspiracy and abetment so as
to determine their genuine evidential worth.
c
342. As referred to hereinabove, this Court in Commissioner of
Income Tax Vs. P. Mohanaka/a (supra), while examining the challenge
to the addition made by the Assessing Officer in respect of receipts
through foreign gifts, exhibited by bank transactions, held on an evaluation
of the materials on record that the transactions of gift were not real,
D though apparent and concluded that the fact that money had come by
way of bank cheques and had been paid through the process of banking
transaction by themselves was no certificate of authenticity. While
comprehending that a transaction though apparent may not be real, as
may be demonstrated by contemporaneous factors, associated therewith,
E rejection of the genuineness of the gift by the Assessing Officer, was
sustained.
343. Having regard to the amalgam of the persons and the entities
involved in the transactions, aforementioned, we are not inclined, in the
absence of other convincing evidence, to accept the said receipts/
F deposits to be lawful income as envisioned in Section 13(l)(e) of the
Act.
Al's Income from Jaya Publications, CANFIN Homes and
Namadhu MGR:
344. The next unit of income of Al as per the respondents is
G receipts as a pa1iner from Jaya Publications from three sources i.e.
drawings from Jaya Publications, loan from CANFIN Homes which
had been repaid by Jaya Publications on behalf of Al and withdrawals
from Namadhu MGR. Vis-a-vis the first component referred to
hereinabove, it has been endeavoured on behalf of Al to demonstrate
on the basis of oral and documentary evidence which mostly constitute
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 817
[PIN AKI CHANDRA GHOSE, J .]

entries in the Current Account No. 2047 of Jaya Publications by way of A
withdrawals of various amounts therefrom in favour ofA I. Such transfers
as the relevant statement of account of A 1 and the entries in the
aforementioned current account of Jaya Publications would indicate
are of5.8. l 991, 12.8.1991, 21.10.1992, 21.3.1995, 17.7.1995, 7.11.1995,
each of an amount ranging from Rs.2 lakhs to Rs.5 lakhs. This is
B
significant in the backdrop of the recorded facts that as disclosed in the
income tax returns of J aya Publications for the assessment years 1992-
93 to 1996-97, its net income during the said period had been
Rs.1,15,94,848/-. According to Al, under this head, an amount of
Rs.1,01,49,900/-had been withdrawn from the current account No. 2047
of Jaya Publications. c
345. ln addition to the above, it has been claimed on behalf of Al
that she had availed loan of Rs.75 lakhs from CANFIN Homes on
29.9.1992 which was repaid by Jaya Publications on 27.3.1995. It is
asserted by her that this amount was not refunded by her to Jaya
Publications and has to be construed to be her drawings as a partner of D
the said firm. In other words, during the check period, J aya Publications,
apart from disbursing Rs.1,01,49 ,900/- in favour ofAl did also repay her
loan of Rs. 75 lakhs. Noticeably, as has been recorded by the Trial Court,
while discussing the aspect ofloan taken by Al from CANFIN Homes,
p1ior to such loan, she had deposited Rs. l crore in the fixed deposit with
the said financial institution on 6.3.1992. This, as the Trial Court has, E
brought on record is vide the testimony of PW-95 Veerappan, Regional
Manager, CAN FIN Homes. This witness has disclosed further that the
above loan amount was taken on this fixed deposit. He stated that on
25.8.1995, Al again took loan of Rs.75 lakhs on this fixed deposit,
however qua a different loan account. F
346. In re the third head, admittedly Namadhu MGR is only a
publication of Jaya Publications but has a separate bank account. Al's
claim of having drawn Rs:94,33,000/- as well from Namadhu MGR is
seemingly also in the capacity ofa partner of Jaya Publications.
347. The deposits and withdrawals represented through the G
different entries in the bank accounts suggest multiplication of transactions
stemming from the same corpus. The maze of financial exchanges in
fragments involving different combinations hint at the attempt to inflate
individual and collective income of the respondents. The banking
transactions, though resorted to for proclaiming genuineness thereof, H
818 SUPREME COURT REPORTS [2017] 5 S.C.R.

A having regard to the overall factual conspectus do not appear to be real.
The claim of income ofRs.2,70,82,900/- of Al by way of receipts from
Jaya Publications, therefore is unconvincing. In other words, A 1, in our
estimate, has failed to satisfactorily prove this constituent of income.
Additional Income Claimed bv A2 to A4:
B 348. Apropos, A2 to A4, their cavil is that the prosecution had
omitted to take into account their actual income and had limited it to
Rs.6,72,41,640/- in all. They claim that the prosecution had not taken
into account Rs.26,50,57,478/- being their individual income as well as
that of their firms/companies Sasi Enterprises, Jaya Publications; Jay
c Farm House, Green Farm House, Super Duper T. V., Anjaneya Printers
Private Limited, J .Jay T. V. Private Limited and Super Duper T. V. Private
Limited. Break ups of income under different heads have been furnished
in the form of a chart and after effecting deductions of amounts included
by the prosecution and payments made to the outsiders/partners, they
assert that their total income, during the check period, ought to have
D been recorded as Rs.28,23,16,656/- instead of Rs.6, 72,41,640/-.
349. The compilation of the relevant facts and figures in
endorsement of the above claim indicates the oral and documentary
evidence in support of the different items of income, those which have
not been considered by the Trial Court at all according to them but dwelt
E upon by the High Court as well as those examined by the Trial Court but
not accepted by it. Qua certain items, it is not clear as to whether those
had been taken note of by the Trial Court or not. There are instances as
well of components of income, scrutinised by the Trial Court but not
responded to by the High Court. The constituents of income refeITed to
F by A2 to A4 include those recorded in the income tax returns of A2
during the relevant assessment years, loan payable/availed/received by
her from the related firms in the capacity of a partner and otherwise,
loan secured by such firms from the bank and the sister firms, rental
advance, agricultural income of Sasi Enterprises, rental income, sale of
capital assets, net profit of Jaya Publications and scheme deposits of the
G Namadhu MGR.
350. Further income of A3 through his proprietorship firn1, inter
alia from Super Duper T.V. and loan availed from sister firms and income
of A4 through loans from the related firms, rent receipts etc. has been
cited. Earnings of Anjaneya Printers Private Limited and rental advance
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 819
[PINAKI CHANDRA GHOSE, J.]

received by the firm have also been included. Loan availed by J. Jay A
T. V. Private Limited from Indian Bank, non-refundable deposits obtained
from the subscribers by Super Duper T.V. Private Limited have been
taken into account as well to compute the income claimed.
351. ln reinforcement ofthe plea that an amount ofRs.26,50,57,478/
- by way of income of A2 to A4 ought to be added, a collage of statistics B
qua the different heads of earnings/ receipts had been pressed into
service. For the sake of convenience in scrutiny, these are proposed to
be dealt with in cognates groups.
352. Vis-a-vis the item numbers 1 to 21, according to the
respondents, the High Court had dealt therewith in the judgment but c
except for the item number 8, according to them, the Trial Court did not
even consider the evidence relatable thereto. The sources of income
against item numbers 1 to 5 are traceable to the income tax returns of
A2 forthe assessment years 1992-93, 1993-94 and 1994-95. The income
pertains amongst others to foreign remittance of Rs.51,47,955/- and
agricultural income of Rs.35,000/- of A2. Documentary evidence in D
particular by way of income tax returns and the orders of the income tax
authorities have been relied upon. The oral testimony of DW-88 has
also been referred to.
353. Per contra it has been contended on behalf of the prosecution
that not only the income tax returns and the orders passed in connection E
therewith are not conclusive of the lawfulness of the income as referred
to therein, the fact that M/s Sasi Enterprises along with Al and A2 had
been prosecuted for delayed submission of the returns for the assessment
years involved cannot be lost sight of while judging the credibility of the
defence based thereon. It has also been urged that receipt of such huge F
amount of foreign remittance by A2 is plainly unacceptable more
particularly in absence of any explanation oy her justifying the same.
According to the prosecution thus, not only this receipt has not been
satisfactorily accounted for, it is strongly suggestive of a remittance in
favour of Al in the name of A2 thus attracting the presumption to that
effect. The prosecution has pleaded that such a possibility is writ large G
in the face of the charge of abetment and conspiracy levelled against
the respondents.
354. Though a defence was sought to be taken on behalf of the
assessee against the prosecution that as the accounts of the firm M/s
H
820 SUPREME COURT REPORTS [2017) 5 S.C.R.

A Sasi Enterprises had not been finalized and therefore no returns had
been filed and that as the assessment of the relevant returns had not
attained finality, the indictment was premature, the contentions were
rejected. lt was held by this Court in Sasi Enterprises Vs. Assistant
Commissioner of Income Tax, (2014) 5 SCC 139, that pendency of
appellate income tax proceedings was not a relevant factor for not
B
initiating prosecution under Section 276CC wherein an offence had been
committed for non-filing of the return. It was recorded as well that
mere allusion in the individual returns of the partners, that the account of
their firm had not been finalized and therefore no return could be submitted
was not an acceptable plea to absolve the firm of its obligation under the
c Income Tax Act to file the return within the prescribed period.
355. Noticeably, according to the compilation provided by the
defence, the High Court had dealt with item numbers 1 to 21 of the
income of A2 to A4. A plain perusal of the narration of that portion of
the judgment reveals that the High Court therein had dealt exclusively
D with loans taken from the nationalized banks as income of the
respondents. Though a reference has been made of loans availed by
the respondents from various firms as named therein, the High Court
had not taken into the account the same and had limited itself only to the
loans availed by the respondents from the nationalized banks. In that
view of the matter, the items of income under scrutiny, had also been left
E out of consideration by the High Court. Thus the grievance of the
respondents that the evidence with regard to these items of income had
not been considered by the Trial Court, is not of decisive significance
more particularly in absence of any challenge made by the them to the
omission as well of the High Court in this regard.
F 356. In course of the arguments, attention of this Court had been
drawn to the Remittance of Foreign Exchange and Investment in Foreign
Exchange Bonds (Immunities and Exemptions) Act, 1991. This is a
statute to provide for certain immunities to persons receiving remittances
in foreign exchange and to persons owning foreign exchange bond and
G for certain exemptions for direct taxes in relation to such remittances
and bonds and for matters connected therewith or incidental thereto.
Section 3 of the Act, which deals with immunities, however makes it
clear in sub section (2) that such immunity would not apply in relation to
prosecution for any offence punishable under Chapter IX or Chapter
XVIII of the Indian Penal Code, the Narcotic Drugs and Psychotropic
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 821
[PINAKI CHANDRA GHOSE, J.]

Substances 1985, The Terrorists and Disrnptive Activities, (Prevention) A
Act 1987, The Prevention of Corrnption Act 1988 or for the purpose of
enforcement ofany civil liability.
357. The asse1iion of the respondents qua item Nos. 6 and 7
refers to loan availed by A2 for herself and for the business purposes of
her fim1 Metal King, from Housing and Real Estate Development Private B
Limited, Chennai by two transactions amounting in all to Rs.60,00,000/-.
To demonstrate this receipt, reliance has been placed amongst others on
the oral testimony of OW 88, the statement of account of M/s Metal
King and also of Housing and Real Estate Development Private Limited,
the lender.
c
358. The prosecution has refuted this claim contending that though
credit entries by way of clemance have been sought to be brought on
record, there is no satisfactory evidence to prove convincingly the
transactions of loan. It is pleaded that no one has been examined on
behalf of the lender and the documents relied upon by the respondents
per se are not enough to satisfactorily account for this receipt. According D
to the prosecution, the documents relied upon by the respondents have
not been proved and the transactions referred to have been introduced
with the help of the so called lender to somehow boost the income of
the respondents.
359. Noticeably, the High Court, to reiterate, did not as well accept E
these items of income referring to them as private loans. This assumes
significance in the face of the grievance of the respondents that the
Trial Court had not adverted thereto and there being no cavil on their
part with regard to the omission of the High Court as well in this regard.
360. The next batch of income as claimed by the respondents is F
comprised of advances received by A2 from Bharani Beach Resorts,
Riverway Agro Products (P) Limited and M/s Meadow Agro Farms (P)
Limited by cheques amounting to Rs.22 lakhs, Rs.52 lakhs and
Rs.32,90,000/- respectively. Reliance has been placed on the oral and
documentaiy evidence including the balance sheet of the companies G
involved, the income tax returns for the relevant years and also the
corresponding assessment orders. It has been contended as well that
the Trial Court had wrongly left out of consideration the evidence
adduced. It has been pleaded that the Trial Court had erred in discarding
the transactions by referring to Sections 269SS and 27600 of the Income
H
822 SUPREME COURT REPORTS [2017] 5'S.C.R.

A Tax Act. According to the respondents, the transactions having been
effected through cheques, Section 269SS of the Act had no application
and further Section 276DD having been deleted by the Direct Tax Laws
(Amendment) Act 1987 w.e.f. 1.4.1989, reference thereto, lhe
transactions being undertaken thereafter, was wholly misplaced.
B 361. Per contra, according to the prosecution, the agreement for
sale of property Ex. D-300 against which, it is claimed that an amount
of Rs.22 lakhs had been received by way of advance from Bharani
Beach Resorts, has not been proved in law. DW88 being neither the
executant nor a witness to the document, the prosecution has pleaded,
he could not have proved this document. Alluding to the advances said
c to have been received by A2 from Riverway Agro Products (P) Limited
and M./s. Meadow Agro Farms (P) Limited, the prosecution has
underlined that A3 and A4 are the directors of both these companies
and the transactions presented are really transfers of deposits from one
account to the other. According to the prosecution, these deposits and
D withdrawals inter se the accounts art disguised exchanges involving
the circulation of the money of Al and cannot be said to be income from
lawful source in the backdrop of the charge of abetment and conspiracy.
362. Whereas, the High Court did not take into account these
receipts of A2, the Trial Court, apart from being of the view that
E cognizance of such transfers of fund by way of lawful transactions cannot
be taken in the face of Section 269SS of the Income Tax Act and the
provisions of the Companies Act, rejected these also on the ground that
the respondents had failed to adduce acceptable evidence with regard
to the resources of these two companies to advance such huge amounts.
·F 363. In the opinion of this court, even without reference to Sections
269SS and 276DD of the Income Tax Act, the plea that Ex. D-300 i.e.
the agreement for sale of property against which Bharani Beach Resorts
had advanced Rs 22 lakhs to A2, had 11ot been proved, cannot be lightly
brushed aside. Be that as it may, vis-a-vis the other evidence on record,
as adduced by the respondents in support of the advances received, in
G absence of evaluation thereof by the High Court, in the face of rejection
of this item of income by the Trial Court, this Court is disinclined to
sustain the claim of the respondents.
364. The next item of income cited on behalf of A2 to A4, is by
way of earnings of A2 to the tune of Rs.2.2 crores as a partner of
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 823
[PINAKI CHANDRA GHOSE, J.]

several firms. According to the respondents, all these payments have A
been made by cheques and the related transactions are reflected in the
corresponding bank accounts of A2 and the entities involved. The bank
account in particular and the oral testimony of PW-209 have been relied
upon in support of this source of income.
365. As against this, the prosecution has urged that in absence of B
any evidence to establish the required income of the foms, which supposed
to have advanced amounts ranging from Rs.20 to 25 lakhs each, these
transactions are really sham and made up for the purpose of defence. It
has been asserted that no tax returns (income/commercial/sales) of these
firms had been brought on record to authenticate the extent of their
business and earnings to make such payments feasible. Further, the c
statements of accounts produced show that all these accounts had been
opened on the same day i.e. 20.3.1995 with cash deposit of Rs.501 and
that there had been a credit entry of Rs.20,99,980/- and a debit entry in
favour of A2 on 20.8.1995. Apart from this common feature in all these
nine accounts, at the relevant time, A2 to A4 and Lex Property D
Developers (P) Limited were the partners thereof. It has also been urged
that A3 and A4 were the directors of Lex Property Developers (P)
Limited and all the nine firms were registered on the same day i.e.
15 .2.1995 with the common address of No. 21, Wellington Plaza.
366. The opposition registered by the prosecution in view of the E
recorded facts which bear out unusual striking features of similarity of
the nine firms and their constitution can by no means be lightly disregarded
by constming the same to be a mere co-incident.
367. To reiterate, whereas the remonstration of the respondents
is that the Trial Court did leave out of consideration the evidence in F
support of this source of income, the High Court as well did not refer
thereto.
368. Vis-a-vis the income by way ofRs.2,90,000/-by A2 from the
sale of her properties to Meadow Agro Farms (P.) Ltd., the High Court
as well, according to the compilation furnished by the respondents, did G
not account therefor. In absence of any demurral before this Court, vis-
a-vis such omission of High Court, we are not disposed to evaluate the
facts as a court of first instance. With regard to the claim ofRs.4,35,622/
-as cash balance available withA2 as on 1.7.1991, on her own showing,
as per Ex. P-2191, this amount was in deposit as on 31.3.1991. In
H
824 SUPREME COURT REPORTS [2017] 5 S.C.R.

A absence of better evidence, it is not possible to accept that the same
amount was also available at her disposal as on 1.7.1991, the date of
commencement of the check period.
369. With regard to item Nos. 46 and47 of the compilation offered
by A2 to A4, the claim that an amount of Rs.50 lakhs in all had been
B availed by J. Fatm House and Green Farm House @ Rs.25 lakhs each
from the Housing Real Estate and Development (P) Ltd. during the
financial year 1995-96, these transactions have been sought to be proved
on the basis of the bank statements of the lender and its written
acknowledgment to that effect. The genuineness of these transactions
is sought to be refuted by the prosecution by asserting that there is no
c satisfactory evidence in support thereof and not only none on behalf of
the lender has been examined to prove the same, the documents adduced
also do not convincingly vouchsafe this source of income. Noticeably,
though it is the complaint of the respondents that the Trial Court did not
at all consider this evidence, the High Court as well has not dealt
D therewith.
370. Item numbers 50 and 51 next referred to on behalf of A2 to
A4 represent loans advanced by Bharani Beach Resorts and
Vigneshwara Builders in favour of A3 on 18.3.1995 and 29.4.1995
respectively, totalling Rs.27 lakhs. The prosecution has branded these
E operations as mere transfer of money from one account to another under
the cloak of loans which otherwise have not been proved in law.
371. The Trial Court did refer to the bank account of Bharani
Beach Resorts i.e. CA-9006 while dealing with the broader aspect of
opening of more than 50 accounts apart from the loan accounts during
F the check period. It did note that at the commencement of the check
period, there were hardly 10 to 12 bank accounts standing in the names
of Al and A2. It marked the particulars of 52 accounts in all which
were opened during the check period in the names of the firms/companies
of which Al, A2, A3 and A4 were partners/directors as would appear
from the table referred to. The bank account of Bharani Beach Resorts
G i.e. C.A. 9006 was opened 6.2.1995 and noticeably, as claimed by A2 to
A4, as per the compilation relied upon, loan was advanced by the said
firm on 18.3.1995 to A3. To reiterate, the High Court did not at all
advert to the oral and documentary evidence sought to be relied upon by
A2 to A4 in this regard.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 825
[PINAKI CHANDRA GHOSE, J.]

372. Qua item numbers 52 to 54, which are loans availed by A4 A
from lyyeppa Property Development, Bharani Beach Resorts (P) Ltd
and Housing and Real Estate Development (P) Ltd. during the financial
year 1995-96 to the tune of Rs.62 lakhs, the prosecation in response to
the oral and documentary evidence sought to be relied upon by A2 to
A4, has sought to dismiss these transactions as mere exchange of funds,
B
inter se accounts of A2 to A4 and their firms by giving the same a
colour of loan transactions. These items as well have been left out of
consideration by the High Court as is evident from the impugned decision.
373. With regard to the item of income by way of hire charges at
serial number 55 of the compilation, suffice it to state that the Trial Court
while dealing with item numbers 45 and 48 of the Heads of Income of C
the DVAC had awarded the differential amount of Rs.6,60,064/- and
therefore the respondents ought not to have any cavil in this regard.
374. Qua item number 56,A4 claims that though she had received
an amount of Rs.1,11,231/- by way of gratuity, the prosecution has
recorded this receipt to be ofRs.1,01,231/-. The Trial Court, while dealing D
with this item of income at serial number 63 of the Heads of Income of
the prosecution, has observed that in terms of service register, Rs.40,000/-
had been sanctioned to the legal heirs of T. V. Jayaraman, the husband
of A4. ln any view of the matter, the amount in difference as claimed by
A4 being small, nothing much would turn on this. E
375. The next item of income sought to be included by A2 to A4 is
by way of rentals of Mahasubhalakshami Kalyana Mandapam. It is
claimed that the actual amount received under this head was
Rs.17,85,023/- but the prosecution had quantified it to Rs.14,50,097/-
and thus a further sum ofRs.3,34,926/- ought to be added to the income F
ofA4. Oral evidence by way of the testimony of DW90 and documentary
evidence has been relied upon. Both the Trial Court and the High Court
have not referred to this head of income or the evidence pertaining thereto.
376. Vis-a-vis item numbers 58 and 59, which represent the net
income of Anjaneya Printers Pvt. Ltd for the years ending 31.3.1994, G
31.3 .1995 and 31.3 .1996 and rental advance received by this firm during
the check period, totalling Rs.55,07,715/-, there seems to be no
consideration of the oral and documentary evidence in support thereof
by the High Court. The Trial Court however, exhaustively examined all
relevant aspects with regard to the business activities ofAnjaneya Printers
H
826 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Pvt. Ltd since its incorporation on 14.7.1993 with A2 and A3 as its
directors. lt noted that the company had filed its income tax return on
29.8.1997 declaring undisclosed income for the block period l.4.1986 to
24.9.1996 of an amount of Rs.10,81,478/-. It referred to Ex. D-278
relating to the assessment year 1994-1995 that a sum of Rs 747/- had
been declared as income from business operations but during the year
B
of accounting, an aggregate sum of Rs.30 lakhs had been credited as
share application money received from Jaya Publications in three
installments on 29.9.1993, 23.1.1994 and 23.2.1994. Apart from noticing
the fact that M/s Jaya publications had not filed the income tax returns
for the relevant years, the Trial Court noted as well that in the confirmation
c letter Ex. D-278, the sources offunds available with Jaya Publications
for making such advances to Anjaneya Printers had not been disclosed.
Referring to this document, further, the Trial Court recorded that during
the search operations of the premises of Anj aneya Printers, no regular
books of accounts was found and that consequently the assessing
authority had held that the computerized copy of the accounts produced
D
by the authorised representative of the assessee company would have
to be construed as not written in the normal course of business. The
Trial Court thus in this backdrop entertained a doubt with regard to the
business operations of this company as claimed by it so as to render its
claim of income under these items to be unacceptable in law. To
E reiterate, the High Court did not deal with the oral and documentary
evidence in this regard.
377. So far as item number 60 is concerned, which according to
A2 to A4 is income of Rs. I crore by way of loan availed from Indian
Bank by Mis J. Jay T.V. Private Limited, reliance has been plar.ed on
F the bank statement of this firm. As per the prosecution, this firm is not
one of those involved in the case and therefore its transactions had
been left out from the purview of investigation culminating in the charges.
Whereas the High Court has not dwelt upon this item, it is likely that for
the reasons cited by the prosecution, there is no reference of this loan
in the decision of the Trial Court as well.
G
378. As the principal grievance of the respondents is that such
evidence though available on record, the Trial Court did not advert thereto,
the respondents ought to have assailed the omission on the part of the
High Court before this Court in the manner as contemplated in law. In
arguments as well, no reservation was expressed in this regard.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 827
[PINAKI CHANDRA GHOSE, J.]

