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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

(Memorandum of Criminal Appeal under Section 374(2) of Cr. P. C. read with Sec. 27 of the Prevention of Corruption

Act 1988.

In the Court of the Spl. Judge XXXVI Addl. City Civil and Session Judge, Bangalore

Spl C.C. No. 208/2004

IN THE HIGH COURT OF KARNATAKA AT

BANGALORE

CRIMINAL APPEAL No. /2014 Rank of the Parties

Sessions Court/High Court Between:

Selvi J Jayalalithaa D/o Jayaram, Aged 66 years, 81/36, Poes Garden, Chennai 600 086. 1st Accused / Appellant

And:

State, by the Superintendent of Police, Vigilance and Anti-Corruption Special Investigation Cell Chennai 600 006 Complainant/Respondent

The above named Appellant states as follows:

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1. The address of the Appellant for the purpose of service of

notice, process, is that of the counsel S.Senthil, K. C. Paneerselvam

________________________________________________________,

from this Honble Court is as stated above and that of her Counsel.

2. The address of the Respondent for the aforesaid purpose is as

shown in the cause title.

3. Being aggrieved by the judgment and order of Conviction dated

27.09.2014 in Spl. C.C. No. 208/2004 passed by the learned Court of

the Spl. Judge XXXVI Addl. City Civil and Session Judge, Bangalore,

for the offences punishable under Section 13(1)(e) read with Section

13(2) of the Prevention of Corruption Act, 1988 and Sec 109 read

with 120 B of I.P.C., whereunder the learned judge has convicted A-1

for the offence under sec.13(1)(e) r/w sec 13(2) of the Prevention of

corruption Act 1988, and sentenced her to undergo for a period of 4

years of simple imprisonment and a fine of Rs.100 crores and in

default to pay the fine amount, to undergo further imprisonment for 1

year and for the offence punishable u/s 120-B I.P.C., R/w Sec 13(2) of

P.C. Act, she is sentenced to undergo simple imprisonment for 6

months and to pay a fine of Rs.1 lakh and in default to pay the fine, to

undergo further imprisonment for 1 month on the following among

other grounds. The copy of the judgment is produced as ANNEXURE-A.

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FACTS OF THE CASE

4. The Appellant states that she is the General Secretary of All

India Anna DMK and she was holding the post of Chief Minister of

Tamilnadu during the years 1991 to 1996. The Appellant demitted

office as chief minister of Tamilnadu in May 1996. Subsequently the

Political opponent of the Appellant viz., the DMK party came to

power and a case in Crime No. 13/AC/96/HQ was registered on

18.09.1996 against Appellant herein and 3 others for the alleged

offences under section 13(2) R/W 13(1) (e) of Prevention of

Corruption Act and after investigation charge sheet was filed on

04.06.1997 before the Special Judge, Chennai against them. At this

juncture it is also relevant to note that initially a private complaint was

filed by one Dr. Subramanian Swamy(PW 232) to prosecute the

Appellant under the provisions of Prevention of Corruption Act 1988.

The learned Principle Session Judge directed an enquiry under Section

202 Cr. P.C. However without permitting the enquiry to be concluded,

the then Government directed Inspector General of Police one V. C.

Perumal (PW 241) to register an FIR on 18.9.1996.

5. The Appellant submits that the Respondent has alleged that she

has acquired pecuniary resources in her name and in the names of A-

2, A-3 and A-4 and in the names of various companies floated by her

and to the tune of Rs. 66,65,20,395/-, which are disproportionate to

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her known sources of Income during the check period 01.07.1991 to

30.04.1996.

6. The Trial of the above case commenced before the Spl. Judge at

Chennai in Spl.C.C. 7 of 1997 and when it was in progress, the

political opponent of the Appellant moved the Honble Apex Court

for transfer of the case from Chennai and consequently the case was

transferred from Chennai to Bangalore in the year 2003 and

renumbered as Spl. C.C. 208/2004. As the proceedings pertaining to

transfer of the above case from Chennai to Bangalore are all matters

of record, the Appellant is not dealing with the same herein for the

sake of brevity.

7. The Respondent/prosecution has examined 259 witnesses and

marked 2341 exhibits. Also Ex. X1 to Ex.X24 and Ex. C1 to Ex.C3

were marked as Court exhibits. Material objects were also marked in

this case.

8 On behalf of the accused, they examined 99 defense witnesses

and marked 384 exhibits on there behalf. After the trial, the Spl. Court

pronounced the judgement on 27th September 2014 and sentenced A-1

to the periods which have been referred to earlier.

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GROUNDS

9. The judgment and conviction passed by the learned Spl Judge

is erroneous and contrary to law, weight of evidence and facts of the

case and has resulted in great miscourage of justice. The learned Spl.

Judge has erred in appreciating the evidence in a proper perspective.

10. The learned judge has omitted to take into account the income

and resources available to the accused during the check period.

11. The Learned Judge has failed to see that the income pleaded by

the accused have all been accepted by the income tax authorities right

upto the level of Income tax Tribunal.

12. The learned judge has also failed to see that the findings

rendered by a judicial forum has an effect and force and could not be

brushed aside in a manner as has been done by the learned Spl. Judge.

13. The learned Judge has failed to see that huge expenses

attributed to this Accused have not been established much less by

proof beyond reasonable doubt.

14. The learned Judge has failed to see that the Appellant has

proved her defense with overwhelming evidence and the Income tax

Department itself having gone into the question of her income has

accepted it to be true and genuine. Since the burden of proof on the

Accused is only preponderance of probabilities, the lower Court ought

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to have held the Appellant not guilty, especially when on the same

parameters, the income tax department has accepted the income of the

Appellant.

15. The lower Court ought to have held that the findings rendered

by the income tax department would be binding on it. Therefore the

Judgment is vitiated on account of serious mis-directions in law.

16. The learned Judge has failed to see that the Appellant acquired

only one property and made a renovation and only two constructions

which also have been duly accounted for in the Income tax Returns

and accepted by them. As regards the properties in the name of others,

the prosecution has not proved the benami nature of holding.

17. The learned Judge has failed to see that no evidence worth the

name has been adduced by the Respondent to prove the alleged

conspiracy and abetment. The lower Court allowed itself to be carried

away by presumption, assumption, conjectures and surmises and has

erroneously and wrongly concluded that there was conspiracy and

abetment.

18. The lower Court ought to have seen that mere association of

persons could never lead to conclusion of either conspiracy or

abetment.

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19. The learned Judge has overlooked the very many grave

irregularities in the registration of the case as well as investigation and

in the filing of the final report.

20. The learned Judge has overlooked various infirmities in the

prosecution case as well as the insufficiency of evidence in the

prosecution case which were all pointed out to him in great detail.

21. The learned Judge has failed to see that the entire case, right

from its inception has been engineered by the political opponent of the

Appellant, which on the face of the case of the prosecution itself is

patent and obvious.

22. The learned judge ought to have held that the income of Jaya

Publications by way of subscription can never be treated as the

income of the Appellant.

