(Prayer in Crl.O.P.No.28518 of 2025: Petition filed under Section 528 of BNSS to call for the records relating to impugned proceedings in Spl.C.C.No.2 of 2025 on the file of the learned Special Judge under Prevention of Corruption Act, 1988, Puducherry filed by the respondent and quash same in so far as the petitioners are concerned.

In Crl.A.No.1030 of 2025: Appeal filed under Section 11 of Criminal Law Amendment Ordinance 1944 to call for the records pertaining to the impugned order dated 03.07.2025 made in Crl.M.P.No.536 of 2025 in Spl.C.C. No.2 of 2025 on the file of the learned Principal District Judge/ Special Judge Under Prevention of Corruption Act 1988, Puducherry and set aside the same and consequently direct the trial Court to hear the petitioners and their counter against the attachment.

In Crl.A.No.1031 of 2025: Appeal filed under Section 11 of Criminal Law Amendment Ordinance 1944 to call for the records pertaining to the impugned order dated 03.07.2025 made in Crl.M.P.No.536 of 2025 in Spl.C.C. No.02 of 2025 on the file of the learned Special Judge Under Prevention of Corruption Act 1988, Puducherry and set aside the same and consequently direct the trial Court to hear the petitioner and his counter against the attachment.)

Common Order

1. Crl.O.P.No.28518 of 2025 has been filed to call for the records relating to impugned proceedings in Spl.C.C.No.2 of 2025 on the file of the learned Special Judge under Prevention of Corruption Act, 1988, Puducherry filed by the respondent and quash same in so far as the petitioners are concerned.

2. Crl.A.No.1030 of 2025 has been filed to call for the records pertaining to the impugned order dated 03.07.2025 made in Crl.M.P.No.536 of 2025 in Spl.C.C. No.2 of 2025 on the file of the learned Principal District Judge/ Special Judge Under Prevention of Corruption Act 1988, Puducherry and set aside the same and consequently direct the trial Court to hear the petitioners and their counter against the attachment.

3. Crl.A.No.1031 of 2025 has been filed to call for the records pertaining to the impugned order dated 03.07.2025 made in Crl.M.P.No.536 of 2025 in Spl.C.C. No.02 of 2025 on the file of the learned Special Judge Under Prevention of Corruption Act 1988, Puducherry and set aside the same and consequently direct the trial Court to hear the petitioner and his counter against the attachment.

4. The petition in Crl.O.P.No.28518 of 2025 has been filed to quash the entire proceedings in Spl.C.C.No.2 of 2025 on the file of the learned Special Judge under Prevention of Corruption Act, 1988, Puducherry. The case of the prosecution is that while B.Ravicoumar/ A1 was working as a Data Entry Operator, Villianur Commune Panchayat, Government of Puducherry, he acquired assets in his name as well as in the name of his family members to the tune of Rs.19,00,51,077/- which is disproportionate to the tune of 604.26% to his known and legitimate sources of income for the check period from 01.04.2017 to 16.10.2024.

5. On the said allegation, the respondent registered FIR in RC.No.032 2024 A0014 for the offences punishable under Sections 13(2) r/w 13(1)(e) of Prevention of Corruption Act, 1988 and 13(2) r/w 13(1)(b) of the Prevention of Corruption Act, 1988 (as amended in 2018) and after completion of investigation filed final report for the offences punishable under Sections 13(2) r/w 13(1)(e) of the Prevention of Corruption Act, 1988 and Sections 13(2) r/w 13(1)(b) of the Prevention of Corruption (as amended in 2018) Act, 1988 as against A1. A2 and A3 were charged for the offences punishable under Sections 109 of IPC r/w 13(2) r/w 13 (1)(e) of the Prevention of Corruption Act, 1988 and Sections 109 IPC r/w 13(2) r/w 13(1)(b) of the Prevention of Corruption (as amended in 2018) Act, 1988.

6. The final report has been taken cognizance by the trial Court in Spl.C.C.No.02 of 2025 on the file of the learned Special Judge Under Prevention of Corruption Act 1988, Puducherry. Pending framing of charges, the petitioners filed petition to discharge them from all the charges. While pending discharge petition, the petitioners filed this petition seeking to quash the entire proceedings on several grounds.

