- 1 - CRL.RP No.100202 of 2014 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 07TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MS. JUSTICE J.M.KHAZI CRIMINAL REVISION PETITION NO.100202 OF 2014 BETWEEN: THE STATE OF KARNATAKA, BELAGAVI LOKAYUKTA POLICE STATION, BELAGAVI. …PETITIONER (BY SRI SANTOSH B.MALAGOUDAR, ADV. FOR PETITIONER) AND: 1. DEVENDRAPPA BHIMAPPA NAIK, AGE: 65 YEARS, OCC: RETD. CHIEF EXECUTIVE OFFICER, ZILLA PANCHAYAT, BELAGAVI. 2. ASHOK BHIMAPPA NAIK, AGE: 54 YEARS, OCC: AGRICULTURE, R/O: PANCHANAYAKANHATTI, TQ: GOKAK, DIST: BELAGAVI. 3. SMT. RENUKA BASAPPA HOSATTI, AGE: MAJOR, OCC: HOUSEHOLD, R/O: H.NO.387, T.V. CENTER, BELAGAVI. …RESPONDENTS (BY SRI K.L. PATIL, ADV. AND SRI S.S. BERURMATH, ADV. FOR RESPONDENT NO.1; SRI N.D. GUNDE, ADV. FOR RESPONDENTS NO.2 AND 3) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397(1) & 401 OF CR.P.C. SEEKING TO SET ASIDE THE IMPUGNED ORDER ON DISCHARGE OF ACCUSED/RESPONDENTS DATED 30.06.2014 IN SPL. CASE NO.118/2011 PASSED BY THE IV ADDL. DISTRICT AND SESSIONS JUDGE AND SPECIAL JUDGE (PCA), BELAGAVI, P/U/S 13(1)(E) R/W 13(2) OF PC ACT BY ALLOWING THIS REVISION PETITION, IN THE INTEREST OF JUSTICE. - 2 - CRL.RP No.100202 of 2014 THIS CRIMINAL REVISION PETITION, HAVING BEEN HEARD AND RESERVED ON 02.09.2024, COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT DELIVERED THE FOLLOWING: CORAM: THE HON’BLE MS. JUSTICE J.M.KHAZI CAV ORDER (PER: THE HON'BLE MS. JUSTICE J.M.KHAZI) This petition filed under Section 397(1) r/w 401 Cr.P.C is by the State, challenging the impugned order dated 30.06.2014 passed by the Special Court in Spl.C.No.118/2011 discharging the respondents/accused Nos.1 to 3 for the offences punishable under Sections 13, (1) (e) r/w 13 (2) of Prevention of Corruption Act 1988, r/w Section 120-B and 109 IPC. 2. For the sake of convenience, the parties are referred to by their ranks before the trial Court. 3. In support of the petition, the State has contended that at the relevant point of time, accused No.1 was working as Chief Executive Officer, Zilla Panchayat, Belgaum. On the basis of source information, the Superintendent of Police, Karnataka Lokayukta Bengaluru - 3 - CRL.RP No.100202 of 2014 Rural PS registered Cr.No.27/2008 against him for the offences punishable under Sections 13 (1) (e) r/w 13(2) of Prevention of Corruption Act. Search warrant was secured and raids were conducted at several places. Thereafter, the case was transferred to Lokayukta Police, Belgaum and registered in Cr.No.20/2008 on 30.09.2008. After completing the investigation, charge sheet in Spl.C.No.118/2011 was submitted against accused No.1 for the offences punishable under Sections 13 (1) (e) r/w 13(2) of Prevention of Corruption Act. In the same charge sheet, accused Nos.2 and 3 were charged for the offences punishable under Sections 120-B and 109 IPC on the ground that they have conspired with accused No.1 in getting some of the properties in their names on his behalf. Sanction was secured against accused No.1 before filing the charge sheet. However, at the stage of framing charge, the trial Court has passed the impugned order discharging accused Nos.1 to 3. 4. Challenging the same, the State has come up with this petition, contending that the order under revision - 4 - CRL.RP No.100202 of 2014 is contrary to law and evidence on record. It is illegal, harsh, one-sided and arbitrary and as such liable to be set aside. According to the prosecution, accused No.1 held property worth Rs.91,27,409/- while his total income from the known sources is Rs.75,73,463.41 ps and expenditure during the cheque period is Rs.63,11,522/-. Therefore, the assets dis-proportionate to the known source of accused No.1 was 103.85%. However, the learned Spl.Judge without proper appreciation of the material placed on record, merely on the basis of statement of the witnesses has discharged accused Nos.1 to 3. 5. The reasons assigned by the trial Court for discharging accused Nos.1 to 3 are required to be appreciated after the full fledged trial and not at the stage of framing charges. The trial Court cannot conduct a mini trial and cannot take into consideration the material relied upon by the accused. What is required to be appreciated at the stage of framing charges is whether the material placed on record by the investigating agency makes out a prima facie case to proceed against the accused persons - 5 - CRL.RP No.100202 of 2014 by framing charge or it show that the charge is ground less. At this stage, the trial Court cannot decide the prosecution case without providing opportunity to the prosecution to establish its case. Whether the properties held in the name of accused Nos.2 and 3 are Benami is to be decided at the trial. At the stage of framing charge, the prosecution case cannot be thrown out on the basis of material relied upon by the defence. 6. The income which the accused earned while working in DCC Bank from 24.12.1979 to 12.08.1981, does not pertain to the check period and as such the learned Special Judge ought not to have considered the same. While taking interest in the fixed deposits held by accused No.1 in the name of his wife and children, the Special Judge has failed to consider the principal amount of Rs.6 lakhs. 