Judgment 1. This appeal is by the accused against the judgment of conviction and order of sentence date 12-6-2006 passed by the Principal Sessions and Special Judge, Dharwad in Special (SVC) C.C.No.13 of 1991 convicting the appellant-accused for the offence punishable under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 (for short, ‘the Act of 1988’) and sentencing him to undergo rigorous imprisonment for 3 years and to pay fine of Rs.3,89,000/-for the aforesaid offence. 2. The appellant was appointed in Hubli Dharwad Municipality as a Surveyor on 1-7-1966. Later he was promoted as a Junior Engineer and ultimately retired from service on 30-3-1994. 3. According to the case of the prosecution, C.W.1-Y.V. Patil, Police Inspector, Lokayuktha Police Station, Dharwad, by 2-2-1989 received credible information that the appellant-accused has amassed wealth disproportionate to his known source of income by means of corrupt activities. On 2-2-1989, C.W.1 obtained a search warrant and conducted search in the house of the appellant on 2-2-1989 in the presence of the panchas and seized incriminating documents and other evidence from the house of the appellant. Investigation by C.W.1 revealed that the appellant has two minor sons and a daughter who were studying in schools and he has got 5 brothers who had no landed properties in Agadi Village or elsewhere; that on plot bearing Nos.14089/13 and 14088 situated in Rajatgiri on Kalghatagi Road, the accused has constructed ground floor of the house in 1980 measuring about 10 squares and first floor in the year 1998 apart from a outhouse built in the year 1978-79 and the approximate value of the house as well as the outhouse was more than 3 lakhs; that the appellant has purchased a Maruthi car in the name of his wife on 14-12-1988, the approximate value of which is about Rs.60,000/-; that he has also maintained a scooter cost of which was about Rs.10,000/-. His investigation revealed that the accused has assets approximately valued at Rs.3,70,000/-and the total amount of assets and expenditure was to the extent of Rs.6,12,000/-as against the income from the salary and other sources of Rs.2,80,000/-and thus he owns surplus asset worth Rs.3,32,000/-.On that basis, the investigation was continued and after getting the immovable properties and other assets held by the appellant-accused, assessed by competent persons, the Investigating Officer found that during the period from 1-7-1966 to 2-2-1989, the assets acquired by the accused was worth Rs.10,38,029/-and the expenditure incurred by him during that period was Rs.2,51,775.64 paise and his total income from all sources was Rs.3,86,137.27 paise and thereby came to the conclusion that the appellant-accused has amassed assets to the tune of Rs.9,03,667.56 paise in excess of his known sources of income which works out to 234%. The details worked out by the Investigating Officer to reach the conclusion was as under: Particulars Assets Figure arrived at by the I.O. in Rs. 1. House property 5,66,820.00 2. Plot No.4178 20,000.00 3. Car 61,101.00 4. Luna and Kinetic Swift 18,098.00 5. Plot No.19 9,500.0 6. N.S.Cs. 4,320.00 7. Indira Vikas Patra 250.00 8. Shares in Co-operative Society 3,060.00 9. Members fees and deposit in Co-operative Society 5,606.00 10. Deposits in the names of wife and daughter 10,000.00 11. LIC Premium 15,406.91 12. Bank Balance 9,275.29 13. Household articles 2,42,591.00 14. Handloans given by the accused 72,000.00 Total assets 10,38,029.20 Verifiable Expenditure 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Stamp Duties Penalties paid to HDMC Domestic expenditure Electricity charges Telephone charges Education expenses Bank locker rent Dogs maintenance Payment of house tax Stall Rent House rent paid Vehicles maintenance Total 3,883.50 3,000.00 1,02,302.00 1,523.20 11,080.30 14,971.00 925.00 3,150.00 5,497.54 19,200.00 12,760.00 4,385.00 1,82,677.54 Non-verifiable Expenditure 1. 2. 3. 4. 5. 6. 7. 8. 9. Medical Expenses Religious functions and ceremonies Expenses over cosmetics Expenses over cloths Entertainment expenses Wages paid to servants Newspapers and Magazines Fuel and cooking gas Interest paid on loans Total Total of all three heads 4,500.00 9,000.00 7,500.00 12,500.00 7,500.00 9,900.00 6,468.75 4,500.00 4,157.60 66,026.35 12,88,731.89 Income from proved source Particulars Figure held as proved in Rs. 1. Salary 2,03,730.98 2. House building advance 20,000.00 3. Refrigerator loan 3,800.00 4. HDMC C-operative Society Loan 5,000.00 5. Gold loan 10,000.00 6. Sale proceeds of Plot No.90 94,000.00 7. 1. Salary 2,03,730.98 2. House building advance 20,000.00 3. Refrigerator loan 3,800.00 4. HDMC C-operative Society Loan 5,000.00 5. Gold loan 10,000.00 6. Sale proceeds of Plot No.90 94,000.00 7. LIC amount received 4,145.40 8. Rent received 45,310.00 9. Bank interest received 150.89 Total 3,86,137.27 Thereafter, the Investigating Officer issued notices to the appellant and called upon him to furnish his explanation as to the assets acquired by him disproportionate to his known sources of income. In reply to the same, the appellant submitted his detailed explanation as per Ex.D.4 wherein he inter alia contended that the valuation made by the Investigating Officer regarding the house property is excessive; that since his father was running a cement agency business and since he owned a lorry in the name of his wife, cost of construction should have been reduced by at least 35% as against the standard rates fixed by PWD; that his family owned large extent of agricultural lands and other properties and for the purpose of construction, his father had contributed large extent of amount in addition to the utilisation of income derived from running the lorry and those incomes have not been taken into account by the Investigating Officer, that domestic expenditure assessed by the Investigating Officer is highly exaggerated; that his contribution to the domestic expenses was hardly about 60% whereas the remaining amount was being contributed by his father and wife from out of the income derived by them from the businesses run by them; that valuation of the household articles is also excessive and that majority of the household articles have been purchased from out of the income derived by his father and wife from their businesses; that during this check period, he for himself and on behalf of his family members namely, father, brothers and sisters as their power of attorney holder, had sold several plots held by their family and had received huge amounts by means cheques and demand drafts which have been credited to his Bank account as is clear from several documents seized by the Investigating Officer during the search of his house and inspite of the same, those monies so received by him have not been taken into account. Thus according to the explanation of the appellant, he had not acquired any asset by means of corrupt activities nor he possessed asset disproportionate to his known sources of income. Thus according to the explanation of the appellant, he had not acquired any asset by means of corrupt activities nor he possessed asset disproportionate to his known sources of income. However, the Investigating Officer not being satisfied with the explanation regarding the valuation of the house and other immovable properties and not accepting the contention of the appellant with regard to the receipt of large extent of money from sale of the plots and other properties on account of non-disclosure of those receipts in his annual assets and liability statement which ought to have been submitted to the disciplinary authority, after obtaining necessary sanction for prosecution from the Competent Authority filed the charge-sheet against the appellant alleging that the appellant-accused has acquired assets disproportionate to his known sources of income to an extent of Rs.6,48,695/-. 