379. The item of income at serial number 22 of the compilation A
submitted on behalf of A2 to A4, pertains to loan said to be availed by
Jaya Publications from Indian Bank, Abhayrampuram Branch. It is an
admitted fact that this loan amount of Rs.1.5 crores had been repaid.
The High Court has allowed this head of income and the necessary
analysis in this regard having been undertaken, repetition is avoided.
B
380. According to the respondents, Sasi Enterprises had availed
loan of Rs. I 0 lakhs from Housing Real Estate and Development (P)
Limited and Rs.2 lakhs on 18. l 0.1995 from Lex Properties, both by
cheques. These transactions are sought to be authenticated by the
respondents on the basis amongst others, of the bank statements, their
grievance being that the Trial Court had erroneously excluded these c
amounts by overlooking the evidence to that effect.
3 81. The prosecution has refuted the genuineness of these
transactions ofloan contending that the bank statements and the letters
of confirmation from the lenders concerned, as sought to be relied upon
by the respondents, do not per se prove the loan. D
382. Though the Trial Court did refer to the documents, relied
upon by the respondents, it rejected the same as unreliable. In doing so,
it made reference in particular to letter of confirmation of Housing Real
Estate and Development (P) Ltd ..
E
383. The High Court, on the other hand, did accept these
transactions by making passing reference to the documents called in
evidence by the respondents in this regard. The High Court readily
acted upon the letter of confirmation of accounts issued by Mis Housing
Real Estate Development (P) Limited and also the balance sheet ofSasi
Enterprises indicating that an amount of Rs.2 lakhs had been received F
by way of unsecured loan from Lex Properties Development Private
Limited. No attempt was made to examine the credibility of the documents
in the context of the charges levelled.
384. The respondents have next claimed income of Rs.75 lakhs
by way of capital introduction in Sasi Enterprises by Al on 29.9.1992. G
According to them, this amount was contributed by way of capital by
A 1 which she had availed as loan from CAN FIN Homes Limited against
her fixed deposit of Rs. I crore. Reliance had been placed on the bank
accounts ofSasi Enterprises showing the receipt of Rs. 75 lakhs as capital
contribution by Al as its partner during the check period.
H
828 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 385. The prosecution has dismissed this transaction as inter se
transfer between the accounts of A 1, the partner of Sasi Enterprises
and the said firm, so much so that it could not be construed to be a
genuine income. The High Court did not deal with the oral and
. documentary evidence to this effect in details. The Trial Court ·was
however of the view that this receipt by Sasi Enterprises was in fact
B
diversion of unexplained wealth of Al to its account.
386. Next in the que of income claimed by A2 to A4 is by way of
dues repaid to Sasi Enterprises by M. Ramachandran Nagammal and
Subramaniuim during 1992-93. The balance sheets of Sasi Enterprises
as on 31.3.1991 and 31.3.1992 along with the relevant orders of
c Commissioner of lnco~ne Tax (Appeals) have been pressed into service
in support of this assertion. According to A2 to A4, under this head an
amount of Rs.61,91,000/- has been received by Sasi Enterprises by way
of repayment of advances made by it to these persons. The prosecution
has repudiated this claim contending that the balance sheets for the
D years in question have been belatedly prepared to conjure this plea and
thus cannot be relied upon.
3 87. The Trial Court indeed did deal with this document and took
note of the fact as well that the claim of repayment of loan had been
accepted by the income tax authorities. It however declined to accept
E the transaction of Joan and repayment thereof to Sasi Enterprises by
holding principally that the statement of profit and loss accow1t submitted
before the income tax authorities and proof thereof was not reliable and
authentic. This is more so according to the Trial Court as neither the
Joanee of the firm had been examined nor there was any other material
to show that these transactions had been disclosed before the income
F tax authorities at any point of time before the registration of the case.
388. The High Court, however, accepted on its face value the
relevant balance sheet, the profit and loss account as well as of the
orders of the income tax authorities to this effect without embarking
upon any independent verification of the contents thereof to ascertain
G the correctness or genuineness of the same, in the teeth of the finding of
the Trial Court, contrary thereto.
389. Against item Nos. 28, 30, 32, 34, 38 and 41 of the compilation,
A2 to A4 have claimed rental income of Rs.16,4 7,800/- during the check
period. The breakups of the different amounts of income have been set
H out as well. They have mainly relied upon the returns of the respective
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 829
[PINAKI CHANDRA GHOSE, J.]

assessment years and have contended that as the income tax authorities A
had accepted the said returns disclosing their rental income, the sum of
Rs.16,4 7,800/- ought to be included in their total tally of income.
390. Per contra, the prosecution has refuted this claim on the
ground that the balance sheets adduced before the income tax authorities
were all belatedly prepared as had been admitted by DW-88 and thus B
cannot be accepted to be authentic to sustain this item of income ofA2
toA4.
391. The Trial Court rejected this claim inter alia on the ground
that the respondents had failed to produce any lease deed or rent receipt
as acceptable proof of such income and has analysed the oral and c
documentary evidence offered by A2 to A4 in this regard. The High
Court however relied principally on the income tax returns and the
statement of income and the balance sheet of the concerned years to
accept this claim.
392. A2 to A4 have next claimed a sum of Rs.9,72,550/- as the D
agricultural income ofM/s Sasi Enterprises during the assessment years
1992-93 to 1996-97. Whereas according to the concerned respondents,
the income tax returns as accepted by the income tax authorities
adequately demonstrate the agricultural income of the firm, the
prosecution has dismissed this claim contending that the income tax
returns, the statement of income and the balance sheet to this effect are E
all prepared subsequently and cannot be accepted to be genuine.
393. The Trial Court noticed the reliance of the respondents on
the relevant income tax returns and the orders of the income tax authorities
accepting the same rather than on any independent and acceptable
evidence of lease involved and in fact rejected the copy of the lease F
deed produced in one of such instances by recording cogent reasons. It
did take note of the fact that neither the lessor in any case nor any
person who had purposely carried on the agricultural operations had
been examined and discarded the materials produced by the respondents
in support of this head of income. G
394. Apropos the next segment of income, i.e. from sale of capital
assets of Sasi Enterprises, the respondents have claimed it to be
. Rs. I 0,20,000/- during the assessment year 1994-95. Reliance has been
placed on the related income tax return which had been accepted by the
concerned authorities. The prosecution has repudiated this claim H
830 SUPREME COURT REPORTS [2017] 5 S.C.R.

A contending that the same being based on belated balance sheet prepared
and produced through DW-88, the same is per se unacceptable in law.
The Trial Court did take note of this income and while considering the
same along with other heads of income i.e. agricultural income, rental
income, repayment of loan etc. dismissed the same principally on the
ground of want of reliable evidence. It discarded the statement of
B
income, balance sheet and profit and loss account for the relevant .year
in support of this item of income
395. To reiterate, the High Court however acted on the income
tax return and on a overall consideration of the evidence, mostly the
income tax returns and the orders of the authorities together with the
c related balance sheet and the profit and loss account accepted the income
ofSasi Enterprises collectively to be Rs.25 lakhs during the check period.
396. Vis-a-vis the income from business operations of Sasi
Enterprises as enumerated against item numbers 36 and 39 of the
compilation, which according to the respondents, was in all Rs.2,39,70 II
D - by way of income from business operations for the year ending on
31.3.1994 and profit of business operations for the year ending 31.3.1995,
they again wholly relied on the income tax returns for the assessment
years 1994-95 and 1995-96, which as a matter of record, had been
submitted on 1.1.1997 and 26.9.1997 respectively. Whereas the
E respondents assert that the income tax authorities having accepted these
returns, this amount of Rs.2,39,70 II- ought to be added to the income of
Sasi Enterprises during the check period, the prosecution has rejected
the claim on the ground that the belated income tax returns and the
con-esponding balance sheets lack in credibility and thus cannot be
accepted as evidence in support thereof.
F
397. The Trial Court duly noted this head of income along with
the other sources of income of the firm. It dealt with amongst others the
oral testimony ofDW-88 and on a comprehensive scrutiny of the evidence
adduced, declined to accept the same in absence of any authenticated
proof in support thereof. While dealing with the other sources of income
G as well, the Trial Court refused to rely on the income tax return, the
statement of income, the balance sheet and the profit and loss account
for the concerned assessment years doubting the genuineness of these
documents/records. This was more so, according to the Trial Court, in
absence of any other independent and cogent evidence in support of the
H claim of income made by the firm.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 831
[PINAKI CHANDRA GHOSE, J.]

398. The High Court generally referred to the evidence adduced A
by the respondents and without any endeavour to evaluate the same to
ascertain its probative worth, readily acted thereon to return a finding
that the income of the firm, cumulatively having regard to the various
sources claimed by it, was assessable at Rs.25 lakhs.
399. Qua the claim of A2 to A4 that they earned Rs.6 lakhs B
during the assessment year 1996-97 from the proceeds of sale of building
materials pertaining to industrial estate, Gundy and Rs.23,80,000/- as
advance received towards sale of property by it during the assessment
year 1995-96 based too on the relevant income tax returns, the prosecution
has adhered to the same stand i.e. unreliability of such returns as valid
and absolute proof of such claim. The Trial Court took note of the fact
c
that the claim of total income of Sasi Enterprises during the check
period was Rs.95,92,776/-which included these two items. On an analogy
of reasonings, rejecting the income tax returns and the records associated
therewith, it declined to take cognizance thereof.
400. Item number 44 of the compilation deals with the net profit D
earned by Jaya Publications for the assessment years 1992-93 to 1996-
97 amounting to Rs.1,15,94,849/-. The respondents contend that the
above income by way of profit stands duly proved by the income tax
returns for these years and are supplemented by the profit and loss
accounts. Their grievance is that the Trial Comi had rejected this head E
of income by dismissing the income tax returns and the profit and loss
accounts as unreliable, the same having been filed after the registration
of the case. The prosecution has endorsed this approach of the Trial
Court.
40 l. The High Court, while dealing with this aspect did notice as F
well that the income tax returns for the relevant years of Jaya Publications
had been filed much belatedly and had expressed its reservation qua
this claim. The High Court, while dwelling on this segment of income,
did elaborate its appraisal mainly on the scheme deposit but concluded
that in view of the belated submission of the income tax returns, the
assessee stood disentitled to any relief based thereon. While recording G
that the Namadhu MGR newspaper was one of the publications of Jaya
Publications and that none of the two accused persons i.e. Al or A2
who then were the partners had examined themselves in support of the
claim of income from the deposits made by the subscribers under the
scheme, the High Court, however did not reject the claim of the H
832 SUPREME COURT REPORTS [2017] 5 S.C.R.

A respondents as a whole and awarded a sum of Rs.4 crores as income
earned by Jaya Publications acting solely on the evidence of the ardent
party workers de hors any independent corroboration.
402. The Trial Court noted the different sources of income of
Jaya Publications with the corresponding figures and exhaustively
B assayed the evidence, oral and documentary in connection therewith. It
analysed the oral evidence of the depositors under the scheme as well
as the income tax returns, the profit and loss accounts of the
corresponding assessment year, the orders passed by the income tax
authorities and eventually rejected the claim wholly, taking the view that
the evidence adduced in support thereof did not commend for acceptance.
c It noticed as well the fact that the income tax returns of the firm had
been submitted much beyond the time statutorily prescribed and in
particular, after the case had been registered against the respondents.
Jn this context, it noticed the inflow and outflow of funds from and to the
current account of Jaya Publications vis-a-vis the Namadhu MGR's
D current account and that of the account of A I, Sasi Enterprises, Vi nod
Video etc. of which either Al and A2 together or A2, A3, A4 were the
partners/proprietor thereof. While rejecting the scheme deposit as sham
and frivolous and designed after the filing of the charge sheet, the Trial
Court concluded that the evidence in support thereof had been devised
only for the purpose of defence against the charge levelled.
E
403. Regarding the other heads of income of Jaya Publications
during the relevant assessment years, the Trial Court also referred to
the evidence adduced in support of agricultural income in the form of
testimony of DW-88 and the orders passed by the concerned income
tax authorities and rejected the same as lacking in_probative worth, the
F income tax returns of the assessment years 1991-92, 1992-93, 1993-94
having been filed on 6.11.1998 and those of 1994-95, 1995-96 and 1996-
97 on 17 .3 .1999 much after the registration of the case against the
respondents. That no witness in support of the factum of cultivation and
the nature of crops grown was examined, was noted.
G 404. With regard to income from sales/works, the Trial Court
observed that the profit and loss account statement for the relevant years,
at the first place, had not been enclosed with the returns, but were
produced after the year 1999. Moreover, those lacked in veracity and
therefore, were wanting in credence.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 833
[PIN AKI CHANDRA GHOSE, J .]

405. The earnings by way of rental incor:ne were also rejected A
being based on the profit and loss accounts of the res pee' ive years which
the Trial Court discarded as untrustworthy.
ASSETS
406. The items of assets of the respondents as on 1.7.1991 (i.e.
at the beginning of the check pi:;:riod) have been set out in Annexurc I to B
the charge-sheet and comprise of 52 heads valued at Rs.2,01,83,956.53.
(Annexure P-2327). Annexure II, according to the DVAC, lists 306 items
of assets at the end of the check period i.e. 30.4.1996, valued at
Rs.66,44,73,573.27 (Annexure P-2328). Thus, according to the
prosecution, the value of assets acquired during the check period by the c
respondents is Rs.64,42,89,616/-.
407. The prosecution has distributed these assets in 12 categories.
For ready reference, the figures cited/arrived at by the prosecution,
defence, Trial Court and the High Court have been furnished in the table
below: D
SL Categories AsperDVAC As(l'rT.C. AsperHC. Asper
Respoodenls
Rs. Rs
Rs,

lmrrov.ible Propaty 22.83,99,174.70 20,07,00,246 6,24.09,120'- 16,19,ffi,301
(Consi<i:rntio1\ cu;t
of regisu·ation)
E
2 Cashpoido\ermxl 2,53,&l,619/- l,.5.~,30,619 nil NIL
abme sale
COIEicCrrtion
3 l'kwu- alditioml 28,17,40,430 22,53,92,344/- 5. 10,54.{)({l'- 8fJJ,59,2611-
cxmstnctim of
1'"Lilding;
4 CiJ!dan!Dianrnd 5,53,02,331.75 251.59.144/- A'(1CrpnrecLdim NIL F
je\\ellay
5 Sil \t.'lv..ares 48,80,8CU'- 20,80,UXJ/- A' 1:erpm;ccLdim NIL
6 f.D;. ard sh1res 3,42/i2,728/- 3, 42.62,728 As p:r prusecutim 2, 30.00,000
7 01sh balanre in bank 97,47,751.32 97.47,751.32 As porprusec·utim 97,47,751.32
OCCO\'Glts

8 Vehicles 1,29,91.ffi3.05 1,29,94.033.05 As (1Crpnrecutim 81,35.J(X;
G
9. M1chinay 2,24,11,UXJ 224.11.000 As 1x:rpm;ecurim 9425,835
IO Fool\\ras 2,00,90245 Nil Nil NIL
II Sm-ees 92,44290.00 Nil. Nil NIL
12 \\list \V<i!Cres 15,90.350.00 15,90,350 A5 per pn:recutim Nil.
'JUfAL 68,61,54,413.27 55,02,48,215/- 25,46,52,177/- 29,82,71,:zst.32 H
834 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 408. The judgment of the High Court at page 966 reveals that it
has for the purposes of computation, accepted the value of the assets of
the respondents at the end of the check period to be Rs.66,44,73,537/-
as noted by the prosecution. Further, though it has reduced the value of
the assets vis-a-vis item Nos.l, 2, 3, 10 and 11 out of the 12 categories
aforementioned, it essentially caused modification, in quantifying the value
B
of assets, with regard to item number 3, pertaining to new or additional
construction of buildings. As would be evident from its rendering, it
assessed the value of this item ofassets, to be Rs.5, 10,54,060/- compared
to Rs.28,17,40,430/- .as mentioned by the prosecution. It thus reduced
the value of the assets by Rs.23,06,86,370/-. While making the
c calculations, however the High Court took the value of the cost of
construction as cited by the prosecution to be Rs.27,79,88.945 and on
the basis of its assessment of the value of the new or additional
construction of buildings at Rs.5,10,54,060/-, it effected a reduction of
Rs.22,69,34,885/-. According to the prosecution even if this valuation of
the new or additional construction of buildings as made by the High
D
Court is accepted, the other items remaining intact, the total value of
assets of the respondents at the end of the check period, would be
Rs.66,44,73,573/- minus Rs.22,69,34,885/- = Rs.43, 75,38,688.
409. According to it, thus while computing the percentage of
disproportionate assets qua the income of the respondents, this figure
E
ought to have been applied in the relevant formula.
410. Noticeably, the valuation of the assets except as cited by the
prosecution at serial numbers I, 2, 3, 10 and 11 has been accepted by
the High Court. Nevertheless, while computing the value of the assets
finally, it did not take into account as well its evaluation in respect of
F item numbers 1, 2, I 0 and 11 and limited its consideration only to item
number 3 which it had valued at Rs.5, 10,54,060/-.
411. Thus in the above revealing perspective, it is not considered
essential to scrutinise the evidence on the assets pertaining to all items
thereof and it would be adequate enough to limit the audit only qua item
G number 3 i.e. new or additional constrnction ofbuildings, more particularly
because of its decisive bearing on the adjudication.
412. In the above premise, being of crucial relevance, evidence
with regard to the item number three namely; new or additional
construction of buildings in the list of assets demands scrutiny. As
H mentioned hereinabove, though the High Court had altered the value of
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 835
[PINAKI CHANDRA GHOSE, J.]

five out of twelve items, in the ultimate quantification, it did focus only A
on the item of new or additional construction of buildings and computed
the worth thereof to be Rs.5,10,54,060/- against Rs.22,53,92,344/-
adjudged by the Trial Court. According to the prosecution, however, the
investment on this count had been Rs.28,17,40,430/-. Significantly, the
respondents had valued this item of their assets at Rs.8,60,59,261/-
B
which is about Rs.3.5 crores above the valuation made by the High
Court.
413. Be that as it may, whereas the prosecution had listed out
twenty one items under the head new or additional construction of
buildings, the Trial Court took note of eighteen items and the High Court
of seventeen items as would be adverted to in details hereafter. The
c
total construction area of these twenty one items, according to the
prosecution is 23,076.84 sq. meters which is equivalent to 2483.97
squares. The area of four items left out by the High Court when deducted
from the total area of 2483.97 squares calculate to 2174.69 squares.
However, the High Court computed the value by adopting the area of D
the 17 items selected by it to be 1668.39 squares instead of 2174.69
squares and thus reduced the actual area under consideration by 506.3
squares. Ergo, according to the prosecution, not only did the High Court
exclude four out of twenty one items in assessing the value of the assets
under examination, it erred as well on the resultant area corresponding
to the seventeen items chosen by it. This did also impact upon the value E
eventually arrived at.
414. In course of the arguments before this Court, emphasis has
beenlaidonitemnumbers 179, 180and 181 ofannexurelli.e. buildings/
construction on which investments had been made to sum up the total to
the figure ofRs.29,35,68,982/-according to the prosecution. According F
to the respondent No. 1, as against the figure of Rs.24,29,40,490/- being
the value of her assets during the check period, as computed by the
prosecution, her assertion is of Rs.6,52,34,410/-. It has been urged on
her behalf that she had acquired only one property during the entire
check period i.e. the item at serial number 18 in anneuxre II worth Rs. I 0 G
lakhs and in addition thereto, she had made two constructions i.e. of a
farm house at Jeedimetla Village near Hyderabad and at 31-A, Poes
Garden, besides renovating her residential building at 36, Poes Garden.
Against item numbers 179 and 181 referred to hereinabove, it has been
asserted that as against Rs.13,65,31,901/- assessed by the prosecution,
H
836 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the value of her assets corresponding thereto and as accepted by the
income tax authorities is Rs.3,62,47,700/- and thus an amount of
Rs.10,02,84,20 II- needs to be deducted. The break up of expenditure
on the relevant counts towards these items has been provided as
hereinbelow:
B a) Renovation of 36 Poes Garden Rs.76,74,900
b) Construction at 31-A, Poes Garden Rs.1,35,10,500
c) Hyderabad Grape Garden Fa1m House : Rs.1,39,62,300
d) Compound wall for Hyderabad Farm House Rs.11,00,000
c Total Rs.3,62,47, 700/-
415. While endeavouring to authenticate the above figure, the
deficiencies in the evidence of the prosecution relating to the valuation
of the constructions have been highlighted in quite some details. Broadly,
the denunciation qua the process related thereto, refers to the non-
D verifiable measurements in absence of essential datas and want of
supporting particulars in the repo11s rendering them sterile and worthless
being of no probative worth, absence of any scientific or laboratory
tests convincingly demonstrating the age of the buildings to correctly
appreciate the value thereof, absence of any basis for calculating the
price of non-scheduled items etc. Vis-a-vis the price of non-scheduled
E
items in particular, it has been asseverated that though the valuers had·
deposed that with regard thereto, market enquires had been made and
the inputs had been recorded in a paper or a note book, the same had
not been retained but destroyed and were not enclosed with the
corresponding reports. The assessment of the price of the non-scheduled
F items has thus been dismissed to be not only as being bereft of any
foundation but also as mere hearsay.
416. The oral evidence of the prosecution witnesses namely; PW-
98, PW-116 and PW-220, amongst others, has been referred to and
analysed apart from the reports submitted by the inspection team which
G as adverted to hereinabove, have been repudiated to be lacking in
indispensable datas. Other documentary evidence adduced by the
prosecution has also been dealt with. Evidence of defence witnesses,
amongst others of DW-64, S. Shanmugham, Chartered Accountant of
RI/Al, DW-76 who was a part of the inspection team and DW-78 who
was one of the signatories to the report Ex. P-671 has been highlighted.
H
STATE OF KARNATAKA v. SELVI J. JAYALAL!THA & ORS. 837
[PINAKI CHANDRA GHOSE, J.]