7. The total salary received by accused No.1 during check period was Rs.40,26,065/- and after deductions towards PF, KGID, Group Insurance, - 6 - CRL.RP No.100202 of 2014 Professional Tax and NSC, the net salary received by accused was Rs.33,25,074/-. The deductions from gross salary are not considered as expenditure, the question of considering the said amount on income side does not arise. In the final report, it was stated that since the salary particulars from Tarikere, Bagalkot and Bengaluru were not received information provided by accused No.1 was considered. But the Court has wrongly held that the investigating officer has not collected material documents. 8. The investment made as NSC in respect of DA allowance is not considered as expenditure by the trial Court. The amount received on maturity of the said NSC at Rs.2,80,680/-, the amount invested was to be taken as Rs.1,40,340/-. Since accused No.1 has not reported alleged receipt of Rs.3,20,000/- being his 1/5th share out of Rs.16 lakhs received from the sale of house property, the investigating officer has rightly not taken it into consideration. Equally the expenditure is required to be taken into consideration. Out of Rs.73,000/-, the 1/5th share of accused No.1 come to Rs.14,600/- only. - 7 - CRL.RP No.100202 of 2014 Therefore, the trial Court committed error in considering Rs.73,000/- as the income of accused No.1 towards agriculture property. The trial Court has erred in taking into consideration Rs.16,51,987/- as the agricultural income of accuse No.1 from 1989–90 to 2007–08. 9. Instead of examining whether there is prima facie material to frame charge, the trial Court has committed grave error in examining the merits of the case of the prosecution by taking into consideration the material relied upon by the accused No.1, which could be his defence at the trial. At the stage of framing charge, the trial Court cannot take into account the probable defence of the accused which is required to be appreciated at the trial. The trial Court has also failed to appreciate the fact that sanction is issued against accused No.1, after considering the entire material in the charge sheet. Viewed from any angle, the impugned order is not sustainable and pray to set aside the same and direct the trial Court to frame charge and proceed with the trial. - 8 - CRL.RP No.100202 of 2014 10. In support of his arguments, learned counsel for prosecution has relied upon the following decisions: (i) State of Rajasthan Vs. Ashok Kumar Kashyap (Ashok Kumar Kashyap)1 (ii) State through Dy.Superintendent of Police Vs. R.Soundirarasu, etc. (Soundirarasu)2 11. Learned counsel for accused has filed statement of objections which is nothing but reiterating the impugned order. During the course of arguments learned counsel representing accused Nos.1 to 3 supported the impugned order and sought for dismissal of the petition. 12. Heard elaborate arguments of both sides and perused the record. 13. Before referring to the facts, it is necessary to refer to the decisions relied upon by the learned counsel for the State represented by Lokayukta. 14. It is held in Ashok Kumar Kashyap, that at the stage of Section 227 i.e, framing charge, the Court is 1 (2021) 11 SCC 191 2 (2022) AirOnline SC 281 - 9 - CRL.RP No.100202 of 2014 required merely to sift evidence in order to find out whether or not there is sufficient ground for proceeding against the accused. The sufficiency of grounds would take within its fold nature of evidence recorded by police or documents produced before the Court, which ex facie disclose that there are suspicious circumstances against the accused so as to frame a charge against him. If it come to the conclusion that there is sufficient ground to proceed, he will frame charge under Section 228 Cr.P.C, if not, he will discharge the accused. While exercising its judicial mind to facts of the case in order to determine whether case for trial has been made out by prosecution, it is not necessary for Court to enter into pros and cons of matter or into weighing and balancing of evidence and probabilities which is really function of Court, after trial starts. At the stage of framing of charge and/or considering discharge application, mini trial is not permissible. The Hon’ble Supreme Court further held that at the stage of framing of charge and/or discharge - 10 - CRL.RP No.100202 of 2014 application, the defence of accused on merits cannot be taken into consideration. 15. In Soundirarasu the Hon’ble Supreme Court held that the term "known sources of income" used in Section 13 (1) (e) would mean sources known to prosecution and not sources within knowledge of accused. It is for accused to account satisfactory for assets in his hand. Accused cannot make an attempt to discharge onus upon him at the stage of discharge. At the stage of discharge, the Court has to only look into prima facie case and decide whether the case put up by prosecution is groundless. On merits, the Hon’ble Supreme Court further held that the High Court has erred by enquiring into material produced by accused persons, comparing with information compiled by investigation agency and pronouncing a verdict saying that the explanation offered by the accused persons deserves to be accepted. It was further held by the Hon’ble Supreme Court that at the stage of framing charge the accused does not have a right to afford a chance to explain the alleged dis-proportionate - 11 - CRL.RP No.100202 of 2014 assets to investigating officer, before filing of charge sheet. 