4. Upon service of summons, the appellant appeared before the learned Special Judge and pleaded not guilty for the charges levelled against him and claimed to be tried. The prosecution in order to bring home the guilt of the accused, examined P.Ws.1 to 52 and relied on under Section 313 of Cr.P.C., the accused denied all the incriminating circumstances appearing against him in the evidence of the prosecution witnesses. By way of defence, he examined himself as D.W.1 and also relied on documentary evidence marked as Exs.D.1 to D.16. In his evidence he reiterated the stand taken by him in his explanation-Ex.D.4. However, the learned Special Judge after hearing both sides and on assessment of oral as well as documentary evidence, held that the prosecution has proved that the accused has acquired assets disproportionate to his known source of income to an extent of Rs.3,86,137.27 paise. The basis on which the learned Special Judge arrived at this figure is as under: Particulars Figure arrived at by the Court as proved in Rs. 1. House property 4,53,456.00 2. Plot No.4178 20,000.00 3. Car 61,101.00 4. Luna and Kinetic Swift 18,099.00 5. Plot No.19 9,500.0 6. N.S.Cs. 4,320.00 7. Indira Vikas Patra 250.00 8. Shares in Co-operative Society 3,060.00 9. Members fees and deposit in Co-operative Society 5,606.00 10. Deposits in the names of wife and daughter 10,000.00 11. LIC Premium 15,406.91 12. Bank Balance 9,275.29 13. Household articles 1,45,555.00 14. Handloans given by the accused 47,000.00 Total assets 8,02,629.20 Verifiable Expenditure 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Shares in Co-operative Society 3,060.00 9. Members fees and deposit in Co-operative Society 5,606.00 10. Deposits in the names of wife and daughter 10,000.00 11. LIC Premium 15,406.91 12. Bank Balance 9,275.29 13. Household articles 1,45,555.00 14. Handloans given by the accused 47,000.00 Total assets 8,02,629.20 Verifiable Expenditure 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Stamp Duties Penalties paid to HDMC Domestic expenditure Electricity charges Telephone charges Education expenses Bank locker rent Dogs maintenance Payment of house tax Stall Rent House rent paid Vehicles maintenance Total 3,883.50 3,000.00 1,02,302.00 1,523.20 11,080.30 14,971.00 925.00 2,520.00 5,497.54 19,200.00 12,760.00 4,385.00 1,82,047.54 Non-verifiable Expenditure 1. 2. 3. 4. 5. 6. 7. 8. 9. Medical Expenses Religious functions and ceremonies Expenses over cosmetics Expenses over cloths Entertainment expenses Wages paid to servants Newspapers and Magazines Fuel and cooking gas Interest paid on loans Total Total of all three heads 4,500.00 9,000.00 7,500.00 12,500.00 5,000.00 00.00 3,000.00 4,500.00 4,157.60 50,157.00 10,34,832.54 Income from proved source Particulars 1. Salary 2. House building advance 3. Refrigerator loan 4. HDMC C-operative Society Loan 5. Gold loan 6. Sale proceeds of Plot No.90 7. LIC amount received 8. Rent received 9. Bank interest received Figure held as proved in Rs. 2,03,730.98 20,000.00 3,800.00 5,000.00 10,000.00 94,000.00 4,145.40 45,310.00 150.89 5. As could be seen from the above, with regard to the valuation of the house property arrived at by the Investigating Officer, the learned Special Judge allowed a deduction of 20% by accepting the contention of the accused that on account of the user of lorry as well as the cement in which his father was dealing and also self-supervision, the cost of construction would be less by 20% than the standard rate. He also gave a deduction to an extent of 40% with regard to the investment for the household articles being the investment from father and wife of the accused. The learned Special Judge also gave reduction of Rs.25,000/-towards hand loan said to have been given by he accused. 6. The learned Special Judge did not accept the defence of the accused with regard to receiving large extent of money by sale of plots on the ground that those details have not been furnished to his official superiors in the form of filing annual assets and liabilities statement as required by Conduct Rules. 6. The learned Special Judge did not accept the defence of the accused with regard to receiving large extent of money by sale of plots on the ground that those details have not been furnished to his official superiors in the form of filing annual assets and liabilities statement as required by Conduct Rules. By placing reliance on the explanation to Section 13(1)(e) of the Act, the learned Special Judge held that since those amounts have not been disclosed in the annual assets and liability statement for the particular years, the same cannot be taken as income from known sources, therefore, the learned Special Judge came to the conclusion that the accused has acquired asset to the extent of Rs.3,89,000/-over and above his known source of income. In that view of the matter, the learned Special Judge convicted the appellant-accused for the offence punishable under Section 13(1)(e) read with Section 13(2) of the Act and sentenced him to imprisonment and also to pay fine as stated supra. Being aggrieved by the said judgment, the appellant-accused is before this Court in this appeal. 7. I have heard the learned Counsel for the appellant and also the Counsel appearing of the respondent-Lokayuktha Police. 8. I have perused the judgment under appeal and also voluminous records secured from the Court below. 9. Being aggrieved by the said judgment, the appellant-accused is before this Court in this appeal. 7. I have heard the learned Counsel for the appellant and also the Counsel appearing of the respondent-Lokayuktha Police. 8. I have perused the judgment under appeal and also voluminous records secured from the Court below. 