23. The learned Judge has failed to see that the prosecution has

purposely either boosted or under stated the figures to suit to its

connivance.

24. The learned Judge has though noted that very elaborate

submissions were made on behalf of A-1 on the illegalities in the

registering the FIR, the proceedings under Sec.202 Cr.P.C and during

the course of the investigation, has failed to discuss each one the

illegalities pointed out and the consequences flowing therefrom.

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25. The learned Judge failed to see that the materials collected

during the enquiry under sec.202 Cr.p.c have been relied upon when

the final report is filed u/s 173(2) of the code. This procedure is wrong

for the following reasons. Apart from the reasons it involves two

grave violations

[a] The evidence/materials collected during the course of enquiry have

been used in the final report as if it is an investigation done under

chapter 12 of the code. Thus, the learned Judge taking cognizance of

the case, had been informed that 98% of all documents and statement

of 300 witnesses were collected during the enquiry u/s 202 and

therefore they cannot be considered as materials gathered during the

investigation then the Learned Judge could not have taken cognizance

of the case at all.

[b] The accused has been also misled until the examination, at the

fag end of the trial, when (Pw.240) and (Pw.259) were examined that

they did not form part of the investigation done under the chapter 12

of the code. The learned Judge, though noticed the violations has

submitted in the arguments as not given any finding in this regard or

shown how despite the grave mistake the proceedings are still valid.

26. The Learned Judge has failed to see that the proceedings in the

complaint of (PW.232) Dr. Swami u/s. 202 is also gravely violative of

the code.

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27. The Learned Judge failed to see that sec.202 enquiry is not to

be treated as an investigation under chapter 12 of the code. The object

of the enquiry is only to find out if the complaint is true or false. The

object can never be to investigate or to support the complaint of the

private complainant.

28. The learned Judge therefore failed to see that the gathering of

documents and recording statement of 300 persons in the enquiry

u/s.202 is wholly invalid.

29. The Learned Judge has failed to see that the materials gathered

are all contrary to the investigation and the safeguards provided

therefore under the code.

30. The learned Judge failed to see that it is an admitted case that

under the guise of enquiry u/s.202. Documents have been collected

from banks, financial institutions, registration departments and from

company law authorities pertaining to all the accused of this case. All

this were gathered without a search list and without a mahazar. These

facts have been admitted by Pw.240 herself.

31. The Learned Judge failed to see statements of 300 persons

including bank officers have been examined in this case but without

following safeguards under the code.

i). The witnesses are not shown to have been examined u/s.161 of the

code.

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ii). When examined u/s.161 the person is forbidden by law to speak

the truth.

iii). Under the code a police officer is forbidden from offering any

inducement or threat to the witness.

iv). The power to examine a person u/s.161 can only be exercised

when proceedings are taken after registering the FIR under chapter 12

of the code. Thus, the violations of the code are patent.

32. The Learned Judge failed to see materially erred in marking

stating that no witness examined u/s.300 were examined as

prosecution witnesses during the trial. This statement is factually

incorrect. More than 10 witnesses has been examined including

Pw.232 Dr. Swami who had originally given the complaint before the

Sessions court in pursuant to which the enquiry u/s.202 was ordered

by the Principal Sessions Judge.

33. Further, the documents gathered during the enquiry u/s 202

have also violated the provisions of P C Act. Under this ACT to

investigate a person must have a specific authorization u/s 17 of the

Act. If he wants to investigate any bank then there must be a specific

authorization u/s 18 of the Act admittedly the persons who collected

the documents from the banks were never authorized u/s 18 of the

Act. Thus there is total violation of not only the code but also the P C

Act.

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34. The learned Judge has not examined the fact that for almost

98% of the documents marked in this case there have been no

Mahazar or Search list and the consequences resulting in the invalidity

in using such documents, it is submitted the entirety of the documents

produced by the prosecution is therefore, liable to be discarded.

35. The learned Judge materially erred in stating that all these

objections have been earlier considered and rejected. Such a theory is

wrong if only because the defects came to be light only when PW 240,

241 and 259 were examined at the fag end of the trial itself.

36. The learned Judge failed to see that registration of an FIR can

only be by SHO. Even assuming that DV and AC is a police station

[for which prosecution has not produced any document] still the

Director of DV and AC PW 241 could never register an FIR.

37. The learned Judge failed to see that V C Perumal PW 241 is a

Chief of DV and AC and Superior to PW 259. Hence, he is in the

nature of appellate authority to correct any action or inaction of the

original authority namely PW 259. Such appellate authority himself

cannot exercise the powers of the lower authority on whom the code

has conferred certain powers to register a cognizable case. The

Supreme Court Judgment in this regard though cited has been ignored

by the learned Judge.

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38. The learned Judge failed to see that PW 241 clearly admitted

that he registered the FIR has the Government had passed a three page

order requiring him to register the FIR against the A-1. Thus PW 241

not only taken over the discretion of PW 259 he had surrendered the

discretion vested in him and acted at the behest of an outside authority

like the Government.

39. The learned Judge failed to see that on account of this the FIR

registered by PW 241 makes a strange reading showing that it was not

registered by PW 241 and copy given to PW 241 himself as an

informant.

40. The learned Judge is in grave error in thinking that

illegalities/irregularities do not matter unless the accused is able to

establish that she is prejudiced infact on account of such irregularities.

The approach of this learned Judge is clearly wrong and contrary to

the code and the decisions cited before him.

41. The learned Judge failed to see that the concept of the prejudice

could be examined only in an appeal or revision and when any

irregularity is pointed out during the course of trail plainly a duty is

cast on the trial court to remedy the same. It is submitted that all or

any one of the grave defects in the procedure vitiates the prosecution

case.

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42. The learned Judge failed to see that since 1971, the case of

Sirajudeen vs State of Tamil Nadu, the Honble Supreme Court of

India has laid down that before registering a case under P C Act

particularly against the persons who held High Offices their must be a

preliminary enquiry and decision must be taken whether or not to

register the FIR. In this case, there has been no preliminary enquiry at

all.

43. The learned Judge failed to see that this has two aspects [a]

there must be a preliminary enquiry [b] that preliminary enquiry

materials must be viewed by some other person preferably a superior

and prima facie conclusion must be drawn whether or not to register

the FIR. In this case, no prosecution witness says he conducted the

preliminary enquiry, no witness for the prosecution says that he

concluded on the basis of any such preliminary enquiry that there was

a necessity to register an FIR.

44. The learned Judge failed to see that as stated earlier, the FIR

itself was a registered at the behest of the Government.

45. The learned Judge failed to see that after Sirajudeens case in

1971 a constitution Bench of Supreme Court of India in Lalithakumari

vs Government 2014[2] SCC page 1 has again stated that such a

preliminary enquiry is necessary. The decision in Sirajudeens case

was quoted and approved.

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46. The learned Judge failed to see that it is now an established

position in law that the manual governing the investigative agency

must also be strictly followed. If not the subsequent proceedings

should be invalid. The accused have marked Exb. D.384 which is the

manual of DV and AC paragraph 81 specifically requires a

preliminary enquiry to be conducted before the registration of FIR.

