Mr. V. Ramaswami, J.
1. This appeal IB brought by a certificate under Article 134(1)(c) of the Constitution from the judgment of the Patna High Court, dated 18 October 1965, in Criminal Appeal No. 410 of 1963.
2. During the relevant period between 16 March 1957 and 27 October 1958, the appellant was working as District Engineer under the Southeastern Railway at Naomundi Banspani which is located in the district of Singhbhum. The charge against the appellant was that during the aforesaid pariod, he committed criminal misconduct in the discharge of his duties as a public servant and
obtained pecuniary advantage for himself and others by giving contractors favourable rates in respect of earthwork done by them and by acquisition of assets worth more than Rs. 3 lakhs which were disproportionate to his known sources of income
and thereby committed an offence punishable under Section 5(2) read with Sections 5(1)(a) to 6(1)(d) of the Prevention of Corruption Act, 1947 (2 of 1947). Sections 5(1)(a) to 5(1)(d) of Act 2 of 1947 as it stood at the material time read as follows:
(1) A public servant is said to commit the offence of criminal misconduct In the discharge of his duty,
(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any gratification (other than legal remuneration) as a motive or reward such as is mentioned in Section 161 of the Indian Penal Code (46 of 1860), or
(b) If he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or for a consideration which he know a to be inadequate, from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connextion with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned, or
(c) if he dishonestly or fraudulently misappropriates or otherwise) converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or
(d) if he, by corrupt or illegal means or by otherwise abusing his position as
a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage'.
Section 5(2) provides that any public servant who commits criminal misconduct in the discharge of his duty shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and snail also be liable to fine. Section 6(3) states:
(3) In any trial of an offence punishable under Sub-section (2) the fact that the accused person or any other person on his behalf is in possession, for which the accused person cannot satisfactorily account, of peounlary resources or property disproportionate to his known sources of income may be proved, and on such proof the Court shall presume, unless the contrary is proved, that the accused person is guilty of criminal misconduct in the discharge of his official duty and his conviction therefor shall not be invalid by reason only that it is based solely on such presumption.
This sub-section provides an additional mode of proving an offence punishable tinder Sub-section (2) for which any accused person is being tried. This additional mode is by proving the extent of the pecuniary resources or property in the possession of the accused or any other person on his behalf and thereafter showing that this is disproportionate to his known sources of income and that the accused parson cannot satisfactorily account for such possession. If these facts are proved the section makes it obligatory on the Courts to presume that the accused person is guilty of criminal misconduct in the discharge of his official duty, unless the contrary, i.e. , that he was so guilty, is proved by the accused. The section goes on to say that the conviction for an offence of criminal misconduct shall not be invalid by reason only that it is based solely on such presumption.
3. The appellant served as Military Engineer from 1913 to 1945. He had his automobile business at Coimbatore from 1917 to 1949. He Joined military service again from 1949 to 1956. He was appointed as a temporary Assistant Engineer under the Southeastern Railway on 13 April 1956 and was first posted at Waltair. He took charge as District Engineer at Naomundi on 16 March 1957 and remained there till 25 October 1958 when he resigned from service. His legal remuneration for his work under the railways came to be about Rs. 21,000. At the time the appellant joined service under the Southeastern Railway he submitted a statement, Ex. 1/7, showing his assets as nil, He submitted a second statement of assets, Ex. 1/6, on 15 February 1958 in which he disclosed acquisition of certain properties under three sale-deeds, Exs. 6 dated, 5 August 1957, 6/1 dated 18 November 1957, and 6/2 dated 9 August 1957. The total consideration for the three sale-deeds, was Rs. 1,35,000. On 25 January 1959, a Review Team appointed by the railway reported that there was overpayment to the contractors in the matter of classification of the soil. Thereafter, an enquiry was taken up by the railway department against the appellant. After the conclusion of the enquiry a first information report was lodged against the appellant. An investigation followed and as a result of the investigation the appellant was chargesheeted for offences under Sections 5(1)(a) to 5(1)(d) of the Prevention of Corruption Act, 1947. The specific charge levelled against the appellant was to taking illegal gratification from the contractors in the matter of classification of soils and of conspiracy with the contractOrs. There was no direct evidence led on behalf of the prosecution to show that there was payment by any of the contractors to the appellant of any illegal gratification. The trial Judge after examining the prosecution evidence held that there was no satisfactory proof that the appellant classified the soils in the earthwork in a higher category than what it should have bean and thereby made illegal gain to himself or the contractOrs. But the trial Judge convicted the appellant of criminal misconduct on the application of the presumption arising under Section 5(3) of Act 2 of 1917, that is, on the ground that the appellant had pecuniary resources or property disproportionate to his known source of income. The trial Judge sentenced the appellant for rigorous imprisonment for six months. Subject to this modifications, the High Court dismissed the appeal.
