Now, more serious errors of duplication have been found in Judge CR Kumaraswamy’s verdict. It now appears that the High Court has, erroneously, added loan amounts twice to the income of the defendants. This means that the amount calculated by the judge as ‘explained income’ — the basis on which the court has exonerated Jayalalithaa and others — is a highly inflated figure.
the High Court appears to have made some more glaring errors. Item number 8 in the table on Page 852 is a loan of Rs 1.57 crore in the name of VN Sudhakaran, Jayalalithaa’s foster son and one of the accused. A comparison with Pages 136 and 137 of the trial court order shows the discrepancy. Three pieces of evidence are cited in this particular loan – one, a letter from Sudhakaran to Indian Bank requesting a loan of Rs 1.57 crore. The second evidence is a letter from Indian Bank sanctioning a loan amount of Rs 1.33 crore and not the full amount requested. The third bit of evidence is the statement of accounts from the bank’s records. The trial court has taken the outstanding balance of the loan amount as income. The High Court, however, in a glaring error, takes into account only the first piece of evidence i.e. the loan amount requested by Sudhakaran, which was not even sanctioned in full.
Another glaring error in the loan table is that of item number 3 – a loan of Rs 90 lakhs taken by Jayalalithaa from Indian Bank. The HC has taken this into account despite that loan having been sanctioned in August 1996, after the ‘check period’ of the case, i.e. after her first term as Chief Minister of the state had ended.
IT returns as proof of income
The Karnataka High Court overturned the guilty verdict of the trial court by arguing that the lower court had not considered the Income Tax returns of the defendants. Judge Kumaraswamy then added this income declared in the IT returns of the defendants to clear them of a large chunk of disproportionate assets.
“There are many prior cases where the Supreme Court has said that in cases involving disproportionate assets, the source of the income must be explained convincingly,” said the retired judge(K.Chandru). “Income tax returns are not reliable since they do not verify the source of the income. It is wrong to accept IT returns as proof of income unless the source of the income is proven to be valid,” he said.
On Page 875 of the HC order, the judge agrees that IT returns filed as an afterthought cannot be relied upon. “When Income Tax returns have not been filed for many years, it disentitles the assessee substantially. A doubt arises in the genuineness of the Income Tax returns. But when it is produced before the Income Tax department after a long time and is not produced when its production was warranted, it is a suspicious circumstance against the genuineness of the claim of the assessee in respect of this subscription item i.e. Namadhu MGR.”
However, Kumaraswamy proceeds to accept the income in part i.e. a sum of Rs 4 crores. “In effect, this is an afterthought explanation that anyone can give in a DA case,” said the retired judge. “So basically I can wait until a chargesheet is filed, then I can add all my unexplained income and file my IT returns after that – I will get away scot free. This judgment can be quoted in cases involving IT returns as well. Jurists should wake up to the impact this could have on the social structure, the economy and political structure. If afterthought IT returns are accepted, this means black money can easily come into the system and be laundered by filing a simple IT return,” he said.
“Under this head, the High Court may be wrong and there was no justification to ignore the findings given by Cunha,” said retired judge Chandru. “Sec 19 (3) (a) of the Prevention of Corruption Act does not allow an appellate court (in this case Karnataka HC) to take a different view from the special court in such matters unless there was a failure of justice,” he said.
Apart from the acceptance of IT returns which were filed belatedly, in the case of birthday gifts too, a curious case of a foreign remittance included in this list draws attention. This Rs 77 lakh remittance is the subject of a CBI investigation. The case was dismissed by the Madras High Court and the matter has been mired in legal technicalities and pending before the Supreme Court since 2012.
“Receiving gifts from foreign countries by a minister is completely prohibited by the Foreign Exchange Regulation Act (FERA),” said retired judge Chandru. “It can be accepted as an income for the purpose of the present case if it is shown that it was remitted by a bonafide person.”
The retired judge quoted the Supreme Court to ask whether this means the judiciary encourages politicians to take bribes in kind rather than cash. “If public servants are allowed to accept presents when they are prohibited under a penalty from accepting bribes, they would easily circumvent the prohibition by accepting the bribe in the shape of a present,” he said.