Thus on both the aspects non holding of preliminary enquiry itself has

vitiated the trial.

47. The learned Judge unfortunately has quoted Lalithakumari as if

it is a statement of PW 259. Thus paragraph 34.12 of the judgment is

not only wrong serious misleading and total failure to consider the

vital point of law which itself would have the effect of invalidating the

trial itself.

48. The learned Judge has wholly misunderstood the arguments

relating to proceedings u/s 202. The proceedings u/s 202 was

deliberately exceeded by the Police so that the safeguards available

during the investigation or not observed. To frustrate the learned

Principal Session Judge, Chennai who had ordered the Investigation

u/s 202 from passing orders thereon, the prosecution did not file any

report before the Principal Session Judge, Chennai thereby prevented

the learned Judge from passing any order which might be one

dropping the proceedings thus the prosecution has practiced a fraud

upon the court. The learned Judge totally misunderstood the

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arguments addressed before him and failed to consider the serious

objections raised before him.

49. The learned Judge has also failed to consider in proper

perspective the arguments of lack of authorization u/s 17 and 18 of

P.C Act to the Police Officer to investigate an Offence u/s 13(1)(e) of

the Act.

50. The learned Judge failed to consider the detailed arguments

addressed in this regard but has blindly overlooked the serious

violations by the prosecution.

[i] The first question is whether there wasauthorization to the

Officers who have taken part in investigation of this case u/s 17 or 18

of the Act.

[ii] If such authorization exists whether it is valid in law. The

learned Judge has failed to pose proper question and therefore has not

reached the proper conclusion.

51. The learned Judge failed to see that the authorization under

Exb. P.2265 is given only u/s 17 of the Act and therefore PW 259

could not have done any investigation relating to bank records.

Whereas he did so.

[i] This authorization is also invalid as he does not give any reason

why the authorization is been given by PW 240. Decisions have

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uniformly held that without reasons ex-facie the authorization would

be invalid.

52. The learned Judge failed to see that in respect of the

authorization given by PW 241 there also invalid has they do not give

reasons. Secondly, it is not even mentioned in the authorization has to

whom the authorization is being given. Further, no authorization u/s

18 of the Act is marked. Thus, there has been no valid authorization at

all in this case.

53. The learned Judge failed to see that the decision report in State

vs Surya Shankaram Karri 2006[7] 172 is an authority for the

proposition that invalidity or the lack of an authorization u/s 17 or 18

of the Act would vitiated the trial as if it would render the proceedings

invalid.

54. The learned Judge failed to see that Exb. P. 2309 and Exb.P.

2267 to 2272 are invalid for both the above stated reasons.

55. The learned Judge, it is a matter of serious consternation, as

remarked that PW 249 has buckled under pressure and disowned his

own statement. The learned Judge could not have pleaded for the

prosecution. It is settled law that where a prosecution witness deposes

then it must be taken and would be used against prosecution unless he

is declared hostile and cross examined to impeach the testimony.

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56. The learned Judge by the above process of reasoning has failed

to examine whether the authorizations above referred to is valid or not

and the invalidity pleaded by the accused have remained unexamined.

57. The learned Judge in paragraph 35.20 has concluded that the

argument that PW 259 had no authorization is not correct and he had

been duly authorized u/s 17 and 18 of the Act is not only incorrect on

fact but wholly misses the point that the authorization is invalid.

Further, the lack of authorization for number of officers who

investigated this case remains unanswered.

58. The learned Judge though has mentioned the various decisions

cited in this regard has not even chosen to say what though judgments

hold nor the learned Judge has attempted to follow the same.

59. The learned Judge ought to have come to the conclusion that

there has been no valid authorization to any of the officers who

investigated this case and also to PW 259. Hence, following Surya

Shankaram Karri case the proceedings are invalid.

60. The learned Judge ought to have held that the charges has

framed is clearly invalid, as they are vague and indefinite. The further

observations in the judgment in paragraph 36.5 that there is no

necessity to specify the individual instances of acquisition of property

or modus operandi adopted by the accused, it is submitted, is a clear

mistatement of law.

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61. The learned Judge failed to see that the charge

mentioned 32 firms said to have been floated by A2 to A4.

[a] This is clearly invalid as even the charge sheet mentions more

than 32 firms of which six are registered companies.

[b] Law knows the difference between a firm and the company.

Company has never be described as a firm.

[c] Charges must be a stand alone document. It has been viewed

and understood on its own.

[d] The crucial words are 32 firms floated by A2 to A4 during the

check period. All the six companies are not floated by A2 to A4. In

fact some of them were Directors without even being Shareholders for

a brief period. Hence, plainly charge cannot include those companies.

[e] The firms of Jaya Publications and Sasi Enterprises were in

existence early to the check period. They also must stand excluded on

a plain reading of the charge. Above factors show the charge has not

given the accused a proper case to meet. What is not plainly covered

in the charges as framed has been sought to be included in this case.

62. The learned Judge failed to see that the second charge mentions

that A1 is holding substantial extent of properties in the names of A2

to A4 and 32 firms floated by A2 to A4 during check period. How

could a charge say substantial extent of property without either

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specifying the extent of properties, are its value?. It is text book case

of vagueness in charge vitiating the trial.

63. The learned Judge failed to see that the on the charge of

abetment there cannot be a lumped up charge of abetment for A2 to

A4. There has to be a separate charge and in respect of each act of

abetment.

64. The learned Judge has brushed aside the submissions on

invalidity of charges by stating that the accused is not prejudiced and

they have led defence evidence. This approach is wrong. As per

Section 464 Cr.P.C the prejudice on account of invalidity in the

charge has no application to trial court thus on this aspect also the

proceedings are invalid.

65. The learned Judge has erred in clubbing the properties of firms

and companies who are not accused in the case. This is directly

contradictory to the decision in Anitha Hada vs God Father Travels

2012 5 SCC 661.

[a] If the court conducting the trial comes to the conclusion that the

company has abetted the accused by acquiring the properties with her

funds and keeping them in their name, then it would amount to its

having committed an offence. According to the above judgment the

company has a reputation of defend. This reputation cannot be

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tarnished without giving the company an opportunity of hearing

particularly in a criminal case.

[b] The procedure will violate fairness and article 300A which says

that all persons are entitled to right to property and they shall not be

deprived of the same except in accordance with law. The properties of

the company therefore cannot be dealt with and ultimately forfeited

without giving them an opportunity to show cause.

[c] The proceedings are also invalid as how could the accused

proved that the company acquired properties with its own funds. It

will amount to causing an impossible burden on the accused to prove

that somebody else acquired the property lawfully.

66. The learned Judge has not met any one of the arguments

advanced before him. The theory that the owners of the property

would be given opportunity in the attachment proceedings under the

Criminal Law Amendment Ordinance is clearly erroneous.

[i] The attachment of property is only optional and therefore, all

the properties might not be dealt with under the Ordinance.