16. The Hon’ble Supreme Court further held that the expression for which the public servant cannot satisfactorily account, refer to the onus or a burden on the accused to satisfactorily explain and account for the assets proven to be possessed by the public servant. This burden is on the accused as the said facts are within his special knowledge. The explanation to Section 13(1)(e) is a procedural Section which seeks to define the expression 'known source of income' as 'sources known to the prosecution' and not to the accused. The explanation applies and relates to the mode and manner of investigation to be conducted by the prosecution, it does away with the requirement and necessity of the prosecution to have an open, wide and rowing investigation and enquiry into the alleged source of income which the accused may have. It curtails the need and necessity of the prosecution to go into the alleged sources - 12 - CRL.RP No.100202 of 2014 of income which a public servant may or possibly have but are not legal or have not been declared. 16.1 The undeclared alleged sources are by their very nature are expected to be known to the accused only and are within his special knowledge. The effect of the explanation is to clarify and reinforce the existing position and understanding of the expression "known source of income", i.e, the expression refers to sources known to the prosecution and not sources known to the accused. The prosecution can rely upon the information furnished by the accused to the authorities under the law, rules, and orders for the time being applicable to a public servant. No further investigation is required by the prosecution to find out the known sources of income of the accused/public servant. 16.2 The Hon’ble Supreme Court further held that the word groundless used in Section 239 Cr.P.C means that there must be no ground for presuming that accused has committed the offence. It means the material placed - 13 - CRL.RP No.100202 of 2014 before the Court do not make out or are not sufficient to make out a prima facie case against the accused. If no prima facie case regarding the commission of any offence is made out, it would amount to a charge being groundless. The only consideration at the stage of discharge or charge is as to whether the allegation/charge is groundless. This would not be the stage for weighing the pros and cons of all the implications of the materials, not for sifting the materials placed by the prosecution the exercise at the stage of discharge or charge is to be confined to considering the police report and the documents to decide whether the allegations against the accused can be said to be groundless. The test which may, therefore, be applied for determining whether the charge should be considered groundless, is that where the materials are such that, even if unrebutted, would make out no case whatsoever. 17. In the light of the ratio in the above decisions, it is necessary to examine whether there is sufficient material to frame charge against the accused persons and - 14 - CRL.RP No.100202 of 2014 despite the same, whether the trial Court has erred in discharging them by taking into consideration the material relied upon by the accused, which would be their defence at the trial. The perusal of the impugned order makes it amply clear that instead of examining whether there is a prima facie case to frame charge against the accused or whether the charges levelled against the accused in the charge sheet is groundless, the trial Court has indulged itself into the exercise of examining the entire material in the charge sheet in the light of the defence put forth by the accused, which is required to be appreciated at the trial after providing opportunity to the prosecution to establish the allegations against the accused person. 18. In the impugned order, the trial Court has held that before joining the Government service from 24.12.1979 to 12.08.1981 accused worked in DCC Bank, Belgaum and during this period, he was paid Rs.10,330/- per month as per Annexure-A and despite furnishing the said information, the investigating officer has not taken it into consideration. This period does not come under the - 15 - CRL.RP No.100202 of 2014 check period. Similarly the burden is on the accused No.1 to prove that he had income of Rs.4 lakhs before the check period. He has stated in his schedule information about the agricultural income at Rs.73,000/- from 1973–74 to 1981, but no documents were produced and therefore the investigating officer has not taken it into consideration. At the same time out of the said income, expenditure is required to be deducted and at that time, the accused was only having 1/5th share which comes to Rs.14,600/-. Therefore, the trial Court has committed error in considering the agricultural income at Rs.73,000/- before the cheque period. 