REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 945 of 2003

Ashok Tshering Bhutia      …Appellant

Versus

State of Sikkim                   …Respondent

J U D G M E N T

Dr. B.S. CHAUHAN, J.

1. This appeal has been preferred against the judgment and order  

dated 11.12.2002 passed by the High Court of Sikkim at Gangtok in  

Criminal Appeal No. 4 of 2002, upholding the judgment and order  

dated  30.5.2002,  passed  by  the  Special  Judge,  Prevention  of  

Corruption Act, Gangtok in Criminal Case No. 4 of 1997, convicting  

the  appellant  for  the  offences  punishable  under  Section  13(2)  read  

with  Section  13(1)(e)   of  the  Prevention  of  Corruption  Act,  1988  

(hereinafter called as PC Act 1988) and awarding him the sentence of

3 years RI and a fine of Rs.10,000/-, in default thereof, to undergo a  

further RI for six months.  

2. Facts and circumstances giving rise to appeal are as under:

(A) The appellant joined the Special Branch of  Police in the State  

of Sikkim as a Constable in 1972. He was accorded promotion to the  

rank of Head Constable in 1976, and was subsequently promoted on  

an ad hoc basis to the post of Inspector in 1987. His services were  

attached  to  the  Hon’ble  Chief  Minister  of  Sikkim  in  1987.   The  

appellant  was repatriated to his parent  department,  i.e.  the Reserve  

Line, in 1994.

(B) An FIR dated 5.1.1996 was registered against the appellant by  

the DSP, CBI (ACB) under Section 13(2) r/w Section 13(1)(e) of the  

PC  Act  1988,   alleging  that  the  appellant  was  in  possession  of  

disproportionate  assets   to  the  tune  of  Rs.6,46,805/-  and  had  

accumulated the same between 1987 to 1995.

(C) The appellant  received  the  office  memorandum dated 5th/31st  

August, 1996 from the Superintendent of Police, Police Headquarters,  

Gangtok,  directing  him  to  give  a  consolidated  statement  of  the  

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immovable properties inherited and/or owned or acquired by him in  

his  name or  in  the  name of  any member  of  his  family  during  the  

period  from  1987  to  1995,  as  per  the  requirements  of  statutory  

provisions in the Sikkim Government Servants Conduct Rules, 1981  

(hereinafter called Rules 1981).  

(D) The  appellant  submitted  the  required  information  vide  

document Ext. D-4 on 10.9.1996 giving full details of the properties  

acquired  and  possessed  by  him.  The  Director  General  of  Police,  

Sikkim granted sanction  on 5.4.1997, under the provisions of Section  

19(1)(c) of the PC Act 1988 to prosecute the appellant under Section  

13(2) r/w Section 13(1)(e) of the PC Act 1988.

(E) The  charge  sheet  was  submitted  against  the  appellant  on  

23.4.1997, alleging that he was found in possession of the assets dis-

proportionate  to  his  known  sources  of  income,  to  the  tune  of  

Rs.18,25,098.69, which had been acquired by him, abusing his official  

post during the period from 1.4.1987 to 10.1.1996.

(F) The learned Special Judge vide order dated 18.6.1998 came to  

the conclusion that there was a prima facie case against the appellant  

to try him for the aforesaid charges.  

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(G) Being aggrieved, the appellant approached the High Court by  

filing the Revision Petition No.4 of 1998 challenging the aforesaid  

order.  The High Court  disposed of the said petition vide order dated  

26.8.1998  holding  that  it  would  be  the  duty  of  the  Investigating  

Officer to establish its authority at the time of commencement of the  

trial.  

(H) During  the  course  of  trial,  the  prosecution  examined  26  

witnesses  and  the  statement  of  the  appellant  was  recorded  under  

Section 313 of the  Code of Criminal Procedure,  1973 (hereinafter  

called Cr.P.C.) on 29.11.2001. Subsequent thereto, in support of his  

case the appellant also examined 4 witnesses. The Special Judge held  

the appellant guilty of the aforesaid charges vide judgment and order  

dated 30.5.2002 and awarded the punishment mentioned hereinabove.  

(I) Being aggrieved, the appellant approached the High Court by  

filing  Criminal  Appeal  No.4  of  2002.  During  the  hearing  of  the  

appeal, an argument was advanced before the High Court that a large  

number of documents, particularly the Exhibits P/16, P/17, P/23, P/33,  

P/34, P/35(I), P/35(II), P/35(III), P/62 and P/63, though relied by the  

Special  Judge  during  the  trial,  had  not  been  proved  in  evidence.  