[ii] Under the Ordinance the burden is on the company or the firm

to show it has some interest in the property in a prosecution the

burden will be on the prosecution to prove beyond reasonable doubt

that the property standing in the name of the company actually

belongs only to the accused. Having regard to this serious and

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important distinction between the two proceedings, it is submitted that

the proceedings under the Ordinance will not take away the necessity

of the company being made a party.

67. The learned Judge therefore ought to have excluded the

properties in the name of the companies who have not been made a

party to the proceedings in the prosecution.

68. The learned Judge ought to have held that the registration of the

FIR and filing of the final report are vitiated by malafides. As stated

earlier, the registration of the FIR was under the direction of the

Government final report is also not the independent opinion of PW

259. How could PW 259 refuse to file the final report when the FIR it

was registered at the instance of the Government and by his superior.

69. The learned Judge therefore ought to have set-aside the trial

acquitting the accused on the ground of malafide.

70. The learned Judge has erred in not giving effect to the Ex.D 370

to 373 they are the orders and final report of previous disproportionate

assets case registered against A-1. These documents show that A-1

had as on 30/01/1991 certain extent of property which taken into

consideration would result in addition of Rs.62,42,338.60 which

would have to be added to the Annexure-1 which is the extent of

property held by A-1 before the check period. The reasons given by

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the learned Judge to exclude this amount are arbitrary and

unsustainable.

[i] These documents were sent for from the DV and AC itself.

Hence, plainly admissible.

[ii] The final report has been accepted and the case closed. The

reasoning of the learned Judge whether the final report is what was

closed in the order is not known is unacceptable. Firstly, it is nobodys

case that during the same period there was yet another case for which

a final report came about. Hence, the closure report must refer only to

the final report marked through DW 99. Secondly, this also does not

matter as the period is important this refers only to the period

immediately before the check period in the present case. Thirdly, the

final report is a product of investigation which is accepted in the

judicial order. Fourthly, the decision would operate has issue estoppel.

Therefore, the learned Judge ought to have taken the value of assets

before check period as Rs.2,64,26,295.13 plus Rs. 62,42,338.60

totaling Rs.3,26,68,633.73.

71. Re Agricultural Income:

The learned Judge ought to have accepted the agricultural

income derived by A-1 during the check period in a sum of

Rs.52,50,000/-. His reasons for accepting only Rs. 10,00,000/- as total

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agricultural income deriving by her during the check period is

unacceptable and wrong.

72. The learned Judge failed to see that she had been returning

agricultural income even from 1987-88 in her Income-tax returns and

the same were being accepted, after deep scrutiny as all her

assessments were under section 143[3] of the I T Act.

73. The learned Judge it is submitted has rightly rejected the

prosecution evidence including the report filed by PW 165 and 166 as

totally unreliable.

74. The learned Judge failed to see that the agricultural income

returned by her during check period were accepted after deep

consideration.

75. The learned Judge has failed to see that under exb.D-61

Commissioner of Income-tax [Appeals],in an acutely recent judgment

has accepted the Income from the Agricultural property in a sum of

Rs. 10,50,000/- for that year. The order notes that he had deputed the

Assessing Officer to make a personal inspection and also verify the

price prevailing for varieties of agricultural produce from the land.

The order of CIT[A] shows that the officer had specifically verified

and counted the number of plants by dividing the entire area into

plots. The Officer had also examined neibouring land owner Sri Malla

Reddy and had recorded statements from him u/s 131 of the I T Act.

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The order notes the price from NABARD was obtained. It is only

after deep consideration, physical inspection ascertaining the grape

vines the Officer accepted the agricultural income returned.

76. The learned Judge failed to see that the department obtained the

details from the DV & AC or moved by DV & AC had sought to re-

open the assessment. The assessments were re-opened and but on re-

appraisal of the material including those produced by DV and AC, I T

authorities accepted the agricultural income returned by the A-1. It is

submitted that the same is binding on the trial court.

77. The learned Judge erred in remarking that A-1 ought to have

produced the evidence before the trial court to show that the land had

the potential to yield the agricultural income. This reasoning is wrong

[i] The physical inspection noted in the order Exb.D-61 which is

accepted by the Tribunal itself clearly shows the same. There is no

reason to discard the same particularly when it constituted a basis for

Judicial order.

[ii] The evidence in this regard is given by PW 64 auditor for A-1

who had deposed that he had personally accompanies the Assessing

Officer on his inspection of the grape garden at Hyderabad. His

evidence remains unchallenged. It is settled in law the defence

witnesses are entitled to equal weight and credence as prosecution

evidence.

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78. The learned Judge having accepted that A-1 had agricultural

land of 14 acres calculates on his own basis only for 10 acres. Why

this is not mentioned thus the reasoning of the learned Judge is clearly

arbitrary.

79. The learned Judge ought to have accepted the agricultural

income has returned by A-1 and which have been accepted upto the

Tribunal level has correct and proper. It may be mentioned that A-1 is

required to lead rebuttal evidence after lapse of more than sixteen

years. It would be impossible to lead evidence and what was

cultivated during the check period. That exercise had been done by the

Income-tax authorities.

80. Re Gifts:-

The learned Judge ought to have accepted the gift amount of

Rs.2,15,00,012/- received by A-1 during her 44th birthday which is her

first birthday after she led her party to victory at the polls, as the

General Secretary of AIADMK party and became Chief Minister of

the State of Tamil Nadu.

81. The learned Judge has found as a fact that the gifts were all

received by way of Bank Drafts except a small portion in cash. These

have been disclosed to the Income-tax authorities contemporaneously.

There is no reason to discard the same. The reasoning of the learned

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Judge as to why she had not received such gifts in later years is

answered in ground No.73.

82. The learned Judge failed to see that the drafts in which the gifts

were received from the party men itself was taken from unmarked

documents and marked through defense witnesses examined by

accused.

83. The learned Judge has noticed that defends witnesses D-9 to D-

20 and DW 64 and also Exhibits marked in Ex D-21 to 25, D-372 to

373 were acceptable. Even so the gifts have not been accepted. This is

unsustainable.

84. The learned Judge in paragraph 48.16 has stated the receipts of

the presents by themselves may not amount to windfall or immoral

secretions [SIC]that they are received when A-1 was holding the

office as Chief Minister of Tamil Nadu creates serious doubts and

suspicion. It is submitted that on a conjuncture and vague doubts the

resource available to the accused has been negatived.

85. The learned Judge has seriously overlooked the vital material

and his decision qua gifts is therefore stands vitiated

[i] PW 259 has in clear terms admitted in the Cross examination

about the receipt of the gifts by A-1 and how he had examined

seventy five persons who have given the gifts and accepted that the

gifts were genuine. Thus Investigation Officer himself has accepted

27

the gifts has genuine and received. Significantly PW 259 does not say

even a word that the gifts were not legal and not otherwise acceptable

as a resource available to A-1. Thus A-1 was never asked to face a

case of the gifts not being legal.