Considerable emphasis has also been laid on the orders of the income A
tax authorities by way of corroboration of the quantum of expenditure
cited by the defence. This is more particularly as the income tax
authorities had accepted the figure cited by the respondent No.I/Al on
the basis of independent enquiries conducted by the department
specifically in respect of the market rates/price of the marbles/granites
B
during the relevant period i.e. 1994-95 to 1996-97. The corresponding
invoices have also been referred to in the course of arguments. According
to the defence, the expenditure as shown by respondent N o.11A1 was
supported by bank documents, bills, contemporaneous vouchers proved
through defence witnesses, which inter alia, establish that the price of
the marble per square meter at the relevant time was between Rs. I 00 c
to Rs.180 per sq. meter as against Rs.5000 per sq. meter to Rs.21000
per sq. meter cited by the prosecution. While dismissing the valuation
offered by the prosecution to be arbitrarily exaggerated and inflated, it
has been asserted that though the Trial Court was right in observing
that the prosecution had not been able to establish the cost of construction D
in respect of special items like marble, it erred in accepting the valuation
made by it after granting only 20% deduction in the owrall quantum. It
was pointed out as well that the Trial Court's rejection of the documents
i.e .. D-210 series pertaining to the price of marbles prevailing during
1995-96 by construing the same erroneously to be of subsequent years,
was patently flawed. It has been urged that the prosecution had failed to E
prove beyond reasonable doubt, the expenditure towards the construction
of the items under the head, new or additional construction of buildings
and thus no burden lay on the defence to explain the amount spent
towards the same. According to the defence, the valuation made by the
High Court of the expenditure on such construction is correct and does
not merit any interference.
F

417. Per contra, it has been insisted on behalf of the prosecution
that though its computation of the expenditure against twenty one items
comprising the investments in new or additional construction of buildings
did sum up to Rs.29,35,68,982/-, the Trial Court taking note of eighteen
such items, did quantify the expenditure at Rs.22,53,92,344/-. As sample G
instances, the prosecution highlighted the expenditure towards item
numbers 179, 180 and 181 of annexure 11 i.e. the list of items of assets
acquired during the check period and referring to the oral testimony of
PW-98, 107 and 166 as well as the reports prepared and submitted by
the inspection team i.e. Ex. P-645, P-661 and P-671 maintained that the H
838 SUPREME COURT REPORTS [2017] 5 S.C.R.

A sum total of expenditure on the basis thereof was Rs.19,05,84,199/-.
Understandably, this figure was included in the total expenditure of
Rs.29,35,68,982/-and had been highlighted as these three items accounted
for the major portion of the investments.
418. According to the prosecution, the High Court not only limited
B its analysis to seventeen out of twenty one items, it also erred in the
measurement of the built up area of these items so much so that instead
of 2174.69 squares, it proceeded to make the computation on the basis
of an area of 1668.39 squares i.e. yielding a short fall of 506.30 squares.
In addition thereto, it has been urged on behalf of the prosecution that
the High Court appraised the expenditure towards new and additional
c construction by taking only the cost expended for a sentry shed by totally
overlooking the additional and highly expensive enhancements and
fixtures of the main buildings. According to the prosecution, whereas
as per the evidence adduced by it, the cost of construction of the new/
additional buildings was Rs.4037 per sq. feet, the High Court on the
D basis of the cost of construction of the sentry shed III adopted the rate
of Rs.680 per sq. feet, as a result whereof the actual cost of construction
of the new/additional building stood reduced by 83%. The prosecution
has thus insisted that in quantifying the expenditure towards the
construction of the new/additional building, the High Court thus patently
erred not only on the actual built up area but also on the basic rate of
E cost by drawing an analogy of a sentry shed with the new/additional
buildings, though these two classes of structures with the inherent
characteristics thereof were not comparable by any means.
419. As referred to hereinabove, the Trial Court scrutinized the
oral and documentary evidence of both sides relating to 18 items of
F new/additional constructions out of 21 cited by the prosecution. It
exhaustively evaluated the evidence item wise and weighed the merits
and demerits thereof in details. It took note of the reports submitted by
the inspection team qua every new/additional building involved and also
took cognizance of the denunciation by the defence thereof primariiy on
G the ground that those lacked in details and further were not accompanied
by supporting documents. The Trial Court appreciated the evidence of
the prosecution witnesses who were participants in the exercise of the
valuation of the buildings, the ancilla1y structures, accessories, fixtures
and furnishings. The members of the inspection team, who were Civil
Engineers drawn from the Public Works Department, in addition to
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 839
[PINAKI CHANDRA GHOSE, J.]

Electrical Engineers from Electricity Department, as their evidence A
noticed by the Trial Court, would demonstrate did take into account all
the essential aspects of the subject matter of survey including the make
and age of the structures and also duly discounted the value thereof on
depreciation. A common feature of the evidence is that the price of the
electrical appliances mostly was assessed on the basis of their age and
B
the expertise of the officers undertaking the inspection. Qua the non-
scheduled items, according to the prosecution witnesses, the price was
ascertained from the market. The demur of the defence that such
evaluation was not decisive in absence of the notes of the relevant inputs
was however noticed by the Trial Court. For the general items, the
contemporaneous PWD schedule of rates prevailing in the districts C
involved were applied. The defence witnesses who mostly were the
members of the same team did not radically differ from the substance of
the version of the prosecution witnesses. A marked attribute of the
prosecution witnesses, as noted by the Trial Court, was that when
examined on their first recall, they seemed to vacillate in their disclosures
0
in the examination-in-chief but reaffirmed the same narration on their
second recall. The defence however noticing this demeanour has
endeavoured to discredit them as prevaricating and unfaithful witnesses.
420. As had been elaborately appraised by the Trial Court, the
evidence of the prosecution witnesses disclose that the members of the
inspection team did minutely notice all the salient characteristics of the E
new/additional buildings under surveillance together with their exquisite
and expensive structural attachments, trappings, fineries and adornments
having formidable potential of enhancing their overall worth.
421. The Trial Court while taking note of the income tax returns
disclosing the expenditure statements and the orders accepting the same F
after the departmental inquiries however accepted the expenditure
towards the new/additional buildings to be Rs.22,53,92,344/- by
discounting the figure furnished by the prosecution by 20% as according
to it, the prosecution had not produced convincing evidence in support of
the value fixed by the Public Works Department engineers in respect of G
price of the special items and as there was some dispute regarding the
payments of the architects' fees. In arriving at this conclusion, the Trial
Court did take note of every objection of the defence to the evaluation
of the new/additional buildings and rejected the same. In particular, the
defence plea that the valuation on plinth rate area ought not to have
H
840 SUPREME COURT REPORTS [2017] 5 S.C.R.

A been adopted, was also dismissed. It took note of the evidence ofDW-
78 that building valuation could be done on the basis of plinth area oflhe
building or the detailed method. It was of the firm view that the engineers
involved in the process of the evaluation of the new/additional buildings
were competent for the assignment entrusted and that the defence had
not disputed the measurement of the buildings and the nature of the
B
constructions as well as the quality of the materials used. It however
observed that the prosecution could not produce any direct evidence in
proof of the cost of the special items used and had relied on the oral
testimony of its witnesses who had stated that they had ascertained the
price of marbles and other special items from the market.
c 422. The defence has tried to demonstrate that the rejection by
the Trial Court of the invoices Ex.D2 l 0 series pertaining to marbles as
proved by DW96 construing the same to be the year 1999 was patently
erroneous as the said document disclosed that those related to the period
between 1994 and 1996. Be that as it may, the Trial Court however
D while rejecting the objections of the defence on the valuation of the
new/additional buildings, effected a reduction of20% of the total estimate
furnished by the prosecution witnesses for want of persuasive evidence
in support of the recorded value fixed by the PWD Engineers in respect
of the special items and the dispute regarding payments of architects
fees and quantified the amount of expenditure to be Rs.22,53,92,344/-.
E
423. Noticeably, the exercise undertaken by the inspection team
was a massive one chancing minor shortcomings and from the Trial
Court's comprehensive narrative of the evidence on record, in our view,
its estimate on the basis thereof cannot be said to be perverse. As it is,
having regard to the nature and size of the survey, insistence on proof
F beyond reasonable doubt with mathematical exactitude would be both
unwarranted, inexpedient and un-pragmatic.
424. In our comprehension, the appreciation made by the Trial
Court of the evidence on record and the final determination of the extent
of expenditure incurred cannot be discarded as absurd or implausible.
G
425. The High Court on the other hand noted the reservations
expressed by the defence to the valuation made by the prosecution. It
noted the denouncement that the valuation made was highly inflated and
that the cost of marbles and granites have been assessed on a very
exorbitant measure. The remonstrance that neither any sample of marble
H or granite had been taken nor tenders had been called for to ascertain
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 841
[PINAKI CHANDRA GHOSE, J.]

the rates thereof was recorded. The objection that forests officers have A
not been examined to price the cost of the wood and that nobody had
certified that the teakwood had been used, was accounted for. The
High Court did take cognizance of the reference to the inquiries made
by the Income Tax Department to ascertain the prevailing rates of marble
and marble slabs during the relevant period. Defence evidence to that
B
effect was also marked.
426. The High Court in the ultimate analysis adopted the "per
square foot method" in evaluating the value of the new/additional
buildings. According to it, the Public Works Department rates were
supposedly higher, taking into consideration the delayed payment and
other miscellaneous expenses. The High Court accepted the cost of C
construction of the new/additional buildings to be Rs.28,000/-per square
basing on the rate of construction of the Sentry Shed-Ill. Refen-ing to
the estimate for construction of such sentry shed, the High Court deduced
that, it was valued for one square at Rs.31,580/- and therefrom as a
measure of cost of construction for new/additional building, it applied D
Rs.28,000/- per square for the said purpose. It accounted for the other
investments towards super structures, windows, doors, internal painting,
electrification, flooring, water supply etc. The total constructed area,
according to the High Court, was 1,66,839.68 sq.ft. i.e. 1668.39 squares.
It accepted an area of 25662.22 sq.ft. i.e. 256.62 squares as area on
which granites had been used. It added an amount of Rs.9,65,060/- E
towards expenditure for sanction of plan and architect fees.
427. Qua the prosecution evidence, the High Court observed that
though reports had been prepared by the inspection tean'l for the new/
additional buildings involved, all the members ofinspection team did not
subscribe their signatures thereto. Further in course of the testimony, F
they did not speak anything about the measurement of the floor area
where marbles and granites had been used. It held the view that the
valuation reports by themselves did not prove the estimate of granites
and marble stones and that the appreciation thereof was more or less on
guess work. By adopting the valuation on square feet method and by G
applying the rate of Rs.28,000/- per square, the High Court computed
the value of new/additional building with all its accessories and furnishings
to be Rs.5, l 0,54,060/-.
428. Primajacie thus the plea of the prnsecution that in assessing
the expenditure of new/additional buildings, the High Court had not only H
842 SUPREME COURT REPORTS [2017] 5 S.C.R.

A taken a reduced constructed area of 1668.39 sqs. instead of 2174.69
sqs. (for the 17 items considered by it), thereby introducing a shortfall of
506.3 sqs., it also applied the rate of Rs.28,000/- per square based on the
construction cost of a sentry shed, as the base value to work out the
amount of investments made towards the new/additional buildings/
constructions is borne out by the records.
B
429. The approach of the High Court on both counts in the face
of the evidence on record does not commend for acceptance. By no
means, in our estimate, the High Court could have applied the base value
of Rs.28,000/-per square for quantifying the expenditure incurred towards
the new/additional buildings/ constructions involved. The adoption of
c Rs.28,000/-per square as the base value, which is the cost of construction
of a sentry shed, per se is erroneous, having regard to the fact that a
sentry shed and the new/additional constructions/buildings are
incomparable on many counts. Even if it is assumed, as has been
pleaded by the defence that the base value so applied was only for
D appreciating the expenditure towards the skeletal framework of the
constructions, the method adopted by the High Court in the final
computation of the investments by making lump sum additions towards
cost of marbles, granites/interior decorations, staircase, overhead tank
and other furnishings, having regard to the descliption of the constructions/
buildings does not appear to be either realistic or rational and does not
E merit affirmation.

430. In any case however even assuming that the arithmetic
undertaken by the High Court is correct, it having accepted the value of
assets to be Rs.66,44,73,573/-, the remainder would still value at
Rs.43,75,38,688/-. In other words, in calculating the disproportionate
F assets, the amount ofRs.43,75,38,688/- has to be applied even ifthere is
a reduction in value of assets by Rs.22,69,34,885/ i.e.
(Rs.29,82,71,254.32- Rs.5,10,54,060).
431. According to A2 to A4, the valuation of their assets at the
beginning of the check period as per the prosecution was
G Rs.59,29,168/- and according to them Rs.63,64,790.60. At the end of
the check period, the figure swelled, as per the prosecution to
Rs.37,55,10,354.38, which in their computation became
Rs.25,03,36,963.40/-. Thus, whereas the prosecution case is that the
valuation of their assets acquired by A2 to A4 during the check period
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 843
[PINAKI CHANDRA GHOSE, J.]

was Rs.36,95,81,186.38, it had been only Rs.24,39,72,172.80 as per the A
estimate of these respondents.
432. A2 to A4 have not disputed the prosecution's figure of
Rs.59,29,168/-andin fact hadadded Rs.4,35,622/-being the cash balance
available with A2 at that point of time making the tally according to the
respondents at Rs.63,64,790.60. While commenting on the prosecution's B
valuation of their assets at the end of the check period at
Rs.37,55,10,354.38, A2 to A4 have asserted that the properties of six
companies; Signora Business Enterprises (Private) Limited, Meadow
Agro Farms (Private) Limited, Ram Raj Agro Mills (Private) Limited,
Riverway Agro Products (Private) Limited, Lex Property Development
(P) Limited and lndo Doha Chemicals and Pharmaceutical Limited being
c
separate legal entities and not arraigned as accused in the case ought to
have been excluded from the corpus of assets, more particularly in
absence of any evidence that their acquisitions had been made with the
funds provided by the respondents.
433. ln course of the arguments on their behalf, several disputed D
items of assets have been highlighted, accompanied by emphatic assertion
that either the value attached thereto ought to be excluded wholly or to
the extent reduced on the basis of the oral and documentary evidence
relied upon by them.
434. A plain perusal of the compilation to this effect reveals that E
broadly these disputed items can be categorized as "land and building,
shares, acquisition of lndo Doha Chemicals and Pharmaceutical Ltd.,
new/additional constructions, renovation, vehicles, fixed deposits,
jewellery and machinery.
435. As has been hinted hereinabove, these assets had been F
classified under 12 components. The High Court, though had altered
the valuations in five of these items, it did ultimately limit its consideration
to item No. III (i.e. new/additional construction of buildings) and reduced
the cost thereof by Rs.22,69,34,885. As a corollary, for the purpose of
the eventual quantification of the disproportionate assets, the High Court G
did not consider it essential to invoke its findings vis-a-vis the remaining
four items on which it had differed from the Trial Court. As would be
evident from the chart adduced by the defence, out of Part-B containing
the disputed items in Annexure-11 appended to the charge-sheet, ten
items thereof i.e. item numbers 6,7,8,9, 12, 13, 14, 15, 16, 17 are claimed to
H
844 SUPREME COURT REPORTS [2017) 5 S.C.R.

A have been acquired prior to the check period. Vis-a-vis the other disputed
items, to reiterate, referring to the oral and documenta1y evidence, it has
been urged that either the full value as cited by the prosecution or to the
extent, highlighted by them, ought to have been excluded. Qua the items
pertaining to "new/additional constmctions", the eventual pl en is that the
Trial Court though had concluded that the prosecution had failed to prove
B
the cost of constmction, as cited by it, it erroneously accepted the valuation
by granting 20% reduction in the overall cost. According to A2 to A4, in
view of the failure of the prosecution to prove the cost of construction,
the entire valuation made by it to this effect ought to have been discarded
and the evidence adduced by it should have been rejected in its entirety.
c 436. In course of the elaboration of this salient feature of the
disputation, it has been underlined that there has been non-application of
mind by the Trial Court to the evidence on record in arriving at its findings.
Apart from refeITing to the oral and documentary evidence adduced by
both the parties, reliance has also been placed amongst others on the
D income tax returns and the orders passed in connection therewith. The
valuation reports of the buildings submitted by the inspection team,
comprised of civil engineers of the Public Works Department and others,
have been seriously repudiated on the ground of being laconical, incredible,
inchoate and deficient in material particulars. The respondents have
been particularly critical about the valuation of electrical mstallations
E and other items as in their perception, those were wholly unfounded in
absence of standard rates and corroborative proof based on market
survey. Even the expertise and competence of the members of the
inspection team offered by the prosecution as witnesses of valuation
has been questioned. The respondents have sought to buttress this plea
F by examining as defence witnesses, members of the same inspection
team. It has been urged as well that the prosecution could not prove
that all new/additional constructions had been built during the check
period. It has been contended that the valuation of the special items i.e.
marbles, granites, sanitary ware, decorative tiles, teakwood etc. in
absence of any schedule of rates had been highly inflated without any
G contemporaneous documents or authenticated proof in support thereof.
According to the respondents, the defence witnesses who were members
of the inspection team did not support the conclusions recorded in the
reports rendering those wholly unacceptable. On smaller items, like
vehicles, fixed deposits, jewellery and machinery, the respondents have
H dismissed the valuations made by the prosecution either on the ground
STATE OF KARNATAKA v. SELVl J. JAYALALLTHA & ORS. 845
[PlNAKl CHANDRA GHOSE, J.]

that those had beeu wrongly exaggerated or had been acquired before A
the check period.
43 7. Apropos the above impeachment, the prosecution has
reiterated its valuation of the assets and has reconciled to the
quantification made by the Trial Court. It has reiterated that the valuation
of the constructions had been made by the qualified. PWD engineers B
and that the findings are elaborately contained in the valuation reports,
based on exhaustive inspection of all necessary components of the
buildings surveyed. It has stoutly refuted the defence plea that the Trial
Court had rejected the evidence adduced and has maintained that the
discount of20% accorded by the Trial Court had been due to the several
imponderables attendant on the massive exercise undertaken. It has c
insisted that in view of the superior quality of marbles and granite used
in the buildings as well as the prevalent price of the various special items
availed by way of ornate enhancements, the cost appreciation made by
the Trial Court was justified. That the High Court had wrongly assessed
the cost of new/additional buildings at Rs.5, 10,54,060 compared to the D
admitted computation by the respondents at Rs.8,60,59,261 has been
underscored as well.
438. Qua the other segments of the assets, the prosecution has
underlined that the Trial Comt had totally excluded the valuation of sarees
and footwear and that had effected considerable reduction in the value E
of the jewellery and silverwares. Jn all, according to the prosecution,
though it had cited higher value of the assets, it has accepted the
determination thereof as made by the Trial Court.
439. The prosecution has jettisoned the disclosures in the income
tax returns and the orders/opinions expressed thereon by the departmental F
authorities as wholly inconsequential. It has been insisted that enquiries
made by the income tax authorities even if conducted, those had been
ex-parte in which the investigating agency had not been associated. In
any view of the matter, according to the prosecution, the findings of the
income tax or wealth tax authorities on the valuation of the assets, neither
bind the prosecution nor is of any conclusive relevance for the case and G
is far less final for the criminal court trying the same. The cavil of the
respondents that the civil engineers of the inspection team were
incompetent to undertake the valuation work has been emphatically
refuted by the prosecution. That the High Court in adopting the plinth
area of the new/additional buildings had en-oneously reduced the same H
846 SUPREME COURT REPORTS [2017] 5 S.C.R.

A by 50,630 sq. feet, has been reiterated. It has been asserted as well that
the High Court had erred in taking into account only five special items
by excluding the other expensive furnishings/attachments in computing
the cost of construction. Ill specific terms, the prosecution has been
critical of the valuation of the Otis lift at Rs.15,000/- and the cost of
construction of staircase, pump and overhead tanks at Rs.40,000/- to be
B
much on the lower side. That the untenable attempt of the defence to
represent that ordinary marble and granite had been issued against
expensive versions thereof, has been highlighted as we!\.
440. As indicated hereinabove, the only item apart from the new
or additional construction of buildings forming a major component of
c assets is immovable properties which the prosecution valued at
Rs.19,77,18,164.70 whereas the Trial Court assessed the same
Rs.20,07,80,246/-. According to the High Comt, it computed the value to
be Rs.6,24,09, 120/-. Noticeably the respondents had indicated the value
of this item as Rs.16,19,03,301/-. Significantly though in all, 146 sale
D deeds were involved qua the immovable properties figming therein, the
High Court limited its attention only to 97 such deeds and thus left out
from its consideration, the remaining 49 sale deeds, while arriving at its
quantification of this item of the asset to be Rs.6,24,09,120/-.
441. To reiterate however the High Court though did accept the
E valuation of the assets for the purpose of computation to be
Rs.66,44,73,573/- as valued by the prosecution, for the purpose of
ascertaining the disproportionate assets, it took into account only the
cost of new or additional construction of buildings as assessed by it at
Rs. 5, 10,54,060/- thus reducing the value thereof as made by the
prosecution by a sum of Rs.22,69,34,885/-. The omission on the part of
F the High Court to exclude the other four items of assets, on which as
well it had scaled down the value, in working out the extent of
disproportionate assets however had not been questioned by the
respondents before this Court. The judgment of the Trial Court does not
demonstrate as well, the alleged total non-consideration of the evidence
G adduced on behalf of the respondents. On an overall appraisal of the
materials on record, the reduction of the cost of new or additional
construction of buildings to Rs.5,10,54,060/- as effected by the High
Court has to be held as patently erroneous. Consequently the
quantification of the disproportionate assets is also visibly wrong.

H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 847
[PINAKI CHANDRA GHOSE, J.]

Expenditure A
442. Annexure IV to the charge-sheet enumerates 244 items of
expenditure cited by the prosecution. This sums up to Rs.11,56,56,833.41
out of which the major segment being Rs.6,45,04,222/- is towards the
expenditure incurred in connection with the marriage of Tr. V.N.
Sudhakaran, (A3) on 07 .09 .1995. Incidentally, the High Court did accept B
the expenditure assessed by the prosecution in respect of all items except
item nos. 2 to 6 i.e. the marriage of A3 and reduced the sum of
Rs.6,45,04,222/-as fixed by the DVACto Rs.28,68,000/-, thus occasioning
a drop ofRs.6,16,36,222/-. The Trial Court however had also lessened
the amount cited by the prosecution by Rs.7,50,000/- against item No.
235 and also the marriage item by Rs.3,45,04,222/-, thereby reducing C
the total expenditure incurred to Rs.8,49,06,833/-. The Trial Court had
assessed Rs.3,00,00,000/- towards marriage expenses.
443. ln this factual premise, it would thus be enough, for the present
adjudication vis-a-vis this facet of the debate, to confine the appraisal of
the evidence, oral and documenta1y pertaining only to the expenditure D
towards the marriage of A3. As the Trial Court's appreciation of the
materials on record would reveal, it analyzed the evidence under the
following heads:
a) Expenditure incurred towards the erection of marriage pandals.
E
b) Expenditure incurred towards the cost of food, mineral water and
tamboolam.
c) Cost of34 Titan watches - Rs.1,34,565/-
d) Cost of stitching charges of wedding dress - Rs.1,26,000/-
F
e) Cost of 100 silver plates - Rs.4,00,000/-
f) Postal Expenses - Rs.2,24,000/-
444. In re the erection of marriage pandals, the Trial Court did
assess the oral and documentary evidence adduced by the parties. It
took note, amongst others, of the testimony of PW-181 Shri Thangarajan, G
who was the Assistant Engineer, PWD at the relevant point of time and
to whom, according to the witness, the work of estimating the expenses
incurred towards the pandals, both at the marriage and reception venues
was entrusted. He referred to the measurements of these pandals

H
848 SUPREME COURT REPORTS [2017] 5 S.C.R.

