TaxTMI 
TaxTMI 
TaxTMI 
2006 (1) TMI 636
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.... that the appellant was corrupt and had amassed assets disproportionate to his income, R.C. No. 33 of 1986 was registered on 28.5.1986 by the Superintendent, Central Bureau of Investigation, Madras. Chelladurai, Inspector CBI [PW- 23] took up the case for investigation and obtained a warrant for inspection of the appellant's house No. 16, North Colony, Railway Quarters, Dindigul, from the Chief Judicial Magistrate, Chennai. On 29.5.1986, PW-23 along with his party and two independent witnesses went to the house of the accused. Appellant was not present but his son was present. The search was commenced at 8 A.M. The appellant came around 11.30 A.M. and his wife came around 2.45 P.M. There were three steel almirahs kept in the house of the appellant and on opening them with the keys provided by the appellant, a sum of ₹ 2,94,615/- in cash was found in ten different containers (biscuit tins, briefcases, etc.,) which was seized. Certain documents were also seized. 2.3 As per the charge-sheet dated 18.5.1987, the check-period was 1.5.1976 to 29.5.1986 and the value of the assets held by the appellant at the beginning of the check period (1.5.1976) was ₹ 13,449/17; and t....
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.... to 29.5.1986 (Rs.3,16,076.30 claimed by the appellant and ₹ 2,81,497.97 assessed by PW-23) (Note: The said difference relates to difference in receipt of interest on fixed deposits) = ₹ 34,578.37 Total = ₹ 4,36,990.41 The appellant submitted that the extent of assets beyond the known sources of income was not, therefore, ₹ 4,63,551/40 as charged, but only ₹ 26,561/-. The appellant contended that a margin of 10% is permitted and as the unexplained assets were only to an extent of ₹ 26,561/- which was less than even 10% of the total income, the courts below committed an error in holding that the assets possessed by the accused were disproportionate to his known sources of income, so as to justify the raising of presumption under Section 5(3). 4. The special court after considering the evidence came to the conclusion that even if all other explanations and contentions of the appellant were accepted, assets to an extent of ₹ 3,05,985.39 remained unaccounted and unexplained. It accepted the claim of the accused that the total of assets as on 29.5.1986 was ₹ 6,41,112.78. It also accepted his claim that the value of assets as on 1.5.197....
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....2/-, thereby increasing the assets by an extent of ₹ 28,740/-. Consequently, out of ₹ 6,69,852.78 (value of assets as on 29.5.1986), the High Court deducted ₹ 63,198.61 (being the value of assets at the beginning of check period as claimed by the appellant) and ₹ 1,92,852.01 (surplus of income over expenditure during the check period as determined by it) and concluded that assets of the value of ₹ 413,802.16 remained unexplained. 6. The said decision is challenged in this appeal by special leave. The learned Counsel for the appellant contended that the High Court committed a serious error in over-estimating the cost of the Salem house and by refusing to take note of the following five items of income during the check period: (i) ₹ 2,50,000.00 Loans received from PW-11 and PW-15 (ii) ₹ 40,000.00 Loans received from brothers and brother- in-law (iii) ₹ 34,578.37 Interest on deposits (part) (iv) ₹ 22,922.60 Travelling allowance received by appellant (v) ₹ 8,000.00 Bonus received by appellant (vi) ₹ 28,740.00 (Excess in the valuation of Salem House taken as ₹ 1,08,740/- instead of ₹ 80,000/-) Th....
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....[Ex.P-69] and the entries in the account books of PW-11 and PW-15 [Ex.P-70 to P-81]. He submits that the said documentary evidence proved beyond doubt that he had received ₹ 2,50,000/- as loan from PW-11 and PW-15. 9. We may briefly refer to the evidence of PW-11 and PW-15 who were the alleged creditors. 9.1 Chandiram (PW-11) stated that he was carrying on money- lending business at Salem in partnership with his mother and three brothers, from the year 1984 under the name and style of 'Pahlaprai Sons'; that Satram Das (PW-15) was his paternal uncle and he was also doing money lending business under the name and style of 'Satramdas Mahesh Kumar'; that whenever money was to be lent, he was taking a promissory note, guarantee letter, confidential form etc. from the borrower; and that he maintained a promissory note book, day book, cash book wherein the transactions were entered by one Kattanmal, the common Accountant for himself and PW-15. He further stated that he was a friend and acquaintance of Kasinathan and Ramchandran (brothers of appellant) as he used to play tennis with them for about 15 years; that he knew the appellant and his another brother Narayana....
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....ppellant. Thereafter, the appropriate entries were made in the pronote entry book and in the respective day book and cash book, showing ₹ 1,25,000/- was advanced by the firm of PW- 11 and another ₹ 1,25,000/- by the firm of PW-15. After the entries were made, the three brothers of the appellant took the promissory notes, guarantee letters, confidential form, equitable mortgage document stating that they will get the signatures of the appellant and later brought back those documents and delivered them on 1.6.1986 with the signatures of the appellant. Along with the said loan documents, they also gave two alleged 'title deeds', that is, a certificate showing the ownership of the appellant in regard to the house at Salem [Ex. P-82] and two electricity bills [Ex. P-83 series]. PW-11 stated that the aforesaid documents were created to make the lending transaction to appear genuine even though no money was advanced. 9.3 PW-11 also stated that only on 19th & 20th June, 1986, when CBI raided his office and house and seized the said documents [Ex. P-64 to P-83], he and PW-15 came to know about CBI discovering cash of about ₹ 3 lakhs in appellant's house on 29.....