9. The contentions urged by the learned Counsel for the appellant before this Court are as under: That the learned Special Judge though has allowed reductions to an extent of 20% with reference to the valuation of the house property on the premise that the construction was done by the accused under his self-supervision by utilizing the lorry owned by him in the name of the wife and also by utilizing the cement at a cheaper ate since his father was dealing in cement business, has failed to give deduction to an extent of 35% as contended by he appellant since the standard rate fixed by the PWD included approximately about 10% on supervision 2% on curing etc.; that the rejection of the defense of accused regarding receipt of large extent of monies by sale of plots, on the ground of non-disclosure of those amounts received by appellant-accused in the annual assets and liability statement as required by the Conduct Rules, is bad in law for the reason that the explanation to Section 13(1)(e) of the Act of 1988 which is found in the Act of 1988 was conspicuously absent in Prevention of Corruption Act, 1947 and since the major portion of the check period was falling within the period during which the old Act was in operation, the non-disclosure of receipt of those incomes in the annual assets and liability statement ought not have been viewed seriously and the Special Court ought to have accepted the same and on that basis proceeded to record the finding; that since the appellant had received all those amounts by means of cheques and demand drafts which were later credited to his Bank accounts, it could not be said that they are all unaccounted sums, therefore, failure on the part of the appellant to disclose receipts of said monies to the disciplinary authorities by filing assets and liability statement alone could not be a ground to reject those incomes and if the said income is taken into account, there are no circumstances to hold that the appellant has acquired assets disproportionate to his known sources of income; that several heads under which the Court below has accepted the value of assets and verifiable expenditure are not based on Special Judge in this behalf is perverse and is liable to be set aside. By placing reliance on the judgment of the Apex Court in the case of Ashok Tshering Bhutia v State of Sikkim(AIR 2011 SC 1363 : (2011) 4 SCC 402 : 2011 AIR SCW 1505 :2011 Cri.L.J. 1770 (SC) : (2011) 2 SCC (Cri.) 258), learned Counsel contended that even in the absence of disclosure of those incomes in the assets and liability statement, the appellant-accused is entitled to prove those incomes in the manner provided by the provisions of the Indian Evidence Act, 1872 and the Court ought to have considered the evidentiary value of those materials independently of the circumstance of non-disclosure in the assets and liability statement. It is his submission that non-disclosure of those incomes in the assets and liability statement as required by the Conduct Rules may be a ground to initiate disciplinary actions as per the service Rules but that by itself cannot be a ground to totally reject the documentary evidence proved in accordance with the provisions of Indian Evidence Act; that the provisions relating to filing of annual assets and liability statement in the Conduct Rules are procedural laws as such, the admissibility and prerogative value of the evidence led by the appellant with regard to the receipt of the income from sale of the properties should have been considered in the light of the provisions of he Indian Evidence Act. He further contended that, since provision similar to explanation to Section 13(1)(e) of the 1988 Act was not found in 1947 Act, and since the major portion of the check period was falling within the period in which the old Act was in force, the learned Special Judge could not have pressed the explanation to Section 13(1)(e) of the Act of 1988 into service to the case on hand and such exercise made by the learned Special Judge is contrary to the Article 20, clause (1) of Constitution of India. 10. Per contra, the learned Counsel appearing for the respondent-State south to justify the judgment under appeal and contended that the learned Special Judge on proper appreciation of oral and documentary evidence has recorded a finding that the accused has acquired assets disproportionate to his known sources of income and the said finding being sound and reasonable having regard to the evidence on record, does not call for interference by this Court. The Court below has rightly not accepted the contention of the accused with regard to the receipt of the huge extent of amounts from sale of plots in the light of explanation to Section 13(1)(e) of Act of 1988 as admittedly, the appellant has not disclosed the said income in his annual assets and liability statement required to be submitted to the disciplinary authority as per the Conduct Rules. Therefore, he contended that the judgment does not suffer from perversity or illegality calling for interference by this Court. 11. In the light of the above, following points arise for consideration: 1. Whether the learned Sessions Judge is justified in holding the appellant-accused guilty of the offences charged against him? 2. Whether the judgment under appeal suffers from perversity or illegality calling for interference by this Court? 12. I have bestowed my serious considerations to the submissions made by learned Counsel on both sides. Let me briefly refer to the legal position. Section 13 of the Act of 1988 deals with various situations when the public servant said to have committed criminal misconduct. Clause (e) of sub-section (1) of Section 13 is applicable when the public servant or any person on his behalf is in possession or has at any time during the period of his office been in possession of any pecuniary resources or property disproportionate to his known sources of income which the public servant cannot satisfactorily account. Clause (e) of sub-section (1) of Section 13 of the Act of 1988 corresponds to clause (e) of Section 5 of 1947 Act. In State of Maharashtra v. Wasudeo Ramchandra Kaidalwar ( AIR 1981 SC 1186 : 1981 Cri.L.J. 884 (SC) : 1981 SCC (Cril.) 690 : (1981) 3 SCC 199 ), the Apex Court while interpreting scope of Section 5(1)(e) of 1947 Act has held thus in paras 12 and 13. 12. The provision contained in Section 5(1)(e) of the Act is a self-contained provision. The first part of the section casts a burden on the prosecution and the second on the accused. When Section 5(1)(e) uses the words “for which the public service cannot satisfactorily account”, it is implied that the burden is on such public servant to account for the sources for the acquisition of disproportionate assets. The first part of the section casts a burden on the prosecution and the second on the accused. When Section 5(1)(e) uses the words “for which the public service cannot satisfactorily account”, it is implied that the burden is on such public servant to account for the sources for the acquisition of disproportionate assets. The High Court, therefore, was in error in holding that a public servant charged for having disproportionate assets in his possession for which he cannot satisfactorily account, cannot be convicted of an offence under Section 5(2) read with Section 5(1)(e) of the Act unless the prosecution disproves all possible sources of income. 