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Therefore,  the  judgment  of  the  Special  Court  suffered  from  

fundamental  procedural  errors  and stood vitiated.   The High Court  

instead  of  deciding  the  appeal  taking  into  account  the  aforesaid  

argument,  remitted the matter to the Trial Court vide order dated 27th  

September, 2002, giving an opportunity to the prosecution to prove  

those documents and it directed the Trial Court to send the file back to  

the High Court after completing that formality.  

(J) The  Special  Judge  considered  the  matter  in  the  light  of  the  

directions issued by the High Court and on an application submitted  

by the Special Public Prosecutor on 7.10.2002, issued summons to 12  

witnesses i.e. Shri Kishore Kumar Mukhiya (PW.3), Shri P.S. Rasaily  

(PW.4),  Shri  Chandra  Prakash  Raya  (PW.6),  Shri  B.K  Gurung  

(PW.8), Shri B.K. Mukhiya (PW.9), Shri Kamal Tewari (PW.10), Shri  

R.K. Gupta (PW.11), Shri K. Somarajan (PW.12), Shri D.P. Deokotta  

(PW.15), Shri C.K. Das (PW.16), Shri Shri B.K. Trihatri (PW.23) and  

Shri  Pallav  Kenowar  (PW.24)  to  appear  before  it  to  prove  the  

aforesaid  documents,  and  dates  were  fixed  for  that  purpose  from  

25.10.2002 to 30.10.2002.

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(K) In  spite  of  all  this,  the  prosecution  failed  to  prove  the  said  

documents as the original records of the aforesaid documents, which  

related  to  the  bills  of  telephone  and  electricity  expenditure  

aggregating to Rs.1,04,364/-. Shri R.K. Gupta, Sr. Accounts Officer  

(PW.11)  appeared  before  the  Special  Court  and  admitted  that  the  

original S.R.C. could not be produced in the court as the same was not  

traceable in respect of the telephone bill. Same remained the position  

in respect of the electricity charges as Shri D.P. Deokota, Executive  

Engineer,  Power  Department  (PW.15),  admitted  that  the  original  

demand register could not be brought as the same was not traceable.  

With the aforesaid remarks, the Special Judge referred the matter back  

to  the  High  Court  and  the  High  Court  heard  the  arguments  and  

dismissed the appeal vide impugned judgment and order. Hence, this  

appeal.  

3. Shri  V.A.  Bobde,  learned  senior  counsel  appearing  for  the  

appellant,  has raised a large number of issues contending  inter-alia  

that  the  FIR could  not  have  been  lodged  without  the  written  

order/direction  of  the  Superintendent  of  Police.  The  FIR had been  

lodged in flagrant violation of statutory requirements. The question of  

putting the criminal law into motion could not arise.  Executive action  

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has  not  only  been  taken  irresponsibly,  it  tantamounts  to  abuse  of  

power. The courts below not only ought to have disapproved of it but  

should have refused to act upon it.  The police authorities cannot be  

permitted to take advantage of an abuse of power.   Sanction could not  

have been accorded without considering the contents of Ex.D-4; no  

preliminary  enquiry  had  been  conducted  against  the  appellant,  as  

required  by  various  judicial  pronouncements  of  this  Court.  The  

documents very heavily relied upon by the prosecution had never been  

proved in spite of remand of the case for that purpose. Remand even  

for limited purpose to prove the documents was impermissible as it is  

tantamount to giving an opportunity to the prosecution to fill up any  

lacunae in its case. The procedural error committed by the prosecution  

is  not  curable.  Therefore,  the  entire  prosecution  proceedings  stood  

vitiated. More so, the evidence adduced by the appellant in defence  

regarding the income from his rented premises had been discarded on  

flimsy grounds e.g. that the tenants had not shown their income and  

expenditure  while  filling  up  the  income  tax  returns,  nor  had  the  

tenants produced the rent receipts or on the basis that there was some  

discrepancy between the income derived  from the tenants and the  

amounts shown from other sources while submitting the Ext. D-4.   

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Shri Bobde has further submitted that the Explanation added to  

Section 13(1)(e) of PC Act 1988 did not exist in the Prevention of  

Corruption Act, 1947 (hereinafter called Act 1947). It provides that  

“known sources of income” means income received from any lawful  

source and such receipts had been submitted by the appellant in Ext.  