A including amongst others those for VIPs with iron-sheet roof in his report
Ex. P-1019 mentioning the estimated cost towards the same and also
with regard to the incidental decorative trappings and fornishings. He
mentioned as well about the air conditioners usO"d and the chairs with
the dining tables arranged at the two venues and assessed the expenditure
towards all these at Rs.5,91,00,000/-. The Trial Court did take note of
B
the cross-examination of this witness, branding him to be partisan and
without any personal knowledge or information about the event or the
expenses in connection therewith and alkged to have been set up by
the prosecution with a view to inflate the expenditure by creating the
document Ex P-1019. The said document in any case was denounced
c as not being contemporaneous, having been prepared after 2 Yi years of
the marriage without any acceptable foundation therefor.
445. The Trial Court to start with did not endorse this criticism of
the witness and instead proceeded to evaluate the merit of his testimony
by co-relating the same with the version of the other witnesses. In doing
D so, the Trial Court traversed the evidence of PW-200 Shri, K.P.
Muthuswami, Chief Engineer, PWD, Tamil Nadu, who, as stated by this
witness, had been entrnsted to complete the pan dais' work by A2 in a
proper manner. This witness testified to have consulted a plan given to
him by the architect involved whereafter he amongst others levelled the
land and put up the pandals as specified. This witness affirmed that
E several pandals had been erected amongst others for serving food to the
VIPs, kitchen and cooking sheds together with marriage platform,
bathroom, rooms for the bride and bridegroom. He further stated that
the expenses towards this construction work were made on behalf of
Al. This witness clarified that the panda! work at the reception venue
F was undertaken by Kurnarason Nader which too he had to oversee on
the instrnctions of the Assistant Secretary of the secretariat of Al.
According to this witness, an amount of Rs.14 lakhs in four installments
was also paid by the bride's father Mr. Narayan Swamy. Incidentally
PW-181 had also referred to the same architect and the contractors as
named by PW-200 in his evidence.
G
446. The Trial Court after taking note of the cross-examination of
this witness, accepted his version being satisfied that he had a first-hand
information about the arrangements made at the marriage venue and
concluded that the same corroborated the testimony of PW-181
sufficiently.
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 849
[PINAKI CHANDRA GHOSE, J .]

447. The Trial Court assessed the evidence of PW-183 Mr. A
Ramesh, Managing Director, Montis Advertising Services (P) Ltd., who
deposed to have printed 65,000 cards for man-iage invitation as instrncted
by Tr. Jawahar, Assistant Secretary to Al. This witness also claimed to
have printed 5000 car passes for which on the basis of his bill submitted,
he had received payment of Rs. I I lakhs through cheque issued by A I.
B
Though this witness resiled from these statements in his cross-
examination, when recalled and was confronted with this inconsistency,
he affirmed his version in the examination-in-chief to be correct.
448. PW-184 Mr. Vincent claimed to have lent out ten cars on
hire and had received Rs.27,502/- through cheque signed by Al. This
witness too recoiled from this statement in his cross-examination but
c
reverted thereto in his re-examination.
449. PW-185 Prem Kumar did state to have, on the requisition of
the Tamil Nadu Guest House lent six cars for rent for four days against
which he was paid Rs.19,211/- through cheque 23.09.1995 issued by
Al. D

450. The Trial Court next also took note of the evidence of PW-
186 Chalapathy Rao who had supplied chairs, tables, cooking wares,
vessels etc. for the event as ordered by A3 and Sachitnanandam, PRO
of Al and received payment of Rs 1,30,000/- by cheque as advance.
He also received a further amount of Rs.57,250/- by cheque issued by E
Al and according to him, Rs.2,65,000/-was still outstanding. This witness
too vacillated in his cross-examination only to affirm the correctness of
the statement in his examination-in-chief after he was recalled for re-
examination.
451. The endeavour on the part of the defence that the payment F
received by this witness by way of cheque of Rs.1,30,000/- was in fact
towards supply made to the ATADMK Party was dismissed by the Trial
Court in absence of any evidence to that effect.
452. The Trial Court also examined the evidence of PW-188,
Sundareshan, who was the Senior Advertisement Manager of a local G
daily in which a thanks giving message of Al had been published in its
issue dated I 0.09.1995. According to this witness, such an advertisement
was published in all other editions of the daily on l 1.09.1995 as well and
that he had raised a bill of Rs. 2,47,660/- therefor.
H
850 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 453. The evidence of PW-199 A.G. Krishnamurti of A.GK.
Travels, Chennai is that he had aJTanged two Ambassador AC cars
from 06.09.1995 to 08.09.1995 on rent, raised bills in the name of Al
and received payment of Rs.15,814/- through cheque issued by her.
454. PW-228 Shri Rajasekharan, Chartered Accountant claimed
B to have filed Income Tax arid Property Tax returns of A 1 for year 1984-
85 to 1996-97 and stated about seizures amongst others of a file Ex. P-
2218 containing the expenditure bills, receipts etc. in connection with the
marriage. This witness was not cross-examined at the first instance on
behalf of the respondents and thereafter he failed to appear in spite of
issuance of summons. Though the defence raised a plea that in absence
c of cross-examination of this witness, his untested testimony ought to be
eschewed, the Trial Court noted that neither the respondents-accused
had cross-examined this witness when the opportunity was available
nor had thereafter, when as many as 145 witnesses have been recalled
for cross-examination, did they seek the assistance of the court to secure
D his presence, if necessary by applying coercive legal process. Even
otherwise, according to the Trial Court the testimony of this witness
pertained mainly to the seizure of the documents from his office which
included amongst others, the file containing vouchers, receipts etc. relating
to the expenditure incuJTed in the maJTiage of A3. This is more so as
some of these documents had also been relied upon by the respondents-
E
accused.
455. Vis-a-vis the expenditure incurred towards cost of food,
mineral water and thamboolam, the Trial Court did assess the evidence
of PW-237, Jawahar, who at the relevant time, was working as Assistant
Secretary to Al and his office functioned amongst others from her house
F at No.36, Poes Garden. This witness stated about musical concerts
presented by Mr. Srinivas and Mr. A.R. Rahman whom he had met for
such arrangement on the direction of Al. He deposed about the printing
of invitation cards for the VIPs. He also stated generally about the
other features of the maJTiage including the supervision of the panda!
G works by Mr. K.P. Muthuswamy, a retired Engineer. This witness too
had resiled from the above, in his cross-examination but reiterated, in his
re-examination, his testimony in his examination-in-chief.
456. The defence plea that the afore-mentioned witnesses in view
of their contradict01y orientations ought to be discarded as a whole did
H not meet the approval of the Trial Court. It recorded that not only the
STATE OF KARNATAKA v. SELVl J. JAYALAL!THA & ORS. 851
[PINAKI CHANDRA GHOSE, J.]

evidence of such witnesses does not deserve to be discredited as a A
whole and instead can be acted upon on the same analogy as of a hostile
witness, the circumstances under which 76 prosecution witnesses were
recalled by the respondents/accused after Al had assumed the office of
the Chief Minister of the State and the way, 64 of them had casually
resilcd from their earlier version, could not be lightly brushed aside. The
B
Trial Court observed that as most of these witnesses who were in service
in the Government Departments, were likely to be influenced by the
status of Al, it being one of the considerations for which the trial of the
case had been transferred out of Tamil Nadu to Karnataka, it concluded
that the temporary retraction of these witnesses in cross-examination
from their testimony in their examination-in-chief ipso facto did not c
warrant rejection of their version in toto.
457. The Trial Court noted the evidence of PW-192 Mr. Sanjay
Jain, Proprietor of Titan Show Room, Chennai to the effect that he had
delivered 34 watches amounting to Rs.1,34,565/- for which he was paid
the amount in cash. D
458. PW-196 Mr. Sayad Bawker, claimed to have done the
stitching work of suits, shirts, she1wanis etc. for the bridegroom-A3 for
which he received Rs.1,41,025/- as the charges therefor. The witness
conceded that the payment was made by Ram Kumar, the maternal
uncle of the bride. The Trial Court however disbelieved the statement E
that the uncle of the bride had made the payment.
459. On the expenditure of JOO silver plates, the prosecution had
examined PW-191, Mr. Srinivas and PW-214 Mr. A.R. Rehman who
had conducted music conce11s. Both of them stated to have made the
performances on the request made on behalf of Al and that they had F
not charged therefor. They however admitted to have been offered silver
plate, silk saree and a small kumkum box at the time of their invitation
for the event. They deposed that on being requisitioned by the investigating
agency, those items had been handed over to the concerned officers.
460. Acting on the evidence of these witnesses, the Trial Court G
concluded that on the occasion of the marriage, silver plates, silk saree/
dhoti and kumkum box were presented to the VIPs.
461. Regarding postal expenses, the prosecution relied on the
evidence of PW-189 Office Administrator, Head Office of AIADMK
who confirmed to have sent 56,000 invitations, expending therefor,
H
852 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Rs.2,24,000/-. He stated to have received the said amount from Mr.
Jawahar, Assistant/Joint Secretmy of A 1.
462. In response, the respondents had examined several witnesses
with documents to bu tress and consolidate the oral testimony. DW 1
Ram Kumar, the maternal uncle of the bride in his deposition claimed to
B have met the entire expenses of the marriage and for that purpose, had
opened an account in State Bank of India being Account No. 95071 in
Gopal Puram Branch, State Bank of India and had remitted a sum of
Rs.92 lakhs which was spent on the occasion. He also proved Ex. 015,
the photocopy of the pass book of the said account and stated that the
deposit had been arranged through the brides' family. In cross-
c examination, he disclosed that the account was opened on 14.8. I 995 but
did not disclose the details of the expenditure therefrom. He also did
not produce the counter-foils of the cheques issued in that account.. His
statement in cross-examination also revealed that he had not produced a
copy of the passbook earlier in course of the investigation. He however
D affirmed that the total expenditure in the marriage did sum up to Rs.92
lakhsonly.
463. Apart from this witness, the respondents examined a host of
party workers who, at the relevant time, held various positions at the
district level and elsewhere. These witnesses, as the tenor of their
E testimony demonstrates, in essence asserted that they had collected
various sums of money from the party workers and others and had utilized
the same for various purposes relating to the marriage like decorating
the pandals erected by the bride party, crackers, music, food for the
party workers, chairs in the pandals, reception on the visit of AI to
areas in connection with the event etc. All these witnesses, however, did
F admit that there was no instrnction from the party to raise such fund
and incur the expenditure but insisted that they had given their statements
before the income tax department in course of the enquiry made in this
regard. The witnesses also did concede that accounts/receipts in
connection with the collection and expenditures had not been retained/
G maintained.
464. In addition to the above, the respondents examined DW64
S. Shanmugam, Chartered Accountant who claimed to be the auditor of
A I from 1996 to 2000 and had dealt with her accounts/assessment for
the assessment years I 99 1-92 to 1997-98. He referred to the que1y
H made by the income tax department in the year 1995 about the amounts
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 853
[PJNAKI CHANDRA GHOSE, J .]

spent by her in the marriage and also the reply given by Al in response A
thereto. He also deposed that on necessary enquries being made, the
income tax authorities eventually did write off the expenditure ofRs.94
lakhs, which earlier, it had observed, had been spent by A 1 on the event.
Reference was also made to the assessment made by the income tax
authorities with regard to food expenses to the tune of Rs.3 lakhs which
B
also stood deleted in appeal.
465. DW24 T. Tharani, who was a painter and also Art Director
of the films, was examined to affirm that in connection with the maITiage,
people from AIADMK pa1ty had approached him for designing the facade
of the entrance of the marriage hall and that he had entrusted the work
to one of his assistants Mr. Ramesh. He also added that he did not
c
charge any remuneration for the work.
466. DW54 Gopi Kant, at the relevant time, was working as Cine
Art Director and stated that on being requested by the bride's family, he
met DW 1 Ram Kumar, maternal uncle of the bride who introduced him
to PW 200, Muthu Swamy. This witness stated that PW 200 asked him D
to prepare a panda! at the place of reception/public procession of the
bride and the bridegroom and to erect two arches and sets at the
designated locations. According to him, the cost of the work was
Rs.12,98,000/- which was paid by cheque in the name of G.K. Arts by
DW 1 Ram Kumar. That a further cheque of Rs.4 lakhs was also issued E
by DW 1 towards some items of additional work, was also stated by this
witness. The witness confirmed that he was the proprietor of GK. Arts.
467. The respondents also examined DW80, B. Vasudevan who,
at the relevant time, was working as Junior Engineer, PWD, Madras.
The witness deposed that the investigating officer of the case on 17.4.1997 F
had orally instructed him to value the marriage panda! and other works.
This witness identified his signature in the report Ex. PlOl 9 but maintained
that the drawings pertaining to the pandals and the stage had not been
given by Vijay Shankar, Architect and that he did not know where the
said panals had been put up. He stated that the measurements mentioned
in the report were based on the instructions of the l.O. and that the said G
report had been prepared in the office without carrying out any inspection.
He also disputed the measurements mentioned in the report.
468. In cross-examination, however, this witness admitted that
he along with PW 181 Thangrajan were the members of the valuation
H
854 SUPREME COURT REPORTS [2017] 5 S.C.R.

A team and also conceded that the report contained the signatures of the
Architect, Vijay Shankar.
469. DW-85, as offered by the respondents, was the Manager
(Administration & Accounts) in Super Duper TV Private Limited, who
conducted the TV coverage of the wedding for which, according to this
B witness, a sum of Rs.2 lakhs was paid by DW 1. In cross-examination,
this witness admitted that at that time, the bridegroom-A3- Sudhakaran
and A2- Sasikala were the directors of Super Duper T.V. Pvt. Limited
and that A3 was its Managing Director.
DW-97 A. Vijay Kumar, Assistant Commissioner oflncome Tax,
c Central Circle-11, Chennai produced documents containing 10 volumes
and exhibited Ex. 0325 to 0364, referred to by the other witnesses for
the defence. This witness however admitted that the assessment for
the year 1993-94 pertaining to the concerned respondents was sub judice
before the High Court in appeal and that the assessment orders relating
to them had not been finalised and were pending before various
D authorities.
470. It has been emphatically urged that the evidence of PW18 l
ought to have been summarily rejected being hearsay and besides
speculative, arbitrary and based on no verifiable data and that this witness
is wholly untrustworthy even otherwise. It was insisted on behalf of the
E respondents that the learned Trial Court had also rejected the evidence
of PWl 81 to be hearsay in character and thus in absence of any other
admissible evidence, its computation of the expenditure at Rs.3 crores is
also without any tangible basis and is wholly inferential. The testimony
of PW181 being clearly hearsay in nature, in terms of Section 60 of the
F Evidence Act, the same could not have been accepted as substantive
evidence and thus the Trial Court's approach of seeking corroboration
thereto had also been flawed. According to the respondents, the version
ofPW200 supports the case of the accused in view of his admission that
Rs.16 lakhs was paid by the bride's father towards the expenses for the
construction of the pandals. It has been urged that his evidence as well
G is rejectable as hearsay in nature, as this witness did not personally know
about the expenses, if any made by A 1 and that he had only been informed
of the contribution of Al by some unnamed panda! contractors. In
absence of any evidence to show that A 1 had incurred the expenditure,
as claimed by the prosecution, towards the construction of the marriage
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 855
[PINAKI CHANDRA GHOSE, J.]

panda! or towards the actual cost thereof, the entire amount of Rs.5.21 A
crores, as cited by the prosecution, ought to be deducted. Qua the
expenses on the other heads including food, mineral water, presentations,
stitching charges, etc., it has been argued that not only the Trial Court
had wrongly accepted the evidence forthcoming from the prosecution
that the expenditure on Titan watches and stitching charges had been
B
incurred by the respondents, it grossly erred in holding that on a rough
estimate, an amount of Rs.3 crores had been spent by the respondents
on the event. It has been canvassed that in doing so, the Trial Court left
out of consideration amongst others, the evidence adduced by the defence
through DWI Ram Kumar, the maternal uncle of the bride, the party
workers and most importantly the income tax proceedings, which after c
thorough enquiries and scrutiny at different levels did finally record that
only an amount ofRs.29,66,552/-, as mentioned by Al in her reply dated
19.09.2005, had been spent and that too by cheques except for a sum of
Rs.3 lakhs. In all, having regard to the entire gamut of the evidence, it
has been argued that considering the different segments of expenditures
D
incurred by the bride's family and the party workers, the same is
Rs.1,85,17 ,000/-, to which Rs.29,66,552/-only could be added on account
of Al. In this premise, the respondents have maintained that the High
Court's computation of the expenses of Rs.28,68,000/- only by Al by
way of expenditure incurred by the respondents is unassailably correct
being based on a logical analysis of the materials on record. E
4 71. The High Court however readily discarded the testimony of
PW181 and the report Ex.P1019 primarily on the ground that this witness
had no personal knowledge or idea of the structures raised at the venue
of the marriage and of the reception and that his version with regard
thereto was on the basis of derived inputs though it mentioned that the F
witness, as attested by him, did consult the architect, the Art Director,
the electrician etc. who accompanied him to the site and that he had
been given as well a drawing of the wedding choultry and the
measurements of the panda! along with the sketch of the decorative
arches etc. It held the view that the witness had prepared the report on
the basis of what the witness had heard and seen from the drawings and G
the sketches and was not personally aware of the authenticity thereof
and that he did not ask for quotations or confirm the sketches. That his
report Ex.P 1019 was deficient and scanty in essential particulars to inspire
confidence for its acceptance was recorded. On this aspect, the High
H
856 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Court also referred to the evidence of PW200 K.P. Muthuswamy, who
claimed to have been entrusted to oversee the works related to the pandals
by A2. This witness, to reiterate had confirmed that he visited both the
venues and that a plan for the pandals as well as stage arrangements, as
prepared by architect Vijay Shankar had been handed over to him. He
narrated in details about the specifications of the strnctures and the
B
payments therefor. He also admitted to have received a sum of Rs.16
lakhs from the father of the bride in this regard. The High Court, however
observed that this witness, amongst others, did neither tell the police
about the expenses of leveling nor disclose the particulars about the
number of air conditioner machines used. The High Court further
c commented that he did not supervise the work of Art Director Gopi
Nath and that this witness could not remember as to how much money
was spent for the marriage. The High Court touched upon the evidence
of other witnesses and in particular elaborated on the testimony of PW228
R. Rajshekheran from whom the file containing the original vouchers,
bills, invoices in connection with the marriage i.e. Ex. P22 I 8 had been
D
seized. It also analyzed the queries made by the Income Tax Department
and the reply given thereto by A I by her letter dated 19 .09 .1995 wherein,
she provided the breakup of the expenditure incurred by her. The
testimony of DW 1 Ram Kumar, the maternal uncle of the bride, more
specifically to the effect that the entire expenses had been borne by the
E bride's family to the tune of Rs.92 lakhs by remittances through the
bank account opened on 14.08.1995 was taken note of. The evidence of
the party workers claiming their contribution in the expenditure through
collection was also recorded and eventually the High Court accepted
the statement of Al furnished to the Income Tax Department disclosing
the expenditure by her ofRs.28,67,520/-towards marriage and rounded
F
up the said figure to Rs.28,68,000/- to be her share of expenses.
4 72. Jn reaching this conclusion, apart from rejecting the testimony
of PW! 81 being second hand in nature, the High Court seemingly
accepted in substance the version of the defence witnesses observing
that at the relevant time Al was the Chief Minister of the State and was
G incidentally then the General Secretary of AIADMK party as well. It
recorded further that the bride was none else than the grand-daughter
of famous cine actor Shivaji Ganeshan. It observed that the prosecution
for no reason forthcoming, had omitted to examine the bride's father
who would have been the best person to state about the actual expenses
H on the marriage. The High Court as well seem to have accepted that it
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 857
[PINAKI CHANDRA GHOSE, J.]

was the customary practice for the bride's family to bear the expenses A
of the marriage normally and though it was of the view that such
expenditure was comprised of verifiable and non-verifiable components,
it was difficult to ascertain the non-verifiable segment while verifiable
expenditure could be assessed through investigation. Et al, the High
Court eventually accepted the figure of Rs.28,67,520/-, as cited by the
B
Al to be the amount expended by her in the marriage and limited the
liability of the respondent- accused, as stated above, to Rs.28,68,000/-.
Thereby the High Court reduced the expenditure of Rs.6,45,04,222/-
towards marriage expenditure by the Rl/Al, as mentioned by the
prosecution, to Rs.28,68,000/-.
473. A2 to A4 also have positioned themselves to question the
c
expenditure of Rs.2,38,89,609/- attributed to them by the prosecution.
This amount, as is apparent from annexure IV to the charge sheet,
includes sums expended not only by A2, A3 and A4 but also by nine
companies/films as named therein. In the compilation referred to in course
of the arguments, the break up of the expenditures incurred by A2, A3, D
A4 and the firms aforementioned have been provided. It is however the
contention of A2 to A4 that an amount of Rs.1,63,06,897.16 is liable to
be deducted on the grounds as enumerated in the compilation so much
so that the total admitted expenditure by them and their firms as named
by the prosecution was Rs.75,82,712.17. Qua the disputed items, it has
been urged on behalf of these respondents that the Trial Court had E
overlooked the defence evidence and instead had received the version
of the prosecution witnesses though on the face of the records, the
corresponding expenditures had not been proved. According to the
respondents, apart from these infirmities, the Trial Court also ignored,
amongst others, the aspect that on several items of expenditure by way F
of payment of interest, these respondents had been subjected to double
jeopardy inasmuch as though these sums had been accounted for in
computing their net profits, these amounts were shown separately again
as expenditures. Not only sums not expended in fact had been
deliberately shown to be so, the attempt on the part of the prosecution to
make double and inflated additions in respect of purchase of machineries G
in some items has been overlooked. It has been argued as well that the
Trial Court erroneously also relied on the evidence of prevaricating
prosecution witnesses against the respondents.
474. Per contra, the prosecution has insisted that the challenge to
1-l
858 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the so called flaws in the assessment of the evidence by Trial Court on
items other than the one pertaining to marriage expenditure is wholly
misplaced and unmerited as the High Court had also endorsed the amounts
corresponding thereto. This is more so in absence of any challenge to
the conclusions of the High court in this regard by the respondents.
According to the prosecution, the High Court scaled down the marriage
B
expenditure from Rs.6,45,04,222/-, as quantified by the prosecution to
Rs.28,68,000/-, though the Trial Court had computed the same to be
Rs.3 crores. Arithmetically thus, the High Court endorsed the total
expenditure to be Rs.5,40,20,611/- instead of Rs.11,56,56,833.41 quoted
by the prosecution. It has been argued that the analysis of the evidence
c on record as a whole by the Trial Court and its computation of the
marriage expenditure of Rs.3 crores is correct and did not call for any
interference. According to the prosecution, the Trial Court did not reject
the evidence adduced by it, but on a rational appraisal thereof, had
moderated the marriage expenditure to be Rs.3 crores. It has been urged
as well that the Trial Court had rightly disbelieved the evidence of the
D
defence witnesses and more particularly the party workers who claimed
to have collected funds to spend the same on the event. That A2. had
failed to account for the expenditures, referred to by A I in her reply. to
the notice to the Income Tax Department had been underlined too.
475. The break-up of expenditure of Rs.6,45,04,222/- on the
E marriage has been furnished by the prosecution as hereunder.
Expenses towards the erection of Rs.5,21,23,532/-
marriage pendal over and above the
admittetVrecorded payments
Expenditure incurred towards cost of Rs. 1,14,96, 125/-
F food, mineral water and tamboolam

Cost of 34 Titan Watches Rs.1,34.505/-
·-
Amount paid to Tr. Syed Bawkar Rs.1,26,000/-
towards stitching of wedding dress for
G A-3
Amount paid for purchase of 100 silver Rs.4.00,000/-
plates(paid by N. Sasikala)
Postal expenses for dispatch of 56000 Rs.2,24,000/-
wedding invitations

H TOTAL Rs.6,45,04,222/-
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 859
[PINAKI CHANDRA GHOSE, J.]