13. That takes us to the difficult question as to the nature and extent of the burden of proof under Section 5(1)(e) of the Act. The expression “burden of proof” has two distinct meaning as: (1) the legal burden i.e., the burden of establishing the guilt; and (2) the evidential burden i.e., the burden of leading evidence. In a criminal trial, the burden of proving everything essential to establish the charge against the accused lies upon the prosecution, and that burden never shifts. Notwithstanding the general rule that the burden of proof lies exclusively upon the prosecution, in the case of certain offences, the burden of proving a particular fact in issue may be laid by law upon the accused. The burden resting on the accused in such cases is, however, not so onerous as that which lies on the prosecution and is discharged by proof of a balance of probabilities. The ingredients of the offence of criminal misconduct under Section 5(2) read with Section 5(1)(e) are the possession of pecuniary resources or property disproportionate to the known sources of income for which the public servant cannot satisfactorily account. To substantiate the charge, the prosecution must prove the following facts before it can bring a case under Section 5(1)(e), namely, (1) it must establish that the accused is a public servant; (2) the nature and extent of the pecuniary resources or property which were found in his possession; (3) it must be proved as to what were his known sources of income i.e., known to the prosecution; and (4) it must prove, quite objectively, that such resources or property found in possession of the accused were disproportionate to his known sources of income. One these found ingredients are established, the offence of criminal misconduct under Section 5(1)(e) is complete, unless the accused is able to account for such resources or property. The burden then shifts to the accused to satisfactorily account for his possession of disproportionate assets. The extent and nature of burden of proof resting upon the public servant to be found in possession of disproportionate assets under Section 5(1)(e) cannot be higher than the test laid by the Court in V.D. Jhingan v. State of Uttar Pradesh, AIR 1966 SC 1762 i.e., to establish his case by a preponderance of probability. That test was laid down by the court following the Dictum of Viscount Sankey, L.C. in Woolmington v. Director of Public Prosecutions, 1935 AC 462. The High Court has placed an impossible burden on the prosecution disprove all possible sources of income which were within the special knowledge of the accused. As laid down in C.S.D. Swami v State, AIR 1960 SC 7 , the prosecution cannot, in the very nature of things, be expected to know the affairs of a public servant found in possession of resources or property disproportionate to his known sources of income i.e., his salary. Those will be matters specially within the knowledge of the public servant within the meaning of Section 106 of the Indian Evidence Act, 1872. Section 106 reads: “When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him”. In this connection the phrase “burden of proof” is clearly used in the secondary sense, namely, the duty of introducing evidence. The nature and extent of the burden cast on the accused is well-settled. The accused is not bond to prove his innocence beyond all reasonable doubt. All that he need do is to bring out a preponderance of probability”. This view has been reiterated by the Constitution Bench of the Apex Court in the case of K. Veeraswami v Union of India and Others ((1991) 3 SCC 655 : 1991 SCC (Cri.) 734. The relevant observations are founding para 72 in K. Veeraswami’s decision: “72. The soundness of the reasoning in Wasudeo Ramchandra Kaidalwar’s case has been doubted. Counsel for the appellant urged that the view taken on Section 5(3) cannot be imported to clause (e) of Section 5(1) and the decision, therefore, requires reconsideration. The relevant observations are founding para 72 in K. Veeraswami’s decision: “72. The soundness of the reasoning in Wasudeo Ramchandra Kaidalwar’s case has been doubted. Counsel for the appellant urged that the view taken on Section 5(3) cannot be imported to clause (e) of Section 5(1) and the decision, therefore, requires reconsideration. But we do not think that the decision requires reconsideration. It is significant to note that there is useful parallel found in Section 5(3) and clause (e) of Section 5(1). Clause (e) creates a statutory offence which must be proved by the prosecution. It is for the prosecution to prove that the accused or any person on his behalf, has been in possession of pecuniary resources or property disproportionate to his known sources of income. When that onus is discharged by the prosecution, it is for the accused to account satisfactorily for the disproportionality of the properties possessed by him. The section makes available statutory defence which must be proved by the accused. It is a restricted defence that is accorded to the accused to account for the disproportionality of the assets over the income. But the legal burden of proof placed on the accused is not so onerous as that of the prosecution. However, it is just not throwing some doubt on the prosecution version. The legislature has advisedly used the expression “satisfactorily account”. The emphasis must be on the word “satisfactorily”. That means the accused has to satisfy the Court that his explanation is worthy of acceptance. The burden of proof placed on the accused is an evidential burden though not a persuasive burden. The accused however, could discharge that burden of proof 'on the balance of probabilities’ either from the evidence of the prosecution and/or evidence from the defence.” The Apex Court has further held thus in para 74: “74. Counsel for the appellant however, submitted that there is no law prohibiting a public servant having in his possession assets disproportionate to his known sources of income and such possession becomes an offence of criminal misconduct only when the accused is unable to account for it. Counsel seems to be focussing too much only on one part of clause (e) of Section 5(1). The first part of clause (e) of Section 5(1) as seen earlier relates to the proof of assets possessed by the public servant. Counsel seems to be focussing too much only on one part of clause (e) of Section 5(1). The first part of clause (e) of Section 5(1) as seen earlier relates to the proof of assets possessed by the public servant. When the prosecution proves that the public servant possesses assets disproportionate to his known sources of income the offence of criminal misconduct is attributed to the public servant. However, it is open to the public servant to satisfactorily account for such disproportionality of assets. But that is not the same thing to state that there is no offence till the public servant is able to account for the excess of assets. If one possesses assets beyond his legitimate means, it goes with-out saying that the excess is out of ill-gotten gain. The assets are not drawn like nitrogen from the air. It has to be acquired for which means are necessary. It is for the public servant to prove the source of income or the means by which he acquired the assets. That is the substance of clause (e) of Section 5(1). In the case of State of Madhya Pradesh v Awadh Kishore Gupta and Others, ( AIR 2004 SC 517 : 2004 Cri.L.J. 598 (SC) : 2004 SCC (Cri.) 353 : (2004) SCC 691), the Apex Court while interpreting the scope of Section 13(1)(e) of the 1988 Act has held thus in paras 5 to 7: “5. Section 13 deals with various situations when a public servant can be said to have committed criminal misconduct. Clause (e) of sub-section (1) of the Section is pressed into service against the accused. The same is applicable when the public servant or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession, for which the public servant cannot satisfactorily account pecuniary resources or property disproportionate to his known sources of income. Clause (e) of sub-section (1) of section 13 corresponds to clause (e) of sub-section (1) of section 5 of