D-4. No such requirement was there under Section 5(1)(e) of the Act,  

1947  and,  therefore,  the  start  of  check  period  from  1.4.1987  and  

computation of income was not based on any income derived from  

other  lawful  sources.  The  addition  of  the  Explanation  to  Section  

13(1)(e)  led to a material  change in the statutory requirement.  The  

courts below failed to appreciate the submission that the PC Act 1988  

was made applicable in the State of Sikkim on 12.9.1988, though in  

other States it had come into force earlier.  The prosecution failed to  

make any segregation between the periods covered by the two Acts, as  

regards  income,  expenditure,  savings,  assets  with  the  result  that  

prosecution  had  not  proved  any  of  the  said  documents  from  

12.9.1988. Thus, the entire proceedings had been conducted in gross  

violation  of  the  rights  of  the  appellant  under  Article  21  of  the  

Constitution of India. In view of the above, the appeal deserves to be  

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allowed and judgments and orders of the courts below are liable to be  

set aside.

4. On  the  contrary,  Shri  P.P.  Malhotra,  Additional  Solicitor  

General and Shri A. Mariarputham, learned senior counsel appearing  

for the respondents, have vehemently opposed the appeal pointing out  

that the document Ext.D-4 was not submitted in compliance of the  

statutory  requirement  of  Section  19  of  Rules  1981.  The  fact  that  

documents  particularly  the  telephone  and  electricity  bills  were  not  

proved even after remand itself does not affect the merits of the case,  

as the same cannot be a ground for disbelieving the said documents.  

The said bills had been prepared on the basis of the registers, though  

registers could not be traced and the bills could not be proved.  

Addition of Explanation to Section 13(1)(e) of the PC Act 1988  

does not make any difference whatsoever in view of the fact that once  

the  prosecution  successfully  establishes  the  possession  of  dis-

proportionate  assets  the  burden  shifts  to  the  accused  to  prove his  

innocence. Mere acquisition of property does not itself constitute an  

offence under the P.C. Act, 1988, rather it is failure to satisfactorily  

account  for  such possession of  property  that  makes  the  possession  

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thereof objectionable as offending the law.  The issue of segregation  

of income and expenditure etc.  for the periods covered by the two  

Acts is not required to be considered as PC Act 1947 as well as PC  

Act 1988 provided for the possession of assets at any time during the  

period of his office.  Defence evidence has rightly been discarded by  

the courts below being not reliable. Any error, omission or irregularity  

in the sanction does not vitiate the trial unless a failure of justice has  

been occasioned thereby. Thus, the appeal is devoid of any merit and  

is liable to the dismissed.  

5.      We have considered the  rival  submissions  made by learned  

counsel for the parties and perused the record.  

6. This Court in P. Sirajuddin etc. v. The State of Madras etc.,  

AIR 1971 SC 520; and State of Haryana & Ors.  v. Ch. Bhajan Lal  

& Ors., AIR 1992 SC 604 has categorically held that before a public  

servant is charged with an act of dishonesty  which amounts to serious  

mis-demeanor and an FIR is lodged against him, there must be some  

suitable  preliminary  enquiry  into  the  allegations  by  a  responsible  

officer. Such a course has not been adopted by the prosecution though  

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the law declared by this Court is binding on everyone in view of the  

provisions of Article 14 of the Constitution, which would by all means  

override  the  statutory  provisions  of  the  Cr.P.C.  and  such  an  

irregularity is not curable nor does it fall within the ambit of Section  

465 Cr.P.C.  However, as the issue is being raised first time before  

this Court, it is not worth further consideration. More so, the aforesaid  

observations do not lay down law of universal application.  

7. Much has been argued on the issue that investigation has been  

conducted  without  a  proper  order  in  writing,  by  an  officer  not  

authorised otherwise and sanction has been granted under Section 19  

of the PC Act 1988 vide order dated 5.4.1997, without taking into  

account  the assets and income shown in Ext. D-4, though the said  

assets represented known sources of income within the meaning of  

Section 13(1)(e) and the Explanation attached thereto.  It has further  

been submitted that an invalid sanction cannot be the foundation for  

the  prosecution  and  thus,  the  entire  investigation  and  trial  stood  

vitiated as the investigation without proper authorisation and invalid  

sanction goes to the root of the jurisdiction of the court and so the  

conviction cannot stand.

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8. The  issues  raised  hereinabove  are  no  more  res  integra.  The  

matter  of investigation by an officer not authorised by law has been  

considered by this Court time and again and it has consistently been  

held  that a defect or irregularity in investigation however serious, has  

no  direct  bearing  on  the  competence  or  procedure  relating  to  

cognizance or trial and, therefore, where the cognizance of the case  

has in fact been taken and the case has proceeded to termination, the  

invalidity  of  the precedent  investigation does not  vitiate  the result,  

unless a miscarriage of justice has been caused thereby. The defect or  

irregularity in investigation has no bearing on the competence of the  

Court  or  procedure  relating  to  cognizance  or  trial.  (Vide  H.N.  