7. The learned Senior Counsel appearing for the petitioners in Crl.O.P.No.28518 of 2025 submits that A1 was working as a Data Entry Operator, Villianur Commune Panchayat, Government of Puducherry and received monthly salary of Rs.46,000/-. The first petitioner in Crl.O.P.No.28518 of 2025/A2 is the wife of A1 and the second petitioner in Crl.O.P.No.28518 of 2025/A3 is the mother – in – law of A1. A2 and A3 have been falsely implicated as accused alleging that they instigated A1 to amass wealth which is disproportionate to the legitimate source of income.

8. The learned Senior Counsel appearing for the petitioners in Crl.O.P.No.28518 of 2025 further submits that A2 is a graduate and she was doing business as sole proprietrix in the name and style of M/s.Mohit Construction, which is engaged in the field of real estate and construction activities for the past 8 years and she is managing all of her business activities independently with the help of supporting staffs. A1 has no connection or role whatsoever in the business and income of A2. Infact, the business of A2 was duly informed by A1 to his department in a proper manner even at the time of beginning itself on 21.10.2016. Out of the business income, A2 acquired several properties in her name and she has been regularly paying income tax to income tax department by disclosing all the properties acquired by her and her liability. Without considering the same and ignoring the sources of income, the respondent filed final report.

9. The learned Senior Counsel appearing for the petitioners in Crl.O.P.No.28518 of 2025 further submits that A1 was working as Data Entry Operator, which is Group C category and last grade staff working in Villianur Commune Panchayat, Government of Puducherry. He further submits that though the FIR was registered for the check period from 01.04.2017 to 31.03.2023, while filing charge sheet, the check period was extended till 16.10.2024 by including the properties which were purchased by A2, inorder to rope the family members of A1 as accused. A2 had purchased 18 properties during the check period for the value of Rs.15,46,79,280/-. A3 had purchased 3 properties for the value of Rs.66,57,000/-. There is absolutely no material on record to connect A1 for the property purchased by A2 and A3. That apart, A2 availed loans from bank and private persons for a sum of Rs.18,04,55,607/-, however, the respondent has taken only a sum of Rs.2,53,00,940/-. The details of the gross receipts and loan received by A2 was explained in Annexure 1 and 2. However, without considering the above facts, mechanically, the respondent filed final report. Therefore, no charge is attracted as against the accused 2 and 3 herein.

10. The respondent filed counter and the learned Special Public Prosecutor CBI Cases submits that there are totally three accused in this case, in which, the petitioners are arrayed as A2 and A3. As per the income tax returns for the assessment years 2016 – 2017 to 2024 – 2025 as declared by A2 reveals that secured loans amounting to Rs.5.26 Crores and the total taxable income is around Rs.90 Lakhs, which is manifestly insufficient to justify the acquisition of assets. He further submits that the accused 2 and 3 had already filed petition for discharge before the trial Court. While pending discharge petition, this quash petition has been filed which is not maintainable. He also relied upon the statements of List of Witnesses [L.Ws.] 34, 89, 95 to 100, 103, 104, 105 and 112, who have categorically spoken about the loan and also the other money which have been transferred to A2’s account without doing any business.

11. The learned Special Public Prosecutor further submits that though A2 assessed her income for income tax, it does not mean that A2 has source of income to amass wealth. Though A2 is engaged in real estate and construction business in the name and style of M/s.Mohit Construction. A1 was also associated with M/s.Mohit Construction in a legitimate business capacity. Further, A2 by in her income tax returns, deliberately misrepresented the true nature of the unsecured financial transactions by classifying them as secured loans. It is evidenced in document LD-15, pertaining to the assessment year 2023-2025. The said disclosure is inconsistent with the actual loan arrangement and constitutes a material misstatement under the provisions of Section 277 of the Income Tax Act, 1961, relating to false verification. He also relied upon the proviso under Section 277 of the Income Tax Act. Thus, it is a punishable offence with rigorous imprisonment for a term which shall not be less than 6 months which may extend up to 7 years with fine.

