Supreme Court Upholds Conviction of Accused in Corruption Case Under Prevention of Corruption Act, 1947; Disproportionate Assets Acquired Before Act Can Be Considered. The Court Held That Section 5(3) of the Prevention of Corruption Act, 1947 Merely Prescribes a Rule of Evidence and Does Not Create a New Offence, Allowing Pre-Act Assets in Possession to Be Taken Into Account.

Criminal appeal against conviction under Section 5(2) of Prevention of Corruption Act, 1947 for criminal misconduct by a public servant.

The appellant sought to set aside conviction and sentence, challenging consideration of pre-Act assets under Section 5(3).

Conviction was based on presumption of disproportionate assets and direct evidence of illegal gratification.

The Special Judge, Ambala convicted the appellant under Section 5(2) PC Act and sentenced him. The Punjab High Court confirmed conviction and sentence, with two judges differing on whether pre-Act assets could be considered. The High Court rejected State's application for enhancement.

Whether pecuniary resources or property acquired before the Prevention of Corruption Act, 1947 came into force could be taken into consideration for the purpose of Section 5(3) of the Act Whether Section 5(3) of the Prevention of Corruption Act, 1947 creates a new offence or merely prescribes a rule of evidence Whether the prosecution is barred from adducing evidence in support of its case when relying on a statutory presumption under Section 5(3)

Appellant argued that pre-Act assets could not be considered without giving the Act retrospective operation; he also contended that the property and pecuniary resources held by his wife and son were not held on his behalf and that his own assets were not disproportionate. Appellant contended that the testimony of the partners who were accomplices required independent corroboration and that the account books maintained by them did not amount to independent corroboration. Appellant denied the charge and alleged that false evidence and fictitious books were prepared by the prosecution witnesses. Respondent/State argued that Section 5(3) covered all pecuniary resources and property in possession regardless of acquisition date and that the assets held by the appellant's wife and son were held on his behalf, thus the presumption was validly raised.

Section 5(3) of the Prevention of Corruption Act, 1947 is a rule of evidence, not a substantive offence. The words 'pecuniary resources or property in the possession of the accused or any other person on his behalf' include assets acquired before and after the commencement of the Act. Considering pre-Act assets does not give retrospective operation because the section only prescribes a method of proof for an offence already existing under Section 5(1). Once disproportionate assets are proved and not satisfactorily accounted for, the presumption under Section 5(3) may be raised, and the prosecution may also adduce evidence in support of its case.

to take into consideration the pecuniary resources or property in the possession of the accused or any other person on his behalf which were acquired before the date of the Act, was in no way giving the Act a retrospective operation. Sub-section 3 of s. 5 does not create a new kind of offence. It merely prescribes a rule of evidence for the purpose of proving the offence of criminal misconduct as defined in s. 5(l) for which an accused person is already under trial. On proper construction of the words of the section and giving them their plain and natural meaning, it is clear, that the pecuniary resources and property in possession of the accused person or any other person on his behalf have to be taken into consideration for the purpose of s. 5(3), whether these were acquired before or after the Act came into force. The facts proved in this case raise a presumption under s. 5(3) of the Act and the appellant’s conviction must be maintained on the basis of that presumption.

On 7 December 1952, the General Manager, Bhakra Dam, made a written complaint to the Superintendent of Police, Hoshiarpur, alleging illegal gratification by the appellant and other officials. A case was registered under the Prevention of Corruption Act, 1947. After sanction from the Government of Punjab, the appellant was tried by the Special Judge, Ambala, on a charge under Section 5(2) of the Prevention of Corruption Act, 1947. The Special Judge convicted him under Section 5(2) and sentenced him to one year rigorous imprisonment and a fine of Rs. 5,000/-, in default six months rigorous imprisonment. The Punjab High Court, on appeal, confirmed the conviction and sentence but rejected the State's application for enhancement of sentence. The appellant then appealed to the Supreme Court by special leave.

• Prevention of Corruption Act, 1947: 5(1), 5(2), 5(3)
• Indian Penal Code, 1860: 161, 165
• Indian Evidence Act, 1872: 34