Rishbud & Anr.  v. State of  Delhi, AIR 1955 SC 196; Munnalal v.  

State of U.P., AIR 1964 SC 28,  Khandu Sonu Dhobi & Anr. v. The  

State of Maharashtra, AIR 1972 SC 958;  State of M.P. v. Bhooraji  

&  Ors., AIR  2001  SC  3372;   State  of  M.P.  v.  Ramesh  Chand  

Sharma, (2005) 12 SCC 628; and State of M.P. v. Virender Kumar  

Tripathi, (2009) 15 SCC 533).   

9. In Kalpnath Rai v. State (Through CBI), AIR 1998 SC 201,  a  

case under the provisions of Section 20 of Terrorist and Disruptive  

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Activities (Prevention) Act, 1987, this Court considered the issue as to  

whether an oral direction to an officer to conduct investigation could  

meet  the  requirement  of  law.  After  considering  the  statutory  

provisions, the Court came to the conclusion that as  oral approval  

was obtained from the competent officer concerned, it was sufficient  

to legalise the further action.  

10. In  State  Inspector  of  Police,  Vishakhapatnam  v.  Surya  

Sankaram Karri,  (2006) 7 SCC 172, a two-Judge Bench  of  this  

Court  had taken a contrary view without taking note of the earlier  

two-Judge  Bench  judgment  in  Kalpnath  Rai (supra)  and  held  as  

under:  

“When  a  statutory  functionary  passes  an   order, that too authorizing a person to carry out a   public function like investigation into an offence,   an order in writing was required to be passed. A  statutory  functionary  must  act  in  a  manner  laid   down in the statute. Issuance of an oral direction   is not contemplated under the Act. Such a concept   is  unknown  in  administrative  law.  The  statutory  functionaries  are  enjoyed  with  a  duty  to  pass  written orders. However, the Court taking note of   subsequent  proceedings  recorded its  conclusions  as under:  

‘It  is  true that only on the basis of illegal   investigation  a  proceeding  may  not  be  quashed  unless miscarriage of justice is shown, but in this   

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case  as  we  have  noticed  hereinbefore,  the   respondent had suffered miscarriage of justice as   the investigation made by PW 41 was not fair’.”   

11. In the instant case, the officer has mentioned in the FIR itself  

that he had orally been directed by the Superintendent of Police to  

investigate the case.  It is evident from the above that the judgments in  

Kalpnath  Rai (supra)  and  Surya  Sankaram Karri  (supra)  have  

been decided by two Judge Benches of this Court and in the latter  

judgment, the earlier judgment of this Court in Kalpnath Rai (supra)  

has not been taken note of.  Technically speaking it can be held to be  

per incuriam.  There is nothing on record to show that the officer’s  

statement is not factually correct.  We have no occasion to decide as  

which of the earlier judgments is binding.  It is evident that there was  

a direction by the Superintendent of Police to the officer concerned to  

investigate the case.  Thus, in the facts and circumstances of the case,  

the issue as to whether the oral order could meet the requirement of  

law remains merely a technical issue. Further, as there is nothing on  

record to show that the investigation had been conducted unfairly, we  

are not inclined to examine the issue further.

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12. Same remained the position regarding sanction. In the absence  

of anything to show that any defect or irregularity therein caused a  

failure of justice, the plea is without substance. A failure of justice is  

relatable to error, omission or irregularity in the sanction. Therefore, a  

mere error, omission or irregularity in sanction is not considered to be  

fatal  unless  it  has  resulted  in  a  failure  of  justice  or  has  been  

occasioned thereby. Section 19 (1) of the PC Act 1988 is a matter of  

procedure and does not go to the root of the jurisdiction  and once the  

cognizance has been taken by the Court under Cr.P.C.,  it cannot be  

said that an invalid police report is the foundation of jurisdiction of  

the court to take cognizance. (Vide  Kalpnath Rai (supra);  State of  

Orissa v. Mrutunjaya Panda,  AIR 1998 SC 715;  State by Police  

Inspector  v.  Sri  T.  Venkatesh  Murthy, (2004)  7  SCC  763;  

Shankerbhai Laljibhai Rot  v. State of  Gujarat,  (2004) 13 SCC  

487;  Parkash Singh Badal & Anr. v. State of Punjab & Ors., AIR  

2007 SC 1274;  and  M.C.  Mehta v.  Union of  India & Ors.  (Taj  

Corridor Scam),  AIR 2007 SC 1087).   