[ii] The learned Judge has not even adverted to, which is a grave

mistake that in respect of the gifts at the instance of the then DMK

Government who were inimically disposed towards A-1, the matter of

gifts was referred to CBI for prosecution. The CBI registered an FIR

ultimately filed a charge sheet. The CBI filed the charge sheet only in

respect of 19 draft among numerous drafts received as gift. Thus, CBI

did not find anything unlawful in respect of majority of drafts

received as gift. Further, the case instituted by CBI in respect of only

19 drafts was challenged before the High Court, Madras which was

pleased to quash the entire prosecution. The documents in this regard

has been marked in evidence. It is also a reported judgment which

report had also been submitted to the court. Thus on account of these

factors the gifts ought to have been accepted.

86. The learned Judge failed to see the above case law had also

been quoted in the written submissions filed. The A-1 submits that the

learned Judge has chosen to over look a significant document filed on

behalf of A-1 has apparently he had considered it to be inconvenient.

Hence, the gift pleaded in the form of Rs. 2,15,00,012/-.

28

87. Re Subscription Scheme Deposit of NAMADU MGR

amount to Rs.14,10,35,000/-:-

The learned Judge has disallowed the entire amount towards the

scheme and it is submitted must be termed as on convoluted

reasoning.

[i] While considering the income or resource pleaded by the

accused the learned Judge has failed to keep in mind the requirement

that it has to be proved only by probabilities as in a Civil Case and not

by proof beyond reasonable doubt.

[ii] In this regard, the learned Judge has not given any reason why

the decision of the Tribunal under the I T Act is not accepted by the

trial court. The Income-tax Department in scrutiny assessments had

fiercely contested the claim of deposit as the deposit being returnable

deposit could not be taxable as an income. For all the five years,

comprising the check period the Income-tax Appellate Tribunal has

accepted the receipt of deposits. It is submitted the trial court is bound

by the same.

[iii] The learned Judge also failed to see in the light of the evidence

of the decisions of the Income-tax authorities under scrutiny

assessments, the burden on the accused, if any, is very light in deed.

These parameters in judging the income is severely ignored by the

learned Judge. The learned Judge has noticed 31 defence witnesses

29

have been examined who have through whom the deposit receipts

were marked and oral evidence given for having made the deposits.

There is no reason at all why these evidences are not accepted. The

only reason given in para 50.23 is they are interested and partisan

witnesses.

[iv] This criticism is unacceptable as the News paper is Namadu

MGR and it is in effect mouth piece of the AIADMK party and

therefore, the party men subscribing to the same cannot be considered

interested. They have also deposed why they are subscribed and what

they do with a free copies received. The learned Judge therefore, is in

serious error in rejecting the oral evidence on such flimsy ground.

88. The learned Judge has made a long para in 50.21 and

considered Ex. D-230 series which are nearly 7000 applications

received from the scheme deposit holders. The theory of the learned

Judge they must have been prepared sometime in 2012 and that

appearance of old used papers and that the papers must have been

kept in the sunlight and expose to smoke to give them appearance of

old used papers. It is unfortunate that such serious observations have

been made without any basis. The learned Judge has forgotten that no

question has been asked in the cross examination to DW 88

suggesting the above theory. Without such suggestions being made

the learned Judge cannot launch into a theory that the documents were

created for the purpose of this case.

30

89. The learned Judge further erred in thinking that PW 201, the

Bank Manager had not stated that the cash deposits were subscription

money of NAMADU MGR. He only has the bank deposit and bank

deposit will show as cash. It is only the Auditor connected with

NAMADU MGR will know the nature of the deposit.

90. The learned Judge in paragraph 50.12 has remarked as under:-

What is significant to be noted is that, no where in his evidence PW

201 has stated that a sum of Rs. 14,10,35,000/- collected by way of

the deposit under the alleged scheme by A-1 and A-2 have been

credited to the bank account of Jaya Publications.

It is not known for what basis or on what reasoning this averment has

been made. A Bank Manager cannot know the nature of the cash

deposit by the account holder. He need not also know it.

91. The learned Judge has noticed in paragraph 49.2, that the

scheme deposit was in existence even earlier to the check period and

deducting the initial deposit earlier to the check period the amount of

Rs. 14.10 crores has been arrived at.

92. The learned Judge has also committed serious error and failed

to understand the accounting practice. The learned Judge in paragraph

50.2 has stated that the scheme deposit receipt has not been reflected

in the return filed by the Jaya Publication, the assessee. He had relied

upon the Ex.D-221 to 223 in this regard.

31

[i] The deposits under the scheme are returnable deposit therefore

they will not be and cannot be shown as an income. Therefore, the

above returns do not show deposit receipts on the income side of the

profit and loss account. These documents show they were shown on

the side of liabilities as they are returnable deposits. Serious

arguments addressed in this regard has been forgotten by the learned

Judge.

[ii] The learned Judge is also wrong in noting that these returns and

profit and loss account statements are attested as True Copy by Sri

Vydianathan, Chartered Accountant. It has been marked without

objection. They cannot now be disputed. The decision had also be

cited. It is not even referred. Sri Vydianathan is the partner of M/s.

Venkataraman and Co., who are the Chartered Accountants of the

firm.

[iii] The learned Judge further over looked the assessment orders

upheld by the Income-tax Appellate Tribunal for all the five years of

the check period have also been marked in this case. They are based

on the same profit and loss account and return in the above exhibit.

This itself assures their admissibility. Hence, the scheme deposit

resources pleaded on behalf of the accused ought to have been

accepted.

32

93. Re Agricultural Income of M/s. Jaya Publications:-

The learned Judge ought to have accepted the agricultural

income for all the five years received by M/s. Jaya Publications for

the leased hold lands ought to be accepted.

94. The firm M/s. Jaya Publications has also been carrying on

agricultural operations under the name Sapthagiri Farms.

[i] In the Income-tax returns, the assessment orders of which were

accepted by the Income-tax authorities upto the Income-tax Appellate

Tribunal level the agricultural income has been disclosed and

accepted, all the assessments being scrutiny assessments u/s 143[3] of

the I T Act.

[ii] As the burden on the accused is only as that of a Civil Case, the

Income-tax assessment orders that to determination by the Judicial

Form is conclusive and binding on the trial court.

[iii] In the assessment orders there is a reference to detailed

accounts have been maintained and how on perusal of the same. The

Income has been determined. After 17 long years, when the accused is

called upon to lead defense evidence she cannot lead evidence as to

the agricultural produce 17 years back. The contemporaneous Income-

33

tax proceedings accepting the agricultural income requires to be

accepted.

[iv] The learned Judge is in error in thinking a partnership firm

cannot carry on agricultural operations if there is no specific provision

in the Partnership deed in this regard. A partnership Firm unlike a

company can carry on any business if the partners agree to do the

same.

95. Re-Sales and Job Work Income of M/s. Jaya Publications:-

The learned Judge ought to have accepted the total income

during the check period under the above heading in a sum of

Rs.4,19,96,605.60. All these Income received have been disclosed to

the Income-tax authorities and assessment orders made and upheld by

the Income-tax Appellate Tribunal.