the Prevention of Corruption Act, 1947 (referred to as 'the old Act'). But there has been drastic amendments. Under the new clause, the earlier concept of "known sources of income" has undergone a radical change. Clause (e) of sub-section (1) of section 13 corresponds to clause (e) of sub-section (1) of section 5 of the Prevention of Corruption Act, 1947 (referred to as 'the old Act'). But there has been drastic amendments. Under the new clause, the earlier concept of "known sources of income" has undergone a radical change. As per the explanation appended, the prosecution is relieved of the burden of investigating into "source of income" of an accused to a large extent, as it is stated in the explanation that "known sources of income" mean income received from any lawful source, the receipt of which has been intimated in accordance with the provisions of any law, rules orders for the time being applicable to a public servant. The expression "known sources of income" has reference to sources known to the prosecution after thorough investigation of the case. It is not, and cannot be contended that "known sources of income" means sources known to the accused. The prosecution cannot, in the very nature of things, be expected to know the affairs of an accused person. Those will be matters "specially within the knowledge" of the accused, within the meaning of Section 106 of the Indian Evidence Act, 1872 (in short the 'Evidence Act'). 6. The phrase "known sources of income" in section 13(1)(e) (old Section 5(1)(e)) has clearly the emphasis on the word "income". It would be primary to observe that qua the public servant, the income would be what is attached to his office or post, commonly known as remuneration or salary. The term "income" by itself, is elastic and has a wide connotation. Whatever comes in or is received, is income. But, however, wide the import and connotation of the term "income", it is incapable of being understood as meaning receipt having no nexus to one's labour, or expertise, or property, or investment, and having further a source which may or may not yield a regular revenue. These essential characteristics are vital in understanding the term "income". Therefore, it can be said that, though "income" is receipt in the hand of its recipient, every receipt would not partake into the character of income. Qua the public servant, whatever return he gets of his service, will be the primary item of his income. These essential characteristics are vital in understanding the term "income". Therefore, it can be said that, though "income" is receipt in the hand of its recipient, every receipt would not partake into the character of income. Qua the public servant, whatever return he gets of his service, will be the primary item of his income. Other incomes which can conceivably are income qua the public servant, will be in the regular receipt from (a) his property, or (b) his investment. A receipt from windfall, or gains of graft, crime, or immoral secretions by persons prima facie would not be receipt from the "known sources of income" of a public servant. 7. The legislature has advisedly used the expression "satisfactorily account". The emphasis must be on the word "satisfactorily" and the legislature has, thus, deliberately cast a burden on the accused not only to offer a plausible explanation as to how he came by his large wealth, but also to satisfy the Court that his explanation was worthy of acceptance”. This view has been reiterated by the Apex Court in the case of D.S.P. Chennai v K. Inbasagaran ( AIR 2006 SC 552 : 2005 AIR SCW 6208 : 2006 Cri.L.J. 319 (SC) : 2006 SCC (Cri.) 325 : (2006) 1 SCC 420 ). Keeping in mind the above said principles let me consider the case on hand and find out as to whether the prosecution has discharged the initial burden rested on it and if so, whether the accused has satisfactorily accounted for the pecuniary sources put forth by him by way of his defence. 13. It is an admitted fact that the appellant-accused joined the service in Hubli-Dharwad Municipality as Surveyor on 1-7-1966 and later he was promoted as Junior Engineer. According to the prosecution, during the check period viz., 1-7-1966 to 2-2-1989, the appellant-accused has acquired assets disproportionate to his known sources of income. The appellant has not disputed that his total salary during the check period was Rs.2,03,730.98 paise as found by Investigating Officer and also by the Court below. There is no dispute that the appellant during the check period constructed a house on the plot owned by him after obtaining prior permission from the disciplinary authority. The appellant has not disputed that his total salary during the check period was Rs.2,03,730.98 paise as found by Investigating Officer and also by the Court below. There is no dispute that the appellant during the check period constructed a house on the plot owned by him after obtaining prior permission from the disciplinary authority. Though the Investigating Officer assessed the value of the house property at Rs.5,66,820/-, the learned Special Judge accepting the contention of the accused in part, allowed deduction to an extent of 20% and has assessed the value of the house property at Rs.4,53,456/-. Similarly though the Investigating Officer assessed the value of the household articles found in the residential house of the appellant-accused at Rs.2,42,591/-, the learned Special Judge allowed deductions to an extent of 40% by accepting the contention of the appellant that his contribution to the purchase of household articles as well as domestic expenditure was only 60% whereas remaining 40% was by his father and wife, on that basis, the learned Special Judge has arrived at the value of household articles at Rs.1,45,555/-. However, no deduction is made in the domestic expenditure as assessed by the Investigating Officer at Rs.1,02,302/-. The major area of controversy is only with regard to the valuation of the house property, valuation of the household articles and the domestic expenses there is no dispute that the father of the appellant-accused till his death was residing with the accused. The evidence also establishes that his father and wife jointly were running a cement agency business. The evidence also has clearly established that a truck was purchased in the name of the wife of the accused and this was in fact included in the assets and liability statement submitted by the accused to the Disciplinary Authority for the year 1984-1985 as per Ex.P.43. Therefore, the contention of the appellant-accused that on account of the user of lorry owned by his wife in the construction activities and also user of cement at cheaper rate resulted in reduction of cost of construction is highly probable. In fact, the learned Special Judge has accepted the said contention. In addition to this, the appellant-accused is an Engineer by himself. Therefore, it is reasonable and also quite natural that the construction activity must have been supervised by him only and on account of this, cost of construction must have come down further. In fact, the learned Special Judge has accepted the said contention. In addition to this, the appellant-accused is an Engineer by himself. Therefore, it is reasonable and also quite natural that the construction