19. The total salary received by accused No.1 during the check period is Rs.40,26,065/-. After deduction of PF, KGID, Group Insurance, professional tax, NSC, etc, the net salary received by him is Rs.33,25,074/. Accused No.1 has contended that the entire Rs.40,26,065/- was required to be taken into consideration as the income and they should not have been any deduction towards PF, KGID, Group Insurance, Professional tax, NSC. When the - 16 - CRL.RP No.100202 of 2014 accused has paid these contributions out of the salary received by him, it is proper deduction. Of course, it is open for the accused to cross-examine the investigating officer on this aspect and convince the trial Court at the arguments that the entire gross salary was required to be taken into concentration. 20. Accused No.1 has received Rs.2,80,680/- towards maturity value of the NSC and claimed entire amount as income. However, the investigating officer has deducted Rs.1,40,342/- as the amount invested and given deduction. The trial Court has held that the entire amount have to be taken as income, which is incorrect. Similarly, while calculating the interest and on the Fixed deposits held by accused No.1, in the name of his wife and children, the trial Court has failed to consider the principal amount of Rs.6 lakhs and thereby erred in calculating the total income. Accused No.1 has claimed that by sale of house property, his family members have received Rs.16 lakhs and his share is Rs.3,20,000/-. However, he has not reported its receipt to the Government and therefore it - 17 - CRL.RP No.100202 of 2014 ought not to have been taken into concentration by the trial Court as income. 21. During investigation, the investigating officer has taken into consideration Rs.24,759/- as the interest received by accused No.1 from various Banks, but the accused has claimed it to be Rs.6,24,759/-, it is a matter of evidence and at the stage of framing charge the trial Court ought not to have accepted his contention. 22. In the APRs accused No.1 has declared his agriculture income as Rs.25,96,187/-. The investigating officer has calculated it Rs.4,83,260/- on the ground that when the agriculture is carried out with the help of workers, there would be more expenditure when compared to doing the same personally. It is a matter to be established at trial. However, the trial Court has taken the agriculture income at Rs.16,51,987/- and there is no basis for arriving to at the said figure. The entire exercise of the trial Judge is based on surmises and conjectures. - 18 - CRL.RP No.100202 of 2014 23. Similarly, though the accused No.1 has claimed that he has received rent of Rs.36,000/- from the house property, since he has failed to disclose the name of the tenant and necessary information, the investigating officer has not considered the said income. Of course it is a matter for evidence wherein the accused No.1 is at liberty to prove the same. 24. Through the investigation, the investigating officer has come to the conclusion that land in Sy.No.45/3 and 45/2 measuring 8 acres 34 guntas of Sangargali Village is a Benami property of accused No.1 purchased in the name of accused No.3. To this effect, the investigating officer has recorded the statements of certain witnesses. Accused No.3 has claimed that she has purchased the said property by selling 30 tolas of gold. On the basis of submissions made by the learned counsel for accused that the family of accused No.3 is having agricultural land and at the time of marriage around 400 gms of gold was given to her and her husband had income of Rs.10,000 to 15,000 per month etc, and with all this accused No.3 has - 19 - CRL.RP No.100202 of 2014 purchased the said property. All these disputed facts are required to be established at the trial. At the stage of framing of charge, certainly, the trial Court had no admissible evidence to come to such a conclusion. 25. During the investigation, the investigating officer has found that a luxurious guest house has been constructed in Sy.No.16 of Panchanayakanhatti village standing in the name of one Hanamant Ramappa Gorawar @ Hugar. He has estimated its worth at Rs.18,61,843/-. Based on his investigation, the investigating officer has come to the conclusion that it is a property belonging to accused No.1. Of course, it is for the prosecution to establish the same at trial. Similarly the investigating officer has concluded that an extent measuring 2 acres in Sy.No.227 of Yaragatti village, Saundatti worth Rs.46,000/- and a superstructure worth Rs.5,95,182/-, land measuring 3 acres 10 guntas in Sy.No.139/1 situated at Junjarwad, village, Mudhol worth Rs.4 lakhs, land in Sy.No.56 and 57 of Panchanayakanhatti, Gokak worth Rs.5,17,372/-, Sy No.45 of the same village for - 20 - CRL.RP No.100202 of 2014 Rs.3,83,224/- are the Benami properties of accused No.1. Out of these, Sy.No.45 is standing in the name of Siddavva, the wife of accused No.2 and rest of the properties are standing in the name of accused No.2. It is for accused No.2 to prove that these properties are acquired by him. Of course it is for the prosecution to prove that these are the Benami properties of accused No.1. At the stage of framing charges, the trial Court is certainly not having any admissible evidence to come to a contrary conclusion. 