96. Disallowance of the above amount by the learned Judge is

liable to be set-aside for the following reasons:-

[i] The Income under the above heading received by Jaya

Publications has been duly disclosed in the successive years. The

profit and loss account in Ex.D-219 to 221 and Ex.D-224 to 226

established the same. For the assessment years 1991-92, 1992-93

profit and loss account statement is Ex.D-218 and 219. The

assessment orders were made accepting the accounts as aforesaid.

34

Hence, it is binding on the trial court being findings of the Judicial

Form.

[ii] The Xerox copies marked, having been signed as True Copies

by Sri Vydhyanathan, Partner of M/s. Venkataraman and Co., who are

the auditors of M/s. Jaya Publications makes it admissible.

[iii] The documents have been marked without objection and

therefore, it cannot be questioned at a later stage.

[iv] The profit and loss account statement are not reflected in the

return and lesser figure is shown as Income and therefore, the profit

and loss account exhibited above are unreliable documents. Whole

reasoning shows that the arguments addressed explaining the accounts

were forgotten by the trial court. It also shows lack of accounting

knowledge and perusal of documents filed in this case.

[v] In paragraph 49.2, the tabular coloumn filed by the accused is

shown. This document shows that as per Ex.D 219, the total income

from business is shown as Rs.16,89,680/-. However, this document

has not been kept in view. Whereas in paragraph 52 the trial court

says the income returned for the assessment year 1992-93 is

Rs.2,09,885/-. Thus the paragraph 52 of the judgment factually error.

It is unfortunate that the learned Judge has overlooked written

submission. It is more unfortunate that it has costed the accused their

liberty.

35

[vi] The Income of M/s. Jaya Publications which includes the above

figure has been accepted by the Income-tax department upto the

Appellate Tribunal level, it is binding on the court and this factor is

not even mentioned while the trial court rejects the income. It is

submitted this amounts to omitting to consider a significant evidence

nay that which binds the trial court.

97. Re Rental Income and Interest Income of M/s Jaya

Publications:-

The amount of Rs.45,30,642/- is claimed as a rental income of

M/s. Jaya Publications. Further, Rs.6 lakhs had been received in the

year 1995 and 1996 towards the Hire Charges of the Machinery. The

Interest Income accrued to the firm has also been disallowed.

[i] The learned Judge has rejected the income under the above

head on the basis that the profit and loss account statement of M/s

Jaya Publications are unreliable. It has been stated above, how the

profit and loss account are true and duly considered by the Income-tax

authorities and accepted by them upto the Appellate Tribunal level.

[ii] The above income pleaded by the accused ought to have been

accepted only on the basis of the acceptance by the Income-tax

authorities.

98. Re M/s. Sasi Enterprises and Income therefrom:-

36

The accused have earned the total income of Rs.95,92,776/-.

Every one of the income has been supported by the Income-tax

returns, profit and loss accounts and assessment orders/orders in

appeal which are all in favour of the accused. Therefore, the learned

Judge ought to have accepted the same.

99. The learned Judge has made a serious error in disallowing the

refund of Rs.16,91,000/- from Nagammal and Subramanian. The

return of the money in each year has been shown in the profit and loss

account and on the basis of which the assessment made and accepted

the Income-tax authorities. It is not proper for the trial court assume

that the Income-tax authorities have over looked the section 269SS of

the IT Act and made the assessment order.

100. The learned Judge has filed to see that Section 269SS of the IT

Act applies only to a loan or deposit. This amount is neither a loan or

deposit. This was the amount given to both the persons for purchase

of property and since the transaction did not happened the advance

was returned. For this section 269 SS has no application.

101. The learned Judge has failed to see that when prosecution has

not suggested to DW-88 that this amount is contrary to Section 269

SS of the I T Act the learned Judge on his own accord bringing

Section 269SS of the Act to disallow the amount has being illegal

receipt. If suggestion had been made during the cross examination

37

DW-88 would have had the opportunity to explain it. Hence, the

above receipt of Rs.16,91,000/- is clearly acceptable.

102. The learned Judge has failed to see the receipt of the

agricultural income by M/s. Sasi Enterprises has also been accepted

upto the Commissioner of Income-tax[Appeals]. The reasons given by

the trial court in disallowing the same is unjustified.

[i] The theory that there cannot be lease of agricultural land for 11

months is improper statement of law. Only lease of agricultural land

exceeding 11 months requires registration. It is lease only for 11

months and therefore, it is admissible and no registration is necessary.

[ii] The learned Judge has negatived the receipt of the agricultural

income only on the above fact and therefore, the judgment on this

point is clearly wrong.

[iii] The learned Judge seeking to discard the certificate of

Thasildhar Ex.D-259. There was no cross examination on the validity

of the document. Hence, it is not open to the trial court to assail it.

[iv] In paragraph 59.12, the trial court says that he is not accepting

Income-tax returns and orders thereon as the agricultural lease is not

proved. It is not correct for the above said reasons. The decisions of

the Income-tax authorities are binding on the trial court. This is

necessary to point out the serious arguments addressed and the

38

decisions cited how the orders of Income-tax authorities are binding

on the trial court has not even been adverted in the judgment.

103. Re House Hold Expenditure of the A-1:-

The prosecution has included in Annexure -4 in item 225 House

Hold expenditure of Rs.16,15,500/-. The learned Judge has accepted

the entire amount without discussion if there is an evidence for each

items of the expenditure. The decision of the trial court is vitiated on

account of the same. For example

[i] Salary for six drivers at Rs.1,500/- per month for 59 months is

Rs.5,31,000/-. Except the oral evidence of PW 198 there is no

evidence. Not even name of the six drivers is given by PW 198. The

so called drivers ought to have been examined to show if they worked

in the house hold of A-1 during the relevant time.

[ii] Salary for Electrician of Rs. 88,500/-. Here also no voucher is

produced Electrician not examined not even his name given. This is in

respect of every other expenditure.

104. The learned Judge has overlooked that the prosecution must

prove the expenditure beyond reasonable doubt. The evidence of

prosecution in this regard far short of the requirement of degree proof.

105. The learned Judge failed to see that A-1 had disclosed her

house hold expenditure in her Income-tax returns for all the years. But

39

the trial court omits to take that into consideration on the basis that

such expenditure is not supported to the documentary evidence. It is

submitted this is perverse. The expenditure has been accepted by the

Income-tax Department under scrutiny assessments. Nobody will

admit an expenditure that is against her interest. If the logic of the trial

court is correct, then her house hold expenditure declared under

Income-tax proceedings must be added to her income. What the trial

court has done amounts to taking double expenditure under the head

House Hold expenditure.

106. Re Marriage expenditure:-

The learned Judge in paragraph 67.8 has stated that the

evidence PW 181 regarding the cost of construction of PANDHAL is

mere estimation based on the information furnished to him by other

prosecution witnesses. This statement has two aspects.

[i] The learned Judge himself in paragraph 67.7 has stated rightly

that he agrees with the submission of the counsel for A-1 that PW

181 was neither an eye witness to marriage arrangement made at the

avenue or personal knowledge of the expenditure. If so the entire

evidence is liable to be rejected as hearsay.