activity must have been supervised by him only and on account of this, cost of construction must have come down further. The submission of the learned Counsel that the standard rate fixed by PWD with regard to the construction would also include profit margin of the contractor apart from other overhead charges his great force since, a contractor by profession has to make out profit from the works which he undertakes. Therefore, in my considered opinion, the learned Special Judge having accepted the contention of the appellant in this behalf ought to have allowed reduction to an extent of not less than 30 to 35% over and above the valuation on the basis of the standard rates fixed by PWD. If that is accepted and even if another 10% reduction is given, the valuation of the house property would be reduced by roughly about Rs.60,000/-. Having regard to the fact that the wife of accused was running a lorry and was also a partner in cement business along with her father-in-law, it is reasonable to presume that she was getting good income from the said businesses. No doubt, the appellant-accused has not disclosed those income derived by his wife and father as members of his family to the Disciplinary Authority in the form of assets and liability statements. However on that ground alone it cannot be said that all the household articles found in the residential house of the accused at the time of search and seizure was purchased by accused and accused alone invested money for purchase of those household articles. Possibility of the income of the wife and the father who were residing with the accused in the same family having been utilised for acquisition o those household articles cannot be ruled out. That is the reason why the learned Special Judge has allowed a deduction of about 40% over the valuation of the household articles. This deduction was allowed accepting the contention of the appellant-accused that his contribution to the household and domestic expenditure was only 60% and remaining 40% was from his wife and father. 14. That is the reason why the learned Special Judge has allowed a deduction of about 40% over the valuation of the household articles. This deduction was allowed accepting the contention of the appellant-accused that his contribution to the household and domestic expenditure was only 60% and remaining 40% was from his wife and father. 14. From the evidence of P.W.5-K. Sadananda Shetty, Chief Manager of Vijaya Bank it is clear that a sum of Rs.3,91,469.95 paise including interest was credited to the Bank account of the wife of the accused from 2-9-1986 to 31-1-1989. According to the evidence of P.W.5, the accused was holding S.B. Account No. 526, his wife was holding S.B. No.1751 and Master Vinod son of accused was holding S.B. Account No.2598, the accused and his wife were jointly holding account S.B. No.2447 in Vijaya Bank. His evidence further establishes that in the account of the accused viz., 526 amount of Rs.2,01,168.55 paise including interest was created during the period 17-11-1984 and 10-3-1989 and out of that amount except Rs.1,56,586/-all other amounts were credited by way of cheques. According to P.W.5, a sum of Rs.3,91,469.95 paise including interest was credited to S.B. Account of wife of accused i.e., 1751 between 2-9-1986 and 31-1-1989. 15. The evidence of P.W.6-Vaman Nadakarni, retired Officer, SBI, establishes that there was a joint account in the name of the accused and his wife and between 6-1-1988 and 23-12-1988 an amount of Rs.1,21,591/-was credited to the said account out of which a sum of Rs.36,050/-was credited in cash while remaining amounts were credited by cheques. This indicates that large amounts were found in the accounts of the accused and his wife. This shows that his wife had substantial income by the business run by her. 16. This indicates that large amounts were found in the accounts of the accused and his wife. This shows that his wife had substantial income by the business run by her. 16. It is also in evidence on record that during this check period, father, brothers, sisters of the appellant-accused had executed power of attorney in favour of appellant-accused authorising him to sell the plots owned by their family and pursuant to the said power of attorney, the appellant-accused executed various sale deeds in favour of several buyers both on his behalf and on behalf of his father, brothers and sisters as their power of attorney holder and has received large extent of money from the purchasers as mentioned in the sale deeds through cheques and demand drafts and those cheques and demand drafts have been encashed through his bank account. It is the definite say of the accused in his evidence that from out of the sale considerations he paid the shares of his brothers by issuing cheques on his bank account in which the amounts had been credited. It is also his evidence that a plot owned by his sister was sold and the sister gifted the entire sale consideration to him since by then she had been married. It is in his evidence that the property owned by his mother-in-law was sold by him as power of attorney holder and the sale consideration to an extent of Rs.94,000/-was paid to her daughter. It is in his evidence that the mother-in-law of the accused paid a sum of Rs.1,25,000/-to her daughter namely wife of the accused being her 1/5th share received by sale of property situated in Rajajinagar, Bangalore. Perusal of the judgment under appeal indicates that the learned Special Judge has not rejected the evidence placed on record in this regard. In fact receipt of various amounts by the accused by sale of plots and its remittance to Bank Accounts held by the accused are established by the oral and documentary evidence placed by the prosecution itself. However, the learned Special Judge declined to accept the monies received by the accused by sale of the properties as lawful pecuniary sources only on the ground that those incomes have not been disclosed by the accused in the assets and liability statement which was required to be submitted as per the Conduct Rules. However, the learned Special Judge declined to accept the monies received by the accused by sale of the properties as lawful pecuniary sources only on the ground that those incomes have not been disclosed by the accused in the assets and liability statement which was required to be submitted as per the Conduct Rules. The fact remains that appellant-accused has received monies by sale of the properties and the monies were received by means of cheques and demand drafts which were credited to his bank accounts. These are all evidence by registered documents and statements issued by the Bank authorities. Therefore, it cannot be said that the appellant has not accounted for those monies. However, the only lapse appears to have been committed by the appellant was not reporting the same to the Disciplinary Authority by way of filing annual assets and liability statements. The appellant-accused has accepted in his evidence that he submitted the assets and liability statement only for two years as per Exs.P.4 and P.44 for the years 1984-85 and 1985-86. For the earlier period and also for the subsequent period he did not submit his annual assets and liability statement. Perusal of Exs.P.43 