476. In our comprehension, though PW18 l had neither visited the A
venues on the dates of the event nor was then in-charge of the
construction of pandals and other aJTangements auxiliaiy thereto, his
evidence is not liable to be excluded as a whole. On being entrusted with
the responsibility of making an estimate of the expenses incurred in the
constrnction of the pandals and other arrangements, it is discernible from
B
his testimony that he did consult the Architect Vijay Shankar, the Art
Director Thotha Theerani and others, who were in fact actually involved
in the said works at the relevant point of time. This witness visited the
venues and stated on oath that the Architect Vijay Shankar had given
him the drawing of the choultry and the measurements of the pandals on
the basis of which those had been constrncted. He also referred to the c
plans and sketches provided to him by the Art Director, based whereupon,
the fixtures and ancillary strnctures were raised. In the report Ex.P 1019
prepared by PW 181, he did mention, inter alia, the areas of the various
pandals together with the decorative attachments and after accounting
for the cost thereof and the price of the furniture used and the amenities
provided, estimated the expenditure to be Rs.5,91,00,000/- towards the
D
pandals and other arrangements to secure the intended facilities for the
couple, guests and other participants. Trne it is, that PW 181 was not an
eye-witness to the marriage arrangements and had not personally
undertaken the works pertaining to the pandals and other associated
arrangements, yet as has been observed by the Trial Court, his findings E
as recorded in the report Ex. Pl019 could be construed to be of an
expert witness and further could be used as corroboration for the
testimony of PW200 who indeed had supervised the same works himself
and as claimed by the prosecution on the instructions/advise ofA2. The
evidence of PW 181, that the Architect Vijayshankar and the Art Director
F
Thotha Tharani had provided him with the plan and the sketch map on
which the pandals and other structures at the venues had been
constructed, cannot be discarded as hearsay. In this view of the matter,
the approach of the Trial Court to weigh the probative worth of the
testimony of PWl 81 in conjunction with PW200 cannot be repudiated to
be impermissible in law or outrageously fallacious. G
477. PW200 K.P. Muttuswamy, Chief Engineer, Public Works
Department, Tamil Nadu did assert on oath that he was instrncted by A2
to complete the panda! works as early as possible. He also referred to
a plan to that effect furnished by the Architect Vijay Shankar in presence
of the contractors entrusted for the execution thereof. The witness H
860 SUPREME COURT REPORTS [2017] 5 S.C.R.

A claimed to have arranged land at the identified sites to be levelled and
also provided in details of the number, size and specification of the pandals
together with the purposes thereof. The witness was candid to state
that the father of the bride had paid Rs.14 lakhs towards the expenditure
and that therefrom, he disbursed payments. He deposed as well that A 1
andA2 had inspected the work by visiting the site about a week prior to
B
the marriage. He claimed to have signed the applications for securing
temporary electric connections for the pandals for which payments were
made by cheques on behalf of A 1. In this patent premise, the conclusion
of the Trial Court that the evidence of PW200 was direct and of first
hand in nature with regard to the arrangements at the pandals cannot be
c faulted with. Its finding that his testimony thus lent sufficient corroboration
to that of PW 181 also cannot be dismissed as preposterous.
478. The testimony of DW-80, who was also a signatory to the
report Ex. P-1019, to the effect that the same had been prepared without
any inspection and that the measurements mentioned therein were not
D real had not been rightly preferred to the otherwise consistent versions
of PW181 and PW200. The evaluation of the evidence of the other
witnesses touching upon the remaining aspects of the expenditure incurred
on the marriage, as conducted by the Trial Court, also does not merit
rejection in toto. Noticeably, the Trial Court did not accept the expenditure
quoted by the prosecution on the cost of Titan watches as the evidence
E to that effect was construed to be inadequate to Jay the same in the
account of the respondents. The rejection of the evidence of the party
workers claiming collection of various amounts from its cadres and
utilization thereof towards the purposes and arrangements mentioned by
them also in absence of any persuasive corroborative evidence does not
F merit any repudiation. In the face of the evidence in particular of the
elaborate arrangements at the venues and the expenses incurred on
other items associated with the event, we are of the opinion that the
Trial Court did not err in not accepting the figure of Rs.28,68,000/-, as
the expenditure incurred by A 1 on the basis of her reply to the queries
made by the Income Tax Department. Though it has been urged on
G behalf of the defence that this figure had been finally accepted after the
necessary enquiries undertaken by the income tax authorities, the result
of such enquiries even if made, being not binding on the Trial Court, it
was not obliged to accept the same by ignoring the evidence adduced
before it. The treatment of the evidence by the High Court, on the other
H hand, in our assessment, had been summary and sketchy and it in a way
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 861
[PINAKI CHANDRA GHOSE, J.]

promptly accepted the expenditure meFltioned by Al in her reply to the A
notice of the income tax department without independently appraising
the evidence adduced by the parties at the trial.
479. Though it is not unknown, that very often the bride's family
shares or bears the expenditure of marriage, dependent on the practice
prevalent, it is not an invariable phenomenon and permits of exception B
in varying fact situations and therefore no rigid assumption either way is
tenable. In any case, necessary deductions would have to be drawn on
the basis of the evidence adduced. As the investigation into the
expenditure on the ma1Tiage had to be conducted more than two years
after the event, it is logical that the exercise involved was expected to be
infonned with some assumptions, which ifrealistic and logical, would
c
not as such vitiate the assessment as incurably infirm or non-est.
480. On an overall consideration of the evidence adduced by the
parties, we are inclined to hold that the computation of the expenditure
incuned by Al in the marriage as made by the High Court is unacceptable
in the teeth of the materials on record to the contrary. There being D
concurrent findings of the two forums on the rest of the items of
expenditure, we construe it to be inessential to undertake a fresh exercise
with regard thereto in the present proceedings.
CONSPIRACY AND ABETEMENT
E
481. The prosecution asserts that the respondents i.e. A 1 to A4
had entered into a conspiracy and in fi.Jrtherance thereof, Al who was a
public servant, had come to possess assets to the tune of Rs.66.65 crores,
disproportionate to her known sources of income, during the period 1991
to 1996 when she held the office of the Chief Minister of the State of
Tamil Nadu. The prosecution has alleged as well that A2 to A4 had F
abetted her i.e. A 1 in the commission of offence. To reiterate, the check
period is from 1.7.1991 to 30.4.1996. To buttress this imputation, the
prosecution has relied on the fact that A 1, who was the Chief Minister
of Tamil Nadu from 24.6.1991to13.5.1996 andA2 who was her close
friend and associate, were amongst others partners together in Jaya G
Publications and Sasi Enterprises from before the check period. A2,
who was the wife of Tr. M. Natarajan, a government servant with the
Information and Public Relations Department, initially was a occasional
visitor to the residence of Al till 1988 whereafter she was permanently
assimilated in the household. The prosecution case as well is that A3
who is proclaimed to be the foster son ofAl is the biological son ofA2's H
862 SUPREME COURT REPORTS [2017] 5 S.C.R.

A elder sister Tmt. Vanamani and T. Vivekanandan. He too had come to
reside in the residence ofAl during the year 1992 while pursuing studies
at Chennai and remained there till 1997. lt is in evidence that A 1 had
solemnized his marriage on 7 .9 .1995, claiming him to be her foster son
with noticeable pamp and grandeur. A4, according to the prosecution, is
the wife of the elder brother of A2 and had been residing in the house of
B
Al from the beginning of 1992.
482. The above noticeable integration of Al to A4 and their joint
residence has been highlighted by the prosecution as a fonnindable
indicator to attest the imputation of conspiracy and abetment. Apart from
maintaining that A2, A3 and A4 at the time of joining the household of
c Al were not possessed of properties significant enough in their names
nor did have any independent source of income as such, it has insisted
that the properties acquired during the check period in the names of the
34 firms and companies were with the unaccounted funds and resources .
ofAl. It has been underlined that only few of the companies/firms which
D were formed withA2, A3 andA4 and Lex Property Development (Pvt).
Ltd. in different combinations were registered under the Companies Act.
Noticeably, the properties of these companies/firms had been acquired
during the check period and significantly about 50 bank accounts were
opened with the Indian Bank, Abhirampuram and Canara Bank, M ylapore
in the names of the respondents and their firms/companies during that
E time. The prosecution has also brought on record the fact that out of
these firms/companies, six firms namely; Jay Farm House, J. Real Estate,
Jaya Contractors and Builders, Green Farm House, J .J. Leasing and
Maintenance and J .S. Housing Development had been registered on the
same day ie. 25.1.1994 and ten other firms namely; Vigneshwara
F Builders, Lakshmi Constmctions, Gopal Promoters, Namasivaya Housing
Developments, Ayyappa Property Developments, Sea Enclave,
Navasakthi Contractors and Builders, Oceanic Constructions, Green
Garden Apartments and A.P. Advertising Services on 15.2.1995.
According to the prosecution, all the respondents availed of the services
of common auditors, architects and accountants. It has referred to
G numerous inter-account transfers involving the respondents and the above
firms/companies so much so to unequivocally project that those
represented cash flow from their accounts inter se for comn1on purposes.
RefetTing to the evidence of PW! 98 in particular, it has been contended
on behalf of the prosecution that huge unaccounted cash deposits had
H been made in the two accounts, maintained in Canara Bank, Mylapore
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 863
[PINAKI CHANDRA GHOSE, J.]

and Indian Bank, Abhirampuram originating from 36, Poes Garden, A
Chennai, the residence/secretariat of Al with A2 monitoring the
account(s) in which such deposits were to be made. Vis-a-vis the
purchase of immovable properties, it has been alleged that about 3000
acres of fertile lands, of which 900 acres comprised a tea estate, had
been acquired in the names of individuals/companies through various
B
transactions evidenced by 146 sale deeds. It has been underlined that
qua most of the sales, A2 had suggested the names of the firms/individuals
to figure in the deals. It has been imputed as well that in connection with
such transactions, the vendors/owners were kept away from the
purchasers and and the conveyances were made through attorneys
foisted upon them. The vendors were also subjected to duress to part c
with the property and the officials entrusted with the duty ofregistration
of such transactions, were subjected to instructions from higher
authorities to oblige the purchasers and that the registrations did take
place at the residence ofAl on many occasions. The consideration price
of such sale transactions very often had been below the guidelines
D
prescribed and the amounts were paid from various accounts of the
respondents as well as their firms/companies and also by cash. According
to the prosecution, all these circumstances are borne out unmistakably
by the evidence on record, oral and documentary do prove the charge of
conspiracy and abetment and that in furtherance of these criminal
activities, each one of them had acted on behalf of each other in capacities E
either as individuals, partners, directors, of their firms/companies and
also collaborators.
483. In refutation on behalf of A 1, it has been broadly urged that
though conspiracy can be inferred from circumstances, the same has to
be essentially proved and that the mere fact· that A2 to A4 had been F
residing in the house of Al, per se cannot be a decisive circumstance to
prove conspiracy. It has been argued that from much prior to the check
period, A 1 and A2 had be.en partners in the firms namely; M/s Jaya
Publication and Sasi Enterprises and their business connection ipso fact
also cannot be constrned to be an incriminating circumstance. It has
been maintained that A2 to A4 have purchased properties with their G
own resources and efforts and that the prosecution has failed to establish
even a single instance to demonstrate that the funds for such acquisitions
had been doled out by A 1. Contending that starting of a firm by a non-
public servant by itself cannot be an irrefutable determinant to assume
conspiracy with a public servant more particularly when Al had never H
864 SUPREME COURT REPORTS [2017] 5 S.C.R.

A been a partner in any of the firms started during the check period, it has
been pleaded that the finding of the Trial Court that the evidence available
did prove issuance of cheques by Al in favour of the co-accused and
the applications by her for availing loan for the films involved is factually
incorrect. It has been argued that the prosecution has failed to cite even
one instance where Al had transferred any fund to A3 and A4 and for
B
that matter to any of the six companies in particular which allegedly
have acquired properties therewith. It has been underlined as well that
Al had neither received any dividend from these companies nor been
either a shareholder or a director thereof. In this context, the finding of
the Trial Court that A2 to A4 had acquired defunct companies with a
c sinister motive has been dismissed as imfounded and patently erroneous.
It has been maintained that a circumstance to admit any inference of an
illegal act must be one incapable of any other reasonable explanation
and the prosecution having failed to offer any, by furnishing either direct
or indirect evidence, the charge of conspiracy has remained unproved.
D 484. Elaborating further the refutation of the imputation that the
six companies namely; Meadow Agro Farms Pvt. Limited, Riverway
Agro Products Limited, Lex Property Development (Pvt.) Limited,
Signora Business Enterprises, Ramraj Agro Products Limited and Indo
Doha Chemical and Pha1maceutical Pvt. Limited had no n:sources of
their own and that with the induction of A2, A3 and A4 in particular, a
E tide of funds had flowed into their accounts generated from the coffers
of Al, it has been urged with reference to the testimony of DW86
Vaidyanathan and DW87 Srikant as well as the income tax returns for
the period ending 31.3.1996 and 1996-97 as well as the balance sheets
of the companies that so far as Meadow Agro Farm Pvt. Limited, and
F Riverway Agro Products Limited are concerned, at the relevant time,
the respondents were not the shareholders thereof and their share capital
was formed of the contribution of the shareholders of these entities.
According to the respondents, all these companies had sufficient funds
of their own where from acquisition of properties and expenditures were
made. That huge amount of loans were also advanced by these
G companies, to name in particular, Meadow Agro Farms Pvt. Limited,
Riverway Agro Products Limited and Lex Property Development (Pvt.)
Limited have been highlighted. The loans, noticeable were more
prominently to A2, A3 and the finns/companies formed by them in
different combinations including Sasi Enterprises and Jaya Publications.
H The amount of loans range from Rs.2 lakhs to Rs.62,52,000/-. Vis-a-vis
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 865
[PINAKI CHANDRA GHOSE, J.]

Lex Property Development (Pvt.) Limited, it has been contended that A
from its balance sheet for the assessment year 1996-97, it was patent
that it had received share application money to the tune of Rs.46,00,000
and that it had borrowed a sum of Rs.84,07, 172 from the Indian Bank.
Further, it had a receipt of Rs.2,04,98,350 from sundry creditors. In addition
to the above, it has been pleaded that the company also received an B
inter-corporate deposit (ICD) from Kalyani Constructions Pvt. Ltd. of
an amount of Rs. 1,56,67,000 during the year ending 31.3.1996 and Rs.
45,00,000 fromAltafConstructions Private Ltd. That this company did
make an investment of Rs.2,63,49,857/- in immovable property apart
from granting loans to A3 and three other firms including Sasi Enterprises,
has been mentioned. According to the respondents, thus the total C
expenditure of this company including advances did sum up to
Rs.3,03,48,357/- which was met from its own corpus, as had been
accepted by the income tax authorities.
485. It has been insisted in particular that the properties acquired
by Signora Business Enterprises Private Limited were prior to A3 and D
A4 becoming the additional directors of the company and therefore the
finding to the contrary as recorded by the Trial Court was apparently
erroneous.
486. With regard to Ram Raj Agro Products Limited, it has been
argued that the balance sheet of the company for the year 1994-95 E
disclosed that it had made investment of Rs.14,39,446/- in the purchase
of land. Referring to the balance-sheet of this company for the
assessment year 1995-96, it has been maintained that it had secured
loans from banks to the tune of Rs.1,43,87,336 and unsecured loans of
Rs.75,30,561. It has been urged as well that during the said period, this
company had received a sum of Rs. I crore also from Mangutta F
investment Pvt. Limited. That the company had received back from
the government a refund ofRs.40,00,000 has also been urged to contend
that it thus had funds to the tune of Rs.2,59, 17 ,897 wherefrom it spent
Rs.62,57,000 towards constructions at Thanjavour during 1994-95 and
1995-96. G
487. Vis-a-vis, lndo Doha Chemicals and Pharmaceutical Pvt.
Limited, it has been asse1ied that on 31.3.1995, it had paid up share
capital ofRs.97,00,000/- as disclosed by its balance-sheet. Referring to
the order passed by the Commissioner oflncome Tax (Appeals) in ITA
No. 144/1999-2000, it is submitted that 9,69,400 shares of face value of H
866 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Rs.10 each had been purchased by A2 at Rs.6 per share and the
remaining 600 shares had been purchased by six other persons. That the
price of the 9 ,69 ,400 shares@Rs.6 per share amounting to Rs.58, 16,400/-
and registered in the name of A2 had been paid by A3 is however
admitted. Contending thus that the prosecution version that Indo Doha
Chemicals and Pha1maceutical Pvt. Limited during the check period
B
had a total income of Rs.30,40,000 to be wrong, it has been urged that
after the purchase of the shares, the whole factory was leased out to
Southern Petrochemical Company Limited (SPIC), in return whereof
the company received an amount of Rs.1,39,08,584/-. It has however
been admitted that out of such receipt, Rs.25,00,000/- had been lent to
c Meadow Agro Farm (Private) Limited. Further, an amount of
Rs.20,00,000/- had been paid to James Frederic and Rs.72,00,000/- to
SIPCOT by way of repayment of loan availed earlier leaving a balance
of Rs.57,08,584/- in deposit. This is to contradict the prosecution's
claim that the income of Indo Doha Chemicals and Pharmaceutical Private
Limited during the check period was Rs.30,40,000/-. It has thus been
D
urged that all the properties acquired and constructions raised by the
six companies have been from their own funds and therefore, the amount
of Rs.4,70,24,439/- towards the same is not liable to be integrated while
adjudging the assets of Al to A4.
488. In consolidation of the above, it has been urged on behalf of
E A2 to A4 that they along with the six companies whose assets, income
and expenditure have been combined by the prosecution to lay the charge,
being not public servants, cannot, in law, be called upon to explain their
source of income or the manner of acquisition of their assets or the
mode and extent of their expenditures.
F 489. Referring to Section 13(l)(e) of the 1988 Act, it has been
asserted that the same does not cast any obligation on a non-public servant
even if arraigned as a co-accused with the public servant, to furnish
explanation as otherwise contemplated therein. It has been maintained
that though the clear mandate of this legal provision is that for the charge
G to succeed, the prosecution must establish that the public servant, had
been during the term of his/her office holding his/her assets through
some other person or to put it differently, some other person had been
holding the assets on behalf of the public servant, the Trial Court had
grossly erred in absence of any evidence to that effect, to proceed on
the basis of surmises and conjectures to return a finding against A2 to
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 867
[PINAKI CHANDRA GHOSE, J.]

A4 and the above referred six companies. The prosecution having utterly A
failed to adduce any evidence to demonstrate that A2 to A4 or these
companies had received any money from Al, her financial involvement
in their affairs remained unproved, more particularly as she was neither
a director nor a shareholder of these companies. Underlining the fact
that no charge of benami transaction had been framed against the
B
respondents, it has been insisted that even otherwise the prosecution
has failed to discharge its burden to prove this fact. lt has been argued
that it having been established that A2 to A4 and the six companies at all
relevant times, had their independent sources of income and individual
business, the 1988 Act did not cast any burden on them to prove that
they did not hold any assets on behalf of A 1. Elaborating on this aspect, c
it has been contended that from much before the commencement of the
check period, A2 had been carrying on business in her owri right as the
proprietor ofVinod Vision and she had been filing her income tax returns
in connection therewith. Reference of the income tax returns and wealth
tax returns of A2 for the assessment years 1985-86 to 1992-93 have
D
been referred to. All these returns as the dates thereof would indicate
had been submitted much belatedly and noticeably on same dates i.e.
23.2.1993 and 25.2.1993 for income tax and wealth tax returns
respectively. No explanation for such delayed submission of returns
had been furnished.
490. ThoughA2 had been a partner in Jaya Publications and Sasi E
Enterprises which did exist as well from before the check period, it has
been pleaded that the Trial Court completely disregarded the evidence
with regard to her income and assets of these firms as disclosed more
particularly in the income tax returns and accepted by the income tax
authorities, in holding that the transactions involved were really of A 1
catalysed by her finances. Similarly the income tax returns of A3, A4
and the six companies had also been left out of consideration by the Trial
Court.
491. Reiterating that there is no evidence on record even to indicate
that Al had been the director or a shareholder ofany of the six companies, G
it has been emphasized that these companies had been floated prior to
the check period. Apart form contending that there is no evidence to
suggest that Al had either given loan to the six companies or had made
any investment therein, it has been urged as well that these companies
not having been arraigned as accused, their income and assets could not
H
868 SUPREME COURT REPORTS [2017) 5 S.C.R.

