Gifts received by public servants not lawful source of income: SC

  • The decision of the Supreme Court following the conviction of Sasikala crushed her dream to become the chief minister of Tamil Nadu. The judgment further ruled for the gift-loving public servants that they cannot count their presents as income from lawful sources.   

    A bench consisting of Justices Pinaki Chandra Ghose and Amitava Roy said: "Gifts to Jayalalithaa, a public servant in the context of Sections 161 to 165A of Indian Penal Code now integrated into the Prevention of Corruption Act, are visibly illegal and forbidden by law. The endeavor to strike a distinction between 'legal' and 'unlawful' as sought to be made to portray gifts to constitute a lawful source of income is thus wholly misconstrued."

    The bench further added, "With the advent of the Prevention of Corruption Act, 1988, and consequent upon the expansion of the scope of definition of 'public servant' and the integration of Section 161 to 165A IPC in the said statute, the claim of the defense to treat the gifts offered to Jayalalithaa on her birthday as lawful income, thus cannot receive judicial imprimatur."

    Counsel appearing on behalf of Jayalalithaa said that the income tax department did not view receipts of gifts as crime if one disclosed them and paid taxes for the same. He requested the court to take the same view.

    Rejecting the contention, the SC said: "To reiterate, disclosure of such gifts in the I-T returns of Jayalalithaa and orders of the I-T authorities on the basis thereof do not validate the said receipts to elevate the same to lawful income to repel the charge under Section 13(1)(e) of the PC Act. "While dealing with the nexus between Jayalalithaa as the kingpin and associates Sasikala, V N Sudhakaran and J Elavarasi, the SC said: "The unimpeded, frequent and spontaneous inflow of funds from the accounts of Jayalalithaa to those of the other co-accused and the firms/companies involved overwhelmingly demonstrate the collective culpable involvement of the respondents in the transactions in the face of their overall orientation so as to render the same to be masked banking exchanges though involving several accounts but mostly of the same bank. No other view is possible."

    The trial court had earlier found out Sasikala, Sudhakaran and Elavarasi claimed to have independent sources of income, but the fact of constitution of firms and acquisition of large tracts of land out of the funds provided by Jayalalithaa indicate that all the accused gathered in Jaylalithaa's house, neither for social living nor Jayalalithaa allowed them free accommodation out of humanitarian concern. The Supreme Court agreed with the trial court on this.

    "The facts and circumstances proved in evidence undoubtedly point out that Sasikala, Sudhakaran and Elavarasi were accommodated in Jayalalithaa's house pursuant to the criminal conspiracy hatched by them to hold Jayalalithaa's assets." the SC said.


    This is a remarkable ruling by the Supreme Court in favor of preventing corruption. It shall help in keeping a check on such government officials and public servants who find out the loopholes in the system and use it to turn their black money into white.  

    Visit the Indian Kanoon section of LawRato to learn more on Indian Laws.

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