13. In State of Haryana & Ors.  v. Ch. Bhajan Lal & Ors., AIR  

1992 SC 604, this Court dealing with the same provisions held that a  

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conjoint reading of the main provision, Section 5-A(1) (new Section  

17) and the two provisos thereto, shows that the investigation by the  

designated  police  officer  was  the  rule  and  the  investigation  by  an  

officer of a lower rank was an exception. It  has been ruled by the  

Court in several decisions that Section 6-A (new Section 23) of the  

Act was mandatory and not directory and the investigation conducted  

in  violation  thereof  bears  the stamp of  illegality,  but  that  illegality  

committed  in  the  course  of  an  investigation,  does  not  affect  the  

competence and the jurisdiction of the Court for trial and where the  

cognizance  of  the  case  has  in  fact  been  taken  and  the  case  has  

proceeded  to  termination,  the  validity  of  the  proceedings  is  not  

vitiated unless a miscarriage of justice  has been caused as a result of  

the illegality in the investigation.   

In  the  facts  and  circumstances  of  the  case,  we  are  also  not  

willing to examine the correctness of submissions made by Mr. Bobde  

in respect  of segregation of period covered by two Acts and as to  

whether ratio of the judgment of this Court in State of Maharashtra  

v. Krishnarao Dudhappa Shinde, (2009) 4 SCC 219, runs counter to  

the  ratio  in  State  of  Maharashtra  v.  Kaliar  Koil  Subramaniam  

Ramaswamy, AIR 1977 SC 2091, wherein the earlier  judgment in  

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Sajjan  Singh  v.  State  of  Punjab,  AIR  1964  SC  464,  had  been  

explained.  

14. In view of the above, the facts and circumstances of the instant  

case require an examination of the case on merits.  

Additional Evidence:

15. Additional evidence at appellate stage is permissible, in case of  

a failure of justice. However, such power must be exercised sparingly  

and only in exceptional suitable cases where the court is satisfied that  

directing additional evidence would serve the interests of justice. It  

would depend upon the facts and circumstances of an individual case  

as to whether such  permission should be granted having due regard to  

the concepts of fair play, justice and the well-being of society. Such  

an  application  for  taking  additional  evidence  must  be  decided  

objectively,  just  to cure  the irregularity.  The primary object  of  the  

provisions of Section 391 Cr.P.C. is the prevention of a guilty man’s  

escape  through  some  careless  or  ignorant  action  on  part  of  the  

prosecution before the court or for vindication of an innocent person  

wrongfully  accused,   where  the  court  omitted  to  record  the  

circumstances essential to elucidation of truth. Generally, it should be  

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invoked when formal proof for the prosecution is necessary.  (Vide  

Rajeswar Prasad Misra v. The State of West Bengal & Anr., AIR  

1965  SC  1887;  Ratilal  Bhanji  Mithani  v.  The  State  of  

Maharashtra  & Ors.,  AIR 1971 SC 1630;  Rambhau & Anr.  v.  

State of Maharashtra, AIR 2001 SC 2120; Anil Sharma & Ors.  v.  

State  of  Jharkhand,  AIR  2004  SC 2294;  Zahira  Habibulla  H.  

Sheikh & Anr. v. State of Gujarat & Ors., (2004) 4 SCC 158; and  

Sidhartha Vashisht @ Manu Sharma v. State (NCT of Delhi), AIR  

2010 SC 2352).  

16. This Court in State of Gujarat v. Mohanlal Jitamalji Porwal  

& Anr., AIR 1987 SC 1321, dealing with the issue held as under:

“…To deny the opportunity to remove the formal   defect  was  to  abort  a  case  against  an  alleged   economic  offender.  Ends  of  justice  are  not   satisfied only when the accused in a criminal case   is  acquitted.  The community  acting  through  the  State and the Public Prosecutor is also entitled to   justice. The cause of the community deserves equal   treatment  at  the  hands  of  the  court  in  the  discharge of its judicial functions. The community  or  the  State  is  not  a  persona-non-grata  whose   cause  may  be  treated  with  disdain.  The  entire   community is aggrieved if the economic offenders   who ruin the economy of the State are not brought   to book. A murder may be committed in the heat of   moment  upon  passions  being  aroused.  An  

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economic  offence  is  committed  with  cool   calculation and deliberate design with an eye on  personal  profit  regardless of  the consequence to   the community. A disregard for the interest of the   community can be manifested only at the cost of   forfeiting the trust and faith of the community in  the system to administer justice in an even-handed  manner without fear of criticism from the quarters   which view white collar crimes with a permissive   eye unmindful of the damage done to the national   economy and national interest.….”  