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....nnai only under pressure from the CBI. He admitted that the CBI did not examine them until they gave the statements under Section 164 Cr.P.C. 9.5 To the similar effect is the evidence of PW-15 [J. Chatram Doss]. His sworn statement under Section 131 of Income Tax Act recorded by PW-14 is Ex.P-92 and his statement under Section 164 Cr.P.C. recorded by the Addl. Metropolitan Magistrate, Chennai is Ex.P-96. 10. The evidence of PW-11 and PW-15 are clear and categorical that ₹ 2,50,000/- was not advanced to appellant on 24.5.1986 or any other date and that documents (Ex.P-64 to P-69) and the entries (Ex.P-70 to P-81) were created only on 30.5.1986 to help appellant to explain the huge cash found in his possession. Nothing has been elicited in the cross-examination to disbelieve their evidence. The learned Counsel for the appellant, however, referred to the following factors and contended that the evidence of PW-11 and PW-15 that they had not lent any amount to appellant, should be rejected as not trustworthy in view of the following: i) Such evidence being contrary to the very documents executed in favour of PW-11 and PW-15 (Ex.P-64 to P- 69) and the entries made in the books ....
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.... that the apparent state of affairs was not the real state of affairs. 11.3 We may next refer to the following observations in Gangabai v. Chhabubai interpreting Section 92: 11. Section 91 of the Evidence Act provides that when the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, Sub-section (1) of Section 92 declares that when the terms of any contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted,Page 0012 as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms. And the first proviso to Section 92 says that any fact may be proved which would invalidate any document, or whic....
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....-in-interest. Strangers to the contract Page 0013 (which would include the prosecution in a criminal proceeding) are not barred from establishing a contemporaneous oral agreement contradicting or varying the terms of the instrument. On the other hand, Section 91 may apply to strangers also. iii) The bar under Section 92 would apply when a party to the instrument, relying on the instrument, seeks to prove that the terms of the transaction covered by the instrument are different from what is contained in the instrument. It will not apply where anyone, including a party to the instrument, seeks to establish that the transaction itself is different from what it purports to be. To put it differently, the bar is to oral evidence to disprove the terms of a contract, and not to disprove the contract itself, or to prove that the document was not intended to be acted upon and that intention was totally different. Applying the aforesaid principles, it is clear that the bar under Section 92 will apply to a proceeding inter-parties to a document and not to a criminal proceeding, where the prosecution is trying to prove that a particular document or set of documents are fictitious documents c....
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..... The case of the appellant is that the said stamp paper was purchased at Salem on 23.5.1986. But the stamp paper shows that it was sold by stamp vendor named P.K. Nagaraja Rao at Karur, which is a town far away from Salem where PW-11 and PW-15 carried on their business, and far away from Dindigul where appellant was residing. It is unimaginable that a person residing in Dindigul and proposing to borrow an amount from persons carrying on business at Salem would go to Karur to purchase a stamp paper of ₹ 7/-. On the other hand, it fully supports the evidence of PW-11 that the appellant's brothers wanted an ante-dated stamp paper on 30.5.1986 and PW-11 sent his clerk along with the appellant's brothers to the Bazar to procure such ante-dated stamp paper from some stamp vendor at Salem who apparently kept a stock of such stamp papers illegally and sold them. iii) The creation of an equitable mortgage by depositing documents other than title deeds is not valid or permissible. We extract below the contents of Ex.P-69: "On this day, 24th of May, 1986, I have deposited with you on 23.5.1986, the undermentioned title deeds belonging to my property namely (1) one plot....
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....y of an offence under Section 5(1)(e) of the Act. In view of our said finding, it is really unnecessary to examine the other disputed amounts namely alleged loan from brothers and brothers-in-law (Rs.40,000/-), travelling allowance [Rs.22,922/60], bonus [Rs.8,000/-], difference in interest on fixed deposits [Rs.34,578/37]; and difference in cost of construction (Rs.28,740/-). We may, however, refer to two other questions on which arguments were advanced by the learned Counsel for the appellant. 16. The first relates to his argument that finding in his favour recorded by the Trial Judge cannot be altered to his detriment, in his appeal against conviction. He referred to four items (travelling allowance, bonus, difference in interest on Fixed Deposits and difference in cost in valuation of the house) on which the High Court had reversed the findings of the Special Judge in his favour. Reliance is placed on the decision of this Court in the State of Andhra Pradesh v. Thadi Narayana . 16.1 We will refer to the facts as also the principles laid down in Thadi Narayana (supra) to show that they are inapplicable to the case in hand. In that case, the accused was tried for offences under ....
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....entertains an appeal against conviction is not well-founded and as such it cannot be pressed into service in construing the expression "alter the finding". It was further held that the expression 'alter the finding' in Section 423(1)(b)(2) [corresponding to Section 386(b)(ii) of the new Code] has only one meaning, and that is alter the finding of conviction and not the finding of acquittal. This Court then proceeded to consider the question as to what are the kinds of cases in which the power to 'alter the finding' can be exercised, thus: The answer to this question is furnished by the provisions of Section 236, 237 and 238. Section 236 deals with cases where it is doubtful what offence has been committed, Section 237 with cases where a person may be charged with one offence and yet he can be convicted of another, and Section 238 with cases where the offence proved includes the offence charged and another offence not so charged. Where a person is charged with a major offence, such as for instance under Section 407 of the Indian Penal Code, he may be convicted either of that offence or of a minor offence, as for instance under Section 406. That is the res....