4. It was contended in the first place on behalf of the appellant that the lower Courts were wrong in holding that the assets found in possession of the appellant were disproportionate to the sources disclosed and that the presumption under Section 5(3) of the Act could be resorted in the circumstances of this case. In our opinion, the contention put forward by the appellant is well-founded and must be accepted as correct. According to Ex. 1/6, the statement of assets dated 15 February 1958 three houses were purchased under sale-deeds Exs. 6,6/1 and 6/2 in the name of the children of the appellant, the total consideration for the sale-deeds being Rs. 1,35.000. On 3 June 1958, the appellant purchased National Savings Certificates worth Rs. 1,25,000 and a treasury certificate for Rs. 25.000. On 16 October 1958, the appellant purchased a car worth Rs. 17,000. Hence, the total acquisitions made by the appellant between 5 August 1967 and 16 October 1968 exceed Rs. 3 lakhs in value. The explanation of the appellant was that the acquisitions were made out of family funds and the car was purchased out of the money which was given to him by his wife. There is proof that a promissory note Ex. C/a dated 17 February 1943 was executed for a sum of Rs. 1,50,000 by Sripad Rao in favour of Smt. Kamalamma, wife of the appellant. There is an endorsement on the back of the promissory note that on 14 January 1947 Smt. Kamalamma received Rs. 91,000 in cash from Sripad Rao and the balance of Rs. 79,000 including interest of Rs. 20,000 was discharged by execution of five sale-deeds of house properties mentioned therein. The salt-deeds are Exs. 29,29/1, 29/2, 29/3 and 29/11. The genuineness of the promissory note was challenged on behalf of the prosecution. But the trial Court accepted the promissory notes as genuine. The trial Court also held that five sale-deeds were executed in favour of Smt. Kamalamma for a total sum of Rs. 79,000 and a sum of Rs. 91,000 was paid in cash. The High Court was apparently inclined to take a different view and doubted whether the amount of Rs. 91.000 was paid in cash in January 1947 by Sripad Rao to Smt. Kamalamma. In our opinion the High Court was not justified in differing from the trial Court on this point.
5. Sripad Rao died in 1959 and was not available for being examined as a witness. But his son, Rangnath Rao (D.W. 4), was examined to prove the execution of the promissory note by his father and the fact of his having borrowed the amount shown therein. D. W. 4 also deposed that his father paid Rs. 91,000 in cash to Smt. Kamalamma in January 1947. The evidence of D.W. 4 has been supported by D.W. 3, Gangappa. who said that he was present when Sripad Rao had paid Rs. 91,000 to Smt. Kamalamma and the witness himself wrote out the endorsement at the instance of Sripad Rao and Smt. Kamalamma signed the same in his presence.