[ii] PW 181 claimed estimated the cost of Pandhal that he obtained

the details from six named persons. None of them are examined by the

prosecution. Two of them namely Thottadharini and another have

40

been examined as defence witnesses. To them no question has been

put in the cross examination that he ever gave any information to PW

181.

[iii] The learned Judge has not discussed the cross examination of

PW 181 and the significant answers given in the cross examination.

[iv] There is no process of reasoning by which evidence of

PW 181 can be seen in the light of the expenditure pleaded by other

prosecution witnesses. Each prosecution witnesses when he speaks

about an expenditure it must be judged on its own accord. Thus the

entire expenditure relating to the marriage must be excluded.

[v] The learned Judge erred in relying upon the deposition of

PW 228 this witness requires to be excluded as he was not brought up

for cross examination despite the order permitting his cross

examination the reasons for accepting his evidence is therefore clearly

unsustainable.

[vi] The learned Judge has overlooked that many expenditure

like payment of telephone bills, electricity bills, Adayar Gate Hotel

are mere photocopies objected to at the time of marking. Since no

original has been produced they are inadmissible in evidence.

[vii] Relating to the cost of Mineral Water, Thamboolam etc., mere

oral evidence cannot be accepted as it would not amount to prove

beyond reasonable doubt.

41

107. The learned Judge failed to see that stitching charges was

paid by uncle of the bride. PW 196 himself speaks about the same. He

was not treated hostile. He received it by cheque it is reflected in the

Bank statement of DW 1 still in utter perversity. The learned Judge

says this expenditure must be included as incurred by A-1.

108. In the marriage expenditure, the decision of the trial court

is arbitrary and is based on no evidence.

[i] As stated earlier, PW 181 evidence has to be discarded for the

reasons stated above. Hence, the entire expenditure towards

PANDHAL, Chairs etc. which will exclude Rs. 5.40 crores.

[ii] The other expenditure towards silver etc are not incurred by A-

1. The expenditure towards silver is accepted by Mr. Bhaskaran,

eleder brother of A-3. Even the prosecution has contended that the

expenditure incurred by A-2 and not A-1.

[iii] DW -1 had shown how the marriage expenditure was incurred

by them and for that they had opened an account in State Bank of

India, Gopalapuram Branch, Chennai. This original pass book has

been marked as D-15. The learned Judge casts unwanted aspersion on

this document.

109. The marriage expenditure was subject matter of

proceedings before the Income-tax authorities examined the several

persons who met the expenditure and in Income-tax proceedings

42

ultimately except to the extent which A-1 admitted the expenditure all

other expenditures were deleted. This has also been upheld by the

Income-tax Appellate Tribunal. The learned Judge does not even

referred or considered the document.

110. The learned Judge had arbitrarily fixed the expenditure

incurred by A-1 for marriage of A-3 at Rs. 3 crores. The learned

Judge is not entitled to makes such adhoc expenditure that too to the

tune of Rs. 3 crores without any materials which will cross the

required degree of proof. Thus, allowing an expenditure of Rs.

8,49,06,833/- towards item 146 and 228 is clearly wrong and entire

thing must be excluded.

111. Re Two Constructions and one renovation made by

A-1 during the check period :-

The learned Judge has not independently considered the

defence evidence in this regard. Hence, whole judgment is vitiated.

On behalf of A-1, the following substantial evidence has been let in

regarding construction.

[i] A-1 has incurred the expenditure all by cheque this

contemporaneous document shows the expenditure as also the

vouchers, bill and other supporting documents.

[ii] The Income-tax department made in depth enquiry in this

regard. The Assessing Officer was sent to Mumbai and to record the

43

statement from the suppliers of Marbles and Granites. Such enquiry

was done and statement recorded, vouchers, transport bills collected

by the Income-tax Department. These have been sent for and marked

in defence DW 64 has spoken about the same in detail in his evidence.

The expenditure has returned by A-1 has been accepted by the

department and this has been upheld by the Appellate Tribunal. There

is not even a reference in the judgment about these documents.

[iii] The learned Judge has lumped all the constructions without

analyzing the prosecution evidence in respect of each constructions

and if the same is acceptable. If it is not acceptable, then no burden

will be thrown upon the accused to prove the extent of expenditure if

any.

[iv] The evidence of PWD evaluators is unacceptable highly

discrepant and based on no verifiable data. They cannot be considered

as expert nor it will satisfy the test for accepting expert evidence.

[v] The learned Judge has noted that for all the constructions

allegedly made in this case, the prosecution wants to add huge amount

but the learned Judge in paragraph 78.35 has stated

However, as the prosecution has not produced convincing evidence

in support of the value fixed by the PWD Engineers in respect of the

value of the special items and there being some dispute regarding the

payments of the architects fees, in order to meet the ends of Justice, it

44

would be proper to reduce the overall cost of constructions by 20% of

the total estimation given by the prosecution witnesses. This shows

the arbitrary nature in which the trial court has made the judgment.

[vi] In law if prosecution evidence is not acceptable then it must be

discarded and no burden will shift to the accused.

[vii] In law, accused is called upon to meet a case of the prosecution.

The Court cannot invent a third case which is not the case of the

prosecution or that of the accused.

[viii] The learned Judge has not considered prosecution evidence in

respect of each of the constructions itself vitiates the entire trial as

under the judgment, the learned Judge wants to add Rs. 22,53,92,344/-

as expenditure towards construction.

112. Re Gold Jewellery:-

The laboured reasons given by the learned Judge as regards

gold jewellery requires only to be seen to discard them as totally

wrong. The learned Judge has made a new case which is not even the

case of the prosecution of the defence which the trial court is not

entitled to do.

[i] The learned Judge failed to see that each one of her

assessments made upto 1991-92 had shown the extent of gold

jewellery and diamonds possessed by her. It comes to about 21.250

45

kilo grms. The observations of the learned Judge that she was in

possession only 7040 grams of gold jewellery is based on no material

but overlooking the materials on record. Therefore, no amount is

liable to be added towards the expenditure relating to the Gold.

[ii] In this regard, the learned Judge propose to make a

calculation on the valuation given under the Wealth-tax Act. The

such valuation cannot be adopted for two reasons

[a] Many of the gold jewellery were diamond studded the

valuation of the diamonds has to be made there is no evidence in this

regard.PW 125 admits that he has not valued the diamonds. Secondly,

valuation of the gold depend upon the year of the acquisition. It varies

year after year. When there is no evidence, on which year the

jewellery was acquired it cannot be valued.

[iii] The jewellery declared by A-2 before check period for

which also there is assessment order and return has not been seen or

taken into consideration. Thus the conclusion in the judgment that A-1

has acquired the gold and diamond jewellery worth of Rs.

2,51,59,144/- is based on no evidence and the learned Judge had made

out a third case. This itself vitiates the order.