and P.44 indicates that he submitted this statement as required by Regulation 20 of Hubli-Dharwad Municipal Corporation of Employees Conduct Rules. Of course the learned Special Judge has placed reliance on Rule 23 of the Karnataka Civil Services (Conduct) Rules, 1966. However, since there was a separate Conduct Rule for the employees of the Hubli-Dharwad Municipalities, the provision of Karnataka Civil Services (Conduct) Rules may not apply to those employees. Nevertheless, as per the Conduct Rules governing the accused, he was required to submit the assets and liability statement every year to the Disciplinary Authority and he was also required to report all acquisitions of immovable properties and pecuniary advantages received by him during the specific year. The question is, “whether this lapse on the part of the accused in not reporting the incomes derived by sale of the properties as evidenced by registered documents, should be a sole ground to ignore the voluminous evidence placed by the accused in this regard, which would indicate that the accused had accounted for the monies received by him?” 17. The question is, “whether this lapse on the part of the accused in not reporting the incomes derived by sale of the properties as evidenced by registered documents, should be a sole ground to ignore the voluminous evidence placed by the accused in this regard, which would indicate that the accused had accounted for the monies received by him?” 17. It is the contention of the learned Counsel for appellant that as could be seen from the format in which assets and liability statement are filed as per Exs.P.43 and P.44, there is no specific column provided for mentioning the gifts received. May be there is no specific column in the said Format. Nevertheless, in view of the specific provision contained in the Conduct Rules that an employee governed by the said rule is required to report all the acquisition and pecuniary advantages received, non-providing of specific column in the format itself cannot be a ground to absolve him of his obligation to report such acquisition and receipts. 18. The Apex Court in Ashok Tshering Butia’s case, had an occasion to deal with an almost identical case. In the said case, an employee of the Sikkim Government was charged of acquiring assets disproportionate to his known source of income during certain check period. As per the conduct Rules framed by the Sikkim government, Government servant was required to submit the assets and liability statement on his first appointment and also at the end of closing of every financial year giving full particulars. In that case, the public servant had not complied with the said requirement. Therefore, his contention regarding certain acquisitions and pecuniary advantages received by him, which had not been reported to the disciplinary authority as required by the Conduct Rules were not accepted. Dealing such a situation, the Apex Court has held thus in para 40: “40. The contention of the respondents regarding non-compliance with the 1981 Rules adversely affecting the evidentiary value of Ext.D.4 must be rejected for at least two reasons.— (i) The 1981 Rules 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. 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 Ex.D.4 should be disregarded; and (ii) Rule 19(i) of the 1981 Rules does undoubtedly require Government servants to, on first appointments 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 disciplinary proceedings under the service rules applicable at the relevant time. The provisions of the 1981 Rules 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 fact situation, the appellant could not be fastened with criminal liability for want of compliance with the said requirement of the Rules”. (emphasis supplied) Thus from the above law enunciated by the Apex Court, it is clear that failure to submit the annual assets and liability statement may make the public servant liable to face disciplinary proceedings under the Service Rules applicable to such public servant, but such failure on the part of the public servant cannot have the effect of rendering the evidence placed by him with regard to the pecuniary advantages received by him as inadmissible in criminal prosecution lodged under the provisions of the Prevention of Corruption Act. The Apex Court has clearly held that in such fact situation, the accused cannot be fastened with criminal liability for want of compliance of said requirement, since the Conduct Rules are not rules of evidence. 19. The Apex Court has clearly held that in such fact situation, the accused cannot be fastened with criminal liability for want of compliance of said requirement, since the Conduct Rules are not rules of evidence. 19. The law laid down in the aforesaid decision squarely applies to the case on hand. The fact that the appellant-accused and his family members received large extent of amounts by sale of immovable properties and also from business and all those receipts are accounted in their Bank accounts is not in dispute. Those monies have been received by means of cheques and demand drafts as mentioned in the documents registered as per the provisions of the Indian Registration Act. If really those monies were meant to be unaccounted, the appellant-accused would not have received those monies by way of cheques and demand drafts nor he would have got them encashed through his bank accounts. The very fact that the monies are received by means of cheques and demand drafts and the same were collected through his bank accounts through his Bankers clearly indicate that he had accounted for those monies received by him. The requirement to submit annual assets and liability statement furnishing all the particulars is a rule of procedure and not rules of evidence. Therefore, in my opinion, the learned Special Judge could not have rejected the contention of the appellant in this regard. The contention of the appellant in this regard deserves acceptance having regard to the voluminous evidence placed by him on record. This shows that the appellant-accused during the check period has received more than Rs.5 lakhs towards his share by sale of the plots and he has accounted for the same and therefore that should have been accepted as an income from a lawful source and the appellant has satisfactorily explained all his sources which clearly demonstrates that he has not acquired asset disproportionate to his known source of income. 