State of Karnataka vs. Selvi J.

Jaylalitha & Others

(2017) 6 SCC 263

(A1 is Selvi J. Jayalalitha A2 is Sasikala Natrajan A3is TM Sudhakaran A4 is J Elavarsi )

District Court:

The case was heard by a Special Judge, in Chennai. In the present case Dr. Subramanium
Swamy had filed a case against the, then Chief Minister of Tamil Nadu, A1, alleging the
following tabulation of assets and liabilities from the period of 01.07.1991 to 30.04.1996, which
amounts to the offense of Disproportionate Assets:

a. Income (Including salary and all other sources of income); Rs 9,34,26,054

b. Expenditure: Rs11,56,56,833

The extent of disproportion (value of her properties and resources) was pointed out to: Rs.
66,65,20,395.

During investigation, after conducting search of the residential premises of A1 and various other
locations, the Investigating Officer found several incriminating materials and voluminous
documents were seized and statements of a large number of witnesses were recorded. The
incriminating evidence collected during such investigation disclosed the complicity of A2 to A4
in the alleged offence.

The judge hence framed 3 charges:

 A1 being a public servant, along with A2 to A4, were parties to a criminal conspiracy
with the object of acquiring and possession pecuniary resources of income to the extent
of Rs.66,65,20,395/- in the names of A1 and in the names of A2 to A4 and 32 business
enterprises floated in the names of A2 to A4, for which (A1) could not satisfactorily
account and (A2 to A4) abetted A1 by holding a substantial portion of the pecuniary
resources and property in their names (A2 to A4) on behalf of A1 and thereby A1 to A4
committed an offence punishable u/Sec.s 120-B, IPC r/w 13(2) r/w 13(1)(e)
of Prevention of Corruption Act, 1988 and within the cognizance of this Court.

 A1 in pursuance of the said criminal conspiracy, during the said period and the said
places, being a public servant to the Chief Minister of the State of Tamil Nadu, acquired
and possessed in their name and in the names of A2 to A4 and in the names of the
 business enterprises floated in the names of A2 to A4, pecuniary resources and property
disproportionate to their known sources of income to the extent of Rs.66,65,20,395/- for
which they could not satisfactorily account, and thereby A1 committed an offence
punishable u/Sec. 13(2) r/w 13(1)(e) of Prevention of Corruption Act, 1988 and within
the cognizance of this Court.

 A2 to A4 in pursuance of the said criminal conspiracy during the said period and the said
places abetted A1 who was a public servant, by intentionally aiding her in the possession
of pecuniary resources and property disproportionate to her known sources of income and
for which she could not satisfactorily account, by holding a substantial portion of the said
pecuniary resources and property in their names and in the names of the business
enterprises floated in their names, and thereby A2 to A4 committed an offence
punishable u/Sec. 109 I.P.C r/w 13(2) r/w 13(1)(e) of Prevention of Corruption Act,
1988 and within the cognizance of this Court.

The trial was conducted, 99 witnesses were examined in front of a special judge and the accused
was held guilty.

Thus, as on 30.4.1996, A1 being a public servant was found to have acquired and possessed
pecuniary resources and properties in her name and in the names of A2, A3 and A4 and the firms
floated by them, which were overwhelmingly disproportionate to her known sources of income
to the extent of Rs.66,65,20,395/- (Rupees Sixty Six Crores Sixty Five Lakhs Twenty Thousand
Three hundred and Ninety Five only) which is an offence of criminal misconduct within the
definition of Sec.13(1)(e) punishable under Section 13(2) of 1988 Act and A2, A3, and A4
conspired with A1 and abetted the commission of the above offence.

A1 was sentenced to a punishment under Section 13 (1) (E) and Section 13 (2) of the Prevention
of Corruption Act for 4 years along with fine of Rs100 crores. Under Section 120 B of IPC, she
was sentenced to 6 months of imprisonment and RS 1 lakh. A2, A3 and A4 were punished under
Section 109 of IPC and were sentenced to 4 years of imprisonment and 10 crores fine. Further,
all property amassed by these individuals was to be ceased by the state.

High Court

A criminal appeal was filed in the High Court by the accused on the grounds that Special Trial
Court was mistaken in calculating the finances and that the decision of the trial court should be
quashed. The High Court re calculated the assets, income, expenditure and disproportionate
assets and reached the following conclusion:
DISPROPORTIONATE ASSETS: Total Assets - Total Income

Rs.37,59,02,466 - Rs.34,76,65,654 = Rs.2,82,36,812

It further calculated the extent of disproportion to 8.12% and following the principles laid down
in Krishnanand Agnihotri vs State of Madhya Pradesh, (AIR 1977 SC 769), held that when there
is disproportionate asset to the extent of 10% or below, the accused are entitled to acquittal and
accordingly the High Court allowed the appeal and quashed the decision of the Special Judge.

Supreme Court:

Further after the decision of the High Court, an appeal was made to the case Supreme Court
analysed the decisions by both the courts and found that District Court had calculated the extent
of disproportionate assets to 211.09% and the High Court had listed it as 8.12%.

Justice Ghose delved in detail into all the loans, the gifts, the valuation of the properties, other
incomes and the marriage expenses of Ms. Sasikala’s nephew, and for each one of these upheld
the finding of the trial court. The High Court’s finding on the percentage of disproportionate
assets being 8.12% was “based on completely wrong reading of the evidence on record
compounded by incorrect arithmetical calculations”. The trial court’s judgment was restored in
total. It was found that calculation errors in the High Court’s calculation amounting to Rs.
13,50,00,000.

The court upheld the iterated following figures:

 Assets as on 30.04.1996- Rs.55,02,48,215

 Expenditure: Rs. 8,49.06,833
 Total of assets and expenditure: Rs. 63,51,55,048
 Income: Rs. 9,91,05,094
 Disproportionate assets were then calculated: (Total of assets + Expenditure) –
Income i.e. Rs.63,51,55,048 – Rs. 9,91,05,094 = Rs. 53,60,49,55,954

The decision of the Supreme Court in Krishnanand Agnihotri was held to have no application to
the facts of this case. Justice Ghose noticed a close connection between Jayalalithaa and Ms.
Sasikala and their collaboration in many transactions, including purchases of large properties and
opening of about 50 bank accounts, and held the latter to be guilty of abetment and conspiracy.
Although the appeal against Jayalalithaa stood abated due to the reason of her demise, Ms.
Sasikala’s (A2) conviction and sentence and that of her relatives, Sudhakaran (A3) and Ilavarasi
(A4) stood restored who were sentenced to a four year term with a fine of Rs.10 crores.