26. Based on the investigation, in the charge sheet it is alleged that accused No.1 has purchased land in Sy.No.227 measuring 2 acres in the name of accused No.2 and a structure is constructed and a college is run. The investigation reveals that accused No.1 has removed the earlier construction and valued the building at Rs.8,92,442/- and that accused No.1 has made investment of Rs.5,95,182/-. Similarly, according to the prosecution, the investigation reveal that land in Sy.No.139/1 of Junjarkop is purchased by accused No.1 in the name of his - 21 - CRL.RP No.100202 of 2014 younger brother accused No.2 for Rs.4 lakhs and both of them have constructed a building and running training institution and valued the structure at Rs.26,66,161/-. It is a matter for evidence and burden on the prosecution to prove the same. Of course it is for the accused to establish their defence at the trial. 27. There being no legal evidence at this stage of charge, the trial Court has entered into discussion that the brother of accused No.1 were in Government service and appears to have declared the properties in their assets and liabilities statements, etc, and therefore the charge sheet version is not reliable. At the stage of framing charge, the trial Court cannot look into any other documents except the charge sheet. The entire exercise of the trial Court is based on surmises and conjectures. The evaluation of household articles and expenses are based on the guidelines and it is for the accused to prove otherwise at the trial. - 22 - CRL.RP No.100202 of 2014 28. As held by the Hon'ble Supreme Court in Saundirarasu the known source of income means the income received from any lawful source and such receipt should have been intimated by the public servant in accordance with the provisions of law, rules or orders for the time being applicable to a public servant. Both conditions are to be proved. The income acquired by accused No.1 should be from a lawful source and the same has been intimated. Mere intimation is not a sufficient compliance. It is for the prosecution to establish that the income so intimated is not from a lawful source. Of course, it is the defence of the accused and he is at liberty to question the investigating officer about the same and it is for the trial Court to appreciate whether the investigating officer was justified in coming to a contrary conclusion. 29. Despite framing, a proper point for consideration and observing that at this stage of framing charge, the trial Court has to prima facie consider whether there is sufficient ground for proceeding against the accused, the trial Court has indulged in examining the - 23 - CRL.RP No.100202 of 2014 charge sheet material in the light of defence put forth by the accused and without providing opportunity to the prosecution has come to a conclusion that there are no justifiable grounds to proceed against the accused. The entire exercise made by the trial Court is contrary to the basic principles. It has exceeded its powers in indulging in hair splitting analysis of the material in the charge sheet. 30. As held by the Hon’ble Supreme Court in N Ramakrishna Vs State of AP (Ramakrishna)3, in case of a public servant, whatever returns, he gets of his service will be the primary item of his income. Other income which can conceivably be income qua the public servant will be in the regular receipt from his property or 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 source of income" of a public servant. Therefore, it is for the prosecution to prove that the assets held by the accused are disproportionate to his known source of income. The accused would get an opportunity to 3 2009 Crl.LJ 1767 (SC) - 24 - CRL.RP No.100202 of 2014 establish that they are acquired through the legitimate known source of income. This can be decided only after a full fledged trial. It appears the trial Court has over enthusiastically swayed away the arguments of the learned counsel for the accused. Therefore, the impugned order is not sustainable. 31. It is pertinent to note that the impugned order came to be passed on 30.06.2014. The present revision petition is filed on 26.09.2014. For all these 10 years, this petition was kept pending. In this type of cases, it is for the State to request for early hearing so that the unnecessary dragging of the matter by the defence counsel would be avoided. 32. In the result, the petition succeeds and accordingly the following: ORDER (i) Criminal Revision Petition filed under Section 397(1) and 401 of Cr.P.C by the - 25 - CRL.RP No.100202 of 2014 State represented by Belgaum Lokayukta police is allowed. (ii) The order dated 30.06.2014 in Spl.C.No.118/2011 on the file of IV Addl.District and Sessions Judge & Spl.Judge (PCA), Belgaum is hereby set aside. (iii) The trial Court is directed to frame charge and proceed with the matter without unnecessary delay. (iv) Send a copy of this order to the trial Court forthwith. SD/- (J.M.KHAZI) JUDGE RR CT: UMD