17. In  Rambhau  (supra), a  larger  Bench  of  this  Court  held  as  

under:  

“Incidentally,  Section 391 forms an exception to   the general rule that an Appeal must be decided on  the evidence which was before the Trial Court and  the powers being an exception shall always have   to be exercised with caution and circumspection  so  as  to  meet  the  ends  of  justice. Be  it  noted  further  that  the  doctrine  of  finality  of  judicial   proceedings does not stand annulled or affected in  any  way  by  reason  of  exercise  of  power  under   Section 391 since the same avoids a de novo trial.   It is not to fill up the lacuna but to subserve the   ends  of  justice. Needless  to  record  that  on  an  analysis of the Civil Procedure Code, Section 391  is  thus  akin  to  Order  41,  Rule  27  of  the  C.P.   Code.”  (Emphasis added)

18. In view of the above, the law on the point can be summarised to  

the effect that additional evidence can be taken at the appellate stage  

in  exceptional  circumstances,  to  remove  an  irregularity,  where  the  

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circumstances so warrant in public interest.  Generally, such power is  

exercised to have formal proof of the documents etc. just to meet the  

ends  of  justice.  However,  the  provisions  of  Section  391  Cr.P.C.  

cannot  be  pressed  into  service  in  order  to  fill  up  lacunae  in  the  

prosecution’s case.

19. In  Santa Singh v. State of Punjab, AIR 1956 SC 526;  Tori  

Singh & Anr. v. State of Uttar Pradesh,  AIR 1962 SC 399; and  

State of Rajasthan v.  Bhawani & Anr., AIR 2003 SC 4230, this  

Court  placed  reliance  upon  its  earlier  judgment  and  came  to  the  

conclusion  that  any  information  or  statement  made  before  the  

investigating officer under Section 161 Cr.P.C. requires corroboration  

by sufficient evidence. In the absence of any corroboration thereof,  it  

would merely be a case where some witnesses had stated a particular  

fact  before  the  investigating  officer  and  the  same  remained  

inadmissible in law, in view of the provisions of Section 162 Cr.P.C.  

20. In the instant case, the electricity and telephone bills have not  

been proved at the time of trial.  The High Court while hearing the  

appeal  remitted  the  matter  back  to  the  Trial  Court  to  allow  the  

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prosecution to prove the said documents and in spite of giving full  

opportunity  to  the  prosecution  witnesses,  the  said  bills  were  not  

proved.  Though  it  may  be  permissible  in  law  as  referred  to  

hereinabove to get the formal approval of the documents by adducing  

additional  evidence,  but  it  cannot  be  held  even  by  any  stretch  of  

imagination that in absence of proving the said documents the same  

can  be  relied  upon.  Therefore,  the  judgments  of  the  courts  below  

suffered from a fundamental procedural error and the amount shown  

in  the  said  bills  to  the  tune  of  Rs.1,04,364/-  cannot  be  taken  into  

account.   

21. For the sake of argument, even if it is assumed that the form  

required  to  be  filled  up  under  Rule  19  of  the  Rules  1981  was  

mandatory and the appellant failed to fill up the same, for the reason  

that the form had never been prescribed under the Rules 1981, and he  

ought  to  have  declared  the  same  on  plain  papers,  as  he  did  on  

instructions of the superior authority after lodging of the FIR against  

him,  the  document  Ext.D-4  could  not  be  rejected  merely  on  the  

ground that it had been submitted after the lodging of the FIR. Not  

filling up the form under the mandatory requirement of  Rule 19 of  

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Rules  1981  may  render  the  appellant  liable  for  disciplinary  

proceedings under service jurisprudence,  but that itself  cannot be a  

ground for rejection of the said documents in toto without examining  

the contents thereof. In this regard, we are of the considered view that  

the  courts  below  have  committed  a  grave  error  and  the  contents  

thereof should have been examined.   

22. In  Bharat Sanchar Nigam Limited & Anr. v. BPL Mobile  

Cellular Limited & Ors., (2008) 13 SCC 597, this Court held that  

“prescribed” means that prescribed in accordance with law and  not  

otherwise.

Thus, in view of the above, furnishing information about assets  

and income etc. on a plain paper was not required as the Government  

failed to prescribe the said form.

23. It has been urged by the respondents that the contents of Ext.D-

4 were rightly rejected as evidence by the High Court for two reasons;  

(i)    Ext.D-4 is not in compliance with the Rules 1981; and (ii) the  

statements  of  the  defence  witnesses  corroborating  the  contents  of  

Ext.D-4 must be discarded because they did not account for rent paid  

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in their IT returns or show any receipts or any documents to support  

their statements.  