12. The learned Special Public Prosecutor further submits that L.W.34 who is none other than the brother of A2 states that he received a sum of Rs.17,45,000/- from M/s.Seichem Technologies as directed by A2 and subsequently, the said amount was transferred to the account of A1 and A2. Similarly, L.W.95 who is the son of A1’s sister (L.W.97) received a sum of Rs.20,79,000/- from M/s.Seichem Technologies Private Limited and handed over the same to A2. Similarly, L.W.97 who is the sister of A1 received a sum of Rs.14,62,000/- from M/s.Seichem Technologies Private Limited and handed over the same to A2. Similarly, a total sum of Rs.3,80,83,000/- was transferred from M/s.Seichem Technologies to the account of A1 and A2 through various persons who are examined as List of Witnesses. Therefore, there are oral and documentary evidences which are very much available to prosecute the accused.

13. The learned Special Public Prosecutor also relied upon the judgment in the case of State of Tamil Nadu Vs. R.Soundirarasu and others [(2023) 6 SCC 768] in which the Hon’ble Supreme Court held since the accused public servant does not have a right to be afforded a chance to explain the alleged disproportionate assets to the investigating officer before the filing of a charge sheet, a similar right cannot be granted to the accused before filing of FIR by making a preliminary inquiry mandatory.

14. Heard the arguments advanced on either side and perused the materials placed on record.

15. There are totally three accused, in which, the petitioners in Crl.O.P.No.28518 of 2025 are arrayed as A2 and A3. A1 while working as a Data Entry Operator, Villianur Commune Panchayat, Government of Puducherry, he along with A2 and A3 who are none other than his wife and mother – in – law amassed wealth to the tune of Rs.19,00,51,077/- which is disproportionate to the tune of 604.26% to his known and legitimate sources of income for the check period from 01.04.2017 to 16.10.2024. The FIR registered in RC.No.032 2024 A0014 reveals that the check period is from 01.04.2017 to 31.03.2023. After investigation, the respondent filed final report, thereby revising the check period as 01.04.2017 to 16.10.2024 by including the properties purchased by A2 and A3 during the check period.

16. A1 was charged for the offences punishable under Sections 13(2) r/w 13(1)(e) of the Prevention of Corruption Act, 1988 and Sections 13(2) r/w 13(1)(b) of the Prevention of Corruption (as amended in 2018) Act, 1988. A2 and A3 were charged for the offences punishable under Sections 109 of IPC r/w 13(2) r/w 13 (1)(e) of the Prevention of Corruption Act, 1988 and Sections 109 IPC r/w 13(2) r/w 13(1)(b) of the Prevention of Corruption (as amended in 2018) Act, 1988.

17. As per the charge sheet, a sum of Rs.19,00,51,077/- is shown as the value of the wealth acquired by the accused which is disproportionate to the tune of 604.26% to the known and legitimate sources of income. A2 had purchased 18 properties during the check period for the value of Rs.15,46,79,280/-. A3 had purchased 3 properties for the value of Rs.66,57,000/-. A1 had purchased 1 property to the value of Rs.8,20,000/- even prior to the check period. The respondent calculated the total assets and expenses to the tune of Rs.22,15,02,882/-. The income during the check period was calculated at Rs.3,14,51,805/-. The respondent calculated the disproportionate assets to the tune of Rs.19,00,51,077/-.

18. The prosecution produced the list of documents including the statement of account of A2 with Indian Bank, Villianur Branch, statement of Bank account of M/s.Mohit Construction with Indian Bank, Villianur Branch, the jewel loan application and statement of Bank account with Indian Bank, Villianur Branch, certified copies of Statement of Bank accounts of A2 with SBI, Thattanchavadi Branch, Puducherry. The prosecution also shown the names of the companies from whom the payments were received by A2 for her proprietrix concern M/s.Mohit Construction as reflected in list of documents nos.20, 23 and 37. Accordingly, A2 received payments from Pelican Realty Projects Private Limited, Chennai; Siechem Technology Private Limited; Cricket Association of Puducherry; SNJ Distillers Private Limited and BSNL through Pinnaacle Technologies, Nodel A/c and India Ideas. Com based on the work orders and invoices issued in favour of M/s.Mohit Construction.