[iv] The learned Judge failed to see that the prosecution

evidence of PW 125, 155 and 179 are all liable to be rejected as

totally unreliable and without any corroboration.

46

113. Re Silver:-

The learned Judge failed to see that in the assessment before

the check period in Ex.P 2318, it is seen that she had 116 kg silver

valued at Rs. 48,80,000/-. The total quantity allegedly recovered is

1200 kgs. Hence, there can be no addition under the head of Silver.

114. Further, no silver allegedly seized was produced or

exhibited in this case. Nor they are in possession of the court. Yet the

learned Judge has added Rs. 20,80,000/- under the head Silver

which is totally unjustified and wrong.

115. As regards to watches, the evidence of Pw.129 & Pw.130

on a plain reading of the evidence will show that they cannot be

considered as expensive. The series of judgment have shown who can

be an expert. These judgments are not even adverted to. The learned

Judge failed to see that these witnesses have also been recalled for

further examination wherein they have disowned their previous

statement. The finding that watches with a particular value must be

added to the expenditure of A-1 is clearly erroneous and wrong.

116. The entire judgment is vitiated on account of one

fundamental error. The learned Judge has lumped up together all the

properties standing in the name of A-1, other accused and Companies

which companies are not parties to this case. This is fundamentally

wrong because the nature of evidence required to show the properties

47

standing in the name of A-2 to A-4 and the properties standing in the

name of the Companies on one hand and the properties standing in the

name of A-1 and the expenditure made by her in the construction on

the other hand are entirely different. This distinction has not been kept

in view by the trial court.

117. The learned Judge failed to see unless the prosecution

establishes the benami character of the property held by A-2 to A-4

they have to be outside the Jurisdiction of this case.

118. The learned Judge mentions about what is requirement

for proof of benami character but has not given any finding nor

applied the law to the facts of this case. This significant and grave

error has vitiated the entire judgment.

119. The learned Judge after accepting that the burden rest

solely on the prosecution to establish the ingredients of the Sec.

13[1][e] of the Act has failed to analyze in respect of each item of the

property and each item of the expenditure, if prosecution has proved

the same beyond the reasonable doubt.

120. As can be seen from paragraph 89.9 the learned Judge

seems to think that the above principle is applicable only while

considering the property in the names of six companies.

121. The learned Judge failed to see the issue is not whether

A-3 and A-4 were Directors of the Companies at some point of time.

48

Issue is whether if A-1 had anything to do with the companies. It is

not even the case of the prosecution that the A-1 was ever a

shareholder or Director in the Company. She was not. Thus, what

others do has no relevance to A-1 and hence the companies must be

excluded from the case.

122. The learned Judge failed to see that the companies had

generated the funds of their own by borrowing from the Banks or by

way of Inter corporate deposits. These have been by cheque and are

bank transactions.

123. The learned Judge failed to see that 5 out of 6 companies

have filed the Income-tax returns and the Income and Expenditure and

Balance Sheets have been marked. The Companies have also

assessed to Income-tax. The scrutiny assessments have been accepted

and Income assessed. There is no reasons to discard this evidence.

The learned Judge does not even discuss this.

124. The learned Judge failed to see that merely because A-3

had signed certain letters requesting loan from Indian Bank, the

property purchased by the company in its own name could become the

property of A-3 or A-1.

125. The entire reasoning of the learned Judge as regards the

companies are vitiated by the above said fundamental defects.

49

126. The learned Judge has also remarked the prosecution has

produced direct evident to show the properties in the name of the

company were purchased out of funds emanating from the accused.

This is no finding in the eye of law as regards Section 13[1][e] of the

Act. The learned Judge does not say that the funds have emanated

from A-1. There is no prosecution evidence in this regard. Thus, all

the properties standing in the name of the Company are liable to be

excluded.

127. The learned Judge failed to see that there is no material at

all to prove conspiracy between the accused. A-2, A-3 and A-4 are all

having independent income and also borrowed from Banks and Public

Institutions.

128. The learned Judge failed to see that there is no material

nor even a finding in the judgment A2 to A4 are benamidhar of A-1.

The Companies are separate juristic entities and the properties

purchased by them cannot be that of A-1 particularly when A-1 was

never a shareholder or director of the Company.

129. The learned Judge failed to see that degree of proof

requires in the Criminal case is higher than in attachment proceedings

and therefore, the attachment proceedings under the Criminal Law

Amendment Ordinance cannot be used against the accused as has

been done by the learned Judge.

50

130. The learned Judge has failed to see that the very framing

of charge itself is defective and the learned judge has failed to remedy

it despite the order of High Court.

131. The learned judge though adjourned the pronouncement

on the question of sentence, pronounced the same only around 4.30

pm. Hence the Appellant is constrained to move this appeal in a

hurry and crave leave of this Honble court to raise some additional

grounds later.

132. The learned Judge while passing the sentence had

imposed a fine of Rs.100 crores, it is extra ordinary, unprecedented,

totally arbitrary exercise of power. The learned Judge could not have

passed an order of fine which is two times the disproportionate of

asset according to the judgment. This shows that the learned Judge

was not objective but appear to have entertained undue animosity

against the accused.

133. The learned Judge erred in specifying the mode of

payment of the huge amount of Rs. 100 crores, there may not be a

power to pass such orders for payment of fine. This is more so, when

most of the fixed deposits and cash balances are in the names of other

accused than A-1. Whereas the liability to pay the fine is cast only on

A-1.

51

134. The learned Judge further failed to see with the direction that if

the above adjustment falls short of the fine amount then gold

jewellery shall be sold except 7040 gms. There is nothing in the

judgment to identify the 7040 gms as most of the jewellery are

studded with diamonds or artificial stones. The value of such

diamonds are artificial stones are not calculated.

135. The learned Judge has further no power to direct that 5 crores

out of the fine amount shall go to the Government of Karnataka

towards the cost of trial conducted in the State of Karnataka. This is

also wrong and without authority of law. The cost of prosecuting the

person can never be recovered from the accused. Further, Honble

Supreme Court of India in the order of transfer has already provided

what should be paid by the State of Tamil Nadu. The order flies in the

face of the order passed by the Honble Supreme Court of India.

136. The learned Judge, though has heard the Appellant as

well as her counsel on question of sentence, has failed to consider the

same and not a whisper is made about it in his judgment which

amounts to violation of the right of the Appellant mandated u/s.

235(2) of Cr.P.C.

137. The Appellant seeks leave of this Honble Court to raise,

plead and urge any other grounds available to him during the course

of hearing.

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PRAYER

Wherefore, it is prayed that this Honble Court be pleased to set

aside the judgment and order of Conviction and sentence both dated

27.09.2014 and passed in Spl C.C. No. 204/2004 by the learned Spl.

Judge, XXXVI Addl. City Civil and Session Judge, Bangalore, for the

offences punishable under Section 13(1) (e) read with 13(2) of the

Prevention of Corruption Act, 1988 and Sec 109 read with 120(B) of

I.P.C., by allowing this Appeal, in the interest of justice and equity.

Bangalore,

29.09.2014 Advocate for the Appellant

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