24. The relevant portion of Rule 19(i)(a) of the Rules 1981 reads as  

under:  

“19(i)a  government  servant  shall,  on  his  first   appointment to any service or post and thereafter   at the close of every financial year, submit to the   government return of his assets and liabilities  in  such  form  as  may  be  prescribed  by  the  Government giving full particulars…..”                                                               (Emphasis added)

25. The contention of the respondents regarding non compliance of  

the Rules 1981 adversely affecting the evidentiary value of  Ext.D-4  

must be rejected for at least two reasons;  

(i) The  Rules  1981  are  not  rules  of  evidence.  The  

admissibility  and  probative  value  of  evidence  is  

determined  under  the  provisions  of  the  Indian  

Evidence  Act,  1872.  These  rules  are  merely  

service  rules  by  which  government  servants  in  

Sikkim are  expected  to  abide.  Consequently,  the  

respondent has not been able to provide any cogent  

reason  why  the  contents  of  Ext.D-4  should  be  

disregarded; and

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(ii) Rule 19(i)(a) of the Rules 1981 does undoubtedly  

require  government  servants  to  on  first  

appointment to any service or post and thereafter at  

the  close  of  every  financial  year  submit  to  the  

government the return of their assets and liabilities.  

However,  it  is  to  be  noted  that  the  said  rule  

envisages  that  public  servants  will  submit  such  

returns  in  a  prescribed  form.  Despite  being  

repeatedly  questioned  by  this  Court,  the  

respondents  were  unable  to  produce  such  form.  

Thus, it  cannot be said that the appellant did not  

comply with the said rule as in the absence of such  

a form it was impossible for him to have done so  

(through no fault of his own). In any event, failing  

to submit such returns even if there had been no  

such a  form, would make the appellant  liable to  

face the disciplinary proceedings under the service  

rules  applicable  at  the  relevant  time.   The  

provisions of the Rules 1981 cannot by any stretch  

of  imagination  be  said  to  have  the  effect  of  

rendering  evidence  inadmissible  in  criminal  

proceedings under the PC Act 1988.   

          Thus, in such a fact situation, the appellant could not be  

fastened with  criminal  liability  for  want  of  compliance  of  the  said  

requirement of the Rules.  

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26. Learned senior counsel appearing for the respondent has placed  

a  great  deal  of  emphasis  on  the  argument  that  Mohanlal  Goyal,  

D.W.1,  Nagaram Agrawal,  D.W.2,  Thakur Bansari,  D.W.3 and Dil  

Hassasan Ansari, D.W.4, did not show that they had taken the shops  

from the appellant on rent as they did not disclose the said fact in their  

respective income tax returns nor did they produce sales tax returns or  

rent receipts. There can be no doubt that the fact that DWs 1-4 did not  

show the transactions in their IT returns reduces their credibility in the  

eyes of the Court, but that does not have any impact on the contents of  

Ext. D-4 itself.

27. Thus, it becomes clear that the High Court erred in not placing  

reliance  on  the  evidence  contained  in  Ext.  D-4.  Taking  into  

consideration  the  contents  of  Ext.  D-4,  it  becomes  clear  that  the  

alleged unexplained income of the Appellant is only Rs. 2,71,613.64.  

This unexplained income is significantly lower than what had been  

alleged by the prosecution. It must also be borne in mind that check  

period had been very long and consequently, it is easily possible that a  

small  over-estimation  of  the  Respondent’s  expenditure  would  have  

been multiplied and could easily explain the said amount.  Thus, the  

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submission made on behalf of the appellant  that  there has been an  

over-estimation of  his expenses, further telephone bills and electricity  

bills aggregating to Rs.1,04,364.00 have not been proved before the  

Trial Court and even after remand by the High Court when witnesses  

were recalled, if accepted would mean that the alleged unexplained  

income is further reduced to Rs.1,67,249.64.    

28. No doubt  the  prosecution  has to  establish  that  the  pecuniary  

assets acquired by the public servant are disproportionately larger than  

his known sources of income and then it is for the public servant to  

account for such excess. The offence becomes complete on the failure  

of the public servant to account or explain such excess.  