A have been attributed to any of the respondents, being impem1issible in
law. In a way, thus it has been argued that the assimilation of the assets
of these companies with those of the respondents and the eventual
confiscation thereof amounts to condemning these entities unheard. The
prosecution as well has been severely criticized to be unfair in withholding
the audit report prepared by Mr. Chokkalingam in respect of Jaya
B
Publications and Namadhu MGR. That several other documents seized
in course of the investigation were also endeavoured to be withheld and
that it was on the intervention of this Court that the respondents could
secure an opportunity to traverse the same, has also been mentioned.
In reiteration of their plea made with regard to the deficiencies in the
c assessment of the valuation of the construction made by the engineers
deputed by the prosecution, it has been insisted that they could by no
means be accepted as experts, the appraisals and the reports based
thereon being wholly incomplete, faulty and conjectural in absence of
any contemporaneous document in support thereof. The approach of
the Trial Court in accepting the valuation furnished by the prosecution
D
through such witnesses by allowing a discount of 20% has also been
castigated as absurd and perverse. According to the re.spondents, the
Trial Court readily accepted the evidence of the prosecution on many
issues without analysing the same in the correct perspective which
patently exhibits its non application of mind.
E 492. Aside impeaching the failure of the Trial Court in omitting to
lay before the A2, all the incriminating circumstances under Section 313
Cr.P.C., its acceptance of the charge of conspiracy and abetment on
the consideration of the joint residence ofAl to A4, execution of general
power of attorney by A 1 in favour of A2, constitution of various firms
F and companies during the check period and inference of cash flow from
one account to another has been branded as visibly flawed. It has been
argued on behalf of the respondents that the deed of power of attorney
was executed by A I in favour of A2 only for the purpose of bank
transactions of Indian Bank and not for all purposes as assumed by the
Trial Court. Further, as A I was neither a partner in any of the firms/
G companies constituted during the check period and as the six companies,
the properties whereof had been confiscated, had been incorporated
prior to the check period with third party promoters/directors, this factor
also did not merit acceptance to reinforce the charge of conspiracy.
493. It has been assiduously pleaded that having regard to the
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 869
[PJNAKI CHANDRA GHOSE, J.]

fact that Al is a spinster and that she and A2 were partners in M/s J aya A
Publications and M/s Sasi Enterprises from before the check period and
thus did share a close relationship,A2's accommodation with Al per se
cannot suggest conspiracy as alleged. Similarly, A3 being the nephew of
A2 and A4, the widowed sister-in-law of A2, their residence with Al
also ipso facto was not an unmistakable circumstance lo deduce
B
conspiracy, in absence of any evidence direct or indirect or a single
instance evidencing flow of cash or finance either from any source of
Al or her account to that of the other accused persons or the six
companies. Such a factor was really non est but presumed and acted
upon by the Trial Court to infer conspiracy and abetment. It has been
emphatically contended that the Trial Court ignored as well the fact that c
Mis Jaya Publications and M/s Sasi Enterprises along with A2 to A4 and
six companies had secured substantial amounts of loan from banks and
other private sources which they rolled in their respective business to
assumt:: their inter dependence and sustenance through circulation of
unaccounted reserves of Al in their accounts.
D
494. On the aspects of abetment and conspiracy, the High Court
dwelt upon the evidence in general without undertaking any minute
analysis of the testimony of the individual witnesses or the documents/
transactions related thereto. It in particular, while dealing with the charge
of accumulation of unaccounted wealth by Al and diversion thereof to
A2 to A4 to acquire immovable properties and administer the firms/ E
companies involved, noted that the respondents along with the firms and
companies had borrowed loans ofRs.24,17,31,274/- from banks. The
High Court therefore concluded that this amotmt having been utilised for
the purchase of inunovable properties and administration of the firms
and companies involved, there was no foundation for the charge of f
abetment. Qua the imputation of conspiracy, the High Court ruled that
the joint residence of A2 to A4 did not warrant an inference thereof and
though as this offence contemplates an agreement between two or more
persons to commit an unlawful act, a court to be satisfied with regard
thereto ought to have at its disposal prima facie evidence. It observed
that where evidence is only circumstantial, it must be complete, continuous G
and unimpeachable to be consistent with the guilt of the accused so
much so to exclude any possible hypothesis of his innocence. The High
Court concluded that the evidence disclosed that A2 to A4 had borrowed
huge amounts from the banks and other sources and had therefrom
acquired the immovable properties and the six companies. It thus ruled, H
870 SUPREME COURT REPORTS (2017] 5 S.C.R.

A that not only the source of income was lawful, the object was also legal.
The charges of abetment and conspiracy against the respondents have
thus been dismissed by the High Court on these considerations.
495. The Trial Court, while examining these charges, did address
at the outset the imputation of the prosecution that the pecuniary
B resources and the properties of A2 to A4 as well as the six afore-named
companies were really held for and on behalf of Al, thus attracting the
offence under Section 13(l)(e) of the Act. The Trial Court recounted
in this context, the plea ofA2 to A4 that the cash deposits in their accounts
and their assets had been acquired out of their own funds and that A I
had no association therewith or contribution therefor in any manner
c whatsoever. This, is in the face of the accusation of the prosecution that
the financial resources as well as the assets of A2 to A4 and the six
companies were in fact those of A 1, as A2 to A4 and the said companies
did not have, at all relevant times, any income, or wherewithal to acquire
the same. The Trial Court was thus alive to the assertion of the prosecution
D that the pecuniary resources and the properties of A2 to A4 and of the
six companies as endeavoured to have been acquired from their funds
were held in benami for and on behalf of Al. It proceeded to analyse the
evidence adduced by the prosecution on the touchstone of the accepted
legal formulation that benami transactions admitted of direct or
circumstantial evidence leading to such inference and embarked on the
E process of scrutinizing the facts and circumstances attendant on the
various transactions pertaining to acquisition of properties of the six
companies of which A2 to A4, in different combinations, were the
directors, as well as the cash flow inter se in their bank accounts.
496. As the narration outlined by the Trial Court would reveal, it
F dealt with in minutest details the oral and documentary evidence available
on record. Without resorting to a dialectical appraisal of the evidence
of the individual witnesses and the documents brought on record, it would
be suffice in our comprehension to notice the salient features discernible
therefrom and strikingly common to the transactions.
G 497. The evidence on record demonstrates that these companies
though were in existence from before the commencement of the check
period and ofwhichA3 andA4 were not the directors then, did neither
have any significant business activity nor transaction nor any profit earning
pursuit to their credit. This the Trial Court rightly noticed was apparent
H from the relevant returns and balance sheets. The contemporaneous
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 871
[PINA.KI CHANDRA GHOSE, J.]

evidence also evinced that these companies were not possessed of A
sufficient resources to acquire properties to the extent amassed during
the check period. Neither did these companies have fixed assets nor did
they avail or give loans to evince financial soundness or stability permitting
acquisition of the assets and properties as made during the check period.
In all, in these six companies, A3 and A4 were nominated as additional
B
directors/directors in the year 1994 and soon thereafter their registered
office stood shifted to Shop No. 21, First Floor, Wellington Plaza No. 19,
Annasalai, Madras. The original directors resigned leaving the reins of
the companies wholly with A3 and A4 in particular. Noticeably, soon
after A3 and A4 were inducted as additional directors/directors, bank
accounts were opened. Simultaneously A2 to A4 formed several c
partnership firms with the principal place of business thereof also at the
above address. Co-incidentally the dates ofregistration of most of these
firms were common in batches and the duration of their existence were
mentioned to be at will. Significantly, A3 and A4 resigned from the
above six companies markedly on the eve of the expiry of the check
0
period.
498. The Trial Court, in details, took notice of the testimony of the
witnesses examined as well as the documents on the aspect ofacquisition
of properties by these six companies. The witnesses included erstwhile
directors of these companies, bank officials who stated about the opening
of their accounts as well as advancement of loans, the concerned sub- E
registrars, who registered the sale deeds of lands purchased by these
companies, officials from the office of the Company Registrar and Mr.
Shiva, Real Estate Agent, who acted as the agent/attorney of the vendors,
whose lands were purchased by these companies. The materials
examined by the Trial Court evidenced heavy deposits/withdrawals of F
cash and transfers thereof hitherto absent before A3, A4 had taken
over the companies. The amounts varied very often in the range of
Rs. I 0 lakhs and above. The pay-in-slips for the deposits amongst others
showed address of 36 Poes Garden, Chennai. Transfers of heavy
amounts to and from other accounts of A2 to A4 and their firms also
surfaced. The income-tax returns/balance sheets belatedly filed also G
demonst:rated·exchanges of deposits inter se the accounts of A2 to A4
and their firms as well as these companies.
499. In respect of the acquisition of the immovable properties, the
evidence attested that soon after A3 and A4 had become directors of
H
872 SUPREME COURT REPORTS (2017] 5 S.C.R.

A these companies, they got involved in the negotiations and survey of
lands intended to be purchased. The sales were got executed through
the attorneys of the owners of the lands for which deeds of power of
attorney were obtained from such owners. Not only uneven bargains
but also inadequate consideration/price by undervaluing the properties
was noticeable in the transactions. Evidence on record disclosed that
B
instrnctions were issued from the higher authorities to the Registrars/
Sub-Registrars to respond to the directions issued from the office of Al
for documentation and registration of the deeds involving such purchases
and as a matter of fact, on various occasions, such precepts did come
and were readily complied with. Several registrations were executed in
c the house of the vendors and at times, also in the concerned office of the
Registrar/Sub-Registrar. The sale deeds executed, which are not disputed
so far as those relate to these companies, did not indicate that the
purchases had been made from their assets existing prior thereto. The
evidence of the witnesses did suggest as well that the registration norms
were flexed and that resultant irregularities in the process were ignored
D
and cast aside to oblige the respondents. Evidence of direct involvement
of A3 and A4 in the purchase of shares and properties on behalf of
Ramraj Agro Mills (Private) Limited and that of A3 in the purchase of
property for Meadow Agro Farms (Private) Limited is discernible from
the evidence adduced. In some cases, A2 was also present at the time
E of negotiations for such purchases. The active role of Mr. Shiva, the
attorney of the owners, is apparent on the face of the records.
500. The Trial Court also noticed the evidence that the companies
had been transferred to A3 and A4 at paltry sums. On a totality of the
scrutiny of the evidence on record which significantly is adequately
F exhaustive, the Trial Court held that at the relevant time of acquisition of
the properties, as above, all the six companies were exclusively in the
control and management of A2 to A4. The statement of the erstwhile
directors/promoters of the companies that they did not purchase any
property in their names either before or after the formation of such
companies was also taken note of. The Trial Court noted as well that A2
G to A4 had taken over the management of the companies even without
buying the requisite shares and concluded that these entities in fact did
not have the trappings of a company. It was determined as well that
none of these companies had any account in their names before A3 and
A4 had taken over the charge thereof and that there was no evidence to
H demonstrate that the funds of these companies had been utilised to
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 873
[PINAKI CHANDRA GHOSE, J.]

purchase properties in their names. It recorded as well, that the funds A
were transferred to the accounts of these companies either from the
accounts held in the names ofNamadhu MGR, Mis Jaya Publications or
other firms of the respondents which unassailably proved that the
resources for the acquisition of the properties of these companies had in
fact been availed from A I orthe accounts maintained in the joint accounts
B
of Al andA2. That admittedly none of the companies had filed returns
either before the Registrar of the Companies or before the income tax
authorities declaring the funds for the purchase of properties or
acquisitions made in the names of the companies was noted. The Trial
Court also recorded the non-compliance of the various provisions namely,
i.e. Sections 209, 210, 211, 215 and220 of the Companies Act in particular c
to conclude that as required by these provisions, no proper books of
accounts had been maintained, no returns had been filed by these
companies from the date of incorporation till the date of attachment of
their properties pursuant to the notifications issued by the Government
of Tamil Nadu under the provisions of Section 3 of the Criminal Law
D
Amendment Ordinance 1944 as per GOMS No. 120 dated 29.1.1997
and GOMS No. 1183 dated 25 .9 .1997. That the balance sheet and profit
and loss account of the companies were not maintained and processed
as mandated by Sections 213 and 220 of the Companies Act was also
underlined. It was of the view as well that there was nothing on record
to show that A2 to A4 had convened any general meeting of the E
companies during the relevant time or that regular returns were filed
before the Registrar as required under the law. It also noted that the
companies did not have their own auditors appointed under Section 234
of the Companies Act and that the auditors of Al to A4 themselves
submitted the returns after the properties of the companies were attached.
F
The Trial Court thus deduced that all the circumstances conjointly
substantiated thatthe acquisition of these companies were never intended
to be the assets thereof and were also not treated to be their properties
at any point of time. According to the Trial Court, it was only after the
attachment of the properties that the respondents raised the contention
that the ownership thereof did vest in the companies and thus could not G
be said to have been held benami for A I. The Trial Court also, with
reference to the certified copies of the orders in Misc. Petition No. 768/
2014 dated 18.6.2014 and Misc. Petition 289/2014 dated 26.6.2004
passed under Section 5(3) of the Criminal Law Amendment Ordinance
recorded that afterthe resignation ofA3 andA4, there was no appointment
H
874 SUPREME COURT REPORTS [2017] 5 S.C.R.

A of directors and that seemingly for that reason, the order of attachment
passed in 1997 was not assailed for nearly two years. It thus rejected
on a comprehensive analysis of the evidence on record, the contention
of the respondents that the properties acquired in the name of the
companies did belong to these entities and could not have been assimilated
in the assets of Al.
B
SO 1. Qua 'the respondents' plea that the companies incorporated
under the Companies Act cannot hold propetty benami for another person,
it entered a finding that none of the documents of title registered in the
names of the companies did bear the seal thereof. That in 90% of the
registered deeds, the companies were not represented by their secretary
c or director and that the address of the companies were not recorded in
such deeds, was noted. The Trial Court concluded that the registrar
who registered these properties and PW 181 who negotiated with the
purchasers, distorted the mies to help A 1 and they went out of his way
to oblige her. That in some of the deeds, the names of the purchasers
D were not included and that the properties were undervalued was
reiterated. The admission of the District Registrar that he proceeded
with the registration solely because the properties were purchased by
Al was taken cognizance of. It was thus of the view that the intention
of the respondents in taking over the companies was for acquiring
large number of properties in their names for diverting the funds
E unlawfully amassed by A 1 during her tenure as Chief Minister of the
State. 1t thus concluded that the properties registered in the names of
these companies and which formed the subject matter of GOMs No.
1183 dated 25.9.1997 and GO Ms No. 120 dated 12.1.1997 issued by the
State ofTamil Nadu were really the properties acquired and held by A2
F to A4 for and on behalf of Al.
502. The evidence on record thus propel several conspicuous and
singular features as noted comprehensively by the Trial Court. Apart
from the fact that the properties aforementioned had been acquired
during the check period, the general phenomenon decipherable is that
G the acquisitions had been made in the names of the newly formed or
acquired films/companies with their directorial composition, as noticed
hereinabove and the two existing firms i.e. M.s. Jaya Publications and
Sasi Enterprises of which A 1 and A2 were partners.
503. Evidently about 50 banks accotmts were opened with the
H Indian Bank, Abhaypuram and Carana Bank, Mylapore in the names of
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 875
[PINAKI CHANDRA GHOSE, J.]

accused persons and the firms/companies as has been stated by PW 182 A
and PW201, details of which are as under:

SI.No. A/CNo. Name of the Bank Account Holder Date of
Opening of A/c
I C.A.No.792 Indian Bank Jaya Publications 18.09.1991
B
2 C.A.No.1152 Indian Bank Super DuperT.V. Pvt. 21.01.1995
Ltd.
3 C.A.No.1104 Indian Bank Super Duper T.V. Pvt. 27.08.1994
Ltd.
4 C.A.No.1179 Indian Bank Jaya Finaoce Pvt.Ltd. 05.05.1995
5 C.A.No.1171 IndianBank Accused No.4 28.03.I995 c
6 C.A.No.1068 Indian Bank Accused No.3 30.03.1994
7 C.A.No.107I Indian Bank Fresh Mushrooms 11.03.1994
8 C.A.No.1059 Indian Bank J .J. Leasing and 27.01.1994
Maintenance
9 C.A.No.4I IO Indim1 Bank Minor Vivek through IZ.09.1994 D
guardian mother A.4
IO C.A.No.1050 lndim1 Bank J. Real Estate 27.01.1994
II C.A.No.I062 Indian Bank J .S. Housing 27.01.1994
Devcloprrent
12 C.A.No.1058 Indian Bank Green Farm House 27.Ul.1994
E
13 C.A.No.1054 Indian Bank J. Fa1m House 27.01.1994
I4 C.A.No.1053 Indian Bank Anjaneya Printers 23.01.1994
I5 C.A.No.I049 Indian Bank Jaya Contmctors and 27.01.1994
Builders
•
I6 C.A.No.1044 Indian Bank Sasi Enterprises 14.I2. I993
F
I7 C.A.No.I l I3 Incfom Bank Meadow Agm Farms 13.03.1994
Pvt. Ltd.
I8 C.A.No.I095 Indian Bank River Way Agro 06.08. I994
Products Pvt. Ltd
I9 C.A.No.1134 Indian Bank Signom Business 23.I 1.1994
Ente1prises Pvt Ltd.
G
20 CA.No.I I 07 Indian Bank Lex Prope11y 31.08.1994
Dcvelopn-ents Pvt. Ltd.
2I C.A.No. I 143 Indian Bank Ramraj Agro Mills 23.12.I994
22 S.B.No.3832 Canara Bru1k Ms. Jayalalitha Accused I6.04.1991
I Mylapore Branch No.I
H
876 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 23 C.A.No.2018 Canam Bank Ms. Jayalalitha Acctrned 12.10.1990
Mylapore Brarx:h No.I
24 S.B.No.23218 Canarn Bank Accused No.2 23.09.1990
Mylapore Brnrx:h
25 S.B.No.5158 Bank ofMadhura, Accused No. I 28.02.1990
Anna Nagar (Ms. Jayalal it ha)
B Branch, Chennai
26 C.A.A/c 1689 Omam Bank, Mahasubbu Lakshmi 27.08.1993
Annanagar Branch Kaly<ln Mantap
(Accused No.3, A4 and
Shrilatha Devi)
27 C.A.No.1173 Indian Ilank, Smt. V. Gunabooshani 05.05.1995
c Abhira1npura111
Branch, Chennai
28 C.A.No.1179 -<lo- Jaya Fina nee Pvt. Ltd.
29 C.A.No.1171 -<.to- Accused No.4 28.03.1995
(Elavarasi)
30 CA.No. I 068 -<lo- Accrned No.3 30.03.1994
D
31 C .A.No.1071 -<lo- Fresh Mushrooms (A.2) 11.03.1994
32 C.A.No. I059 -do- J .J. Leasing and 27.01.1994
Maintc11ancc
33 S.B.No.4110 -<lo- J. Vivek 12.09.1994
34 C.A.No. I050 -<lo- J. Real Estate 27.01.1994
E
35 CA.No. I 062 -do- J .S. H01.i-;ing 27.01.1994
Developments
36 C.A.No.1058 -<lo- Green Fann House
37 CANo.1054 -do- J. Farm House
38 C.A.No.1053 -do- Anjaneya P1i11tcrs Pvt. 23.01.1994
F
Ltd.
39 C.A.No. l 049 -do- J aya Contractors and 27.01.1994
Builders
40 C.A.No. l 044 -do- Sasi Enterprises 15.12.1993
41 O.C.C. No.1143 -do- Rammj Agro Mills Ltd. 23.12.1994
G
42 C.A.No.1146 -do- Go pla Promoters (A.2. 3 23.03.1995
an:J 4)
43 C.A.No.1140 -do- Lakshmi Constn.K:- 23.03.1995
tions (A.2 ,3 and 4)
44 C.A.No.1137 -do- Vignesw,u-a Pru1ters 23.03.1995
(A.2,3 and 4)
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 877
[PINAKI CHANDRA GHOSE, J.]

A
45 C.ANo.1164 -do- Na\oShakti Contradors 23.03.1995
and B.rilders
46 C.ANo.1161 -do- Mis. Sea Enclave 23.03.1995
Enterp1ises (A2,3and 4)
47 C.ANo.1158 -do- AyyaIJ!Xl Property 02.03.1995
Dewloprrent (A 2, 3 B
and4)
48 C.ANo.1155 -do- Narro Sivaya Housing 23.03.1995
Dewloprrent (A2, 3
and4)
49 C.ANo.1149 -do- Sakthi Constrn~tions 23.03.1995 c
(A2, 3 an.14)
50 C.ANo.1167 -do- 0-:eanic Constmctions 23.03.1995
(A2, 3 an.14)
51 CANo.1170 -do- Golden Green 23.3.1995
Apattrrents (A2,3 and4 D
52 C.ANo.9006 -do- Bharani Beach Reoorts 06.02.1995

The accused persons also availed the services of common auditors/
accountants.
E
504. As conspiracy cannot be proved by direct evidence and has
to be essentially inferred from proven circumstances, the ultimate
conclusion with regard thereto has to be deduced from the attendant
state of affairs cumulatively taken. lt is a trite proposition that in the
case of conspiracy, each member thereof becomes the agent of the
other and in law is bound by their actions inter se. So far as A 1 and A2 F
are concerned, one is the agent for other as partners of the two firms
and additionally A2 is the attorney of Al and is a co-conspirator, as
imputed. As testified by PW198, a blanket instruction had been issued
by Al that the directions as made by A2 from time to time ought to be
followed and consequently the latter was to decide in which account the
G
huge cash deposits were to be made. The numerous inter accounts
transfers would only corroborate massive unaccounted cash deposits
being made, the origin whereof had been number 36, Poes Garden,
Chennai. For all intents and purposes, these accounts were construed
to be one.
H
878 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 505. The evidence of PW47, PW 71 and PW 159 taken together
attest that officials were used to locate and purchase lands at various
places. In terms of the testimony of PW 159 , in most of the sales, it was
A2 who had directed as to the names of the firms/individuals to be
mentioned in the sale deeds and in whose names the sales were to be
registered. The amounts had been paid from amongst various accounts
B
of the accused/films/companies. In many cases, the sale transactions
had taken place below the guideline value as has been deposed by PW! 59
and PW 221.
506. The testimony of PW 15, PW 40, PW43, PW 56, PW 76,
PW 89, PW 160, PW 77 and PW237 is amongst others to the effect
c that the vendors were kept unaware of the purchasers' identity and in
some cases were also put under duress to agree to the transactions.
Their statements also divulge that not only was Al aware of these
transactions but on several occasions, the registrations thereof were
performed at her residence.
D 507. Dealing with the plea that the companies incorporated under
the Companies Act cannot hold properties in benami for another, the
Trial Court recorded that a company is a legal entity with perpetual
succession and a common seal and has to essentially act through its
agents and all contracts entered into by them must be under the seal
E thereof. It observed that in the case in hand there was hardly any
document of title registered in the name of above companies bearing
their seal. It concluded on this premise that the properties purchased in
the names of the companies thus never acquired the status of the assets
thereof. It noticed, as well, to reiterate, that in 90% of the registered
deeds, the companies were not represented either by the Secretary or
F the Director and the documents also did not contain the address of the
companies which was a clear indication of the shady and murky deals
undertaken in their names with a view to screen the properties acquired
through illegal means. The fact that evidence had disclosed that on
many occasions, the concerned Registrar/District Registrar had
G compromised the rules only to accommodate Al was adverkd to in this
context. Referring to the decision of Arun Salumun (Pa11pe1~ Vs. A.
Salomon and Company Limited (supra), in which a company, as a
legal entity, is held to be distinct from its members. the court propounded
that though as a corollary, its corporate veil normally is impervious, but
when its corporate identity is applied to circumvent law, to defeat public
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 879
[PINAKI CHANDRA GHOSE, J.]