19. On perusal of those documents establishes that A2 received a sum of Rs.23,61,29,164/- from 29.08.2017 to 16.10.2024 as income from the above five companies. However, the prosecution failed to consider the income of Rs.1 Crore and Rs.4,95,000/-available in statement dated 09.03.2022 and 11.03.2022 respectively from Cricket Association of Puducherry and Pelican Realty Projects Private Limited. Therefore, after deduction of TDS and GST, the prosecution ought to have taken a sum of Rs.24,66,24,164/- as the total income of A2. Further A2 also availed private loans through banking transaction to the tune of Rs.8,14,33,000/-. The loans availed by A2 were spoken by L.Ws.34, 98, 100, 101, 109 and 115. However, the said sum of Rs.8,14,33,000/- was not included in the Statement-C of the charge sheet. Further, the List of Document 35 shows that it was a jewel loan application and statement of loan account. It was also duly shown in the income tax returns but the said sum of Rs.17,17,000/- was also not included in the Statement-C. Further, a sum of Rs.52,49,234/- was shown as available balance in the account of M/s.Mohit Construction as on 16.10.2024. However, it was availed as over draft facility upto a limit of Rs.55 Lakhs. Therefore, it has to be included in the Statement-C instead the prosecution by treating it as asset included in the Statement-B of the charge sheet.

20. Accordingly, after deducting the above said amount, the asset value at the end of the check period shall be Rs.17,30,09,080/-. Hence, there is no absolute material evidence to show that the accused amassed wealth disproportionate to their known source of income.

21. Upon perusal of records also reveals that A2 is sole proprietrix of M/s.Mohit Construction and she is doing real estate business as well as construction business. All the amounts which were received to the account of M/s.Mohit Construction are only through Bank transaction from various persons. The entire income was accounted and assessed with income tax. Hence, the prosecution failed to produce any piece of evidence to show that the amounts which were received by A2 in the account of M/s.Mohit Construction is ill-gotton money through A1. It is well settled that mere disclosure of income for assessment of income tax does not ipso facto establish the sources of income. At the same time, on perusal of entire records reveals that A2 was carrying on a lawful business and had independent and legitimate source of income. The records further establish that the said business was financed through bank loan as well as private borrowings. Therefore, the prosecution cannot disregard the existence of such legitimate sources of income of A2. Hence, the offence under Section 277 of the Income Tax Act is not at all attracted as against the accused.

22. It is relevant to extract hereunder Section 277 of the Income Tax Act, 1961:

                     “277.[False statement in verification, etc. [Substituted by Act 41 of 1975, Section 70, for Section 277 (w.e.f.1.10.1975).] -If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,-(i)in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with rigorous imprisonment for a terms which shall not be less than three months but which may extend to three years and with fine.]”

23. Thus, it is evident that an assessee would be punishable under Section 277 of the Income Tax Act only if the statement is found to be false. In the case on hand, the returns filed by A2 was duly accepted by the Income Tax Department and the same was not found to be false. Therefore, once the returns filed by assessee have been accepted and the statements made therein have not been found to be false, the assessee cannot be later prosecuted under Section 277 of the Income Tax Act.

24. Further, the Hon’ble Supreme Court of India in the case of M.Krishna Reddy Vs.State Deputy Superintendent of Police, Hyderabad reported in AIR 1993 SC 313 held that, “mere acquisition of properties or accumulation of wealth does not attract the offence under the Prevention of Corruption Act. Only failure to satisfactorily account for such acquisition of the properties or accumulation of wealth makes the possession objectionable as against law.”

25. Even though, the respondent calculated the land value as ‘zero’ for the property stands in the name of A1, however, included a sum of Rs.27,07,725/- spent towards renovation work of the said property, so as to bring within the check period and included the said property in Statement-B of the charge sheet.

26. The respondent also failed to consider the explanation submitted by A2 dated 21.01.2025. As per the income tax returns filed by A2 from the year 2017 to 2024, the actual net profit shown is Rs.1,69,35,856/-, whereas, the respondent has shown as only Rs.89,70,941/-. Therefore, the properties purchased by A2 and A3 are nothing to do with the financial source of A1.