29. The High Court has found that the appellant was in possession  

of  assets  amounting  to  Rs.18,25,098.69   for  which  he  could  not  

account.  In  coming  to  this  conclusion,  the  High  Court  made  the  

following calculations:

Known  income  of  appellant  and  his wife during the check period

Rs.14,54,629.81

Expenditure  of  the  appellant  and Rs.12, 75,928.05

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his wife during the check period Actual assets in possession of the  appellant and his wife at the end of  the check period

Rs.20,38,715.45

Likely savings of appellant and his  wife at the end of the check period

Rs.14,54,629.81(-) Rs.12, 75,928.05

       = Rs. 1,78,701.76

Known assets of the appellant and  his  wife  at  the  beginning  of  the  check period   

          Rs.34,915.00

Unexplained  income  of  the  appellant and his wife at the end of  the check period

Rs.20,38,715.45 (-)            Rs.34,915  (-)  Rs.  1,78,701.76           = Rs.18,25,098.69        

30. The High Court has held that the appellant has amassed assets  

disproportionate  to  his  known  sources  of  income.  However,  

throughout the investigation, trial and appeal, the income contained in  

Ex.D-4 has been totally ignored in computing the income from known  

sources  as  being  Rs.14,54,629.81.  B.K.  Roka,  PW.19,  the  

Superintendent of Police has admitted that even before sanction was  

granted on 5.4.1997, the accused had complied with Rule 19 and that  

Ex.D-4,  subject  to mathematical  accuracy,  for the years 1987-1994  

would aggregate to Rs.15,88,400/- according to the break-up of each  

financial  year.  Similarly,  Chand  Prakash  Raya,  P.W.6  stated  that  

through Ex.D-4 the accused had complied with Rule 19. Therefore,  

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this  figure should have been added to income from known sources  

which  would  have  then  amounted  to  Rs.30,43,029.81.  Even  if  the  

expenditure is taken to be Rs.12,75,928.05, the likely savings amount  

is Rs.17,67,101.76 and not Rs.1,78,701.76. Thus, the gap between the  

assets  worth  Rs.20,38,715.45  and  the  savings  of  Rs.17,67,10176  

would be Rs.2,71,613.69 instead of Rs.18,25,098.69. Thus, the table  

above should have read as follows:  

Known  income  of  appellant  and  his  wife  during  the  check period  (+)  income  explained  and  accounted for in Ext. D-4

Rs.14,54,629.81 (+)           Rs.15,88,400.00         =Rs.30,43,029.81

Expenditure  of  the  appellant  and  his wife during the check period

Rs.12, 75,928.05

Actual assets in possession of the  appellant and his wife at the end  of the check period

Rs.20,38,715.45

Likely  savings  of  appellant  and  his  wife  at  the  end of  the  check  period

Rs.14,54,629.81(-) Rs.12, 75,928.05 (+)

          Rs.15,88,400.00          = Rs.17,67,101.76

Known assets of the appellant and  his  wife  at  the  beginning  of  the  check period   

          Rs.34,915.00

Unexplained  income  of  the  appellant and his wife at the end  of the check period

Rs.20,38,715.45  (-)  Rs.  1,78,701.76  (-)Rs.15,88,400.00  =  Rs.2,71,613.69

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Thus, it is evident from the above table that only a sum of Rs.  

2.71 lacs (approx.) remains unexplained.

31. In  State of Maharashtra v. Pollonji Darabshaw Daruwalla,  

AIR 1988 SC 88, this Court held as under:  

“….on a consideration of  the matter  it  cannot be   said  that  there  is  no  disproportion  or  even  a  sizeable  disproportion…..There  are  also  other   possible errors in the calculations in regard to point   (c). The finding becomes inescapable that the assets   were in excess of the known sources of income. But   on  the  question  whether  the  extent  of  the  disproportion is such as to justify a conviction for   criminal  misconduct….,  a  somewhat  liberal  view  requires to be taken of what proportion of assets in  excess of the known sources of income constitutes   “disproportion” for purposes of Section 5(1)(e)  of   the Act.”                                         (Emphasis added)

32. In view of the  above,  at  the  most  a sum of Rs.  2,71,613.69  

remained unexplained. The appellant entered into in service in 1972  

and there is  no break up so far as  assets and expenditures etc.  are  

concerned in the charge sheet though the check period covered both  

the Acts i.e.  P.C. Acts,  1947 or 1988.  Even if  the said amount is  

spread over the period from 1987 to 1996, the alleged unexplained  

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income  remains merely a marginal/paltry sum which any government  

employee can  save every year.  

33. In view of the  above,  we are  of  the considered opinion that  

judgments and orders of the courts below cannot be sustained in the  

eyes of law and they are liable to be set aside.  The appeal is allowed.  

The  judgments  and  orders  of  the  courts  below  dated  11.12.2002  

passed by the High Court of Sikkim at Gangtok in  Criminal Appeal  

No. 4 of 2002 and judgment and order dated 30.5.2002 passed by the  

Special  Judge,  Prevention  of  Corruption  Act,  Gangtok in  Criminal  

Case No. 4 of 1997 are hereby set aside.

…………………………….J. (P. SATHASIVAM)

  ..……………………..…….J.

New Delhi,            (Dr. B.S. CHAUHAN) February 25,  2011

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