20. This issue may be looked from yet another angle. The Court below has for the purpose of rejecting the contention of the appellant-accused in this behalf has placed strong reliance on the explanation to Section 13(1)(e) of the Act. 20. This issue may be looked from yet another angle. The Court below has for the purpose of rejecting the contention of the appellant-accused in this behalf has placed strong reliance on the explanation to Section 13(1)(e) of the Act. Under this explanation, expression “known source of income” occurring in Section 13(1)(e) of the Act has been explained to mean “income received from any lawful source and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant”. It is necessary to note that though Section 13(1)(a) to 13 (1)(e) found in Act of 1988 are repetition/replica of Section 5(1)(a) to 5(1)(e) of Act of 1947, the explanation to Section 13(1)(e) of the Act was conspicuously absent in Section 5 of the Old Act. In other words, this explanation was introduced only in the 1988 Act. As noticed supra, the check period in this case was from 1-7-1966 to 2-2-1989. Prevention of Corruption Act, 1988 came into force with effect from 9-9-1988 that is about 5 months prior to the end of the check period. The check period was spanning over approximately 22 years, out of which more than 21 years was covered during the period in which the old Act was in force. The period covered under the Act of 1988 was hardly for about 5 months. Since the explanation now found in Section 13(1)(e) of the Act of 1988 was not found in Section 5(1)(e) of the Old Act, it was open to the public servant to satisfactorily account for the pecuniary resources or property whenever an accusation was made against him alleging acquisition of assets disproportionate to his known sources of income even though he had not reported them to his Disciplinary Authority as required by the Conduct Rules. In fact, the object of introducing this explanation in the new Act was to reduce the burden on the part of the prosecution in proving the known source of income by the public servant. Obviously, the source of income for acquisition of the assets by a public servant would always be within his personal knowledge. In fact, the object of introducing this explanation in the new Act was to reduce the burden on the part of the prosecution in proving the known source of income by the public servant. Obviously, the source of income for acquisition of the assets by a public servant would always be within his personal knowledge. Therefore, the parliamentarians thought it necessary to provide an explanation to the expression “known source of income” so that the pecuniary resources or the property acquired by a public servant should be reported to the Disciplinary Authority as per the Conduct Rules and only those pecuniary resources or properties acquired and reported alone should be taken into account while determining the question whether the assets possessed by the public servant have been acquired from lawful sources. Since there was no such compulsion under the Old Act and since the check period in the case on hand was almost covered during the period when the old Act was in force, in my opinion, the failure on the part of the accused to report all his incomes to the disciplinary authority by submitting annual assets and liability statement could not have been viewed seriously to reject his contention and on that basis to hold that the appellant-accused has acquired assets disproportionate to his known source of income. 21. Article 20 of the Constitution gives a protection in respect of conviction for offences. According to clause (1) of said Article, no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. When the appellant-accused received large sums of monies by sale of immovable properties, the provisions of law then prevailing did not compel the adjudicating authority to accept only such properties or pecuniary resources reported to the Disciplinary Authority as the only lawful sources of income while adjudicating as to whether or not a public servant had acquired assets disproportionate to his known source of income. Therefore, in my considered opinion, having regard to the situation in this case, the Special Judge could not have placed reliance on explanation to Section 13(1)(e) of the Act of 1988 to reject the contention of the appellant with regard to the monies which he had received by sale of immovable properties during the check period. the learned Special Judge ought to have taken into consideration the amounts received by the appellant-accused by sale of immovable properties which were accounted for since they had been received by means of cheques and demand drafts. In addition to this, it is also necessary to appoint out that from the evidence on record, it is clear that the family of the appellant-accused owned large extent of lands and major portions of their holdings were lost pursuant to the amendment brought to the Karnataka Land Reforms Act in the year 1974. This show that the appellant-accused hailed from a rich family owning large extent of lands and therefore it would be reasonable to hold that the income derived by him from his salary alone was not the source of income for him to acquire assets and also to meet the domestic expenses. Apart from his salary income he also had considerable income from the properties owned by the family and also the businesses run by his wife and father. Therefore, it is reasonable to hold that the income so derived has been utilised for the acquisition of the assets and also to meet the domestic expenses. If those incomes are taken into account and accepted as lawful sources of income, in my opinion, there is no circumstance to hold that the appellant-accused had acquired assets disproportionate to his known source of income. On the otherhand, the income derived by him during his check period from all sources is more than the assets held by him and also the probable domestic verifiable and non-verifiable expenditures. The Apex Court, in the case of State of Maharashtra v Pollonji Darabshaw Daruwalla ( AIR 1988 SC 88 : 1987 Supp. On the otherhand, the income derived by him during his check period from all sources is more than the assets held by him and also the probable domestic verifiable and non-verifiable expenditures. The Apex Court, in the case of State of Maharashtra v Pollonji Darabshaw Daruwalla ( AIR 1988 SC 88 : 1987 Supp. SCC 379 : 1988 SCC (Cri.) 91), has held that “on the question whether the extent of the disproportion is such as to justify a conviction for criminal misconduct, a some what liberal view requires to be taken of what proportion of assets is in excess of the known source of income constitutes ‘disproportion’ for the purpose of Section 5(1)(e) of the Act” (equivalent to Section 13(1)(e) of the present Act). 22. Having regard to the discussions made above, I am of the considered opinion that from the evidence placed by the accused there is no escape from holding that he has satisfactorily explained and accounted for the value of the assets held by him and also under various head s of expenses incurred by him and therefore there are no circumstances to hold that the appellant-accused has acquired assets disproportionate to his known source o income. The learned Special Judge, in my opinion, has completely overlooked this legal aspect of the matter and therefore, the finding recorded by the learned Special Judge holding the appellant-accused guilty of the aforesaid offence is highly perverse and is liable to be set aside. 23. Accordingly, the appeal is allowed. The judgment of conviction and order of sentence dated 12-6-2006 passed by the Principal Sessions and Special Judge, Dharwad in Special (SVC) C.C. No.13/91 convicting the appellant-accused for the offence punishable under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 is hereby set aside. The appellant-accused is acquitted of the charges levelled against him. The bail and surety bonds executed by him stand discharged. The fine amount, if any, deposited by him is ordered to be refunded to him.