policy, perpetuate fraud or illegality or is sought to be used as a cover or A
a facade to justify a wrong, defend crime, to lend a name to private
dealing, law would cease to acknowledge it to be a corporate entity and
afford such protection otherwise entitled to under the Companies Law.
It concluded that when camouflaged transactions are carried on behind
the legal front, the court may lift the veil and look behind the artificial
B
personality of the company and identify the real personalities or natural
persons operating behind the screen. According to the Trial Court, the
proved facts and circumstance of the case, did establish that respondents
had adopted an ingenious ploy or device in furtherance of their criminal
conspiracy to shield the properties acquired through perpetration of a
series of offences and had illegally amassed wealth totaling 300 acres of C
land, in the name of the above shell companies which they had
strategically taken over to present as a smoke screen to mask such
large scale transactions. The Trial Court thus concluded that the
acquisition of properties in such a colossal measure along with the
attendant manoeuvres, did manifest the criminal motive and intention of
D
the accused persons attracting the ingredients of the offence under Section
13(1 )( e) of the Act read with Section l 20B IPC. It thus held that the
properties registered in the names of these six companies and which
were the subject matter ofGOMS No. 1183 dated 25.9.1997 and GOMS
No. 120 dated 12.1.1997 were in reality acquired and held by A2 to A4
for and on behalf of Al. In reaching this conclusion, the Trial Court also E
did allude to the above-referred decision of this Court that property held
in the name of an income tax assessee per se did not signify that it
actually belonged to the assessee and that there was no embargo in
getting the same registered in the name of one person though the real
beneficiary was another.
F
508. In re the charge of abetment and conspiracy in general, the
Trial Court, while dealing with the defence plea that a non public servant
could not be prosecuted for the offence under Section I 09 IPC in a trial
constituted under the Act, relied on the decision of this Court in P.
Na/lamma/ (supra) to the effect that the acquisition and possession of
any property by a public servant is capable of being abetted and that G
there is neither an express nor implied exclusion of the 1988 Act to deal
with such a situation. The Trial Court noted that under Section 3 of the
1988 Act, the Special Judge had the power to try not only an offence
punishable under the said statute but also one for conspiracy to commit
or attempt to commit or abetment of any offence thereunder. The Trial H
880 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Court thus held that private individuals could be prosecuted by the Special
Court under the Act on the ground that they had conspired with and
abetted the act of criminal misconduct committed by a public servant
within the meaning of Section 13( I)( e) of the 1988 Act.
509. Turning to the charge of criminal conspiracy, the Trial Court,
B noticing the ingredients of the offence as enumerated in Section l 20A ..
IPC, recorded that agreement is the gist of the offence and that mere
passive cognizance of a conspiracy is not sufficient. While acknowledging
that to constitute an offence of criminal conspiracy, there ought to be
active cooperation in furtherance of a joint evil intent, it underlined the
rnle of evidence relating to such offence that anything said or done by
c anyone of the conspirators, with regard thereto, is under certain
circumstances evidence against the other, the logic being that within
the realm of conspiracy, the position of the conspirators is analogous to
that of partners, one being considered as the agent of the other. Negating
the assertion made on behalf of the respondents that the prosecution
D had failed to produce any material to demonstrati;: that A2, A3 and A4
had engaged in any criminal conspiracy with Al in order to acquire
properties on her behalf by utilising her un-accounted finances, as they
had business activities and income independent therefrom totally
unconnected with her, the Trial Court recounted the entire gamut of the
prosecution evidence to the effect that at the relevant time, A2, A3 and
E A4 did not possess any source of income proportionate to the value of
the assets purchased and held in their names and in the name of the six
companies in particular. lt traced the testimony, amongst others of PW 128
Balakrishnan, PW 169 R. Krishnamoorthy, PW 170 R. Jayaraman and
the con-esponding documentary evidence to hold that A2, A3 and A4
F indeed had neither the source of income, means or the wherewithal to
be capable of making the huge acquisitions in their names or for their
firms/companies during the check period. Referring, in particular, to the
properties acquired by A3 either in his name or in the name of firms/
companies involved, compared to his income and the expenditure made,
the Trial Court reverted to the evidence of PW 201, the officer of the
G Canara Bank, Mylapore who, inter alia, had disclosed that in the
application filed by this respondent for opening of his saving bank account
No. 24621, he had given his address as No. 36, Poes Garden, Chennai-
86. This witness testified by adverting to the ledger for this accotint
which on 30.4.1996, showed a balance ofRs.61,430/-. Prior thereto, on
H 17 .7.1992, A3 had remitted cash through signed pay-in-slip for an amount
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 881
[PINAKI CHANDRA GHOSE, J.]

of Rs.5 lakh to this account. He clarified farther that in this saving A
bank account, many receipts were made through clearance. He referred
to a withdrawal ofRs.5 lakh by this respondent on 7.12.1992 from this
account, who deposited the sum in a fixed deposit account No. 1401/
1992 which on maturity was credited to his current account No. 2220.
This witness disclosed further that the application submitted by A3 to
B
open this current account carried an introduction by A2 and the address
here as well was mentioned as 36, Poes Garden, Chennai. Though this
account was opened on 7.4.1993 by remitting an amount of Rs.SO l by
A3, on 24.9.1994, a sum of Rs.4, l 0,000 was received in deposit in the
account by way of cash. The Trial Court made an itemised reference
to various deposits made in this account of heavy sums varying from c
Rs.26000 to Rs. I I lakhs from other accounts standing inter alia in the
name of A2 and several other firms of which A I, A2 and A3 in particular
were partners. That huge amounts were credited through clearance and
were similarly withdrawn were referred to by this witness.
510. The Trial Court, thus deduced that the acquisitions of the D
properties made by A3 were out of the funds diverted from the accounts
either of Al or A2 and A3 and A4 did not invest any fund with regard
thereto.
5 I 1. While dwelling on the charge of conspiracy and abetment,
the Trial Court took cognizance of the formation of large number of E
firms in the names of A2 to A4 during the relevant period to be a
circumstance establishing the said imputation. That A I and A2 had
commenced partnership business by constituting two partnership firms
by the name Jaya Publications and Sasi Enterprises and though Jaya
Publications was registered under the Sales Tax Act, l 988 on 29.9.1988,
it did not file returns up to l 998 as per the Sales Tax Act, was noted. F
The disclosure of PW3 Thangavelu, District Registrar, who at the relevant
time was serving as Assistant Chief in the Registration Department,
South District, Chennai and that he had registered eight firms out of
which six namely; J.J. Leasing and Maintenance, J.S. Housing
Development, Green Farm House, Jaya Farm Houses, J. Real Estate G
and Jay Contractors and Builders were registered on the same date i.e.
25. l .1994, taken note of. The Trial Court also took cognizance of the
testimony of PW132, Prakashoon Epen Leelavati, District Registrar,
Central Chennai District Registration Office, who claimed to have proved
the certified copies of Form No. l relating to the registration often firms
H
882 SUPREME COURT REPORTS [2017] 5 S.C.R.

A with A2, A3, A4 and Lex Property Development Private Limited as
partners, all registered incidentally on the same date i.e. 15.2.1995.
Reference to the statement of PW 230 Balaji on oath that he had been
appointed as the Auditor by A2 to A4 and that the firms referred to by
him did not buy any property or invest in any other business but received
money as loans and further that ten of such firms had closed their bank
B
accounts in 1995 was taken note of. According to the Trial Court, the
overall evidence as considered by it disclosed that the business activities
in the names ofA2, A3 andA4 started only during the check period and
that they did not invest any funds on their own for that purpose and in
fact utilised these as a front to enable A I and A2 to transfer huge
c unaccounted money through the bank accounts thereof.
512. The Trial Court noted that at the commencement of the check
period, there were hardly 10 to 12 bank accounts standing in the names
of Al and A2 but thereafter 50 accounts mushroomed during the check
period as deposed by PWs 182, 201, 207,209 and 239. The particulars
D of the bank accounts, the names of the banks, the dates of opening
thereof, and the corresponding exhibits along with the names of the
account holders were marked in details.
513. Referring to the evidence of PW-201 in particular, the
remittances inter se the accounts of A 1 to A4 and their firms also were
E set out which would demonstrate that the exchanges during the check
period were not only noticeably frequent and numerous but also did
sum up to figures fluctuating from Rs.12000/- to Rs.25 ,00,0001- as would
be evident from the particulars of such transfers involving the accounts
of Al, A2, A3, A4, Namadhu MGR, Fax Universal, Anjaneya Printers,
Green Farm House and Meadow Agro Farm.
F
514. Oral evidence in the form of testimony of M. Jayaraman
(PW-198), Mani, Ram Vijayan & Balakrishnan and the documents
adduced by the prosecution through the witnesses prove that an amount
ofRs.13,55,28,685.50 in all, had been deposited by cash through pay-in-
slips in the current accounts ofA2 toA4 and the firms by these witnesses
G and others. These deposits significantly had been made during the
check period and apart from heavy amounts on every occasion, varying
from above Rs.50,000/- to Rs.33,70,000/-, there is a noticeable frequency
thereof in close proximity with each other. The pay-in-slips proved in
support of such cash deposits and exhibited by the witnesses concerned
H even disclose deposits of various amounts in different accounts on the
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 883
[PINAKI CHANDRA GHOSE, J.]

very same date. As many as 184 deposits between 17.9.1992 and A
8.3.1996 have been made in CUJTent account No. 1952 of Namadhu
MGR. As many as 267 deposits have been made by Ram Vijayan himself
only, totalling Rs.8,96,52,623.30 out of the total amount of
Rs.13,55,28,685/-indicated hereinabove, apart fromM. Jayaraman (PW-
198), Mani, Ram Vijayan & Balakrishnan through whom deposits had
B
been made. A2 and A3 as well have through pay-in-slips made such
deposits of a sum of Rs.28,74,000/-. The noteworthy feature of these
deposits is that the same had not been in the account of Al. Not only
the cash deposits of such a huge amount is out of the ordinary, the mode
thereof i.e. by pay-in-slips through a selected few and the frequency
thereof render an overwhelming phenomenon, highly redolent and c
admitting ofa logical and persuasive inference of laundering of gigantic
unaccounted cash. The absence of deposits in the account of A 1 in the
multitude of such operations admits of reasonable and unimpeachable
conclusion that the wealth in circulation had its origin in her coffers. On
a rational analysis of such mammoth inflow of cash in the accounts of
D
A2 to A4 and the firms/companies involved during the check period, the
conclusion of the Trial Court that these resources were at all relevant
times held by A2 to A4 and their films/companies on behalf of Al in
order to veil her otherwise unexplained disproportionate assets is
unassailable.
E
515. The Trial Court next probed into the credit entries of the
relevant bank accounts of the respondents to seek the trail of the fund
flow and thus examined the deposits of cash into their bank accounts
and also in those of the firms/companies floated by them spanning from
Rs.10,000/- to Rs.33,70,000/. On an audit of the current and saving
bank accounts of the respondents and the fim1s involved, the Trial Court F
identified unexplained cash credits of huge sums therein varying from
Rs.2684.90 to Rs.1,26,00,000/- involving the respondents, Namadhu
MGR, Sasi Enterprises, Vinod Video Vision, Jaya Publications, J. Farm
House, Maha Subalaxmi Kalayana Mandapam, Anjaneya Printers Private
Limited, Fresh Mushroom, Metal King, Super Duper T.V. Private Limited,
Lex Property Development Pvt.Ltd., Riverway Agro Production Private G
Limited, Fax Universal, Meadow Agro Farm Pvt. Limited, Namay Shivaya
Housing Development, Vigneshwara Builders, Laxmi Constrnctions, Sea
Enclave, Ayyappa Property Development Private Limited, Ocean
Construction, Gopal Promoters, Green Garden Apartments, Shakti
Constructions, J. S. Housing Development, Ramraj Agro Mills Private H
884 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Limited. Noticeably except Jaya Publications and Sasi Enterprises, A2
to A4 and Lex Property Development Private Limited were the partners
of the other firms named above.
516. In tlojs context, the Trial Court inter alia ··~fen-ed to the decision
of this Court in Kale J(/1a11 Molzammad Hanij Vs. C.I. T., (1963) 50
B ITR I (SC), wherein it was expounded that the onus was on the assessee
to explain the nature and source of cash credits as to whether those
stood in the assessee 's account or in the account of a third party and
that the assessee had a legal obligation to explain the nature and source
of such credit by proving prima facie the transaction(s) that had yielded
such accruals in his books of account.
c
517. The Trial Court held the view that the respondents in the
case in hand had failed to offer any satisfactory explanation with regard
to the enormous unexplained credit/accumulations in their bank accounts.
It rejected the confirmatory letter offered by the respondents as false
and bogus and further held that the identity of the person who disclosed
D the source, had also not been proved. Further the transactions which
generated such cash credits were also not established. It rejected as
well the balance sheet and the profit and loss statement claimed to have
been filed before the income tax authorities and on which the respondents
primarily relied as their defence, as not proved in accordance with law
E besides being not in conformity with the statutory prescriptions. It
discarded as well the evidence of the auditors examined by the
respondents who, as the evidence on record testified, were not conversant
with the true facts and had not handled their accounts during the check
period. The Trial Court returned the finding that the evidence on record
cumulatively substantiated that the returns, the balance sheet and the
F profit and loss accounts were framed and fashioned to offer an
explanation to the otherwise titanic unexplained credits in their respective
bank accounts. The Trial Court thus held that the respondents had failed
to prove their defence, when tested on the evidence adduced even by
the standard of preponderance of probability.
G 518. While observing that mere declaration of property in the
income tax returns does not ipso facto connote that the same had been
acquired from the known lawful sources of income, the Trial Court.held
the view that the prosecution could successfully establish that the
respondents and their films/companies, who posed to be income tax
H assessees, had no independent or real source of income and that it was
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 885
[PINAKI CHANDRA GHOSE, J.]

the finance of A 1 that was really in circulation and thus it could prove A
beyond reasonable doubt that the only source of money the acquisition
of large assets was that of hers.
519. The evidence of PW 198 M. J ayaraman, a member of staff
with Al in her house at Poes Garden, at the relevant point of time,
admitting remittances into various bank accounts through Mr. Vijayan B
on the instructions of A2 was referred to in particular. That this witness
had stated that A2 used to instruct him about the details of the bank to
which the deposit ought to be credited and that the amounts used to be
dispatched in suit cases and bags through domestic servants was taken
note of. The Trial Court took into consideration his testimony that he
used to fill the challans as directed by A2 which he identified in the c
course of his examination. He identified too, the signatures of Mr. Vijayan
on the challans. The Trial Court also took note of the evidence of PW
182 and PW 201, the bank officers who identified/proved large numbers
of pay-in-slips and also affirmed that those bore the name of Mr. Vijayan
as the person remitting the amounts mentioned. These witnesses had D
stated further, as noted by the Trial Court, that the pay orders and the
demand drafts issued by them for the purpose of acquisition ofthe assets
as involved were at the instance of the respondents. That these demand
drafts or the pay orders could be directly related to the cheques or pay
orders mentioned in the various sales deeds was recorded as well. This
too, as held by the Trial Court, did establish the nexus of the funds of A 1 E
with the investments made for the acquisition of such assets. The Trial
Court thus sustained the charge levelled by the prosecution that all the
assets and pecuniary resources found to be possessed by A2 to A4 and
in the names of various firms/companies actually belonged to Al and
thus she in fact possessed the assets and pecuniary resources of the F
total value ofRs.55,02,48,215 in her name and in the names ofA2 toA4
and of the firms/companies, thus establishing the ingredients of the
offence under Section 13( 1)( e) of the P. C. Act. It held the view that A2
to A4 as the evidence substantiated had conspired with Al and had
actively abetted in collaboration with each other with the sole object of
acquiring and holding properties and assets disproportionate to the known G
sources of income of Al.
520. This according to the Trial Court stood corroborated by the
large number of accounts opened in the names of the respondents or of
firms/companies and the disbursements to these accounts only by the
H
886 SUPREME COURT REPORTS [2017] 5 S.C.R.

A staff of Al on the instructions of A2 who was in-charge of her financial
affairs. The Trial Court also took cognizance of the fact that the evidence
on record established that except Super Duper T.V. Private Limited,
neither the respondents nor their firms did credit any amount to the
various accounts standing in their names. Rather, all these firms had
gained deposits transferred to their accounts either from that ofNamadhu
B
MGR or Jaya Publications. Reiterating the rejection of the plea of the
respondents, that large deposits collected from various subscribers of
Namadhu MGR totalling Rs.15 crores had been credited in the accounts
of Namadhu MGR and Jaya Publications, the Trial Court reaffitmed
that these deposits in fact represented the un-explained wealth
c accumulated by Al.
521. The Trial Court in the ultimate analysis summed up the
circumstances gleaned from the evidence on record to conclusively hold
that the prosecution could prove beyond reasonable doubt, the charges
levelled against the respondents as framed. While enumerating finally
D the facets substantiating this determination, the Trial Court took note of
the fact that Al had executed a general power of attorney (Ex. P-995)
in favour of A2 in respect of J aya Publications as A I, at all relevant
time, was the partner of the said firm. That such a power of attorney
was otherwise not necessary and that this authority was thus endowed
on A2 so as to lend her a free hand in the management of Jaya Publications
E so as to facilitate the defence of A 1 that she used to be a dormant
partner and was unaware of the transactions carried on by A2 was
recorded. The Trial Court however held the view that by the execution
of such power of attorney, in law, A 1 rendered herself liable for all acts
and deeds of A2 pursuant to the powers so conferred. It correlated the
F flow of funds accumulated by A I to the account of Jaya Publications
and thereafter to branch out the same to other accounts to be eventually
appropriated for the acquisition of huge assets. The Trial Court thus
rejected the stand of A I that she was unaware of the activities of A2,
her agent with regard to the transfer of the fonds and the mode of utilization
thereof.
G
522. The constitution of various firms during the check period
was cited as well to be another circumstance to prove the conspiracy
amongst the respondents. The Trial Court re-counted that at the
commencement of the check period, A 1 and A2 were involved in the
two concerns namely M/s Jaya Publication and Mis Sasi Enterprises
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 887
[PINAKI CHANDRA GHOSE, J.]

but during the check period as many as 18/21 firms did come into A
existence. The Trial Court reiterated that the evidence on record however
proved that none of these firms either carried on business during the
check period or contributed any share capital to or receive any profit
from these firms. The fact that in a single day, ten of such firms have
been constituted with identical features was reiterated. The Trial Court
B
did recall as well that not only A2 and A3 did start independent concerns
in their names, even defunct companies were purchased/taken· over by
the respondents. However, none of these firms or companies did actually
cany on any business except acquiring huge properties. Referring to
the fact that at the time of opening of the bank accounts of these firms/
companies, none of these entities had any independent resources, the c
Trial Court deduced that these firms/companies were nothing but
extensions of Namadlm MGR and Jaya Publications and owed their
existence to the benevolence of A 1 and A2 for continued sustenance. It
reiterated that the proved fact that large amount of funds were diverted
to these accounts was a clear attestation of the fact that these firms
D
were constituted to only siphon off the unlawful resources amassed by
Al. The fact that these firms/companies did operate from the residence
ofAl belied the feigned ignorance of Al about their activities, was noted.
The joint residence of all the accused persons also could not be ignored
as a factor contributing to the charge of conspiracy and abetment when
assessed together with the attendant facts and circumstances reinforcing E
the said imputations. This also belied, according to the Trial Court, the
specious plea of A2 to A4 that each one of them had independent business
and own source of income. The fact that A2 to·A4 did combine to
constitute the firms to acquire huge tracts ofland out of the funds provided
by Al also was a clear index that their assemblage in the house of A I
F
was not engendered by any philanthropic urge for friends and their
relations in need, rather to frame and further the criminal conspiracy to
hold the assets of Al. The fact that the materials on record did evince
that A 1 had not only advanced Rs. I crore to Shasi Enterprises as a
contribution to its share capital for which she availed loan, but also that
she did issue several cheques in favour of other accused persons and G
filed application for availing loan for the benefit of the firms involved, did
buttress the charge that she was wholly aware of the dealings of the co-
accused and the firms in their minutest details. The free flow of money
from one account to the other of the respondents, the films/companies
also proved beyond reasonable doubt that all the accused persons had
H
888 SUPREME COURT REPORTS [2017] 5 S.C.R.

A actively participated in the conspiracy to launder the ill-gotten wealth of
Al for purchasing properties in their names. The fact that the assets
and properties of the six companies were attached pursuant to the
provisions of the Criminal Law Amendment Ordinance and that the
applications for vacating the attachments were not filed for more than
two years therefrom did make it apparent that no other person except
B
the accused were interested therein. The Trial Court rightly did mark as
well, referring in particular to the evidence of PWl 59 Sub-Registrar,
North Beach, Sub Registrar's Office and PW71 Radha Krishnan,
Horticulture Officer that they were called to Poes Garden and on the
instructions of higher officers, they did oblige Al even by relaxing the
c rules in the registration oflarge number of documents by taking personal
interest and even overlooking that the properties were undervalued to
hold a deep seated involvement of Al in these transactions. That the
registering authorities had gone to the extent of permitting registration of
six documents even without incorporating the names of the purchasers,
was referred to. The Trial Court in its conclusion, on an exhaustive
D
analysis of the evidence as a whole, held the following facts to have
been proved by the prosecution beyond all reasonable doubt.

I) Total assets found in possession ofA-1 Rs.55,02,48,215
as on 30.4.1996
E II) Total expenditure incurred by the Rs. 8,49,06,833/-
accused during the check period

Ill) Total of (I) and (II) Rs. 63,51,55,048/-
IV) Total income of accused from all Rs. 9,91,05,094/-
sources as determined above
F
V) Value of disproportionate assets and Rs. 53,60,49,55,954/-
pecuniary resources found in
possession of accused as on 30 .04.1996
which has not been satisfactorily
accounted.

G
523. ln view of this, the Trial Court convicted Al for the offences
under Section 13(l)(e) r/w Section 13(2) of the PC Act. Further Al to
A4 were convicted under Section 120-B lPC rlw Section 13(l)(e) r/w
Section 13(2) of the PC Act as well. A2 to A4 were additionally convicted
under Sections 109 !PC r/w l3(1)(e) r/w 13(2) of the PC Act and
H sentenced them accordingly as heretobefore mentioned.
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 889
[PINAKI CHANDRA GHOSE, J.]

524. The Trial Court further ordered that necessary directions be A
issued to the concerned banks to remit the proceeds of the fixed deposits
and the cash balance standing to the credit of the respective accused
persons in their bank accounts to be appropriated and adjusted towards
the fine amounts. It was directed as well that if even after such
adjustment, the amount fell short of the quantum of fine, the gold and
B
diamond ornamer..ts, seized and produced before the court (after setting
apart 7040 gms. of gold with proportionate diamond jewellery) be sold to
RBI or SBI or by public auction so as to meet the deficit. The rest of the
gold and diamond jewellery was directed to be confiscated to the
Government.
525. It further ordered that all immovable properties registered in c
the names of Lex Property Developments Pvt. Ltd., Meadow Agro Firms
Pvt. Ltd., Rama Raj Agro Mills (P) Ltd., Signora Business Enterprises
Pvt. Ltd., Riverway Agro Production (P) Ltd. and lndo Doha Chemicals
and Pharmaceutical Ltd. which were under attachment pursuant to GO
Nos. MS 120 and 1183, above referred to be confiscated to the State D
Government. It ordered as well that out of the fine amount recovered, a
sum of Rs.5 crores be made over to the State of Kamataka towards
reimbursement of expenses for the trial conducted thereat.
526. As many as 34 companies/firms fell for scrutiny in the course
of adjudication. Out of these Jaya Publications, Sasi Enterprises, Signora E
Business Enterprises Private Limited, Lex Property Development Pvt.
Limited, Riverway Agro Production Private Limited, Meadow Agro Firm
Pvt. Limited, lndo Doha Chemical and Pharmaceutical Limited, Ram
Raj Agro Mills Limited did exist from before the check period. The
others were registered during the check period and notably, the date of
registration of six of these had been 25 .1.1994 and three bank accounts F
of five of them had been opened on the same date i.e. 27.1.1994. Further
ten of such fim1s had been registered on 15.2.1995 and their bank
accounts had been opened on 23.3.1995. To say the least, in the context
of the charge levelled, this co-incidence also is conspicuously abnormal
and irreconcilable. Another note worthy feature is that in most of these G
firms, A2, A3 and A4 are the partners with Lex Property Development
Pvt. Limited, joining them in some. There are firms as well where either
A2 or A3 is the proprietor and others are with the combination of A2, A3
and A4. As the evidence with regard to the affairs of the six fin11s in
whose names lar~e tracts of properties had been purchased and deposits
H
890 SUPREME COURT REPORTS [2017] 5 S.C.R.