27. Infact, the respondent valued the properties which were purchased by the A2 based on the schedule of rates prevailing during the year 2022 – 2023, even for the properties which are purchased before 2022. Further, the accused were not given final opportunity notice calling for explanation by furnishing the copies of the statements before filing final report. Nevertheless, the check period covers the period under Section 13 (1)(e) of the Prevention of Corruption Act and also Section 13(1)(b) of the Prevention of Corruption Act, which mandates the respondent to call for an explanation from the accused before filing of charge sheet. It is clear violation of the principles of natural justice, namely, audi alteram partem [no man should be punished and heard]. Therefore, the entire proceedings are vitiated and liable to be quashed.

28. Hence, charging the accused A1 to A3 i.e., A1 for the offences punishable under Sections 13(2) r/w 13(1)(e) of the Prevention of Corruption Act, 1988 and Sections 13(2) r/w 13(1)(b) of the Prevention of Corruption (as amended in 2018) Act, 1988; A2 and A3 for the offences punishable under Sections 109 of IPC r/w 13(2) r/w 13 (1)(e) of the Prevention of Corruption Act, 1988 and Sections 109 IPC r/w 13(2) r/w 13(1)(b) of the Prevention of Corruption (as amended in 2018) Act, 1988, is nothing but clear abuse of process of law and absolutely no prima facie case is made out to proceed further as against the accused since no material evidence is available as against the accused to proceed further.

29. Further, on perusal of the statements made by the List of Witnesses as recorded under Section 161 (3) of Cr.P.C., and other materials collected by the respondent in support of the charge sheet also does not make out any prima facie case as against the accused. Moreover, mere pendency of the discharge petition filed by the accused before the trial Court cannot be construed as a bar to invoke the inherent jurisdiction of this Corut under Section 528 of BNSS for quashing the entire criminal proceedings, particularly in the cases where continuation of the prosecution would amount to an abuse of the process of law. Therefore, the present quash petition is very much maintainable, notwithstanding the pendancy of the discharge petition before the trial Court.

30. In view of the above, the entire proceedings cannot be sustained as against the accused and are liable to be quashed. Accordingly, Crl.O.P.No.28518 of 2025 is allowed. It is also made clear that though A1 was not added as a party in this petition, in the interest of justice and to meet the ends of justice, the entire proceedings in Spl.C.C.No.2 of 2025 on the file of the learned Special Judge under Prevention of Corruption Act, 1988, Puducherry is quashed as against all the accused, i.e., A1 to A3.

31. Insofar as the criminal appeals in Crl.A.Nos.1030 and 1031 of 2025 are concerned, both the appeals have been filed as against the order passed in Crl.M.P.No.536 of 2025 in Spl.C.C.No.2 of 2025 on the file of the learned Special Judge Under Prevention of Corruption Act 1988, Puducherry, thereby allowed the petition filed under Section 3 r/w Section 6 of Criminal Law (Amendment) Ordinance, 1944 r/w. Section 18A of PC Act, 1988 (As amended in 2018), thereby attached the properties which were acquired by the accused which form part of the disproportionate assets possessed by the accused.

32. Though several grounds were raised by the appellants, challenging the order of attachment, in view of the quashment of the entire proceedings in Spl.C.C.No.2 of 2025, the order of attachment passed by the trial Court cannot be sustained and liable to be set aside. Accordingly, Crl.A.Nos.1030 and 1031 of 2025 are allowed.

33. Crl.O.P.No.28518 of 2025 is allowed. The entire proceedings in Spl.C.C.No.2 of 2025 on the file of the learned Special Judge under Prevention of Corruption Act, 1988, Puducherry is quashed as against all the accused/ A1 to A3.

34. Crl.A.Nos.1030 and 1031 of 2025 are allowed. The order dated 03.07.2025 made in Crl.M.P.No.536 of 2025 in Spl.C.C.No.2 of 2025 on the file of the learned Special Judge Under Prevention of Corruption Act, 1988, Puducherry, is hereby set aside. Consequently, the connected miscellaneous petitions are closed.