6. The evidence as regards the endorsement of payment by execution of five sale-deeds has been criticized by the High Court. But having gone through the oral and documentary evidence we are satisfied that the view taken by the trial Court is correct and the promissory note must be held to be genuine and the payment of Rs. 91,000 in cash by Sripad Rao in January 1947 must be held to be established. The appellant has also given satisfactory evidence that five sale-deeds were executed in favour of Smt. Kamalamma in part-payment of the promissory note to the extent of Rs. 79,000. Both the trial Court and the High Court have accepted the case of the appellant that his mother had assets to the extent of Rs. 12,000. Both the Courts however held that the appellant has furnished explanation for assets worth about Rs. 2 lakhs and not for Rs. 3 lakhs and hence the presumption under Section 5(3) of the Act was applicable. But the evidence establishes that the appellant's wife was carrying on money-lending business and she had assets to the value of Rs. 1,70,000 in 1947. It is not unreasonable to think that for a period of ten years from 1947 to 1957 interest on this amount was earned and accumulated to the extent of Rs. 1,00,000. It was also contended on behalf of the appellant that he was carrying on automobile business in Coimbatore and he was the owner of six tracks oat of which he sold two trucks in 1949 and three in 1950. It was said that the appellant had made a profit out of the transaction. The High Court did not accept the contention of the appellant as he did not furnish the accounts of the business. In any event both the High Court and the trial Court have failed to take account of the fool that the appellant's wife was carrying on money-lending business and that she had in her possession assets to the extent of Rs. 1,70,000 in 1947. Upon a review of the evidence as a whole we consider that the appellant has satisfactorily accounted for the acquisition of his assets to the extent of Rs. 3 lakhs from 16 March 1957 to 25 October 1968. It follows, therefore, that the presumption under Section 5(3) of the Act cannot be applied to the present case.
7. As regards the substantive charge, the trial Court held that there was no proof that the appellant was responsible for making any over-classification in the quality of toils or for payment of higher rates to the contractors than what the circumstances lawfully warranted. It was contended on behalf of the appellant that it was not his primary duty to make any classification of soils and the classification was made first by the Assistant Engineer on the measurements token by the Inspector of Works. The appellant had only to sign the measurement books and other relevant papers. On this point the Special Judge observed in his Judgment as follows:
I put the question to the Public ' Prosecutor whether there' is any single instance in which the Inspector or the Assistant Engineer had put certain classification and the same was raised by the accused and the learned lawyer has frankly conceded that the documents do not show any such thing. If there was over-classification, then the primary responsibility was on the Inspectors and the Assistant Engineer. They are not on trial. I fail to understand how it can definitely be said that it was the accused who put the classification higher than it ought to have been dishonestly...
I put the question to the learned Special Public Prosecutor if there is any' instance in which an altogether different kind of soil was classified into a different soil and he has expressed his inability to do so.
It also appears that two contractOrs. Mahar Singh and Bam Sadhu working under the appellant had been chargesheeted by the police along with the appellant on the charge of conspiracy and defrauding the department in the matter of contract work. But the contractors were discharged by the Special Judge by his order dated 13 November 1982 as no prima facie case was found against them. There are also two arbitration awards, Exs. I and I/a, dated 7 October 1961 and 1 March 1983. The Union of India represented by the Southeastern Railway was one party in both the awards. Under Ex 1 Atwal & Co. was awarded by the sole arbitrator a decree for Rs. 1,50,737.and under the award Ex. I/a Ratilal Ranched was awarded a decree for over 3 lakhs of rupees. It was stated on behalf of the appellant that the two contractors were awarded decrees for their claims in connextion with the contract work troy had done in the same project of which the. appellant was the District Engineer. On behalf of the respondent it was objected that the agreements for the contract were not filed and the awards do not show the nature of the claims. But it was the duty of respondent to produce the agreements of contract in order to disprove the contention of the appellant. In any case both the trial Court and the High Court have held that the prosecution has not been able to establish the charge under Section 5(2) of the Act by any direct evidence. It is manifest that in the absence of presumption arising under Section 5(3) of the Act the conviction of the appellant for the charge under Section 5(2) of the Act cannot be sustained.
8. For these reasons we hold that the appeal must be allowed and the conviction and sentence imposed on the appellant under Section 5(2) of the Act should be set aside and that the appellant must be acquitted of the charge levelled against him.