A made, has been dilated upon hereto before, the same does not warrant
further elaboration.
527. The unimpeded, frequent and spontaneous inflow of funds
from the account of Al to those of the other co-accused and the firms/
companies involved, ove1whelmingly demonstrate the collective culpable
B involvement of the respondents in the transactions in the face of their
overall orientations so as to render the same to be masked banking
exchanges though involving several accounts but mostly of the same
bank. No other view is possible.
528. Apart from the above, the demurral of unfairness in
c investigation and trial also cannot be sustained in the overall factual
conspectus. True that in course of the investigation, some documents
had been seized which were not adduced in evidence being construed to
be irrelevant for substantiating the charge, but it did not certainly
tantamount to suppression thereof so as to afflict the trial with the vice
of unfairness and non-transparency as alleged. Additionally, the courts
D did intervene as permissible in law wherever merited to ensure against
any prejudice qua the parties. The fact that the documents seized but
not brought on evidence by the prosecution had not been destroyed and
were available to the respondents for their inspection, at all relevant
times, is, per se, an index of fair and impartial trial. The defence as a
E matter of record did at some point of time close its side of evidence by
examining only two witnesses, whereafter following the inspection of
the documents, as desired by the respondents, atler A 1 had returned to
power, examined as many as 99 witnesses. Prior thereto, 76 prosecution
witnesses were permitted to be recalled for further cross-examination.
The remonstrance that the Trial Court did not take into consideration the
F defence evidence is also not borne out by the records. As would be
evident from its judgment, the testimony of several witnesses examined
by the respondents received in-depth appreciation by the Trial Court
wherever relevant. The contention that the Trial Court had conducted
the trial in a manner prejudicial to the respondents in the overall context,
G both factual and legal, thus cannot be sustained.
529. That the Trial Court was meticulous, sensitive, vigilant and
judicious in appraisal, stands authenticated by the fact that in valuing the
assets, as wa1nnted, it excluded a sum ofRs.32 lakhs towards the price
of sarees and further reduced the value of gold and diamond to the
H
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 891
[PINAKI CHANDRA GHOSE, J.]

extent of Rs.2 crores. lt also allowed reduction in the marriage expenses A
by more than 50% and farther discounted the value of constructions by
permitting a depreciation of20%.
530. Apropos the off repeated grievance, of the defence that the
Trial Court had left out of consideration material pieces of evidence
adduced by it, suffice it to state that the decision rendered by it proclaim B
to the contrary. In all the aspects amongst others income, expenditure
and assets, the judgment of the Trial Court reveals on a plain reading
that the evidence adduced by the defence as construed to be relevant
had not only been taken note of but also analysed and applied for
arriving at the conclusions on the issues pertaining to the adjudication.
Whereas qua income, reference of the testimony of the defence c
witnesses is decipherable amongst others pertaining to the scrutiny
involving Namadhu MGR, Super Duper T. V., gifts offered to Al, rental
income and income tax returns, the Trial Court did also assess the defence
evidence while judging the case on the issues of marriage of A3,
expenditure and as well as valuation of buildings. The cavil to the D
contrary thus cannot be entertained. Further this plea though elaborated
in details in course of the arguments in the present proceedings was not
taken very specifically before the High Court by the respondents while
challenging their conviction. Significantly, such a grievance has also not
been made by them by laying a formal challenge to such purported
omissions on the part of the Trial Court, before this Court, as contemplated E
in law. In this persuasive backdrop, we are thus disinclined to sustain
this contention. This is more so as in view of the appraisal of the relevant
evidence as a whole, we are of the unhesitant opinion that the impugned
judgment and order of the High Court suffers from manifest errors on
the face of the record, both on facts and in law and is liable to be set-aside. F
531. The Criminal Law Amendment Ordinance, 1944 (referred
to as the "Ordinance" as well), which was enforced w.e.f. 23.8.1944 is
an yield of the exercise of powers under Section 72 of the Government
oflndia Act, 1935 and is directed to prevent the disposal or concealment
of property procured by means of the offences enlisted in the Schedule G
thereto. To iterate, for the instant adjudication, paragraphs 4A and 5 of
the Schedule are extracted hereinbelow for immediate reference:
4-A: an offence punishable under the Prevention of Corruption
Act, 1988;
H
892 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 5 : Any conspiracy to commit or any attempt to commit or any
abetment of any of the offences specified in item 2,3 and 4 and
4-A.
As the present appraisal does not involve the other offences
enumerated in the Schedule, those are not being dwelt upon.
B 532. Clause 3 of the Ordinance provides that where the State
Government or as the case may be, the Central Government has reason
to believe that any person has committed, whether after the
conunencement of the Ordinance or not, any scheduled offence and
whether or not any court has taken cognizance thereof, it may authorise
c the making of an application to the District Judge within the local limits
of whose jurisdiction, the said person ordinarily resides or catTies on
business, for attachment of any money or other property, believed to
have been procured by means of such offence. It also permits that if
such money or property cannot for any reason be attached, the prayer
in the application may be extended to other property of the said person
D of the value as nearly as may be equivalent thereto. The provisions did
make applicable Order XXVll of the First Schedule to the Code of Civil
Procedure, 1908 to the proceedings for an order of attachment under
the Ordinance as they did apply to the suits by the Government.
533. Section 4 contemplates ad interim attachment by the
E jurisdictional District Judge, in the eventualities as mentioned therein
and while doing so, he is required to issue to the person whose money or
other property was being attached, a notice accompanied by copies of
the order, the application and affidavits and of the evidence, ifrecorded,
asking him to show cause on a date to be specified in the notice as to
F why the order of attachment should not be made absolute. Clause 5
empowers the District Judge to make the ad interim order of attachment
absolute, if either no objection is filed by the person affected or not
varied after necessary enquiry on a consideration of the objection if
filed, and the evidence is adduced. In terms of clause 10 of the
Ordinance, an order of attachment of property made shall unless it is
G withdrawn, continue to be in force, in a contingency where a court has
taken cognizance of the alleged schedule offence whether, before or
after the time when the order was applied for, until orders are passed
by the District Judge in accordance with the provisions of the Ordinance
after the termination of the criminal proceedings. Clause 11 provides
H for appeals against the order(s) of the District Judge, in the matter of
v.
STATE OF KARNATAKA SELVI J. JAYALALITHA & ORS. 893
[PINAKI CHANDRA GHOSE, J.]

attachment before the jurisdictional High Court. Whereas clause 12 A
makes it incumbent on the coi.irt trying a scheduled offence, when
apprised of an order of attachment of the property involved under the
Ordinance, to record a finding, in case of conviction, as to the amount of
money or value of other property procured by the accused by means of
the offence, Clause 13 mandates the manner of disposal of such attached
B
property upon termination of the criminal proceedings. Thereunder, when
the final judgment or order of the criminal court is one of conviction, the
District Judge shall order that from the property of the convicted person
attached under the Ordinance or out of the security given in lieu of such
attachment, there shall be forfeited to Government such amount or value
as is found in the final judgment or order of the criminal court, to have c
been procured by the convicted person, by means of the offence together
with the costs of attachment as determined by the District Judge. Sub-
clause 4 deals with a situation where the amounts ordered to be forfeited
or recovered exceed the value of the property of the convicted person
attached, thus permitting in that eventuality, the steps to follow. Sub- D
clause (6) ordains that every sum ordered to be forfeited in connection
with any scheduled offence other than one specified in item 1 of the
schedule, would after deduction of the cost of attachment as determined
by the District Judge, be credited to the Government or the local authority
to which the offence has caused loss or where there is more than one
such government or local authority, to be distributed amongst them in E
the proportion to the loss sustained by each.
534. Noticeably "termination of criminal proceedings", as per
clause 2(2), as relevant for our present purpose, would be where this
Court would pass its final order in the present appeals.
535. In the appeals, filed by the State of Karnataka pertaining to F
the release of the properties recorded in the name of the six companies
involved, consequent upon the acquittal of the respondents, the parties
are essentially at issue on the applicability or otherwise ofSection 452 of
the Code of Criminal Procedure, 1973 invoked by the Trial Court to
order confiscation/forfeiture of the properties otherwise attached under G
the Ordinance. The other facets of the competing assertions being largely
common and already addressed, are inessential for a fresh scrutiny.
Whereas it is urged on behalf of the State that having regarp to
the scheme of the Act and the, mode of attachment of the property
involved in a scheduled offence, the operation of Section 452 of the H
894 SUPREME COURT REPORTS [2017] 5 S.C.R.

A Code is not excluded, the plea on behalf of the respondents is that the
Ordinance being a complete code by itself, the Trial Court was patently
wrong in assuming to itself the power of disposal of the property under
attachment by invoking the said provision of the Code. It has been
urged in essence on behalf of the respondents that at the most, the Trial
Court could have valued the property under attachment following its
B
conclusion of guilt against them, leaving it thereafter to the fornm under
the Ordinance to comply with the procedure prescribed therein and
further the process to its logical end. This is more so, as has been urged
for the respondents, that the appeals against the orders making the ad
interim attachment absolute are pending before the High Court as
c permissible under the Ordinance. Principally, reliance, amongst others
has been placed by the respondents on the decision of a Constitution
Bench of this Court in State of West Bengal Vs. S.K. Ghosh, AlR 1963
SC 255.
536. In our comprehension, the course adopted by the Trial Court
D cannot be faulted with. To reiterate, in terms of Section 5(6) oftheAct,
it was authorised to exercise all powers and functions exercisable by a
District Judge under the Ordinance. The offences at the trial were
under Sections 13(1 )( e), 13(2) of the Act, Sections l 09 and 120B of the
Indian Penal Code encompassed within paragraphs 4A and 5 of the
Schedule to the Ordinance. These offences were unimpeachably within
E the contours of the Act and triable by a special Judge thereunder. Having
regard to the frame and content of the Act and the limited modifications
to the provisions of the Code of Criminal Procedure, in their applicability
as occasioned thereby and the authorisation of the special Judge trying
the offences thereunder to exercise all the powers and functions
F invocable by a District Judge under the Ordinance, we are of the opinion
that the order of confiscation/forfeiture of the properties standing in the
name of six companies, as involved, made by the Trial Court is
unexceptionable. In any view of the matter, with the peremptory
te1mination of the criminal proceedings resultant on this pronouncement,
the direction of the Trial Court towards confiscation/forfeiture of the
G attached property, as mentioned therein, is hereby restored and \Vould
be construed to be an order by this court as well. The decisions cited on
behalf of the respondents on this issue, are distinguishable on facts and
are of no avail to them.
537. In Mirza Iqbal Hussain through Askari Begum Vs. State
H of UttClr Prtldesh, ( 1982) 3 SCC 516, two fixed deposit receipts and the
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 895
[PINAKI CHANDRA GHOSE, J.]

cash amount of Rs.5200/- seized from the house of the appellant and A
proved to be the subject-matter of charge under Section 5(l)(e) of the
1947 ACt, were ordered to be confiscated to the State. Responding to
the plea of want ofjurisdiction of the Special Court to order confiscation,
this Court referring to Section 4(2) of Cr.P.C., held that in terms thereof,
all offences under any law other than the Indian Penal Code have to be
B
investigated, inquired into, tried and otherwise dealt with according to
the provisions contained in the Code but subject to any enactment for
the time being in force regulating the manner or place of investigation,
enquiry, trial or othetwise dealing with such offences. lt was observed
that none of the provisions of the Prevention ofConuptionAct provided
for confiscation or prescribed the mode by which an order of confiscation c
could be passed and thus, it was ruled that the order of confiscation in
the facts of the case could not be held to be de hors jurisdiction. The
invocation of Section 452 of the Code, in absence of any provision in the
Prevention of Corruption Act, excluding its operations to effect
confiscation of the property involved in any offence thereunder, was
D
thus affirmed.
538. After analyzing the facts and circumstances of this case and
after taking into consideration all the evidence placed before us and the
arguments put forward by all the parties, we are of the unhesitant opinion
that the impugned judgment and order rendered by the High Court is
untenable and is thus set aside. We have considered the facts of this E
case and in our opinion, the percentage of disproportionate assets as
8.12% as computed by the High Court is based on completely wrong
reading of the evidence on record compounded by incorrect arithmetical
calculations, as referred to herinabove. In view of the regnant evidence
on record, unassailably proving the disproportionateness of the assets, F
as contemplated in Section 13( 1)( e) of 1988 Act, it is inessential as well
to resort to any arithmetic to compute the percentage thereof. In any
view of this matter, the decision of this Court in Krisl111a11a11dAg11ihotri
(supra) has no application in the facts of this case and therefore, the
respondents cannot avail any benefit therefrom.
G
539. Both the Courts have construed all the assets, income and
expenditure of all the accused collectively. We see no convincing reason
to adopt a different course which even otherwise, having regard to the
charge, is not warranted.
540. Noticeably, the respondents accused accepted all the findings
H
896 SUPREME COURT REPORTS [2017] 5 S.C.R.

A of the High Court. We have analyzed the evidence adduced by the parties
and we come to the conclusion that Al to A4 have entered into a
conspiracy and in furtherance of the same, Al who was a public servant
at the relevant time had come into possession of assets disproportionate
to the known sources of her income during the check period and had got
the same dispersed in the names of A2 to A4 and the firms & companies
B
involved to hold these on her behalf with a masked front. Furthermore,
the the charge of abetment laid against A2 to A4 in the commission of
the offence by Al also stands proved.
541.We have noticed that:

c In State Through Central Bureau of Investigation, New Delhi
Vs. Jitender Kumar Singh, reported in (2014) 11 SCC 724, this Court
held that once the power has been exercised by the Special Judge
under sub-section (3) of Section 4 of the P.C. Act to proceed against
non-PC offences alongwith PC offences, the mere fact that the sole
public servant dies after the exercise of powers under sub-section (3) of
D Section 4, will not divest the jurisdiction of the Special Judge or vitiate
the proceedings pending before him. Therefore, we hold that as the sole
public servant has died being Al in this matter, in our opinion, though the
appeals against her have abated, even then A2 to A4 are liable to be
convicted and sentenced in the manner as has been held by the Trial
E Judge.
The Trial Court held that even private individuals could be
prosecuted for the offence under Section l 09 of I.P.C. and we find that
the Trial Court was right in coming to the conclusion relying on the decision
of Nal/ammal (supra), wherein it was observed that acquisition and
F possession by a public servant was capable of being abetted, and observed
that Under Section 3 of the 1988 Act, the Special Judge had the power
to try offences punishing even abetment or conspiracy of the offences
mentioned in the PC Act and in our opinion, the Trial Court correctly
held in this matter that private individuals can be prosecuted by the Court
on the ground that they have abetted the act of criminal misconduct
G falling under Section 13( l )( e) of the 1988 Act committed by the public
servant.
Furthermore, the reasoning given by the Trial Court in respect of
criminal conspiracy and abetment, after scrutinizing the evidence of this
case, is correct in the face of the overwhelming evidence indicating the
H circumstances of active abetrnent and conspiracy by A2 to A4 in the
STATE OF KARNATAKA v. SELVI J. JAYALALITHA & ORS. 897
[PINAKI CHANDRA GHOSE, J.]

commission of the above offences under Section 13(l)(e) of the 1988 A
Act. This would be evident from the following circumstances:-
(i) Al had executed a General Power of Attorney in favour of
A2 in respect of Jaya Publications marked as Ex.P-995. The
circumstance of executing the power of attorney in favour of
A2 indicates that with a view to keep herself secured from B
legal complications, A 1 executed the said power of attorney
knowing fully well that under the said powers, A2 would be
dealing with her funds credited to her account in Jaya
Publications.
(ii) Constitution of various firms during the check period is another c
circumstance establishing the conspiracy between the parties.
It has come in evidence that 10 firms were constituted on a
single day. In addition, A2 and A3 started independent
concerns and apart from buying properties, no other business
activity was undertaken by them. The circumstances proved
in evidence undoubtedly establish that these films are nothing D
but extentions ofNamadhu MGR and Jaya Publications and
they owed their existence to the benevolence of Al and A2
(iii) The aforesaid firms and companies were operating from the
residence of Al and it cannot be accepted that she was
unaware of the same even though she feigned ignorance about E
the activities carried on by A2 to A4. They were residing
with Al without any blood relation between them.
(iv) Although A2 to A4 claims to have independent sources of
income but the fact of constitution offirn1s and acquisition of
large tracts ofland out of the funds provided by Al indicate F
that, all the accused congregated in the house of Al neither
for social living nor A I allowed them free accommodation
out of humanitarian concern, rather the facts and
circumstances proved in evidence undoubtedly point out that
A2 to A4 were accommodated in the house of A I pursuant G
to the criminal conspiracy hatched by them to hold the assets
of Al.
(v) Ex.D.61 reveals that before the Income Tax Authorities, the
representative of Al himself had put forth an argument that
Rs.! crore was advanced by Al to Sasi Enterprises towards
H
898 SUPREME COURT REPORTS [2017] 5 S.C.R.

A share capital and further it was submitted that on the security
of the said amount, loan was borrowed by Al, and thus she
cannot claim non-involvement with the firms.
(vi) The flow of money from one account to the other proves that
there existed active conspiracy to launder the ill-gotten wealth
B of Al for purchasing properties in the names of the firms.
(vii) The conspiracy among the accused persons is also proved
by the evidence of Sub-Registrar, North Beach, Sub-Registrar
office-PW.159 and the evidence of PW. 71 Radha Krishnan,
Horticultural officer.
c In our opinion, the Trial Court correctly came to the conclusion on
such reasoning and we hereby uphold the same.
542. Accordingly, in view of the reasoning recorded hereinabove
in the preceding paragraphs, we set aside the judgment and order of the
High Court and affirm and restore the judgment of the Trial Court in toto
D against A2 to A4. However, though in the process of scrutiny of the
facts and the law involved and the inextricable nexus of A 1 with A2 to
A4, reference to her role as well as the evidence pertaining to her had
been made, she having expired meanwhile, the appeals, so far as those
relate to her stand abated. Nevertheless, to reiterate, having regard to
E the fact that the charge framed against A2 to A4 is proved, the conviction
and sentence recorded against them by the Trial Court is restored in full
including the consequential directions.
543. Respondents A2 to A4, in view of this dete1mination and the
restoration of their conviction and sentence, would surrender before the
Trial Court forthwith. The Trial Court is hereby also ordered to take
F
immediate steps to ensure that the respondents A2 to A4 serve out the
remainder of sentence awarded them and take further steps in compliance
of this judgment, in accordance with law.
544. The appeals are allowed in the above terms.
G AMITAVA ROY, J. 1. A few disquieting thoughts that have
lingered and languished in distressed silence in mentation demand
expression at the parting with a pulpit touch. Hence, this supplement.
2. The attendant facts and circumstances encountered as above,
demonstrate a deep rooted conspiratorial design to amass vast assets
H without any compunction and hold the same through shell entities to
STATE OF KARNATAKA v. SELVl J. JAYALALlTHA & ORS. 899
[AMITAVA ROY, J.]

cover up the sinister trail of such illicit acquisitions and deceive and A
delude the process of law. Novelty in the outrages and the magnitude of
the nefarious gains as demonstrated by the revelations in the case are,
to say the least, startling.
3. A growing impression in contemporary existence seems to
acknowledge, the all pervading pestilent presence of corruption almost B
in every walk oflife, as if to rest reconciled to the octopoid stranglehold
of this malaise with helpless awe. The common day experiences indeed
do introduce one with unfailing rei,'l!larity, the variegated cancerous
concoctions of corruption with fearless impunity gnawing into the frame
and fabric of the nation's essentia. Emboldened by the lucrative yields
of such malignant materialism, the perpetrators of this malady have c
tightened their noose on the societal psyche. Individual and collective
pursuits with curative interventions at all levels are thus indispensable to
deliver the civil order from the asphyxiating snare of this escalating
venality.
4. In the above alarming backdrop of coeval actuality, judicial D
adjudication of a charge based on an anti-corruption law motivated by
the impelling necessities of time, has to be informed with the desired
responsibility and the legislative vision therefor. Any interpretation of the
provisions of such law has to be essentially purposive, in furtherance of
its mission and not in retrogression thereof. lnnovative nuances of E
evidential inadequacies, processual infirmities and interpretational
subtleties, artfully advanced in defence, otherwise intangible and
inconsequential, ought to be conscientiously cast aside with moral maturity
and singular sensitivity to uphold the statutory sanctity, lest the coveted
cause of justice is a causality.
F
5. Com1ption is a vice ofinsatiable avarice for self-aggrandizement
by the unscrupulous, taking unfair advantage of their power and authority
and those in public office also, in breach of the institutional norms, mostly
backed by minatory loyalists. Both the corrupt and the corrupter are
indictable and answerable to the society and the country as a whole.
This is more particularly in re the peoples' representatives in public life G
committed by the oath of the office to dedicate oneself to the unqualified
welfare of the laity, by faithfully and conscientiously discharging their
duties attached thereto in accordance with the Constitution, free from
fear or favour or affection or ill-will. A self-serving conduct in defiance
of such solemn undertaking in infringement of the community's H
900 SUPREME COURT REPORTS [2017] 5 S.C.R.

A confidence reposed in them is therefore a betrayal of the promise of
allegiance to the Constitution and a condemnable sacrilege. Not only
such a character is an anathema to the preambulor promise of justice,
liberty, equality, fraternal dignity, unity and integrity of the country, which
expectantly ought to animate the life and spirit of every citizen of this
country, but also is an unpardonable onslaught on the constitutional religion
B
that forms the bedrock of our democratic polity.
6. This pernicious menace stemming from moral debasement of
the culpables, apart from destroying the sinews of the nation's strnctural
and moral set-up, forges an unfair advantage of the dishonest over the
principled, widening as well the divide between the haves and have nots.
c Not only this has a demoralising bearing on those who are ethical, honest,
upright and enterprising, it is visibly antithetical to the quintessential spirit
of the fundamental duty of every citizen to strive towards excellence in
all spheres of individual and collective activity to raise the nation to higher
levels of endeavour and achievement. This virnlent affliction triggers an
D imbalance in the society's existential stratas and stalls constrnctive
progress in the overall well-being of the nation, besides disrnpting its
dynamics of fiscal governance. lt encourages defiance of the rule of
law and the propensities for easy materialistic harvests, whereby the
society's soul stands defiled, devalued and denigrated.

E 7. Such is the militant dominance of this sprawling evil, that majority
of the sensible, rational and discreet constituents of the society imbued
with moral values and groomed with disciplinal ethos find themselves in
minority, besides estranged and resigned by practical compulsions and
are left dejected and disillusioned. A collective, committed and courageous
turnaround is thus the present day imperative to free the civil order from
F the suffocative throttle of this deadly affliction.
8. Every citizen has to be a partner in this sacrosanct mission, if
we aspire for a stable, just and ideal social order as envisioned by our
forefathers and fondly cherished by the numerous self-effacing crnsaders
of a free and independent Bharat, pledging their countless sacrifices and
G selfless commitments for such cause.

Devika Gujral Appeals allowed.